SAMURAI 2K AEROSOL LIMITED LEADING HIGH PERFORMANCE AEROSOL COATING SPECIALIST FOR AUTOMOTIVE REFINISHING AND REFURBISHING INDUSTRY

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1 SAMURAI 2K AEROSOL LIMITED (Company Registration No.: C) (Incorporated in the Republic of Singapore on 9 March 2016) LEADING HIGH PERFORMANCE AEROSOL COATING SPECIALIST FOR AUTOMOTIVE REFINISHING AND REFURBISHING INDUSTRY Placement in respect of 20,000,000 Placement Shares at S$0.20 for each Placement Share, payable in full on application. OFFER DOCUMENT DATED 9 JANUARY 2017 (Registered by the Singapore Exchange Securities Trading Limited, acting as agent on behalf of the Monetary Authority of Singapore, on 9 January 2017) This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax or other professional adviser(s). UOB Kay Hian Private Limited (the Sponsor, Issue Manager and/or Placement Agent ) has on behalf of Samurai 2K Aerosol Limited (the Company ) made an application to the Singapore Exchange Securities Trading Limited (the SGX-ST ) for permission to deal in and for the listing and quotation of all the ordinary shares (the Shares ) in the capital of the Company already issued, the new Shares (the Placement Shares ) which are the subject of the Placement (as defined herein), the new Shares which may be issued upon the exercise of the options granted or to be granted under the Employee Share Option Scheme (the Option Shares ) or pursuant to the vesting of the awards to be granted under the Performance Share Plan (the Award Shares ) on Catalist (as defined herein). The dealing in and quotation of our existing issued Shares, the Placement Shares, the Option Shares and the Award Shares will be in Singapore dollars. Acceptance of applications will be conditional upon the issue of the Placement Shares and upon, amongst others, permission being granted by the SGX-ST for the dealing in, listing and quotation of all our existing issued Shares, the Placement Shares, the Option Shares and the Award Shares. Monies paid in respect of any application accepted will be returned to you, at your own risk, without interest or any share of revenue or other benefit arising therefrom, if the admission and listing do not proceed and you will not have any claims against us or the Sponsor, Issue Manager and Placement Agent. Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s). This offer of Placement Shares is made in or accompanied by this Offer Document that has been registered by the SGX-ST, acting as agent on behalf of the Monetary Authority of Singapore (the Authority ). Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor confirming that our Company is suitable to be listed and complies with the Catalist Rules (as defined herein). Neither the Authority nor the SGX-ST has in any way considered the merits of our existing issued Shares, the Placement Shares, the Option Shares or the Award Shares, as the case may be, being offered for investment. We have not lodged or registered this Offer Document in any other jurisdiction. The registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority, does not imply that the Securities and Futures Act (Cap 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGX-ST s listing rules, have been complied with. Investing in our Shares involves risks which are described in the section entitled RISK FACTORS of this Offer Document. After the expiration of six (6) months from the date of registration of this Offer Document, no person shall make an offer of our Shares, or allot, issue or sell any of our Shares, on the basis of this Offer Document; and no officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document. Sponsor, Issue Manager and Placement Agent UOB Kay Hian Private Limited (Company Registration Number W) (Incorporated in the Republic of Singapore)

2 CORPORATE PROFILE LEADING HIGH PERFORMANCE AEROSOL COATING SPECIALIST FOR AUTOMOTIVE REFINISHING AND REFURBISHING INDUSTRY Samurai 2K Aerosol Limited ( Samurai 2K or the Company, and together with its subsidiaries, the Group ) is a leading aerosol coating specialist with a focus on high performance coating solutions for the automotive refinishing and refurbishing industry. We are principally engaged in the manufacturing, distribution and marketing of our products under our own brands. Headquartered in Malaysia, our products are manufactured in our production facility located in Johor and are distributed in more than four (4) countries including Malaysia, Indonesia, Thailand and Philippines. INVESTMENT HIGHLIGHTS 27% 1 SAMURAI 2K S MARKET SHARE IN % 1 SAMURAI 2K S MARKET SHARE IN Established branding with market-leading position in Malaysia and Indonesia 14.3 MILLION 1 CANS SOLD IN MALAYSIA 58.0 MILLION 1 CANS SOLD IN INDONESIA 2 Well-positioned in attractive end-user market segments THAILAND VIETNAM NO. OF TWO-WHEELERS 1 IN SELECTED SOUTHEAST ASIAN COUNTRIES F F M UNITS CAGR: 6.2% 2020F 239M UNITS MALAYSIA INDONESIA F F in million units Well-positioned to capitalise on the growth in the two-wheelers aerosol refinishing and refurnishing industry with its market-leading position in Malaysia and Indonesia Total two-wheeler population is projected to grow at a CAGR of 6.2%, from 177 million in 2015 to 239 million by 2020F in Southeast Asian Countries 2 Aerosol spray paint market is expected to grow at a CAGR of 6.2% from million cans in 2015 to million cans in 2020F POTENTIAL ADDRESSABLE AFTERMARKET REVENUE FOR TWO-WHEELERS 2020F 2019F 2018F 2017F 2016F 2015 CAGR F 3.4% 6.2% 16.0% 9.8% Indonesia and Vietnam being the most attractive in market size with projected CAGR of 9.8% and 16.0%, respectively from 2015 to 2020F USD million 36 MALAYSIA THAILAND VIETNAM INDONESIA (1) According to the Industry Report dated 31 October 2016 by Frost & Sullivan (2) Southeast Asian countries refers to Malaysia, Indonesia, Thailand and Vietnam as stated in the Industry Report dated 31 October 2016 by Frost & Sullivan

3 PRODUCT SEGMENTS AND BRANDS 1 Paint (Standard) 3 Maintenance and others Cosmetics Metal and paint polish, tyre shine, motorcycle shampoo, water transfer film 2 Paint (Premium) Fluorescent, candy & metallic colour aerosol paint, high temperature aerosol paint, epoxy and primer products, 2K products Maintenance Engine degreaser, chain oil, carburettor and gasket cleaner 3 Innovative product with patented technology Nozzle SAMURAI 2K SYSTEM We have developed an aerosol container system with a two-component design that allows the hardener and paint solution to be mixed just prior to use Innovative nozzle technology allow for a wider and more uniform spray pattern that provide excellent coverage and more control compared to conventional aerosol products As at 16 December 2016, we have 12 registered patents and industrial designs and another 13 patents and industrial designs pending registration Red Cap Hardener (Epoxy/PU) Solvent/Paint Inner Sleeve with Mandrel & Suction Pipe Hardener Epoxy & PU (Polyurethane) Solvent/ Paint 4 Established and long-term relationship with our distributors, major suppliers and major customers Glass Agitator As at 30 June 2016, we have more than 300 long term customers who have maintained business relationships with us for periods of five (5) or more years As at 30 June 2016, four (4) of our top eight (8) major suppliers have supplied us for 10 or more years When pressed, Hardener (A) flows out to mix with Solvent/Paint (B) 5 Established track record of operational excellence, technological breakthrough and awards Obtained ISO 9001:2008 certification 27th International Invention, Innovation & Technology Exhibition 2016 Gold medal and Malaysian Innovative Product Award International Invention Innovation Competition Gold medal

4 6 Experienced and dedicated management team Experienced and dedicated management team, under the leadership of our Executive Director and Chief Executive Officer, Mr Ong Yoke En, who has more than 20 years of experience in the aerosol industry Well-positioned to leverage on the extensive experience and business acumen of our management team, each with more than 5 years of experience in their respective areas of expertise FINANCIAL HIGHLIGHTS REVENUE BY PRODUCT SEGMENTS CAGR: 38.6% REVENUE BY GEOGRAPHICAL SEGMENTS 30,000 30,624 30,000 30,624 25,000 20,000 15,000 10,000 5,000 15, % 19, % 6, % 8,096 25,000 20,000 15,000 10,000 5,000 15,946 19,135 6,495 8, RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 Paint (Standard) Paint (Premium) Maintenance and Others YoY Growth Malaysia Indonesia Others GROSS PROFIT AND GROSS MARGIN CAGR: 51.9% NET PROFIT AND NET PROFIT MARGIN 14,000 12,000 10,000 8,000 6,000 4,000 2, % 35.0% 40.2% 33.2% 44.1% 12, % 5,333 6, % 2, % 3,571 6,000 5,000 4,000 3,000 2,000 1, % 1, % 1, % 5, % % 0 RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 Profit for the Year Net Profit Margin Paint (Standard) Paint (Premium) Maintenance and Others YoY Growth Gross Profit Margin FUTURE PLANS Upgrade production facilities and 1 2 Focus on research and capabilities Upgrade existing Johor facilities and increasing the number of production lines for certain new products; acquire new equipment and machineries to reduce labour reliance development to increase range of innovative products Researching on new products with a focus on greater ease of use and safety; enhance current version of single head 2K system 3 Increase branding and marketing 4 Expand through acquisitions, activities to strengthen market joint ventures or strategic position alliances Increase branding and marketing on social media platforms; penetrate car refinishing and consumer segments; enhancing our shelf presence and product range in consumer retail outlets in Malaysia, Indonesia and possibly other countries in Asia, Europe and North America Strengthen market position and add value to existing business, expand into new businesses to achieve greater economies of scale and provide impetus for future growth

5 TABLE OF CONTENTS CORPORATE INFORMATION DEFINITIONS GLOSSARY OF TECHNICAL TERMS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS SELLING RESTRICTIONS DETAILS OF THE PLACEMENT INDICATIVE TIMETABLE FOR LISTING PLAN OF DISTRIBUTION SPONSORSHIP, MANAGEMENT AND PLACEMENT AGREEMENTS OFFER DOCUMENT SUMMARY THE PLACEMENT PLACEMENT STATISTICS EXCHANGE RATE RISK FACTORS RISKS RELATING TO OUR BUSINESS RISKS RELATING TO OUR OPERATIONS IN MALAYSIA RISKS RELATING TO OUR OPERATIONS IN INDONESIA RISKS RELATING TO OWNERSHIP OF OUR SHARES USE OF PROCEEDS AND LISTING EXPENSES DIVIDEND POLICY SHARE CAPITAL SHAREHOLDERS DILUTION RESTRUCTURING EXERCISE GROUP STRUCTURE SELECTED COMBINED FINANCIAL INFORMATION MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS OVERVIEW INFLATION REVIEW OF RESULTS OF OPERATIONS REVIEW OF PAST FINANCIAL POSITION LIQUIDITY AND CAPITAL RESOURCES SUMMARY OF COMBINED STATEMENTS OF CASH FLOWS MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS CAPITAL COMMITMENTS OPERATING LEASE COMMITMENTS FOREIGN EXCHANGE EXPOSURE i

6 TABLE OF CONTENTS CHANGES TO ACCOUNTING POLICIES CONTINGENT LIABILITIES CAPITALISATION AND INDEBTEDNESS GENERAL INFORMATION ON OUR GROUP HISTORY KEY MILESTONES BUSINESS OVERVIEW PRODUCTION PROCESS MAJOR CUSTOMERS MAJOR SUPPLIERS CREDIT MANAGEMENT INVENTORY MANAGEMENT ORDER BOOK PERMITS, LICENCES AND APPROVALS PROPERTIES AND FIXED ASSETS INTELLECTUAL PROPERTY RIGHTS QUALITY ASSURANCE INSURANCE SEASONALITY SALES AND MARKETING RESEARCH AND DEVELOPMENT CORPORATE SOCIAL RESPONSIBILITY AWARDS, ACCOLADES AND CERTIFICATIONS GOVERNMENT REGULATIONS COMPETITION INVESTMENT HIGHLIGHTS INDUSTRY OVERVIEW, PROSPECTS AND TREND INFORMATION BUSINESS STRATEGIES AND FUTURE PLANS INTERESTED PERSON TRANSACTIONS INTERESTED PERSONS AND OTHERS PAST INTERESTED PERSON TRANSACTIONS PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS OTHER TRANSACTIONS GUIDELINES AND REVIEW PROCEDURES FOR ON-GOING AND FUTURE INTERESTED PERSON TRANSACTIONS ii

7 TABLE OF CONTENTS POTENTIAL CONFLICTS OF INTERESTS INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDERS, SUBSTANTIAL SHAREHOLDERS OR THEIR ASSOCIATES INTERESTS OF EXPERTS DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES MANAGEMENT REPORTING STRUCTURE DIRECTORS EXPERIENCE AND TRAINING OF OUR DIRECTORS INDEPENDENCE OF OUR INDEPENDENT DIRECTORS EXECUTIVE OFFICERS REMUNERATION EMPLOYEES SERVICE AGREEMENTS EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN EMPLOYEE SHARE OPTION SCHEME PERFORMANCE SHARE PLAN CORPORATE GOVERNANCE EXCHANGE CONTROLS DESCRIPTION OF OUR SHARES TAXATION CLEARANCE AND SETTLEMENT GENERAL AND STATUTORY INFORMATION APPENDIX A APPENDIX B APPENDIX C INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND A-1 INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE B-1 UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE C-1 APPENDIX D SUMMARY OF CONSTITUTION OF OUR COMPANY D-1 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS... E-1 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS.. F-1 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME G-1 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN H-1 APPENDIX I INDUSTRY REPORT I-1 APPENDIX J ABRIDGED LEGAL OPINION FROM ZAID IBRAHIM & CO J-1 APPENDIX K TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE K-1 iii

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9 CORPORATE INFORMATION BOARD OF DIRECTORS : Mr Lim Siang Kai (Non-Executive Chairman and Lead Independent Director) Mr Ong Yoke En (Executive Director and CEO) Ms Lim Lay Yong (Executive Director and COO) Dato Loh Shin Siong (Non-Executive Director) Dato Chang Chor Choong (Non-Executive Director) Mr Hau Hock Khun (Independent Director) Mr Sia Yeak Hong (Independent Director) COMPANY SECRETARY : Mr Low Wee Siong (LLB, Hons) Ms Tan Swee Gek (LLB, Hons) REGISTERED OFFICE : 80 Robinson Road #17-02 Singapore PRINCIPAL PLACE OF BUSINESS : Malaysia No. 4 Jalan Dato Yunus 1 Taman Perindustrian Dato Yunus Sulaiman Lima Kedai Skudai, Johor, Malaysia Indonesia Jl. Sunter Mas Utara, Blok H1 No 17W, RT 021 RW 008, Sunter Jaya Sub-District Tanjung Priok District, North Jakarta Jakarta Utara, Indonesia SPONSOR, ISSUE MANAGER AND PLACEMENT AGENT SOLICITORS TO THE PLACEMENT AND LEGAL ADVISER TO OUR COMPANY AS TO SINGAPORE LAW LEGAL ADVISER TO OUR COMPANY AS TO MALAYSIAN LAW : UOB Kay Hian Private Limited 8 Anthony Road #01-01 Singapore : Wong Tan & Molly Lim LLC 80 Robinson Road #17-02 Singapore : Zaid Ibrahim & Co. Level 19 Menara Milenium Jalan Damanlela Pusat Bandar Damansara Kuala Lumpur Malaysia 1

10 CORPORATE INFORMATION LEGAL ADVISER TO OUR COMPANY AS TO INDONESIAN LAW LEGAL ADVISER TO OUR COMPANY AS TO HONG KONG LAW SOLICITORS TO THE SPONSOR, ISSUE MANAGER AND PLACEMENT AGENT INDEPENDENT AUDITORS AND REPORTING ACCOUNTANTS : Ali Budiardjo, Nugroho, Reksodiputro Graha CIMB Niaga 24th Floor Jl. Jenderal Sudirman Kav. 58 Jakarta Indonesia : Wilkinson & Grist 6th Floor, Prince s Building 10 Chater Road Central, Hong Kong : Vincent Lim & Associates LLC 18 Cross Street #07-11 China Square Central Singapore : Baker Tilly TFW LLP 600 North Bridge Road #05-01 Parkview Square Singapore Partner-in-charge: Ms Guo Shuqi (a member of the Institute of Singapore Chartered Accountants) INDEPENDENT MARKET RESEARCHER : Frost & Sullivan (Singapore) Pte Ltd 100 Beach Road #29-01/11 Shaw Towers Singapore SHARE REGISTRAR : Boardroom Corporate & Advisory Services Pte Ltd 50 Raffles Place #32-01 Singapore Land Tower Singapore PRINCIPAL BANKER : Oversea-Chinese Banking Corporation Limited 65 Chulia Street OCBC Centre Singapore RECEIVING BANKER : The Bank of East Asia, Limited Singapore Branch 60 Robinson Road BEA Building Singapore

11 DEFINITIONS In this Offer Document and the accompanying Application Forms, the following definitions apply where the context so admits: Group Companies Company : Samurai 2K Aerosol Limited CPMSB : Creative Paint Marketing Sdn. Bhd. OISB : Orientus Industry Sdn. Bhd. PTSP : PT Samurai Paint SWHL : Supreme Wish Holdings Limited Group : Our Company and our subsidiaries as at the date of this Offer Document Other Corporations and Agencies ABMB : Alliance Bank Malaysia Berhad ACRA : Accounting and Corporate Regulatory Authority of Singapore Authority : Monetary Authority of Singapore BKPM : Investment Coordinating Board or Badan Koordinasi Penanaman Modal of Indonesia BNM or Bank Negara : Bank Negara Malaysia, the Malaysian central bank CDP : The Central Depository (Pte) Limited CPF : Central Provident Fund DOSH : Department of Occupational Safety and Health, Malaysia Independent Auditors and Reporting Accountants Independent Market Researcher or Frost & Sullivan : Baker Tilly TFW LLP : Frost & Sullivan (Singapore) Pte Ltd IRAS : Inland Revenue Authority of Singapore Labour Department : Department of Labour from the Ministry of Human Resources, Malaysia 3

12 DEFINITIONS MIDA : Malaysian Investment Development Authority MITI : Ministry of International Trade and Industry of Malaysia OMSB : Orientus Marketing Sdn. Bhd. Receiving Banker : The Bank of East Asia, Limited SGX-ST : Singapore Exchange Securities Trading Limited Share Registrar : Boardroom Corporate & Advisory Services Pte Ltd Securities Commission : Securities Commission of Malaysia Sponsor, Issue Manager, Placement Agent or UOBKH : UOB Kay Hian Private Limited SPUL : Samurai Paint (UK) Limited Locations ASEAN : The Association of Southeast Asian Nations Australia : The Commonwealth of Australia Bangladesh : The People s Republic of Bangladesh Cambodia : The Kingdom of Cambodia Canada : The Dominion of Canada Europe : A continent that comprises the westernmost part of Eurasia East Malaysia : The part of Malaysia located on the island of Borneo, which consists of the Malaysian states of Sabah and Sarawak, and the Federal Territory of Labuan Hong Kong : The Hong Kong Special Administrative Region of PRC Indonesia : The Republic of Indonesia Japan : The State of Japan Johor : The State of Johor Darul Ta zim, a Malaysian state located in the southern part of Peninsular Malaysia Kuala Lumpur : The capital of Malaysia 4

13 DEFINITIONS Laos : The Lao People s Democratic Republic Las Vegas : A city located in the state of Nevada in USA Malaysia : The Federation of Malaysia (Pesekutuan Malaysia) Myanmar : The Republic of the Union of Myanmar Philippines : The Republic of the Philippines PRC : The People s Republic of China, excluding the special administrative regions of Hong Kong and Macau, and Taiwan for the purpose of this Offer Document Singapore : The Republic of Singapore Sabah : One of the two Malaysian states on the island of Borneo (Sarawak being the other) Sarawak : One of the two Malaysian states on the island of Borneo (Sabah being the other) Taiwan : The Republic of China Thailand : The Kingdom of Thailand United Kingdom : The United Kingdom of Great Britain and Northern Ireland USA : The United States of America Vietnam : The Socialist Republic of Vietnam General 1Q2016 : Financial period commencing 1 April 2015 and ended 30 June Q2017 : Financial period commencing 1 April 2016 and ended 30 June 2016 Application Forms : The printed application forms to be used for the purpose of the Placement and which form part of this Offer Document Application List : The list of applications for subscription of the Placement Shares 5

14 DEFINITIONS Associate : (a) In relation to any Director, CEO, Substantial Shareholder or Controlling Shareholder (being an individual) means: (i) (ii) (iii) his immediate family; the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and any company in which he or his immediate family (whether directly or indirectly) have an interest of 30.0% or more; and (b) In relation to a Substantial Shareholder or Controlling Shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30.0% or more associated company : A company in which at least 20.0% but not more than 50.0% of its shares are held by our Company or our Group Audit Committee : The audit committee of our Company as at the date of this Offer Document, unless otherwise stated Audited Combined Financial Statements : The Independent Auditor s Report and the Audited Combined Financial Statements for the Financial Years Ended 31 March 2014, 2015 and 2016 as set out in Appendix A of this Offer Document Award Shares : The Shares which may be issued and/or transferred from time to time pursuant to the vesting of the Awards under the Performance Share Plan Award(s) : The contingent award of Shares granted or which may be granted pursuant to the Performance Share Plan BLR : Base lending rate Board or Board of Directors : The board of Directors of our Company as at the date of this Offer Document, unless otherwise stated Business : Business operations, results of operations, financial condition, cash flow, business profitability, financial performance and/or business prospects CAGR : Compound annual growth rate 6

15 DEFINITIONS Catalist : The sponsor-supervised listing platform of the SGX-ST Catalist Rules : Section B of the Listing Manual of the SGX-ST, as amended, modified or supplemented from time to time CEO : Chief executive officer CFO : Chief financial officer Code : Code of Corporate Governance 2012, as amended, modified or supplemented from time to time COO : Chief operating officer CMSA : Capital Markets and Services Act 2007 of Malaysia, as amended, modified or supplemented from time to time Companies Act : The Companies Act (Chapter 50) of Singapore, as amended, modified or supplemented from time to time Constitution : The constitution of our Company, as amended, modified or supplemented from time to time Controlling Shareholder : A person who: (a) holds directly or indirectly 15.0% or more of the aggregate of all the voting shares in our Company (unless otherwise determined by the SGX-ST); or (b) in fact exercises control over our Company Directors : The directors of our Company as at the date of this Offer Document, unless otherwise stated DIY : Do-it-yourself EA : Employment Act 1955 of Malaysia, as amended, modified or supplemented from time to time ECM Notices : Exchange control notices issued by BNM from time to time Employee Share Option Scheme : The employee share option scheme adopted by our Company on 16 December 2016, the rules of which are set out in Appendix G entitled Rules of the Employee Share Option Scheme of this Offer Document entity : Includes a corporation, an unincorporated association, a partnership and the government of any state, but does not include a trust 7

16 DEFINITIONS EPS : Earnings per Share European Patent Office : The patent office that grants patents to contracting states of the Convention on the Grant of European Patents of 5 October 1973 Executive Directors : The executive Directors of our Company as at the date of this Offer Document, unless otherwise stated Executive Officers : The executive officers of our Group as at the date of this Offer Document, unless otherwise stated FY or Financial Year : Financial year ended or, as the case may be, ending 31 March FSA : Financial Services Act 2013 of Malaysia, as amended, modified or supplemented from time to time GDP : Gross domestic product GST : Goods and services tax IFSA : Islamic Financial Services Act 2013 of Malaysia, as amended, modified or supplemented from time to time Independent Directors : The independent Directors of our Company as at the date of this Offer Document, unless otherwise stated Indonesian Capital Market Law : The Indonesian Capital Market Law, Law No. 8 of 1995 and its implementing regulations Industry Report : The industry report dated 31 October 2016 prepared by the Independent Market Researcher as set out in Appendix I entitled Industry Report of this Offer Document Interested Person : Our Director, CEO, Controlling Shareholder or any of the Associates of a Director, CEO or Controlling Shareholder IP Territory : The jurisdictions in which we have registered or applied to register our intellectual property, being Singapore, Malaysia, Indonesia, Vietnam, Philippines, USA, Cambodia, Myanmar, Laos, Bangladesh, European Union, PRC, United Kingdom, Thailand, Taiwan, Australia, Japan, Canada Latest Practicable Date : 11 December 2016, being the latest practicable date prior to the lodgement of this Offer Document with the SGX-ST, acting as agent on behalf of the Authority Listing : The proposed listing and quotation of all our Shares on Catalist 8

17 DEFINITIONS Market Day : A day on which the SGX-ST is open for trading in securities NAV : Net asset value New Investor : A subscriber of our Placement Shares pursuant to the Placement NICE Classification of Goods and Services : The international classification of goods and services established by the 1957 Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks Nominating Committee : The nominating committee of our Company as at the date of this Offer Document, unless otherwise stated Non-Executive Directors : The non-executive Directors of our Company (including Independent Directors) as at the date of this Offer Document, unless otherwise stated NTA : Net tangible assets Occupational Safety and Health Rules : Occupational safety and health laws, regulations and policies of the Malaysian government from time to time Offer Document : This offer document dated 9 January 2017 issued by our Company in respect of the Placement Option(s) : The option(s) which may be granted pursuant to the Employee Share Option Scheme Option Shares : The Shares which may be allotted and issued and/or transferred upon the exercise of the Options OSHA : The Occupational Safety and Health Act 1994 of Malaysia, as amended, modified or supplemented from time to time Other Transaction(s) : Material transaction(s) between our Group and Relevant Person(s) Pasir Gudang Port : Port located at Pasir Gudang, Johor, Malaysia PBT : Profit before tax PCT or International PCT : The 1970 Patent Cooperation Treaty, which provides a single unified patent application process to protect inventions internationally in each contracting state PER : Price earnings ratio 9

18 DEFINITIONS Performance Share Plan : The performance share plan adopted by our Company on 16 December 2016, the rules of which are set out in Appendix H entitled Rules of the Performance Share Plan of this Offer Document Period Under Review : The period which comprises FY2014, FY2015, FY2016 and 1Q2017 PMA : Foreign investment company (Penanaman Modal Asing) established in Indonesia pursuant to Law No. 25 of 2007 Placement : The placement of the Placement Shares by the Placement Agent on behalf of our Company for subscription at the Placement Price, subject to and on the terms and conditions of this Offer Document Placement Agreement : The placement agreement dated 9 January 2017 entered into between our Company and UOBKH pursuant to which UOBKH agreed to subscribe and/or procure subscribers for the Placement Shares, details as described in the section entitled Sponsorship, Management and Placement Agreement of this Offer Document Placement Price : S$0.20 for each Placement Share Placement Shares : The 20,000,000 new Shares which are the subject of the Placement Price Control Act : Price Control and Anti-Profiteering Act 2011 of Malaysia, as amended, modified and supplemented from time to time QA : Quality assurance QC : Quality control Relevant Period : The period which comprises FY2014, FY2015, FY2016 and from 1 April 2016 up to the Latest Practicable Date Relevant Person : Persons or entities which are related to our Directors, Executive Officers or Shareholders but do not fall within the ambit of the definition of an Interested Person Remuneration Committee : The remuneration committee of our Company as at the date of this Offer Document, unless otherwise stated Restructuring Exercise : The corporate restructuring exercise undertaken in connection with the Listing, as described in the section entitled Restructuring Exercise of this Offer Document 10

19 DEFINITIONS Securities Account : The securities account maintained by a Depositor with CDP, but does not include a securities sub-account Securities and Futures Act or SFA : Securities and Futures Act (Chapter 289) of Singapore, as amended, modified or supplemented from time to time Service Agreements : The service agreements, each dated 16 December 2016 entered into between our Company and each of our Executive Directors, Mr Ong Yoke En and Ms Lim Lay Yong, as referred to in the section entitled Directors, Executive Officers and Employees Service Agreements of this Offer Document SFR : Securities and Futures (Offers of Investments) (Share and Debentures) Regulations 2005 of Singapore, as amended, modified or supplemented from time to time SGXNET : The corporate announcement system maintained by the SGX-ST for the submission of announcement by listed companies Share Transfers : The transfers of (a) 4,250,000 Shares from Mr Ong Yoke En to Dato Loh Shin Siong at the consideration of S$0.20 per Share; (b) 4,250,000 Shares from Mr Ong Yoke En to Dato Chang Chor Choong at the consideration of S$0.20 per Share; and (c) (i) 3,325,000 Shares from Mr Ong Yoke En; (ii) 105,000 Shares from Mr Ong How En; and (iii) 70,000 Shares from Ms Ong Yoke Hoi, to Mr Lau Sie Hung at the consideration of S$0.019 per Share Share(s) : Ordinary share(s) in the capital of our Company Shareholder(s) : Person(s) who are registered as holder(s) of Shares in the register of members of our Company, or where CDP is the registered holder, the term Shareholders shall, in relation to such Shares, mean Depositors whose Securities Accounts are credited with Shares Sponsorship and Management Agreement Singapore Take-over Code : The full sponsorship and management agreement dated 9 January 2017 entered into between our Company and UOBKH pursuant to which UOBKH agreed to sponsor and manage the Listing, details as described in the section entitled Sponsorship, Management and Placement Agreements of this Offer Document : The Singapore Code on Take-over and Mergers, as amended, modified or supplemented from time to time Sub-Division : The sub-division of 1 Share into 20 Shares as described in the section entitled Restructuring Exercise of this Offer Document 11

20 DEFINITIONS Subsidiaries : Subsidiaries of our Company, being OISB, CPMSB, PTSP and SWHL Substantial Shareholders : Persons who have an interest in our Shares of not less than 5.0% of the aggregate of all the voting shares of our Company Supplementary FX Rules : The supplementary notice on foreign exchange administration rules issued by BNM which took effect from 5 December 2016 Tanjung Pelepas Port : Port located at Gelang Patah, Johor, Malaysia Unaudited Interim Combined Financial Statements Unaudited Pro Forma Combined Financial Information : The Independent Auditor s Review Report and the Interim Condensed Unaudited Combined Financial Statements for the Three-Month Period ended 30 June 2016 as set out in Appendix B of this Offer Document : The Unaudited Pro Forma Combined Financial Information for the Financial Year ended 31 March 2016 and the Three-Month Period ended 30 June 2016 as set out in Appendix C of this Offer Document Currencies, Units and Others % or per cent. : Per centum or percentage CNH : The offshore Chinese Renminbi traded outside PRC GBP : The lawful currency of the United Kingdom HK$ or HKD or Hong Kong Dollar : The lawful currency of Hong Kong p.a. : Per annum RM or MYR or Malaysian Ringgit or sen S$ or SGD or Singapore Dollar : The lawful currency of Malaysia : The lawful currency of Singapore sqm : Square metre Rp or IDR or Indonesian Rupiah US$ or USD or United States Dollar : The lawful currency of Indonesia : The lawful currency of USA 12

21 DEFINITIONS All capitalised terms relating to the Employee Share Option Scheme and the Performance Share Plan which are not defined in this section of this Offer Document shall have the meanings ascribed to them as stated in Appendix G and Appendix H, respectively, of this Offer Document. The expressions Depositor, Depository Agent and Depository Register shall have the meanings ascribed to them respectively in Section 81SF of the SFA. Unless the context otherwise requires, any word defined under the Companies Act, the SFA, the SFR, the Catalist Rules or any statutory modification thereof and used in this Offer Document and the Application Forms shall, where applicable, have the meaning ascribed to it under the Companies Act, the SFA, the SFR, the Catalist Rules or any statutory modification thereto, as the case may be. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. The exchange rates used in this Offer Document are for reference only. No representation is made that any Malaysian Ringgit amount was, could have been, will be or can be converted into Singapore Dollar amounts at any of the exchange rates used in this document, at any other rate or at all. Any reference in this Offer Document and the Application Forms to any statute or enactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any reference in this Offer Document and the Application Forms to Shares being allotted to an applicant includes an allotment to CDP for the account of that applicant. Any reference to a time of day in this Offer Document and the Application Forms shall be a reference to Singapore time unless otherwise stated. References in this Offer Document to our Group, we, our, and us or any other grammatical variations thereof shall unless otherwise stated, mean our Company, our Group or any member of our Group as the context requires. Any discrepancies in the tables included herein between the listed amounts and the totals thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. Where applicable, figures and percentages are rounded off. The information on our website(s) or any website(s) directly or indirectly linked to our website(s) does not constitute part of this Offer Document and should not be relied on. 13

22 GLOSSARY OF TECHNICAL TERMS To facilitate a better understanding of the business of our Group, the following glossary contains an explanation and description of certain terms used in this Offer Document in connection with our Group. The terms and their assigned meanings should not be treated as being definitive of their meanings, and may not correspond to standard industry or common meanings or usage, as the case may be, of these terms. 1K system : An aerosol spray can system consisting of one chemical component casing and which does not require a hardener, catalyst or activator 2K system : An aerosol spray can system consisting of two chemical component casings, usually a mix of one component casing of paint solution and a second component casing of hardener, catalyst or activator actuator : A device connected to the valve of an aerosol spray can and used for the purpose of activating the valve resulting in the discharge of spray particles additives : Chemicals added to paint mixtures to improve the quality, texture, adhesion, smoothness, gloss and evenness of paint aerosol spray : A type of dispensing system which creates a cloud mist of liquid particles agglomerates : The end product which is formed as a result of a chemical process in which pigment particles clump together concentrate : Base component of paint mixture prior to the addition of additives, solvents and water, amongst others crimp : To fix a valve to the rim of an aerosol can head epoxy : A type of resin used in the paint mixture hardener : A substance mixed with resin in the paint mixture for the purpose of drying and hardening the paint discharge hiding power : The ability of the paint to obscure the characteristics of the underlying surface ISO : International Organisation for Standardisation, a world-wide federation of national standards bodies 14

23 GLOSSARY OF TECHNICAL TERMS ISO 9001 : A constituent part of the ISO 9000 series which specifies the requirements for a quality management system for an organisation that seeks to demonstrate its ability to consistently provide products that meet customer and applicable requirements and thereby to enhance customer satisfaction isocyanate : An organic compound used as a raw material in the production of polyurethane paint mandrel : A shaft used to rupture the inner sleeve of the 2K system aerosol can non-isocyanate paint formulations : Paint formulations with no isocyanate content OEM : Original equipment manufacturing pigments : Coloured powder material used as colourant in paint polyolefin film : A plastic film used for packaging of aerosol paint cans primer : A substance used as a preparatory coat on a product in order to improve the adhesion and finish of subsequent layers of materials such as paint on the product propellant : The substance contained in the aerosol can in the form of liquid and/or pressurised gas which generates pressure when the actuator is depressed so that the contents can be released through the valve PU or polyurethane : A mixture of resin and hardener used in the 2K system RAL : A colour system commonly used in Europe resin : A solid or liquid synthetic organic polymer used as the basis of plastics, adhesives, varnishes or other products top coat : An outer coat of paint two-wheeler : A motor vehicle that runs on two wheels valve : A device that regulates the flow of contents in an aerosol can 15

24 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS All statements contained in this Offer Document, statements made in press releases and oral statements that may be made by us or our Directors, Executive Officers or employees acting on our behalf, that are not statements of historical fact, constitute forward-looking statements. You can identify some of these statements by forward-looking terms such as anticipate, believe, could, estimate, profit estimate, expect, intend, may, plan, prospects, will and would or similar words and phrases. However, you should note that these words are not the exclusive means of identifying forward-looking statements. All statements regarding our expected financial position, trend information, business strategies, plans and prospects are forward-looking statements. These forward-looking statements, including without limitation, statements as to our revenue and profitability, cost measures, planned strategy and anticipated expansion plans, expected growth in demand, expected industry trends and any other matters discussed in this Offer Document regarding matters that are not historical fact, are only predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expected, expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, among others, the following: (i) (ii) (iii) (iv) (v) (vi) changes in political, social and economic conditions, the regulatory environment, laws and regulations and interpretation thereof in the jurisdictions where we conduct business or expect to conduct business; the risk that we may be unable to realise our growth strategies and internal growth; changes in currency exchange rates; changes in the availability and prices of materials, technical parts and equipment which we require to operate our business; changes in user preferences and needs; changes in competitive conditions and our ability to compete under such conditions, locally and internationally; (vii) changes in our future capital needs and the availability of financing and capital to fund these needs; and (viii) other factors beyond our control. Some of these risk factors are discussed in greater detail in this Offer Document, in particular, but not limited to, the discussions under the sections entitled Risk Factors and Management s Discussion and Analysis of Financial Position and Results of Operations of this Offer Document. All forward-looking statements by or attributable to us, or persons acting on our behalf, contained in this Offer Document are expressly qualified in their entirety by such factors. These forwardlooking statements are applicable only as at the date of this Offer Document. 16

25 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Given the risks and uncertainties that may cause our actual future results, performance or achievements to be materially different from that expected, expressed or implied by the forward-looking statements in this Offer Document, undue reliance must not be placed on these statements. None of us, the Sponsor, Issue Manager and Placement Agent or any other person represents or warrants that our actual future results, performance or achievements will be as discussed in those statements. Our actual future results may differ materially from those anticipated in these forward-looking statements as a result of the risks faced by us. We and/or the Sponsor, Issue Manager and Placement Agent disclaim any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances, even if new information becomes available or other events occur in the future. We are, however, subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after the registration of this Offer Document but before the close of the Placement, we become aware of: (a) (b) (c) a false or misleading statement or matter in this Offer Document; an omission from this Offer Document of any information that should have been included in it under the SFA, the SFR or the Catalist Rules; or a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST, acting as agent on behalf of the Authority, which would have been required by the SFA, the SFR or the Catalist Rules to be included in this Offer Document if it had arisen before this Offer Document was lodged, and that is materially adverse from the point of view of an investor, our Company may in consultation with the Sponsor, Issue Manager and Placement Agent, lodge a supplementary or replacement offer document with the SGX-ST, acting as agent on behalf of the Authority. Where such changes occur and are material or are required to be disclosed by law, we will comply with the relevant provisions of the SFA and make an announcement of the same to the SGX-ST and the public, and, if required, lodge a supplementary or replacement offer document with the SGX-ST, acting as agent on behalf of the Authority pursuant to the SFA. All applicants should take note of any such announcement, or supplementary or replacement offer document and, upon the release of the same, shall be deemed to have notice of such changes. 17

26 SELLING RESTRICTIONS SINGAPORE This Offer Document does not constitute an offer, solicitation or invitation to subscribe for the Placement Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will be taken under the requirements of the legislation or regulations of, or of the legal or regulatory authorities of, any jurisdiction, except for the lodgement and/or registration of this Offer Document in Singapore in order to permit a public offering of the Placement Shares and the public distribution of this Offer Document in Singapore. The distribution of this Offer Document and the offering of the Placement Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions. Persons who may come into possession of this Offer Document are required by us and the Sponsor, Issue Manager and Placement Agent to inform themselves about, and to observe and comply with, any such restrictions at their own expense and without liability to us or the Sponsor, Issue Manager and Placement Agent. Persons to whom a copy of this Offer Document has been issued shall not circulate to any other person, reproduce or otherwise distribute this Offer Document or any other information herein for any purpose whatsoever nor permit or cause the same to occur. MALAYSIA No approval, authorisation or recognition of or from the Securities Commission has been applied for or will be obtained for the making available, offering for subscription or purchase, or issuing an invitation to subscribe for or purchase, the Placement Shares in Malaysia pursuant to the CMSA. Accordingly, this Offer Document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Placement Shares, may not be circulated or distributed, nor may the Placement Shares be offered or sold, or made the subject of an invitation for subscription or purchase, whether directly or indirectly to anyone in Malaysia, unless the making available, offering for subscription or purchase, or issuing of an invitation to subscribe for or purchase, the Placement Shares, is made to individuals or entities which fall within any of the categories specified in Schedule 5 of the CMSA, which include: (a) (b) (c) (d) (e) a closed-end fund approved by the Securities Commission; a holder of a Capital Markets Services Licence (as defined in the CMSA); a person who acquires the Placement Shares, as principal, for a consideration of not less than RM250,000 or its equivalent in foreign currencies for each transaction whether such amount is paid in cash or otherwise; an individual whose total net personal assets, or total net joint assets with his or her spouse, exceeds RM3,000,000 or its equivalent in foreign currencies, excluding the value of the primary residence of the individual; an individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per annum in the preceding 12 months; 18

27 SELLING RESTRICTIONS (f) (g) (h) (i) (j) (k) an individual who, jointly with his or her spouse, has a gross annual income of RM400,000 or its equivalent in foreign currencies per annum in the preceding 12 months; a corporation with total net assets exceeding RM10,000,000 or its equivalent in foreign currencies based on the last audited accounts; a partnership with total net assets exceeding RM10,000,000 or its equivalent in foreign currencies; a bank licensee or insurance licensee as defined in the Labuan Financial Services and Securities Act 2010; an Islamic bank licensee or takaful licensee as defined in the Labuan Islamic Financial Services and Securities Act 2010; and any other person as may be specified by the Securities Commission, provided that such exchange is specified by the Securities Commission and the distribution of the Placement Shares is made by a holder of a Capital Markets Services Licence who carries on the business of dealing in securities. Neither has or will any offering material or document in connection with the Placement Shares and sale of the Placement Shares been or be registered with the Securities Commission pursuant to the CMSA. Accordingly, no person may issue, offer for subscription or purchase, make an invitation to subscribe for or purchase, any of the Placement Shares directly or indirectly to anyone in Malaysia, unless the issue, offer for subscription or purchase, or invitation to subscribe for or purchase, the Placement Shares falls within the applicable categories under Schedule 5 of the CMSA, and is an excluded offer, excluded invitation or excluded issue under Schedule 6 or Schedule 7, as the case may be, of the CMSA in which case this Offer Document will be deposited as an information memorandum with the Securities Commission under the CMSA. INDONESIA This Offer Document does not constitute a public offering under Indonesian Capital Market Law. This Offer Document may not be distributed or passed on within Indonesia or to persons who are citizens of Indonesia (wherever they are domiciled or located) or entities or residents in Indonesia. The Placement Shares may not be offered or sold, directly or indirectly, within Indonesia or to Indonesian citizens (wherever they are domiciled or located), entities or residents in a manner which constitutes a public offering of the Placement Shares under the laws and regulations of Indonesia, including but not limited to the Indonesian Capital Market Law as amended, modified, supplemented or replaced from time to time. The Indonesian Financial Services Authority (locally known as Otoritas Jasa Keuangan, as the successor of Bapepam & LK) does not review or declare its approval or disapproval on the issuance of the Placement Shares, nor does it make any determination as to the accuracy or adequacy of this Offer Document. Any statement to the contrary is a violation of Indonesian law. 19

28 SELLING RESTRICTIONS HONG KONG The contents of this Offer Document have not been reviewed, approved or authorised by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to this Offer Document. If you are in any doubt about any of the contents of this Offer Document, you should obtain independent professional advice. The Placement Shares have not been, and will not be, offered or sold in Hong Kong, by means of any document, other than (a) to professional investors as defined in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and any rules made under that ordinance; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) and constituting an offer to the public within the meaning of that Ordinance; and no advertisement, invitation or document relating to the Placement Shares that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong has been or will be issued, circulated, distributed, or in the possession of any person for the purposes of issue, circulation or distribution, whether in Hong Kong or elsewhere (except if permitted under the securities laws of Hong Kong) other than with respect to the Placement Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and any rules made under that ordinance. 20

29 DETAILS OF THE PLACEMENT LISTING ON CATALIST The Sponsor and Issue Manager has, on our behalf, made an application to the SGX-ST for permission to deal in, and for listing and quotation of, all our Shares already issued, the Placement Shares, the Option Shares and the Award Shares, on Catalist. Such permission will be granted when our Company has been admitted to the Official List of Catalist. Acceptances of applications and the allotment and issuance of the Placement Shares will be conditional upon, amongst others, the completion of the Placement, which is subject to certain conditions, including permission being granted by the SGX-ST to list and deal in, and for quotation of, all our Shares, including the Placement Shares, the Option Shares and the Award Shares, on Catalist. Monies paid in respect of any application accepted will be returned, without interest or any share of revenue or other benefit arising therefrom and at the applicant s own risk, if the completion of the Placement does not occur because the said permission is not granted or for any reason, and the applicant will not have any claim against us or the Sponsor, Issue Manager and Placement Agent. No Shares will be allotted on the basis of this Offer Document later than six (6) months after the date of registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority. Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s). The Placement is made in or accompanied by this Offer Document that has been registered by the SGX-ST, acting as agent on behalf of the Authority. We have not lodged or registered this Offer Document in any other jurisdiction. Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document, or assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements made, reports contained or opinions expressed in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor and Issue Manager confirming that our Company is suitable to be listed and complies with the Catalist Rules. Neither the Authority nor the SGX-ST has in any way considered the merits of the Shares, the Placement Shares the Option Shares or the Award Shares, as the case may be, offered for investment. Admission to Catalist is not to be taken as an indication of the merits of the Placement, our Company, our Subsidiaries, our existing issued Shares, the Placement Shares, the Option Shares or the Award Shares. A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as agent on behalf of the Authority. Registration of the Offer Document by the SGX-ST, acting as agent on behalf of the Authority, does not imply that the SFA, the Catalist Rules or any other legal or regulatory requirements or requirements under the Catalist Rules, have been complied with. We have not lodged and/or registered this Offer Document in any other jurisdiction. 21

30 DETAILS OF THE PLACEMENT We are subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure. In particular, if after the registration of the final Offer Document but before the close of the Placement, we become aware of: (a) (b) (c) a false or misleading statement or matter in this Offer Document; an omission from this Offer Document of any information that should have been included in it under the requirements of the SFA or the Catalist Rules; or a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST, acting as agent on behalf of the Authority and which would have been required by the SFA or the Catalist Rules to be included in this Offer Document if it had arisen before this Offer Document was lodged, and that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement offer document with the SGX-ST, acting as agent on behalf of the Authority, pursuant to Section 241 of the SFA. In the event that a supplementary or replacement offer document is lodged with the SGX-ST, acting as agent on behalf of the Authority, the Placement shall be kept open for at least 14 days after the lodgement of such supplementary or replacement offer document. Where prior to the lodgement of the supplementary or replacement offer document, applications have been made under this Offer Document to subscribe for the Placement Shares and: (a) where the Placement Shares have not been issued to the applicants, we shall either: (i) (ii) (iii) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement offer document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement offer document, as the case may be, and provide the applicants with an option to withdraw their applications; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement offer document, as the case may be, to the applicants who have indicated they wish to obtain, or who have arranged to receive, a copy of the supplementary or replacement offer document; within seven (7) days from the date of lodgement of the supplementary or replacement offer document, give the applicants the supplementary or replacement offer document, as the case may be, and provide the applicants with an option to withdraw their applications; or (A) treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled; and (B) we shall within seven (7) days from the date of lodgement of the supplementary or replacement offer document, return all monies paid in respect of any application, without interest or any share of revenue or other benefit arising therefrom and at the applicants own risk; or 22

31 DETAILS OF THE PLACEMENT (b) where the Placement Shares have been issued to the applicants but trading has not commenced, we shall either: (i) (ii) (iii) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement offer document, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement offer document, as the case may be, and provide the applicants with an option to return to us the Placement Shares which they do not wish to retain title in; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement offer document, as the case may be, to the applicants who have indicated they wish to obtain, or who have arranged to receive, a copy of the supplementary or replacement offer document; within seven (7) days from the date of lodgement of the supplementary or replacement offer document, give the applicants the supplementary or replacement offer document, as the case may be, and provide the applicants with an option to return to us the Placement Shares which they do not wish to retain title in; or (A) treat the issue of the Placement Shares as void, in which case the issue of the Placement Shares shall be deemed void; and (B) we shall within seven (7) days from the date of lodgement of the supplementary or replacement offer document return all monies paid in respect of any application, without interest or any share of revenue or other benefit arising therefrom and at the applicants own risk. An applicant who wishes to exercise his option under paragraph (a)(i) or (a)(ii) above to withdraw his application shall, within 14 days from the date of lodgement of the supplementary or replacement offer document, notify us of this, whereupon we shall, within seven (7) days from the receipt of such notification, pay to him all monies paid by him on account of his application for the Placement Shares without interest or any share of revenue or other benefit arising therefrom and at his own risk and he shall not have any claim against us or the Sponsor, Issue Manager and Placement Agent. An applicant who wishes to exercise his option under paragraph (b)(i) or (b)(ii) above to return the Placement Shares issued to him shall, within 14 days from the date of lodgement of the supplementary or replacement offer document, notify us of this and return all documents, if any, purporting to be evidence of title to those Placement Shares, to us, whereupon we shall, within seven (7) days from the receipt of such notification and documents, if any, pay to him all monies paid by him for those Placement Shares without interest or any share of revenue or other benefit arising therefrom and at his own risk, and the issue of those Placement Shares shall be deemed to be void, and he shall not have any claim against us or the Sponsor, Issue Manager and Placement Agent. Pursuant to Section 242 of the SFA, the Authority, may in certain circumstances issue a stop order (the Stop Order ) to our Company, directing that no Shares or no further Shares, to which this Offer Document relates, be allotted or issued. Such circumstances will include a situation where this Offer Document (i) contains any statement or matter which, in the Authority s opinion, is false or misleading (ii) omits any information that should have been included in it under the SFA, (iii) does not, in the Authority s opinion, comply with the requirements of the SFA, or (iv) the Authority is of the opinion that it is in the public interest to do so. 23

32 DETAILS OF THE PLACEMENT In the event that the Authority or the SGX-ST, acting as agent on behalf of the Authority, issues a Stop Order and applications to subscribe for the Placement Shares have been made prior to the Stop Order, then: (a) (b) where the Placement Shares have not been allotted or issued to the applicants, the applications for the Placement Shares pursuant to the Placement shall be deemed to have been withdrawn and cancelled and we shall, within 14 days from the date of the Stop Order, pay to the applicants all monies the applicants have paid on account of their applications for the Placement Shares; or where the Placement Shares have been issued to the applicants, but trading has not commenced, the issue of the Placement Shares pursuant to the Placement shall be deemed to be void and we shall, within 14 days from the date of the Stop Order pay to the applicants all monies paid by them for the Placement Shares. Such monies paid in respect of an application will be returned to the applicants at their own risk, without interest or any share of revenue or other benefit arising therefrom, and they will not have any claim against our Company or the Sponsor, Issue Manager and Placement Agent. This Offer Document has been read and approved by our Directors, and they collectively and individually accept full responsibility for the accuracy of the information given in this Offer Document and confirm, after making all reasonable enquiries, that to the best of their knowledge and belief, this Offer Document constitutes full and true disclosure of all material facts about the Placement and our Group, and our Directors are not aware of any facts the omission of which would make any statement in this Offer Document misleading. Where information in this Offer Document has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of our Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Offer Document in its proper form and context. Neither our Company, the Sponsor, Issue Manager and Placement Agent, nor any other parties involved in the Placement is making any representation to any person regarding the legality of an investment by such person under any investment or other laws or regulations. No information in this Offer Document should be considered as being business, legal or tax advice regarding an investment in our Shares. Each prospective investor should consult his own professional or other advisers for business, legal or tax advice regarding an investment in our Shares. No person has been or is authorised to give any information or to make any representation not contained in this Offer Document in connection with the Placement and, if given or made, such information or representation must not be relied upon as having been authorised by us or the Sponsor, Issue Manager and Placement Agent. Neither the delivery of this Offer Document and the Application Forms nor any documents relating to the Placement, nor the Placement shall, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change in the affairs, conditions, prospects or business of our Company, our Shares already issued, the Placement Shares, the Option Shares, the Award Shares or our subsidiaries or in any statements of fact or information contained in this Offer Document since the date of this Offer Document. Where such changes occur and are material or required to be disclosed by law, the SGX-ST and/or any other regulatory or supervisory body or agency, we will comply with the relevant provisions and, if required, make an announcement of the same to the SGX-ST and to the public and/or lodge a supplementary or replacement offer document with the SGX-ST, acting as agent on behalf of the Authority. All applicants should take note of any such announcement and, upon release of such an announcement, shall be deemed to have been given notice of such changes. 24

33 DETAILS OF THE PLACEMENT Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a promise or representation as to our future performance or policies. The Placement Shares are offered for subscription solely on the basis of the information contained and representations made in this Offer Document. This Offer Document has been prepared solely for the purpose of the Placement and may not be relied upon by any persons other than the applicants in connection with their application for the Placement Shares or for any other purpose. This Offer Document does not constitute an offer, solicitation or invitation to subscribe for the Placement Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or unauthorised, nor does it constitute an offer, solicitation or invitation to any person to whom it is unlawful to make such offer, solicitation or invitation. Copies of this Offer Document and the Application Forms and envelopes may be obtained on request, subject to availability during office hours, from: UOB Kay Hian Private Limited 8 Anthony Road #01-01 Singapore An electronic copy of this Offer Document is also available on the SGX-ST website at The Application List will open immediately upon the registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority, and will remain open until noon on 12 January 2017 or for such further period or periods as our Directors may, in consultation with the Sponsor, Issue Manager and Placement Agent, in their absolute discretion, decide, subject to any limitation under all applicable laws and regulations. In the event a supplementary offer document or replacement offer document is lodged with the SGX-ST, acting as agent on behalf of the Authority, the Application List will remain open for at least 14 days after the lodgement of the supplementary or replacement offer document. Details of the procedures to subscribe for the Placement Shares are set out in Appendix K Terms, Conditions and Procedures for Application and Acceptance of this Offer Document. 25

34 INDICATIVE TIMETABLE FOR LISTING An indicative timetable in respect of the Placement and the trading of our Shares is set out below for your reference: Indicative Date and Time 9 January 2017 (immediately upon registration of this Offer Document) Event Commencement of Placement 12 January 2017 at noon Close of Application List 16 January 2017 at 9.00 a.m. Commence trading on a ready basis 19 January 2017 Settlement date for all trades done on a ready basis The above timetable is only indicative as it assumes that the date of closing of the Application List is 12 January 2017, the date of admission of our Company to Catalist is 16 January 2017, the SGX-ST s shareholding spread requirement will be complied with and the Placement Shares will be allotted and issued and fully paid-up prior to 16 January The actual date on which our Shares will commence trading on a ready basis will be announced when it is confirmed by the SGX-ST. The above timetable and procedures may be subject to such modifications as the SGX-ST may, in its absolute discretion, decide, including the decision to permit commencement of trading on a ready basis and the commencement date of such trading. We, with the agreement of the Sponsor, Issue Manager and Placement Agent, may at our discretion, subject to all applicable laws and regulations and the rules of the SGX-ST, agree to extend or shorten the period during which the Application List is open. In the event of any changes in the closure of the Application List or the time period during which the Application List is open, we will publicly announce the same: (a) through a SGXNET announcement to be posted on the SGX-ST s website at and (b) in a major English newspaper in Singapore. We will provide details of the results of the Placement (including the level of subscription for the Placement Shares and the basis of allotment of the Placement Shares pursuant to the Placement) as soon as practicable after the closure of the Application List through the channels described in (a) and (b) above. We reserve the right to reject or accept, in whole or part, or to scale down or ballot any application for the Placement Shares, without assigning any reason therefor, and no enquiry and/or correspondence on our decision will be entertained. In deciding the basis of allotment, due consideration will be given to the desirability of allotting the Placement Shares to a reasonable number of applicants with a view to establishing an adequate market for our Shares. Investors should consult the SGX-ST s announcement on the ready trading date released on the SGX-ST s website at or the newspapers, or check with their brokers on the date on which trading on a ready basis will commence. 26

35 PLAN OF DISTRIBUTION THE PLACEMENT The Placement is for 20,000,000 Placement Shares offered in Singapore and the Listing is managed and sponsored by UOBKH. Prior to the Placement, there has been no public market for our Shares. The Placement Price is determined by our Company following consultation with the Sponsor, Issue Manager and Placement Agent, taking into consideration, amongst others, the prevailing market conditions and estimated market demand for our Shares determined through a book-building process. The Placement Price is the same for all Placement Shares and is payable in full on application. The Placement Shares are made available to retail and institutional investors in Singapore who apply through their brokers or financial institutions by way of the relevant Application Forms. Applications for the Placement Shares may only be made by way of printed Application Forms. The terms and conditions and procedures for application and acceptance are set out in Appendix K entitled Terms, Conditions and Procedures for Application and Acceptance of this Offer Document. Pursuant to the terms and conditions contained in the Placement Agreement as disclosed in the section entitled Sponsorship, Management and Placement Agreements of this Offer Document, we have appointed UOBKH to subscribe for, and/or procure subscribers for the Placement Shares, for a placement commission of three point five per cent. (3.5%) of the aggregate Placement Price for the total number of Placement Shares successfully subscribed, payable by our Company. The Placement Agent may, at its absolute discretion, appoint one (1) or more sub-placement agents for the Placement Shares. The Placement Agreement is conditional upon, amongst others, the Sponsorship and Management Agreement not being terminated or rescinded pursuant to the provisions of the Sponsorship and Management Agreement. Subscribers for the Placement Shares may be required to pay brokerage of up to one per cent. (1.0%) of the Placement Price to the Placement Agent or any sub-placement agent as may be appointed by the Placement Agent as well as stamp duties and other charges. SUBSCRIPTION FOR THE PLACEMENT SHARES To the best of our knowledge and belief, none of our Directors or Substantial Shareholders intends to subscribe for the Placement Shares pursuant to the Placement. To the best of our knowledge and belief, none of the members of our Company s management or employees intends to subscribe for more than five per cent. (5.0%) of the Placement Shares in the Placement. To the best of our knowledge, as at the date of this Offer Document, we are not aware of any person who intends to subscribe for more than five per cent. (5.0%) of the Placement Shares in the Placement. The final allotment of Placement Shares will be in accordance with the shareholding spread and distribution guidelines as set out in Rule 406 of the Catalist Rules. No Shares shall be allotted and issued on the basis of this Offer Document later than six (6) months after the date of registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority. 27

36 SPONSORSHIP, MANAGEMENT AND PLACEMENT AGREEMENTS Pursuant to the Sponsorship and Management Agreement dated 9 January 2017 entered into between our Company and UOBKH as the Sponsor and Issue Manager, our Company appointed UOBKH to manage the Placement on our behalf and to provide full sponsorship services in relation to the Placement, subject to the terms and conditions of the Sponsorship and Management Agreement. UOBKH will receive a management fee for such services rendered in connection with the Placement. Pursuant to the Placement Agreement dated 9 January 2017 entered into between our Company and UOBKH as the Placement Agent, UOBKH has agreed to subscribe for and/or procure subscribers for the Placement Shares, subject to the terms and conditions of the Placement Agreement. Pursuant to the Placement Agreement, the Placement Agent will receive from our Company a placement commission of three point five per cent. (3.5%) of the aggregate Placement Price for the total number of Placement Shares successfully subscribed. The Placement Agent may, at its absolute discretion, appoint one (1) or more sub-placement agents for the Placement. Subscribers of the Placement Shares may be required to pay brokerage of up to one per cent. (1.0%) of the Placement Price (and the prevailing GST thereon, if applicable) to the Placement Agent or any sub-placement agent(s) that may be appointed by the Placement Agent. The Placement Agreement is conditional upon the Sponsorship and Management Agreement not being terminated or rescinded pursuant to the provisions of the Sponsorship and Management Agreement. In the event that the Sponsorship and Management Agreement and/or Placement Agreement is terminated, our Company reserves the right, at our absolute discretion, to cancel the Placement. INTERESTS OF THE SPONSOR, ISSUE MANAGER AND PLACEMENT AGENT In the reasonable opinion of our Directors, UOBKH does not have a material relationship with our Company save as disclosed below and in the section entitled Sponsorship, Management and Placement Agreement of this Offer Document: (a) (b) (c) UOBKH is the Sponsor and Issue Manager in relation to the Listing; UOBKH is the Placement Agent in relation to the Placement; and UOBKH will be the continuing sponsor of our Company for a period of three (3) years from the date our Company is admitted and listed on Catalist. 28

37 OFFER DOCUMENT SUMMARY The information contained in this summary is derived from, and should be read in conjunction with, the full text of this Offer Document. As it is a summary, it does not contain all of the information that prospective investors should consider before investing in our Shares. Prospective investors should read this entire Offer Document carefully, especially the section entitled Risk Factors of this Offer Document and our financial statements and related notes before deciding on whether or not to invest in our Shares. OUR COMPANY Our Company was incorporated Singapore on 9 March 2016 under the Companies Act as a private limited company, under the name of Samurai 2K Aerosol Pte. Ltd.. Our Company s registration number is C. Our Company was converted into a public limited company and the name of our Company was changed to Samurai 2K Aerosol Limited in connection therewith on 16 December Our Company became the holding company of our Group following the completion of the acquisition of OISB, CPMSB, PTSP and SWHL as set out in the section entitled Restructuring Exercise of this Offer Document. For more details, please refer to the section entitled Restructuring Exercise of this Offer Document. BUSINESS OVERVIEW We are a leading aerosol coating specialist with a focus on high performance coating solutions for the automotive refinishing and refurbishing industry. We are principally engaged in the manufacturing, distribution and marketing of our products under our own brands, including Samurai, Kurobushi, Khameleon, Canbrush, Ninjutsu, Geigi, CanArt and Bushido. Headquartered in Malaysia, our products are manufactured in our production facility located in Johor and are distributed in more than four (4) countries, including Malaysia, Indonesia, Thailand and Philippines. According to the Independent Market Researcher, we are one of the leading market players specialising in aerosol spray paints for two-wheelers with an estimated 27.0% and 5.0% market share in Malaysia and Indonesia, respectively. We focus our marketing and promotion efforts on educating end-users on the usage of our aerosol products. For more details, please refer to in the sections entitled General Information on our Group History and General Information on our Group Business Overview of this Offer Document. INVESTMENT HIGHLIGHTS The investment highlights in respect of our Group are as follows: We have an established branding with market-leading position in Malaysia and Indonesia We are well-positioned in attractive end-user market segments We have an innovative product with patented technology We have an established and long-term relationship with our distributors, major suppliers and major customers We have an established track record of operational excellence, technological breakthrough and awards We have an experienced and dedicated management team 29

38 OFFER DOCUMENT SUMMARY For more details, please refer to the section entitled General Information on our Group Investment Highlights of this Offer Document. PROSPECTS Barring unforeseen circumstances, our Directors believe that the outlook for our business is expected to remain positive, in view of the following factors: Rising two-wheeler population Rapid urbanisation Growing disposable income and favourable demographics Affordability and convenience of aerosol spray paint Rising awareness of aerosol spray paint products A detailed discussion of our prospects is set out in the section entitled General Information on our Group Prospects and Trend Information of this Offer Document. BUSINESS STRATEGIES AND FUTURE PLANS Our business strategies and future plans are as follows: We intend to expand our production facilities and capabilities We intend to focus on research and development to increase our range of innovative products We intend to increase branding and marketing activities to strengthen our market position We intend to expand our business through acquisitions, joint ventures or strategic alliances A detailed discussion of our business strategies and future plans is set out in the section entitled General Information on our Group Business Strategies and Future Plans of this Offer Document. OUR CONTACT DETAILS Our registered office is at 80 Robinson Road #17-02, Singapore The telephone and facsimile numbers for our registered office are and , respectively. Our principal place of business is located at No. 4 Jalan Dato Yunus 1, Taman Perindustrian Dato Yunus Sulaiman, Lima Kedai, Skudai, Johor, Malaysia. The telephone and facsimile numbers for our principal place of business are and , respectively. Information contained in our website(s) or any website(s) directly or indirectly linked to our website(s) does not constitute part of this Offer Document and should not be relied upon. 30

39 OFFER DOCUMENT SUMMARY SUMMARY OF OUR FINANCIAL INFORMATION The following tables represent a summary of the financial highlights of our Group. The data presented in this table is derived from the Audited Combined Financial Statements, the Unaudited Interim Combined Financial Statements, the section entitled Selected Combined Financial Information and the financial statements and notes thereto which are included elsewhere in this Offer Document. You should read those sections and the section entitled Management s Discussion and Analysis of Financial Position and Results of Operations of this Offer Document for a further explanation of the financial data summarised here. Selected items from the combined statements of comprehensive income of our Group Audited Unaudited (RM 000) FY2014 FY2015 FY2016 1Q2016 1Q2017 Revenue 15,946 19,135 30,624 6,495 8,096 Gross profit 5,333 6,696 12,298 2,155 3,571 Profit before tax 1,878 2,395 6,760 1, Profit for the year/period 1,339 1,949 5, Pre-Placement EPS (sen) (1) Post-Placement EPS (sen) (2) Notes: (1) For comparative purposes, our pre-placement EPS for the Period Under Review have been computed based on profit for the year attributable to equity holders of the Company and our pre-placement share capital of 80,000,000 Shares. (2) For comparative purposes, our post-placement EPS for the Period Under Review have been computed based on profit for the year attributable to equity holders of our Company and our post-placement share capital of 100,000,000 Shares. Selected items from the combined statements of financial position of our Group (RM 000) Audited as at 31 March 2016 Unaudited as at 30 June 2016 Non-current assets 5,712 10,786 Current assets 22,513 21,828 Total assets 28,225 32,614 Non-current liabilities 1,804 6,170 Current liabilities 14,536 14,219 Total liabilities 16,340 20,389 Total equity 11,885 12,225 NAV per Share (sen) (1) Note: (1) NAV per Share have been computed based on the respective net assets as at 31 March 2016 and 30 June 2016 and our pre-placement share capital of 80,000,000 Shares. 31

40 OFFER DOCUMENT SUMMARY Selected items from the unaudited pro forma combined statements of comprehensive income of our Group (1) Unaudited RM 000 FY2016 1Q2017 Revenue 30,624 8,096 Gross profit 12,248 3,558 Profit before tax 6, Profit for the year/period 5, Pre-Placement EPS (sen) (2) Post-Placement EPS (sen) (3) Notes: (1) Please refer to the Unaudited Pro Forma Combined Financial Information for the basis of preparation of the pro forma combined financial information of our Group. (2) For comparative purposes, our pre-placement EPS for the Period Under Review have been computed based on profit for the year attributable to equity holders of our Company and our pre-placement share capital of 80,000,000 Shares. (3) For comparative purposes, our post-placement EPS for the Period Under Review have been computed based on profit for the year attributable to equity holders of our Company and our post-placement share capital of 100,000,000 Shares. Selected items from the unaudited pro forma combined statements of financial position of our Group (1) RM 000 Unaudited as at 31 March 2016 Unaudited as at 30 June 2016 Non-current assets 10,702 10,723 Current assets 21,818 21,556 Total assets 32,520 32,279 Non-current liabilities 6,367 6,170 Current liabilities 14,536 14,219 Total liabilities 20,903 20,389 Total equity 11,617 11,890 NAV per Share (sen) (2) Note: (1) Please refer to the Unaudited Pro Forma Combined Financial Information for the basis of preparation of the pro forma combined financial information of our Group. (2) NAV per share have been computed based on the respective net assets as at 31 March 2016 and 30 June 2016 and our pre-placement share capital of 80,000,000 Shares. 32

41 THE PLACEMENT Placement Size : 20,000,000 Placement Shares offered in Singapore, by way of the Placement. The Placement Shares, upon their allotment and issuance, will be free from all pre-emption rights, charges, liens and other encumbrances, and will rank pari passu in all respects with the existing issued Shares. Placement Price : S$0.20 for each Placement Share, payable in full on application. The Placement : The Placement comprises, an offering by the Placement Agent, on behalf of our Company, of the 20,000,000 Placement Shares at the Placement Price, subject to and on the terms and conditions of this Offer Document. Purpose of the Placement : Our Directors believe that the listing of our Company and the quotation of our Shares on Catalist will enhance our public image locally and overseas and enable us to raise funds from the capital markets for the expansion of our business operations. The Placement will also provide members of the public, our management, employees and business associates as well as those who have contributed to our success with an opportunity to participate in the equity of our Company. Listing Status : Prior to the Placement, there has been no public market for our Shares. Our Shares will be quoted on Catalist in Singapore dollars, subject to the admission of our Company to Catalist and permission for dealing in, and for the listing and quotation of, our Shares being granted by the SGX-ST. Risk Factors : Investing in our Shares involves risks which are described in the section entitled Risk Factors of this Offer Document. Use of Proceeds : Please refer to the section entitled Use of Proceeds and Listing Expenses. 33

42 PLACEMENT STATISTICS Placement Price S$0.20 (approximately 62.2 sen) (1) NAV NAV per Share based on the Unaudited Pro Forma Combined Financial Information as at 30 June 2016: (a) (b) before adjusting for the estimated net proceeds from the issue of the Placement Shares and based on our pre-placement share capital of 80,000,000 Shares after adjusting for the estimated net proceeds from the issue of the Placement Shares and based on our post-placement share capital of 100,000,000 Shares 14.9 sen 19.2 sen Premium of Placement Price over the NAV per Share based on the Unaudited Pro Forma Combined Financial Information as at 30 June 2016: (a) (b) EPS before adjusting for the estimated net proceeds from the Placement and based on our pre-placement share capital of 80,000,000 Shares after adjusting for the estimated net proceeds from the Placement and based on our post-placement share capital of 100,000,000 Shares 317.4% 224.0% Historical EPS based on the Unaudited Pro Forma Combined Financial Information for FY2016 and our pre-placement share capital of 80,000,000 Shares Historical EPS based on the Unaudited Pro Forma Combined Financial Information for FY2016 and our pre-placement share capital of 80,000,000 Shares, assuming that the Service Agreements had been in place from the beginning of FY sen 4.6 sen PER Historical PER based on the Placement Price and EPS which is based on the Unaudited Pro Forma Combined Financial Information for FY2016 Historical PER based on the Placement Price and EPS which is based on the Unaudited Pro Forma Combined Financial Information for FY2016, assuming that the Service Agreements had been in place from the beginning of FY times 13.5 times 34

43 PLACEMENT STATISTICS Net Cash Flow from Operations (2) Historical net cash flow from operations per Share based on the Unaudited Pro Forma Financial Information for FY2016 and our Company s pre-placement share capital of 80,000,000 Shares Historical net cash flow from operations per Share based on the Unaudited Pro Forma Financial Information for FY2016 and our Company s pre-placement share capital of 80,000,000 Shares, assuming that the Service Agreements had been in place from the beginning of FY sen 7.8 sen Price to Net Cash Flow from Operations Ratio Placement Price to net cash flow from operations per Share based on the Unaudited Pro Forma Financial Information for FY2016 and our pre-placement share capital of 80,000,000 Shares Placement Price to net cash flow from operations per Share based on the Unaudited Pro Forma Financial Information for FY2016 and our pre-placement share capital of 80,000,000 Shares, assuming that the Service Agreements had been in place from the beginning of FY times 8.0 times Market Capitalisation Market capitalisation based on the Placement Price and our post-placement share capital of 100,000,000 Shares S$20,000,000 Notes: (1) The Placement Price was translated based on the exchange rate of RM3.1080: S$1.00 as at the Latest Practicable Date. (2) Net cash flow from operations is defined as the net cash generated from operating activities of our Group for FY2016. Please refer to Appendix C Unaudited Pro Forma Combined Financial Information for the Financial Year Ended 31 March 2016 and the Three-Month Period Ended 30 June 2016 of this Offer Document for more details. 35

44 EXCHANGE RATE Ringgit Malaysia The exchange rate between RM and S$ as at the Latest Practicable Date is RM to S$1.00. The following table sets out the highest and lowest exchange rates between RM and S$ for each month of the six (6) calendar months prior to the Latest Practicable Date and the period commencing from 1 December 2016 up to the Latest Practicable Date. The table indicates the amount of RM required to purchase S$1.00. RM: S$1.00 Highest Lowest June July August September October November Period from 1 December 2016 to the Latest Practicable Date The following table below sets out, for each of the financial periods indicated, the average and closing exchange rates between RM and S$. The average exchange rate is calculated by using the average of the exchange rates on the last day of each month during each financial year/period. The table indicates the amount of RM required to purchase S$1.00. RM: S$1.00 Average (1) Closing (1) FY FY FY Q The above exchange rates have been presented solely for information purposes and should not be construed as representations that such RM amounts actually represent such Singapore Dollar amounts or could have been or could be converted into Singapore Dollar(s) at the rate indicated above, at any other rate, or at all, and vice versa. Note: (1) The above exchange rates have been extracted from information published by Bloomberg L.P.. Bloomberg L.P. has not consented, for the purposes of Section 249 of the SFA, to the inclusion of the information quoted in this section, and is therefore not liable for such information under Sections 253 and 254 of the SFA. While reasonable steps have been taken to ensure that the information attributed to Bloomberg L.P. is extracted accurately and has been reproduced in its proper form and context, none of the Company, the Sponsor, Issue Manager and Placement Agent or any other party has conducted an independent review of such information or verified the accuracy of the contents of the relevant information. 36

45 RISK FACTORS As investment in our Shares involves risks, you should carefully consider and evaluate each of the following risk factors (which are not intended to be exhaustive) and all other information contained in this Offer Document before deciding to invest in our Shares. Some of the following considerations relate principally to the industry in which we operate and our business in general. Other considerations relate principally to general social, economic, political and regulatory conditions, the securities market and ownership of our Shares, including possible future dilution in the value of our Shares. The following describes some of the significant risks known to us now that could directly or indirectly affect our Company and your investment in, or the value or trading price of, our Shares. The following does not state risks unknown to us now but which could occur in future and risks which we currently believe to be immaterial, which could turn out to be material. Should such risks occur or turn out to be material, they could materially and adversely affect our Business. You should also note that certain of the statements set forth below constitute forward-looking statements that involve risks and uncertainties. Please refer to the section entitled Cautionary Note Regarding Forward-Looking Statements of this Offer Document. If any of the following risk factors and uncertainties develops into actual events, our Business may be adversely affected. In such circumstances, the trading price of our Shares could decline and you may lose all or part of your investment. To the best of our Directors belief and knowledge, all the risk factors that are material to investors in making an informed judgement about our Group have been set out below. RISKS RELATING TO OUR BUSINESS Our business operations are affected by changes in existing and adoption of new Indonesian laws and regulations and/or changes in statutory interpretation of the Indonesian laws and regulations as well as possible inconsistencies between the various Indonesian laws and regulations and/or the corresponding interpretation Our business operations in Indonesia are regulated by the laws and regulations of Indonesia, including those relating to corporate, investment, marketing, import and trading, labour, environmental safety and taxation matters. The laws and regulations and their corresponding interpretations are sometimes ambiguous, especially in the absence of implementing regulations, which provide guidance on the implementation and application of the laws and regulations. Our operations may be adversely affected by the adoption of new laws and regulations or changes to, or changes in the interpretation or implementation of, existing laws and regulations which, in turn, could have a material and adverse effect on our Business. In particular, our business operations in Indonesia are conducted through our Indonesian subsidiary, PTSP. PTSP, as a PMA, is subject to oversight by the BKPM, an administrative government body overseeing foreign investment in Indonesia, as well as the Ministry of Law and Human Rights of Indonesia. The policies of government bodies such as the BKPM are subject to changes from time to time, depending on the then policies of the government of Indonesia. In the event that the policies of government bodies such as the BKPM change, our business operations may be materially and adversely affected. A change of policy may result in (i) us having to divest all or some of our shareholding interest in PTSP; and/or (ii) restrictions and changes in the scope of business operations which we may carry out as a PMA. Furthermore, the complexity and ambiguity of laws and regulations in Indonesia, as well as the corresponding guidelines, interpretations and policies may have an impact on our Business. In the past, we have carried out distribution activities in Indonesia without the correct business licence, and such distribution activities accounted for 19.1%, 24.6%, 36.8% and 40.8% of our total revenue for FY2014, FY2015, FY2016 and 1Q2017, respectively. This was in breach of the business licence then issued to us. Pursuant to Minister of Trade Regulation No. 22/M-DAG/PER/3/2016 concerning General Provisions on Distribution of Goods, distributors which do not comply with the obligation to have a licence as a distributor from the relevant authority are subject to gradual imposition of the following administrative sanctions: (a) written 37

46 RISK FACTORS warnings; (b) suspension of the business licence; and (c) revocation of the business licence. In addition, pursuant to Head of BKPM Regulation No. 17 of 2015 concerning Guidelines and Procedures for Capital Investment Implementation Control, BKPM may impose administrative sanctions on companies which have not implemented their investment plan in line with their investment licences, in the form of the following: (a) written warnings and/or online warnings; (b) limitation of the business activities; (c) suspension of the business activities and/or capital investment facilities; or (d) cancellation/revocation of the capital investment licences and/or business activities and/or investment facilities. As at the Latest Practicable Date, we have not received any written warnings in relation to the aforementioned. We have since applied for the correct business licence to carry out distribution activities, which was approved and issued by the BKPM pursuant to the Amendment to Business Licence No. 750/1/IU-PB/PMA/2016 dated 1 November 2016 and the Amendment to Business Licence No. 781/1/IU-PB/PMA/2016 dated 14 November We have, also in accordance with the requirements of such licence, rationalised our shareholding interest in PTSP at 67%. Notwithstanding the issue of the correct business licence by the BKPM and the provision of the indemnity by Mr Ong Yoke En, our Executive Director and CEO, to indemnify the Group against all losses arising from past breaches (please refer to the section entitled Interested Person Transactions Present and Ongoing Interested Person Transactions of this Offer Document for more details), we may be subjected to sanctions for our past breaches. Notwithstanding that Ali Budiardjo, Nugroho, Reksodiputro, the Legal Adviser to our Company as to Indonesian Law, has stated in its legal opinion that the above regulations do not provide for the imposition of criminal sanctions nor financial penalties for our past breaches, the sanctions we may be subjected to include written warnings and/or online warnings, limitation of the business activities, suspension of the business activities and/or capital investment facilities, or cancellation/revocation of the capital investment and/or business licences and/or business activities and/or investment facilities. In the event that we are subjected to sanctions, and depending on the severity of the sanctions, our Business in Indonesia may be materially and adversely affected. Please see the section titled General Information on Our Group Permits, Licences and Approvals of this Offer Document for more details. Further, as a PMA, we are subject to continuing reporting and compliance obligations in Indonesia vis-à-vis the BKPM, amongst others. Accordingly, we incur reporting and compliance costs on an annual basis. In the event of changes to laws and regulations and their corresponding interpretations as well as policies of our supervising government bodies, our costs of compliance may also increase. We may be liable for non-compliances with laws and regulations in Malaysia There have been certain non-compliances by us with the laws and regulations in Malaysia. These non-compliances pertain to, for example, the OSHA and the EA. By having 40 or more persons employed at the place of work, we have an obligation under Section 30(1)(a) of the OSHA to establish a safety and health committee at the place of work. Such safety and health committee shall consist of (a) a chairman, (b) a secretary, (c) representatives of the employer and (d) representatives of employees. In addition, where there are 100 persons or less employed at a place of work, there must not be less than two (2) representatives each from the employers and the employees. We are also required to comply with the requirements set out in the Occupational Safety and Health (Safety and Health Committee) Regulations 1996 including, among others, frequency of meetings of the committee, and the provision of training and information. We had not previously established a formal safety and health committee. The sanctions for such non-compliance include (i) a fine, upon conviction, not exceeding RM5,000; and/or (ii) imprisonment for a term not exceeding six (6) months, and are applicable to our Directors, managers, secretaries or other like officers. 38

47 RISK FACTORS We have not received any penalty notice issued by the DOSH in respect of non-compliance with the OSHA. Upon our awareness of such non-compliance sometime in April 2016, we have immediately established a formal safety and health committee. In addition, we have submitted a voluntary admission to the Director of DOSH Johor on 7 October 2016 and met with the officers from the DOSH in Johor on 1 November 2016 in relation to the non-compliance referred to above. Based on our discussion with the officers from the DOSH in Johor, we understand that the DOSH has, in its experience, exercised its powers to impose financial penalties on Malaysian companies that fail to establish a formal safety and health committee as required under Section 30(1)(a) of the OSHA, and has also initiated criminal proceedings against offenders in court. We were informed that the DOSH has the power to conduct random inspections on any Malaysian company. According to the officer from the DOSH, if a Malaysian company commits a breach of the OSHA, or any regulations, guidelines or orders issued under the OSHA or by the DOSH, a notice of improvement will first be issued to the Malaysian company requesting the offending company to rectify its breaches or non-compliance within the stipulated period. Failure to rectify the breach/non-compliance within the stipulated timeframe, and failure to rectify such breach or non-compliance to the satisfaction of the relevant officer from the DOSH will result in the DOSH taking enforcement actions against the Malaysian company in accordance with its powers as stated under the OSHA. Notwithstanding the above, we were made to understand that the DOSH will not take any enforcement actions against us, or our directors, managers, officers or secretaries for past breaches of Section 30(1) of the OSHA, provided that we have rectified the above breach and are now in compliance with Section 30(1)(a) of the OSHA. Even though we are now in compliance with the relevant regulations relating to the formal safety and health committee in Malaysia, the DOSH reserves the right to inspect our records. If the DOSH is not satisfied with our past records, we may be subject to the sanctions set out above which would in turn result in reputational damage, temporary loss of key personnel and damage to our future relationships and dealings with the DOSH, amongst others, all of which could materially and adversely affect our Business. Furthermore, the EA limits the extent of overtime work of an employee to 104 hours a month. As such, we must seek the prior approval of the Director General of Labour in Malaysia for an exemption if we require our employees who fall under the definition of employee under the EA to work in excess of 104 overtime hours a month. We had previously been in contravention of such requirement when three (3) employees of our Group had undertaken overtime work exceeding the stipulated overtime work limit of 104 hours a month for the period from January 2016 to March 2016 due to a lack of manpower and tight production deadlines. The sanction for such non-compliance of the EA is a fine, upon conviction, not exceeding RM10,000 per employee and per instance. We have not received any penalty notice from the Labour Department and we have since addressed such issue through (i) automation via the use of a fully automated aerosol can assembly line consisting of can-arranging, valve-sorting, rotary-crimping and gas-filling machinery as well as nozzle and cap pressers; (ii) work outsourcing via the use of sub-contractors; and (iii) establishment of internal controls systems in order for our human resource personnel to better monitor the number of hours of overtime each staff works per month. We have also submitted a voluntary admission to the Director of the Johor Labour Office, the Ministry of Human Resources on 7 October 2016 and met with the officer from the Johor Labour Office on 1 November 2016 in relation to the non-compliance referred to above. Based on our discussion with the officer from the Johor Labour Office, we understand that they have not received such voluntary admissions prior to our submission of our letter. We were informed that the Malaysia Labour Office has the right to 39

48 RISK FACTORS initiate an action against any Malaysian company for non-compliance with the EA if it is within the six (6)-year limitation period under the Limitation Act 1953 of Malaysia. We were also made to understand that the likelihood for the Malaysia Labour Office to take any action against us or our directors, managers, officers or secretaries against the above breach is low, provided that we have rectified the above breach and are now in compliance with the EA. However, notwithstanding that the foregoing measures have been taken, there is no assurance that we will be able to employ sufficient manpower to cope with production requirements during peak production periods. In such event and if our applications for exemptions are not approved by the Director General of Labour in Malaysia, or if approved, are not sufficiently meaningful, our production volumes may suffer as a result of insufficient manpower, and this may materially and adversely affect our Business. The Labour Department also has the right to inspect up to past six (6) years of our employees records. If the Labour Department is not satisfied with our past records, notwithstanding the provision of the indemnity by Mr Ong Yoke En, our Executive Director, to indemnify the Group against all losses arising from our past breaches (please refer to the section entitled Interested Person Transactions Present and Ongoing Interested Person Transactions of this Offer Document for more details), we may still be liable to fines or receive warnings which may lead to damage to our reputation. This may also affect our future applications for exemption with the Labour Department. For example, more restrictions and conditions may be imposed by the Labour Department for such applications and this will in turn affect our operations. For more details, please refer to Appendix E entitled Summary of Relevant Malaysian Laws and Regulations and Appendix J entitled Abridged Legal Opinion from Zaid Ibrahim & Co of this Offer Document. Our revenue and profitability may be adversely affected if our Malaysian subsidiary loses its manufacturing licences issued by the Ministry of International Trade and Industry, or if there are changes to the regulations or requirements in relation to foreign ownership in Malaysian companies As at the date of this Offer Document, our Malaysian subsidiary, OISB, has obtained manufacturing licences from the MITI. These manufacturing licences allow OISB to employ 75 or more persons. There is a risk that we may, in future, inadvertently breach the conditions of the manufacturing licences and lose such licences, in which case, we will be required to reduce the number of our employees hired by OISB to below 75 persons. In such instance, we may incur higher expenses due to increased outsourcing of our production work, or in the event of being unable to outsource our production work, we may face potential loss of sales. Please see the risk factor above entitled We may be liable for non-compliances with laws and regulations in Malaysia for more details in relation to our manpower constraints. In addition, there is a possibility that any future changes to existing guidelines issued by the MIDA and/or the MITI or the introduction of new regulations or requirements governing foreign ownership may affect our investment in OISB and consequently, we may be required to review the equity structure of OISB. Currently, OISB is our wholly-owned subsidiary. If the rules or requirements on foreign ownerships are revised, the MITI (or the relevant authority) may require us to reduce our shareholding in OISB. This may result in the loss of management and operations control and consequently affect the operations and profitability of our Group. For more details, please refer to Appendix J entitled Abridged Legal Opinion from Zaid Ibrahim & Co of this Offer Document. 40

49 RISK FACTORS We are subject to the availability and price fluctuations of direct materials and dependent on our major suppliers Our manufacturing processes consume significant amounts of direct materials, the costs of which are subject to supply and demand as well as other factors beyond our control. For the Period Under Review, direct material costs accounted for approximately 83.1%, 83.4%, 84.7% and 83.4% of our total costs of sales for FY2014, FY2015, FY2016 and 1Q2017, respectively. Further, we currently rely on a limited number of suppliers for our direct materials due to the quality of the direct materials that such suppliers supply to us and the terms on which the materials are supplied. For the Period Under Review, our major suppliers accounted for 63.6%, 68.6%, 67.3% and 64.6% of our total purchases for FY2014, FY2015, FY2016 and 1Q2017, respectively. These purchases comprised mainly aerosol cans, propellant, solvents, pigments and packaging materials. We have no long-term contracts with our suppliers and there is no assurance that our suppliers will continue to supply direct materials to our Group or supply our Group at prices that are acceptable to us or at all. We are therefore dependent upon the ongoing supply of a sufficient quantity and quality of direct materials at economically viable prices in order to continue our operations and produce finished products for our customers. There is no assurance that we can continue to secure adequate supplies of direct materials at economically viable levels to meet our production requirements, or will be able to pass on any material increase in the price of any direct materials to our customers. Any disruption in the supply of direct materials or any unfavourable terms offered by our suppliers will adversely affect our ability to sell our products in sufficient quantities to meet customers demand or to maintain price competitiveness of our products. In the event that our major suppliers are not able to continue their supplies to us or ensure prompt delivery of supplies to us, and if we are not able to source for sufficient alternative supplies in a timely manner or at comparable commercial terms, this will delay our ability to meet our customers demand for our products. Consequently, this may materially and adversely affect our Business. Please refer to the section entitled General Information on our Group Major Suppliers of this Offer Document for more details. Our intellectual property may not be sufficiently protected, which could in turn impede our efforts to build brand identity and our ability to compete effectively Pursuant to the Restructuring Exercise, we acquired OISB, including the trademarks owned by OISB and the patents and industrial designs assigned to OISB from Mr Ong Yoke En pursuant to the deed of assignment of intellectual property rights (please see the section entitled Restructuring Exercise of this Offer Document for more details). Our intellectual property portfolio comprises trademarks, patents and industrial designs (some of which are registered and others, the relevant applications pending. Please see the section entitled General Information on our Group Intellectual Property Rights of this Offer Document for more details) with respect to the designs of our aerosol paint packaging and canisters and the technology of our canisters. We have filed intellectual property applications with the respective intellectual property offices in various jurisdictions seeking registration of certain trademarks, industrial designs and grant of certain patents (both invention and innovation patents). There is no assurance that our applications will be successful or that we will be able to secure significant protection for our intellectual properties in countries where we conduct our business operations or elsewhere as we expand internationally. In particular, we have not been successful in obtaining trademark protection of our Samurai brand in certain jurisdictions such as Indonesia, Vietnam and Thailand as our Samurai trademark was deemed by the relevant intellectual property offices in these jurisdictions to be similar to existing registered trademarks in those jurisdictions, and our applications for patent protection in respect of our Group s single head 2K system and dual head 2K system are still pending in our Group s primary markets of Malaysia and Indonesia. If we fail 41

50 RISK FACTORS to obtain registration for our intellectual properties, we may have fewer recourse and remedies to protect our brand and technologies against third-party infringement which may have a material and adverse effect on our Group s competitive position. We may also be subject to infringement claims by third parties challenging our rights to use the aforementioned systems, which in turn, and if successful, would materially and adversely affect our Business in our primary markets due to our inability to use such systems and the impending loss of revenue and bad publicity. In addition, even if such claims are not successful, we may incur substantial expenses and suffer bad publicity from defending such claims, which would materially and adversely affect our Business. The success of our Business is materially dependent on the effective protection of our intellectual property rights, and the inability to do so may compromise the growth of our Business. While we have a few registered intellectual property rights in our intellectual property portfolio, such as registered trademarks and industrial designs, there can be no assurance that such registration will provide adequate protection and remedies if our intellectual property rights are infringed upon. Third parties could in the future bring infringement, invalidity, re-examination, opposition or similar claims with respect to any of our current registered intellectual property rights or any intellectual property rights that we may seek to register in the future. For instance, under Malaysian law, common law rights attached to unregistered trademarks may result in such unregistered trademarks enjoying priority over trademarks belonging to our Group. Further, in relation to our trademarks, our competitors or others could adopt marks similar to our trademarks, or try to prevent us from using our trademarks, thereby impeding our ability to build brand identity and possibly leading to customer confusion and a loss of sales. Some of our intellectual property rights are registered and/or undergoing the registration process in multiple jurisdictions (such as Singapore, Vietnam, Philippines, USA, Cambodia, Myanmar, Laos, Bangladesh, Europe, PRC and the United Kingdom) where the Group has yet to have significant operations. There are hence potential risks of infringement by the Group of third-party intellectual property rights and/or infringement of our Group s intellectual property rights by third-parties especially in light of our non-presence in such jurisdictions. Notwithstanding that to date, save as disclosed in the section entitled General and Statutory Information Information on Directors and Executive Officers of this Offer Document, we are not aware of any infringement by us of third-party intellectual property rights and we have not been involved in any infringement claims against third parties, there is no assurance that such claims would not arise in the future. Further, notwithstanding that Mr Ong Yoke En has agreed to indemnify OISB against all actions, claims, proceedings, costs and damages, and all legal costs or other expenses arising out of, amongst others, any claim by any third party which if substantial would constitute a breach of warranties in the deed of assignment of intellectual property rights (please see the section entitled Restructuring Exercise of this Offer Document for more details), in the event that any third party makes a claim against us, whether with or without merit, we will be required to incur expenses (which may be substantial) in defending the claim against us, and failing which, we will have to discontinue the use of certain process technologies or trademarks and/or pay substantial monetary damages. This will materially and adversely affect our Business. In addition, while trademark registrations may typically be renewed indefinitely, we may fail to make timely renewals of our trademark registrations and thus lose our trademark registration. Similarly, as patents are non-renewable, and industrial designs are renewable only up to a maximum limit,our competitors may be able to legally produce and market products similar to ours after the expiry of our intellectual property rights, resulting in a loss of competitive advantage. Such circumstances may have a material and adverse effect on our Business. 42

51 RISK FACTORS We are dependent on our major customers A significant percentage of our revenue is derived from a limited number of customers, in particular, our largest customer, Bun Seng Hardware Sdn Bhd, accounted for 20.3%, 19.6%, 16.7% and 12.7% for FY2014, FY2015, FY2016 and 1Q2017, respectively. We may not able to maintain our relationships with our major customers. If we are unsuccessful in maintaining strong relationships with our major customers, or if our major customers do not place orders for our products at the current levels and we are unable to source for alternative customers or distributors to place orders for our products at the current levels, this may materially and adversely affect our Business. Please refer to the section entitled General Information on our Group Major Customers of this Offer Document for more details. We rely on our distribution network and third-party delivery services for the distribution and export of our products. A significant portion of our Group s operations is subject to disruptions in transportation and logistics Our Group depends on freight and transportation services provided in part by external service providers for delivery of our products to our customers. All of our products are exported to our customers via Pasir Gudang Port and Tanjung Pelepas Port in Johor, Malaysia. We bear the risks and transportation costs associated with the delivery of our products to our customers. As such, disruption of the port services and/or transportation services to and from the port arising from factors such as unfavourable weather conditions, labour unrest, significant downtime arising from major and unexpected repairs or other events could impair our Group s ability to supply our products to our customers on time. Failure to supply or delay in supplying our products to our customers may materially and adversely affect our reputation and our customers may lose confidence in our ability to deliver our products in a timely manner. In the long term, this may materially and adversely affect the demand for our products and our Business. We may not be adequately insured against operational risks and claims against us We have safety policies and measures in place to mitigate and reduce industrial accidents. Nonetheless, casualties or accidents may occur. As such, we have taken up insurance to cover our operational risks, which include coverage for our technicians and key equipment. However, our insurance cannot cover us against all the risks that we may face. For instance, we have limited insurance coverage relating to natural disasters or acts of God. Also, our insurance may not cover the loss of key personnel, business interruption and third party claims for environmental disaster, property damage, personal injury and environmental liabilities. Thus, our Business will be materially and adversely affected if our losses and liabilities are not covered by insurance. Even if covered, our losses and liabilities may be substantial and may not be adequately satisfied by the insurance pay-out. Our Business will then be materially and adversely affected. In addition, we face the risk of loss resulting from product liability, securities, fiduciary liability, intellectual property, antitrust, contractual, warranty, environmental, fraud and other lawsuits, whether or not such claims are valid. Our product liability, fiduciary liability, directors and officers, property, natural catastrophe and comprehensive general liability insurance may not be adequate to cover such claims. Our insurance costs can be volatile and, at any time, can increase given changes in market supply and demand. We may not be able to obtain adequate insurance coverage in the future at acceptable costs. A successful claim that exceeds or is not covered by our policies could require us to pay substantial sums. In addition, we may not be able to obtain adequate insurance coverage for certain risks such as political risk, terrorism or war. 43

52 RISK FACTORS Lastly, insurance premiums may increase if we make claims on our policies or if laws, regulations and customer requirements become more complex. This will lead to increased costs. Our insurance coverage will also be lost if we are unable to pay the increased premiums. These events will materially and adversely affect our Business. Please refer to the section entitled General Information on our Group Insurance of this Offer Document for more details. We may be materially and adversely affected if we face any disruptions to the supply of electricity, water, diesel, auxiliary materials, equipment and spare parts due to breakout of fire, energy crisis and/or other unforeseen external factors We may face disruptions to our operations due to unforeseen external circumstances such as natural disasters, acts of God, a fire breakout, energy crisis, flooding, civil commotion, and other calamities or events beyond our control. For instance, such unforeseen external circumstances may damage or destroy our buildings, facilities and machinery or cause an increase in electricity prices which would disrupt our business operations and progress, and adversely affect our Business. We currently carry out all our production activities at our production facilities located in Johor, Malaysia. Accidental fires may arise from the concentration of manufacturing facilities within limited areas of factory space or the usage and/or storage of highly flammable substances in our production processes. For instance, in May 2016, a small fire broke out at our production facilities in Johor due to an electrical fault. Notwithstanding that this fire was quickly extinguished by our on-site staff with on-site portable fire extinguishers and there were no material disruptions to our operations, there is no assurance that any future accidental fires would not result in material disruptions to our operations. In the event that any such future accidental fires result in material disruptions to our production and operations, our Business would be materially and adversely affected. Our activities also depend heavily on the availability of electricity, water, diesel, auxiliary materials, equipment and spare parts. An energy crisis, where the supplies of these resources and materials may be interrupted, may materially and adversely affect our Business as the prices for such resources and materials may increase and we may be unable to promptly find suitable suppliers or obtain alternative supplies at prices acceptable to us. An energy crisis could arise as a result of severe damage to power networks in the area where our Group carries out its production activities or due to local or global geo-political events resulting in shortages in the supply of power. Any interruption in electricity supply due to a breakdown of our generators, a breakout of fire, and energy crisis or for any other reason will disrupt our operations and materially and adversely affect our Group s production and operations. We are exposed to foreign exchange risks Our direct material purchases are at times denominated in US$, while our revenue is predominantly denominated in RM and IDR. To the extent that our revenue stream and our costs of sales are not naturally matched in the same currency, we will have a net foreign exchange exposure and will be exposed to any adverse fluctuation in currency exchange rates between the times of our purchases and payments and our sales and receipts denominated in foreign currencies. Overall net foreign exchange gain or loss will be determined by the extent of the impact on our revenue and total costs of sales as well as translations of foreign currency monetary assets and liabilities as at the end of the reporting period arising from the fluctuation of foreign currencies against the respective functional currencies of our subsidiaries. 44

53 RISK FACTORS Given that the reporting currency of our Group s financial statements is in RM, in order to prepare our combined financial statements, we translate our subsidiaries financial statements from the local currencies to RM based on the average exchange rates prevailing over the relevant period of the income statement and based on the closing exchange rates for the balance sheet. Fluctuations in exchange rates may materially and adversely affect our financial performance and financial condition. We do not currently have any formal policy for hedging against foreign exchange exposure. We will continue to monitor our foreign exchange exposure and may employ forward currency contracts to manage our foreign exchange exposure should the need arise. Prior to implementing any formal hedging policies, we will seek the approval of our Board on the policy and put in place adequate procedures which shall be reviewed and approved by our Audit Committee. Thereafter, all hedging transactions entered into by us will be in accordance with the approved policies and procedures. If we fail to maintain our product quality, our business, brand and reputation could be materially and adversely affected We have established a strong reputation for the quality of our range of motorcycle-related products including aerosol paints, two-wheeler cosmetics and two-wheeler maintenance products. Our continued success is dependent upon our marketing strategies and ability to maintain brand image for our existing products and effectively establish a brand image for new products and brand extensions. We believe in preserving and growing the value of our brand in order to be successful in the future. However, brand image is based in part on consumer perceptions. Isolated business incidents may erode consumer trust and in turn affect our brand and reputation, particularly if they receive considerable publicity or result in litigation. Other factors such as poor quality control and low consumer acceptance could adversely affect our brand image. If we fail to maintain high standards of product quality, our reputation could be damaged. Damage to our reputation and brand image may materially and adversely affect our Business, and require further financial resources to rebuild our reputation. We may not be able to compete effectively against our competitors if we fail to develop and market new products and services and manage product life cycles We operate in a competitive industry and we expect to face more intense competition from existing competitors and new market entrants in the future. Some of these competitors may have larger business operations and greater financial resources than our Group. Competitive factors include technical expertise, customer service, pricing and geographical presence. To compete successfully, we need to continually develop innovative solutions and adopt competitive pricing in order to attract buyers for our products. Our operating results are largely dependent on our development and management of our portfolio of current, new and developing products and services, and our ability to innovate and bring these products and services to market, which includes maintaining a robust pipeline of new products and improving the effectiveness of product packaging and marketing efforts. We plan to grow our business by continually investing our resources in research and development to develop new technology and processes to ensure our existing and new products meet the constantly evolving industry standards and customers expectations. Our ability to execute this strategy and our other growth plans, the details of which are set out in the section entitled General Information on Our Group Business Strategies and Future Plans of this Offer Document, successfully could be materially adversely affected by difficulties or delays in product development, such as our inability to (i) identify viable new products; (ii) successfully complete research and development; (iii) obtain relevant regulatory approvals; (iv) effectively manage our manufacturing processes or costs; (v) obtain intellectual 45

54 RISK FACTORS property protection; or (vi) gain market acceptance of new products and services. Due to the lengthy and potentially costly development process, technological challenges and intense competition, there is no assurance that any of the products we are currently developing or that we may develop in the future will achieve commercial success, or that we will be able to otherwise remain competitive. In addition, while we devote significant resources to promoting our brands and new product launches, there can be no assurance as to our continued ability to develop and launch successful new products or to effectively execute our marketing programmes. Any failure on our part to implement effective sales policies that respond to market trends and technological innovations, achieve appropriate innovation, or successfully launch new products could decrease demand for our products by adversely affecting consumer perception of our brands, as well as result in inventory write-offs and other costs. In the event that we are unable to develop commercially successful products or compete successfully against our competitors, this will materially and adversely affect our Business. We may need further financing for our existing business and future growth We may require more funding for capital investment, payment of operating costs and future expansion plans. Although we have identified our future growth plans as set out in the section entitled General Information on our Group Business Strategies and Future Plans of this Offer Document, as the avenues to pursue growth in our business, the net proceeds from the Placement may not be sufficient to fully cover the estimated costs of implementing all these plans. We intend to expand our manufacturing facilities. The actual cost of expansion may differ from our budgeted estimates. We may need to raise more funds if the actual costs of implementing our plans significantly exceed our budgeted estimates. We may also need more funds to tap into new and unforeseen growth opportunities. Failure to secure adequate financing may adversely affect our Business and growth prospects. If more funds are required, we will consider issuing new equity or debt instruments or borrowing from the banks. If new Shares placed to new and/or existing Shareholders are issued after the Placement, existing Shareholders equity interest may be diluted. In addition, such new Shares may be priced at a discount to the then prevailing market price of our Shares on Catalist, which may result in a decrease in our Share price subsequent to such issuance of Shares. Furthermore, any additional debt financing which we may undertake to raise the funds required to develop these growth opportunities may, apart from increasing interest expense and gearing, contain restrictive covenants with respect to dividends, future fund raising exercises and other financial and operational matters. For example, we may require lenders consent for certain corporate actions such as declaration of dividends. In the course of our business and operations, we had inadvertently breached certain bank covenants, which, in particular, required us to obtain prior written consent from RHB Bank Berhad before obtaining any other bank borrowings. As at the date of this Offer Document, we have obtained waivers from RHB Bank Berhad regarding the aforementioned breach and we continue to maintain good relationships with our financiers. In addition, we may not be able to obtain additional financing on favourable and acceptable terms. If we are unable to procure the additional funding that may be required, our growth prospects and/or Business may be materially and adversely affected. 46

55 RISK FACTORS Our future growth will depend on our ability to manage our expansion plans The growth strategies of our Group include the expansion of our production facilities and capabilities, research and development to increase our range of innovative products, increased branding and marketing activities to strengthen our market position, and expansion of our business through acquisitions, joint ventures or strategic alliances. Please see the section entitled General Information on Our Group Business Strategies and Future Plans of this Offer Document for more details. The implementation of these strategies involves risks and uncertainties and may not be successful. Success depends on, amongst others, the presence of favourable economic conditions, approvals from the authorities, and our ability to raise sufficient funding and attract the requisite professionals to support our growth. Please see the risk factor entitled Risks relating to our Business We may need further financing for our existing business and future growth for more details. We may lose any initial investment made by us if our plans subsequently generate lower than expected revenue, incur higher than expected costs, are delayed or aborted, or lack the requisite funding or manpower to be successfully implemented. This will materially and adversely affect our Business. Our products may lose commercial appeal if consumption preference shifts Our Business is susceptible to changes in consumer preferences. In order to generate revenue and profits, we must have product offerings that appeal to consumers. Although we strive to effectively monitor changes in demand for our products, there is no assurance that we will develop new products that appeal to consumers. Any significant changes in consumer preferences or any inability on our part to anticipate or react to such changes could result in reduced demand for our products and erosion of our competitiveness, and impact our operating results and financial position. With regard to product supply, while we make predictions for consumer demand and design plans related to supply and demand based on such factors as consumer preferences, there is a possibility that we will not be able to appropriately respond to demand in the event that it exceeds our Group s estimations. In such an event, our Group would lose opportunities for sales if our customers lose confidence in our ability to react quickly to market changes, and our Group s brand image would also be adversely affected. There is also a possibility that demand for our Group s products would decrease. Such circumstances could materially and adversely affect our Group s Business. Our operations involve hazardous materials and we must comply with environmental laws and regulations which can be expensive Our research and development and manufacturing activities involve the use of controlled hazardous materials. Our business operations may produce hazardous waste products. As such, we are required to comply with a variety of environmental regulations that control, for instance, the handling, use, storage and disposal of such hazardous waste materials. We are unable to eliminate the risk of accident or injury from these waste products. In the event of an accident, or contamination or non-compliance with environmental laws, we would incur significant costs such as criminal or civil penalties. Compliance with environmental law is costly and current or future environmental laws may hinder our innovation, research and development efforts. We may be required under environmental laws to conduct investigation, clean up and monitor the environmental contamination found at our 47

56 RISK FACTORS production sites. The licences and approvals upon which we depend for our business operations may be revoked or may not be renewed if we are found to have violated any environmental laws. The materialisation of such risks may materially and adversely affect our Business. We may not operate efficiently and effectively if we lose key personnel or if we cannot attract and retain skilled workers We depend substantially on our key personnel and skilled workers to manage our strategy and operations. We have an experienced management team, in particular Mr Ong Yoke En, our Executive Director and CEO and Ms Lim Lay Yong, our Executive Director and COO. They possess the relevant experience in their respective areas of expertise to oversee our strategic growth and to manage our day-to-day operations. Each of Mr Ong Yoke En and Ms Lim Lay Yong has entered into service agreements with our Company for initial terms of three years. Notwithstanding this, we face keen competition in the recruitment and retention of these key personnel. Losing the services of any of our key personnel without suitable timely replacements may materially and adversely affect our Business. Similarly, our growing business and operations may require more skilled workers and professional staff in the areas of paint production, operations, engineering, finance and accounting. Competition for these skilled workers and professional staff is intense. There are similar businesses in the industry which also require such skilled workers and professionals and which possess greater resources and ability to attract them. A shortage of labour may increase labour costs. In the event that such cost incentives are not passed on to our customers, this may materially and adversely affect our Business. Our ability to pursue future projects may also be restricted by our inability to recruit, train and retain the requisite number of skilled workers and professional staff. This may also materially and adversely affect our Business, growth and competitiveness. We have geographically diverse operations and face jurisdiction-specific risks We currently operate primarily in two (2) countries, namely Malaysia and Indonesia. We expect to expand into other countries in the future. Different countries have different political, economic and legal systems. These differences expose our multi-jurisdictional operations to regulatory, economic and investment risks. We may face difficulties in enforcing agreements, difficulties in protecting intellectual property, rising labour costs, disruptions in infrastructure, difficulties in staffing and managing our operations and difficulties in complying with foreign and international laws, treaties and policies. These factors introduce uncertainty and risk into our Business. We are exposed to the credit risks of our customers We may extend credit terms to our customers ranging from 30 days to 90 days on a case-by-case basis depending on, amongst others, their credit worthiness and the length of the customer relationship. On a selected basis, we may extend longer credit terms of up to 180 days to selected distributors for marketing reasons, such as promoting certain products and/or expanding into new geographical locations. Our average trade receivables turnover days for each of FY2014, FY2015, FY2016 and 1Q2017 were 40, 37, 44 and 53, respectively. We have also experienced write-offs and doubtful debts. The impairment losses on trade receivables written off in each of FY2014, FY2015, FY2016 and 1Q2017 were approximately RM6,000, RM3,000, RM12,000 and nil, respectively. Please refer to the section entitled General Information on our Group Credit Management of this Offer Document for more details. 48

57 RISK FACTORS Our customers may be unable to meet their contractual payment obligations to us, whether in a timely manner or at all. In addition, our customers may cancel their orders. The reasons for payment delays, cancellations or defaults by our customers may include, amongst others, insolvency, bankruptcy or insufficient financing or working capital due to late payments by their respective end customers. We may not be able to successfully enforce our contractual rights to payment through legal proceedings. In the event that we are not able to collect payments from our customers, this may materially and adversely affect our Business. Our business may be adversely affected by recent developments in the global markets Since the global economic downturn in late 2008, there have been negative developments in the global financial markets including the downgrading by major international credit rating agencies of sovereign debts issued by some of the European Union member countries and the difficult conditions in the global credit and capital markets. These challenging market conditions have given rise to reduced liquidity, greater volatility, widening of credit spreads, lack of price transparency in credit markets, a reduction in available financing, government intervention and lack of market confidence. These factors, combined with declining business and consumer confidence, have resulted in global economic uncertainties. It is difficult to predict how long these developments will last. Further, there is no assurance that measures implemented by governments around the world to stabilise the credit and capital markets will improve market confidence and the overall credit environment and economy. A global economic downturn could adversely affect our ability to obtain short-term and long-term financing. It could also result in an increase in the cost of our bank borrowings and reduction in the amount of banking facilities currently available to us. The inability of our Group to access capital efficiently, on time, or at all, as a result of global economic downturns, may materially and adversely affect our Business. Any deterioration in the global economy could in turn materially and adversely affect the health of the local economies in which we operate and in turn, materially and adversely affect our Business. In the event that the global economic conditions do not improve or any recovery is halted or reversed, this may materially and adversely affect our Business. In addition, recent developments and changes in the political landscape in USA following the USA presidential elections in November 2016 may affect our expansion plans into USA market. These political changes in USA may result in social and/or political instability which may materially and adversely affect the economic and social conditions in USA, and accordingly, our Business and future plans. For more details on our future plans, please refer to the section entitled Business Strategies and Future Plans We intend to increase branding and marketing activities to strengthen our market position of this Offer Document. Terrorist activities in the ASEAN region could destabilise the affected countries Our Group operates mainly in the ASEAN region, in particular, Malaysia and Indonesia. Terrorist activities in the ASEAN region could destabilise the affected countries and increase internal divisions within the relevant governments while they evaluate the possible responses to that instability and unrest. Violent acts arising from, and leading to, instability and unrest have in the past had, and may continue to have, a material adverse effect on the confidence level and/or performance of, the affected country s economy. In the event that the countries that we operate in, such as Malaysia and Indonesia, are affected by terrorist activities, this may in turn materially and adversely affect our Business. 49

58 RISK FACTORS RISKS RELATING TO OUR OPERATIONS IN MALAYSIA Our operations are affected by the changes in existing, and the adoption of new Malaysian laws and regulations and/or the changes in interpretation of the Malaysian laws and regulations as well as possible inconsistencies between the various Malaysian laws and regulations and/or the corresponding interpretation Our operations in Malaysia are regulated by the laws and regulations of Malaysia, including those relating to the corporate, investment, marketing, labour, environmental protection, occupational health and safety, processing and trading of paints, waste treatment, operation management and taxation matters. The legal and regulatory regimes in Malaysia may be uncertain and subject to unforeseen changes. At times, the interpretation or application of laws and regulations in Malaysia may be unclear. Government policies, regulations and guidelines issued and imposed by the relevant authorities may change from time to time. We may have to incur significant capital and maintenance expenditures to comply with laws and regulations. The failure to discharge our obligations could result in the imposition of fines and penalties, damage to our reputation, delays in production or the temporary or permanent closure of our operations. In addition, existing laws, regulations or policies may become stricter or more strictly enforced. Our operations and business may face investigation, scrutiny or evaluation. The adoption of new laws and regulations or any modification to the existing laws and regulations may result in additional expenses to comply with the new laws. Examples of new laws introduced include the Goods and Services Tax Act 2014, which came into force on 1 April There is no assurance that the implementation of the goods and services tax in Malaysia will not materially and adversely affect our Business. In addition, the Companies Act 2016 of Malaysia has been gazetted in Malaysia and will replace the current Companies Act 1965 of Malaysia once the Companies Act 2016 of Malaysia comes into force. While we have compliance procedures in place to ensure compliance with new legislations and every effort is taken to ensure the requirements of new legislations are met, there is no certainty on the approach which will be taken by the relevant regulators, and we may incur additional compliance costs with the introduction of new or amended regulations. We have no control over such conditions and developments and there can be no assurance that such conditions and developments will not have a material adverse effect on our Business. As a result, we may face new liabilities, reduced operating hours, additional investment requirements in pollution control equipment, or delays in the opening or expansion of operations. We may also be compelled to conduct preventive or remedial actions. These may result in increased costs. Such costs, liabilities or disruptions in operations may materially and adversely affect our Business. Further, the Price Control Act, came into force on 1 April 2011 to (i) control prices of goods and charges for services; (ii) prohibit profiteering; and (iii) provide for matters connected therewith or incidental thereto. Pursuant to Section 4 of the Price Control Act, the price controller appointed under the Price Control Act may, with the approval of the Minister of Domestic Trade and Consumer Affairs, by order published in the Malaysian gazette, determine the maximum, minimum or fixed price for manufacturing, producing, wholesaling or retailing of any goods, any particular class or classes of goods and any unit or quantity of any goods, which may include charges for any service in relation to the supply, delivery, repair, maintenance, packing, carriage or storage of such goods. While the existing orders published pursuant to the Price Control Act do not affect our Business currently, there may be changes in the future. This may materially and adversely affect our Business. 50

59 RISK FACTORS We are subject to the political, economic and social conditions in Malaysia Our business is operated in Malaysia and is therefore sensitive to the social, economic, political and legal conditions in Malaysia. Developments in Malaysia such as changes in Malaysian government policies, currency and interest rates, inflation, capital restrictions, price and wage controls, unemployment rate, taxes and duties will materially and adversely affect our Business. We have no control over such conditions and developments and there is no assurance that such conditions and developments will not occur. These changes, if they occur, will materially and adversely affect our Malaysian business and operations and thus our Group s Business. We are subject to regulations governing foreign workers Our Group s operations are based primarily in Malaysia. Due to the nature of our business, we require substantial manual labour, and due to the shortage of domestic labour in Malaysia, we expect to continue to rely on foreign workers for our operations. As at the Latest Practicable Date, our Group employs 152 workers (including 140 full-time employees), 51 of which are foreign workers. Such foreign workers are regulated by the Malaysian government authorities which set a limit to the number of foreign workers which we may hire and also impose levies on each foreign worker hired by our Group. Hence, any changes in governmental policies to lower the limit of the number of foreign workers permissible to be employed by our Group or an increase in levy may materially and adversely affect our Business. Additionally, any changes in the policies of foreign workers countries of origin may affect the supply of foreign labour and cause disruptions to our business operations. Any increase in competition for foreign workers may also increase labour costs. In the event that the number of foreign workers that we can employ is reduced and/or the cost of our labour increases, this will materially and adversely affect our Business. We are subject to the foreign exchange legislation and regulations in Malaysia Local and foreign investors are subject to foreign exchange administration rules in Malaysia. The FSA and the IFSA govern the foreign exchange control framework in Malaysia. Under the FSA and the IFSA, BNM, has issued ECM Notices. These ECM Notices embody Bank Negara s general permissions and directions. They set out the circumstances in which residents and non-residents must seek the specific approval of the Foreign Exchange Administration Department (within Bank Negara) to remit funds to and from Malaysia. The ECM Notices are reviewed regularly according to changing circumstances. As at the Latest Practicable Date, foreign investors are free to repatriate divestment proceeds, profits, dividends, or any income arising from investments in Malaysia. However, the repatriation of funds may be restricted in the future. This will limit our ability to extract the profits from our Malaysian business operations. In addition, our Malaysian subsidiaries may be subject to restrictions on the borrowing of foreign currency or from non-residents, which may affect our ability to raise funds in the future should the need arise. Please refer to the section entitled Exchange Controls of this Offer Document for more details. The relevant rules and regulations on foreign exchange control in Malaysia may change. If there is any adverse change in the foreign exchange rules and regulations relating to the borrowing or repatriation of foreign currency, our Business may be materially and adversely affected. 51

60 RISK FACTORS We may be subject to costs and risks associated with the monitoring, rehabilitation and compliance with environmental laws and regulations We are subject to environmental laws and regulations ( Environmental Rules ). These require us to protect the environment. We may be required to submit environmental assessment reports and environmental management plans. We may also have to comply with environmental monitoring requirements. These requirements will increase our costs. They may also delay our activities, depending on what is permitted and how the requirements are interpreted and implemented by the authorities. In particular, we are required to conduct an environmental impact assessment and to submit a report thereof to the Director General of Environmental Quality. The costs and delays caused by compliance with Environmental Rules may materially and adversely affect our Business. As set out in the section entitled General Information on our Group Business Strategies and Future Plans of this Offer Document, we plan to expand our manufacturing facilities. As the size of our operations grows, we may be subject to further regulations and/or requirements which may lead to further increased costs and and/or delays to our business activities or operations which may materially and adversely affect our Business. In addition, economic development and improvements in living standards may increase awareness of environmental protection. Thus Environmental Rules may become more stringent and/or more stringently enforced. If so, we may not be able to comply with these Environmental Rules, economically or at all. We may be subject to penalties and liabilities under the Environmental Rules. These include warnings, fines, prosecution, suspension of production and closure of our operations. We may also face litigation brought by environment protection groups or other interested persons. These events may delay or halt production and create negative publicity related to our Business, which in turn will materially and adversely affect our Business. We face regulations and risks in relation to environmental hazards, production safety and the occurrence of accidents We handle and store dangerous chemicals and articles and use heavy machinery in our spray paint production operations. Thus, we are subject to the Occupational Safety and Health Rules. The Occupational Safety and Health Rules may become more stringent or more stringently enforced. If so, we may not be able to comply with these Occupational Safety and Health Rules, economically or at all, within the relevant prescribed periods. This may increase our costs of production. Our operations may be suspended. We may even be found guilty of criminal offences and penalised with fines and/or imprisonment. Accidents and technical difficulties may happen. Such incidents may injure people or damage property. Our business and operations may be disrupted or suspended. If such incidents breach the conditions of our licences, permits and approvals, then our licences, permits and approvals may be revoked. Our production costs may be increased. Our reputation and financial condition may suffer. We may even be subject to litigation and regulatory investigations, which may in turn result in civil and criminal liabilities and penalties. Our insurance or workmen s compensation policies may not cover, sufficiently or at all, the claims for compensation. Our insurance claims may even be contested by the insurers. If so, we will have to pay such compensation. These will materially and adversely affect our Business. 52

61 RISK FACTORS RISKS RELATING TO OUR OPERATIONS IN INDONESIA Our operations may be adversely affected by political and social instability in Indonesia The collapse of the regime of President Soeharto in 1998 has caused a major democratic change in Indonesia and has led to several political and social events that demonstrated the unpredictable nature of the Indonesian political landscape. Political instability, social and civil unrest still remain in current day Indonesia. Since 2000, there were multiple instances of demonstrations in Jakarta and other Indonesian cities both for and against the former and current Presidents of the country, in response to specific issues such as anti-corruption measures, decentralisation and fuel subsidy reductions. For example, demonstrations and strikes took place across at least 19 cities in June 2001 after the Indonesian government mandated a 30.0% increase in fuel prices. Demonstrations of similar scale took place later again in January 2003 and March 2005 when the Indonesian government effected a price increase in fuels. In May 2008, the Indonesian government decreased fuel subsidies and the public responded with public demonstrations. While most demonstrations are peaceful in general, there were instances where demonstrations turned violent. There is no assurance that political and social instability will not occur in the future should further sources of discontentment arise. Political and related social developments in Indonesia have in the past been unpredictable. Social and civil disturbances could, directly or indirectly, materially and adversely affect our Business. Regional or global economic changes and crises may materially and adversely affect the Indonesian economy and our business In the past, the Indonesian economy has been susceptible to global economic crises. For example, Indonesia experienced currency depreciation, significant drop in real gross domestic product, high interest rates, social unrest and extraordinary political developments during the Southeast Asian economic crisis in These conditions had a material adverse effect on many Indonesian companies, who were unable to repay their debts on demand. In 2008, Indonesia s economy was again affected by the crisis in the global financial markets originating from the liquidity shortfall in the US credit and sub-prime residential mortgage markets. Many institutions experienced liquidity problems and the Indonesian government had to respond with major government bailout packages for banks and other institutes. As a result of the 2008 crisis, there was a decline in the value of global stock markets, a slowdown in global economy growth and reduction in foreign direct investments. In recent years, the European sovereign debt crisis and the US budget crisis have both resulted in significant global economic uncertainty and turmoil. This may adversely affect consumers, our customers and suppliers, and may in turn negatively affect demand and prices, thereby reducing our sales volume and profitability. Economic crises may lead to higher interest rates and will increase our business costs. While we have been able to secure the necessary credit facilities to finance our business operations thus far, any further market disruptions, fluctuations or uncertainty could negatively impact our borrowing capabilities or increase our borrowing costs. At critical times, we may have to borrow at high interest rates, and thereby experience profit reduction and decreased financial flexibility. 53

62 RISK FACTORS In addition, a loss of investor confidence in the financial systems of emerging and other markets, or other related factors, may lead to increased volatility in the Indonesian and international financial markets and hinder or reverse the growth of the global economy including the Indonesian economy. Any such increased volatility, slowdown or reversed growth could materially and adversely affect our Business. Indonesia faces constant risk of earthquake and other natural disasters which may give rise to economic loss The Indonesian archipelago is prone to natural disasters due to its geographical position. In December 2004, an underwater earthquake struck off the coast of Sumatra and the resultant tsunami caused serious damage to coastal communities located in Indonesia, India, Thailand and Sri Lanka. The death toll recorded in Indonesia was estimated at 230,000. In October 2010, Mount Merapi in Java erupted and killed 300 people. The volcanic ashes disrupted both domestic and international flights in multiple Indonesian cities. As a result of the natural disasters, the Indonesian economy became severely disrupted and investor confidence was undermined. Future natural disasters could significantly affect the Indonesian economy. Our Indonesian operations are mainly located in Jakarta, Indonesia. There can be no assurance that natural disasters will not occur in or around our locations and hence materially and adversely affect our Business. Our insurance may not provide sufficient coverage in the event of natural disasters and other events beyond our control. In addition, there is no assurance that the premiums payable for our insurance policies upon renewal would not increase significantly. Such increase in premium payable may materially and adversely affect our Business. There is also no assurance that future occurrences of earthquake and other natural disasters will not have a negative impact on the Indonesian economy, which in turn, will materially and adversely affect our Business. Growing regional autonomy creates an uncertain business environment and may lead to increased business costs Following the devolvement of autonomy by the Central Government of Indonesia to the local authorities, they may implement their own regulations and policies, amongst others. This may result in more business regulations, higher tax rates, increased cost of compliance, disruption of direct material supply, and increased business costs, amongst others, all of which may materially and adversely affect our Business. RISKS RELATING TO OWNERSHIP OF OUR SHARES Investments in securities quoted on Catalist involve a higher degree of risk and can be less liquid than shares quoted on the Mainboard of the SGX-ST We have made an application for our Shares to be listed for quotation on Catalist, a listing platform primarily designed for fast-growing and emerging or smaller companies to which a higher investment risk tends to be attached as compared to larger or more established companies listed on the Main Board of the SGX-ST. An investment in shares quoted on Catalist may carry a higher risk than an investment in shares quoted on the Main Board of the SGX-ST and the future success and liquidity in the market of our Shares cannot be guaranteed. 54

63 RISK FACTORS Market and economic conditions may affect the market price and demand for our Shares Movements in domestic and international securities markets, economic conditions, foreign exchange rates and interest rates may affect the market price and demand for our Shares. As our Shares will be quoted in S$ on the SGX-ST, dividends, if any, in respect of our Shares will be paid in S$. Fluctuations in the exchange rate between the S$ and other currencies will affect, amongst other things, the foreign currency value of the proceeds which a Shareholder would receive upon sale in Singapore of our Shares and the foreign currency value of dividend distributions. Future sale or issuance of Shares may exert a downward pressure on our Share price Any future sale of Shares by our existing Shareholders or issuance of Shares by us can have a downward pressure on our Share price. The sale or issuance of a substantial number of our Shares after this Placement, or the perception that such sales may occur, could exert a downward pressure on our Share prices. In addition, these factors may also affect our ability to raise capital through the issue of additional equity securities. Except as otherwise described in the section entitled Shareholders Moratorium of this Offer Document, there will be no other restriction on the ability of our Shareholders to sell their Shares either on the SGX-ST or otherwise. There has been no prior market for our Shares and the Placement may not result in an active or liquid market for our Shares Prior to the Placement, there has been no public market for our Shares. Although we have applied to the SGX-ST for the dealing and quotation of our Shares on Catalist, there is no assurance that an active trading market for our Shares will develop or, if developed, will be sustained. The Placement Price may not be indicative of the market price for our Shares after the completion of the Placement. Investors may not be able to resell their Shares at a price that is attractive to them. Our Share price may be volatile, which could result in substantial losses for investors purchasing our Shares pursuant to the Placement The market price of our Shares may fluctuate significantly and rapidly as a result of, amongst others, the following factors, some of which are beyond our control and may be unrelated or disproportionate to our financial results: political, economic, financial and social developments in the jurisdictions in which we operate and in the global economy; perceived prospects, the general outlook of our industry, and success or failure of our management in implementing our business plans; changes in general economic and stock market conditions; changes in our operating results; changes in securities analysts estimates of our financial performance and recommendations; announcements of gain or loss of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; 55

64 RISK FACTORS changes in market valuations and share prices of companies with similar businesses to our Group that may be listed in Singapore or elsewhere; fluctuations of exchange rates; ability to obtain or maintain regulatory approval for our operations; addition or loss of key personnel; and our involvement in material litigation. Future dilution may result due to capital requirements Our working capital and capital expenditure needs may vary materially from those presently planned, depending on numerous factors, including our marketing and distribution strategies, strategic alliances and other factors which cannot be foreseen. If we do not meet our goals with respect to revenues, or costs are higher than anticipated, substantial additional funds may be required. Even if we exceed our goals, our success may introduce new opportunities that may have to be fulfilled quickly and this could also result in the need for substantial new capital. We may have to raise additional funds to meet the new capital requirements. These additional funds may be raised through the issuance of new Shares. In such events, if any Shareholder is unable or unwilling to participate in such fund raising, such Shareholder may experience dilution in his investment. We do not have a fixed dividend policy and may not be able to pay any dividends in the future We cannot assure you that we will pay dividends in the future or, if we pay dividends in the future, when we will pay them. The declaration and payment of future dividends will depend upon our operating results and cash flow, financial condition, other cash requirements, including capital expenditures, the terms of borrowing arrangements (if any), general economic conditions and other factors specific to the industries that we operate in, many of which are beyond our control. Moreover, as we operate under a holding company structure, the level of our income and our ability to pay dividends may depend upon the receipt of dividends and distributions from our Subsidiaries. The payment of dividends by our Subsidiaries is contingent upon many factors, including earnings and cash flows, and may be subject to legal, contractual and/or tax and accounting requirements in the relevant jurisdiction and other restrictions on the payment of dividends under the terms of certain agreement(s). Please refer to the section entitled Dividend Policy of this Offer Document for more details. Negative publicity may adversely affect our Share price Negative publicity involving our Group or, any of our Directors, Executive Officers or Controlling Shareholders, may adversely affect the market perception or the stock performance of our Company, whether or not it is justified. Some examples are unsuccessful attempts in joint ventures, take-overs or involvement in insolvency proceedings. 56

65 RISK FACTORS You may encounter difficulties enforcing a judgement or making a claim against our Group As a significant portion of our operations and assets are located outside Singapore, investors may find it difficult to enforce a judgement against our Group or management. Shareholders may encounter difficulties if they wish to make a claim against our Group, or wish to enforce a judgement against the assets of our Group. You will incur immediate dilution and may experience further dilution in the NAV of your Shares The Placement Price is substantially higher than our Group s NAV per Share of 6.2 cents as at 30 June 2016 (as adjusted for the net proceeds from the issue of Placement Shares) and based on the post-placement share capital of 100,000,000 Shares. Investors who subscribe for our Shares at the Placement will therefore experience immediate and significant dilution in the NAV of their Shares. Please refer to the section entitled Dilution of this Offer Document for more details. In addition, we may grant Award Shares and/or Option Shares pursuant to the Performance Share Plan and/or the Employee Share Option Scheme. To the extent that such share awards are ultimately granted and Award Shares are issued pursuant to such grant, and /or share options are granted and exercised, there may be further dilution to investors participating in the Placement. More details on the Performance Share Plan and the Employee Share Option Scheme are described in the section entitled Employee Share Option Scheme and Performance Share Plan of this Offer Document. Our Controlling Shareholders will retain significant control over our Group after the Placement which will allow them to influence the outcome of matters submitted to Shareholders for approval Upon completion of the Placement, our Controlling Shareholders, namely Mr Ong Yoke En and Ms Lim Lay Yong will respectively hold 50.4% and 15.0% of our enlarged share capital after the Placement, and will have majority control of the Company. As a result, our Controlling Shareholders will be able to exercise significant influence over matters requiring the approval of Shareholders, including the election of Directors and approval of significant corporate transactions. Our Controlling Shareholders will also have veto power with respect to any action of Shareholders requiring a majority vote except where they are required by the Catalist Rules or other applicable regulations to abstain from voting. Our Controlling Shareholders interests may not be aligned with our other Shareholders interests, and they may cause us to, or prevent us from, entering into certain transactions, the result of which might not be in, or may conflict with, the interests of our other Shareholders. We cannot assure you that our Controlling Shareholders will vote on Shareholders resolutions in a way that will benefit all of our Shareholders. Please refer to the section entitled Share Capital and Shareholders Shareholders in this Offer Document for more details. Investors may not be able to participate in future issues of our Shares If we offer to our Shareholders rights to subscribe for additional Shares or any right of any other nature, we will have discretion as to the procedure to be followed in making the rights available to our Shareholders or in disposing of the rights and making available the net proceeds of such disposal to our Shareholders. The decision made may not be to the benefit of Shareholders. We may choose not to offer the rights to our Shareholders having a registered address outside 57

66 RISK FACTORS Singapore. Accordingly, Shareholders who have a registered address outside Singapore may be unable to participate in rights offerings and may experience a dilution in their shareholdings as a result. There may be a future sale or major divestment of our Shares by our Controlling Shareholders The sale of a significant number of our Shares in the public market after the Placement, or the possibility of such sales, may adversely affect the market price of our Shares. Save as set out in the section entitled Shareholders Moratorium of this Offer Document, there are generally no restrictions imposed on our Controlling Shareholders selling or otherwise disposing of their shareholdings. Any major disposal of our Shares by any of our Controlling Shareholders may cause the market price of our Shares to decline. In addition, future sales, or perceived sales, of a substantial number of our Shares may materially and adversely affect our ability to raise capital in the future at a time and a price favourable to us, and our Shareholders would experience dilution of their holdings upon a future issuance or sale of additional securities. The actual performance of our Company may differ materially from the forward-looking statements in this Offer Document This Offer Document contains forward-looking statements, which are based on a number of assumptions which are subject to significant uncertainties and contingencies, many of which are outside of our control. Furthermore, our revenue and financial performance are dependent on a number of external factors, including demand for our aerosol spray paint products which may decrease for various reasons, such as increased competition within the industry or changes in applicable laws and regulations. We cannot assure you that these assumptions will be realised and our actual performance will be as projected. 58

67 USE OF PROCEEDS AND LISTING EXPENSES Based on the Placement Price, the gross proceeds to be raised from the Placement is approximately S$4.0 million. The net proceeds to be raised from the Placement, after deducting estimated expenses incurred in relation to the Placement of approximately S$1.65 million which will be borne by our Company, is estimated to be approximately S$2.35 million. We intend to use our gross proceeds from the issue of Placement Shares primarily as follows: Use of proceeds Estimated amount (S$ 000) Estimated amount allocated for each dollar of the gross proceeds from the Placement (%) Expansion of production facilities 1, General working capital 1, Net proceeds 2, Estimated listing expenses Listing fee Professional fees 1, Placement commission Miscellaneous expenses , Gross proceeds from the Placement 4, For more details on our use of proceeds, please see the section entitled General Information on our Group Business Strategies and Future Plans of this Offer Document. The foregoing discussion represents our best estimate of our allocation of the net proceeds to be raised from the Placement based on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary from these estimates and we may find it necessary or advisable to reallocate the net proceeds within the categories described above or to use portions of the net proceeds for other purposes. In the event that we decide to reallocate the net proceeds of the Placement for other purposes, we will publicly announce our intention to do so through a SGXNET announcement to be posted on the internet at the SGX-ST website, As part of its terms of reference, our Audit Committee will monitor the use of the net proceeds to be raised from the Placement. Our Company will make periodic announcements on the use of the net proceeds from the Placement as and when the net proceeds from the Placement are materially disbursed, and provide a status report on the use of the proceeds from the Placement in our annual reports. 59

68 USE OF PROCEEDS AND LISTING EXPENSES Pending the deployment of the net proceeds to be raised from the Placement as aforesaid, the funds may be placed as short-term deposits with financial institutions, used to invest in short-term money market instruments or debt instruments and/or used for working capital requirements or as our Directors may, in their absolute discretion, deem fit. In the event that any part of our proposed uses of the net proceeds raised from the issue of the Placement shares does not materialise or proceed as planned, our Directors will carefully evaluate the situation and may reallocate our net proceeds within the categories above or use the net proceeds for other purposes and/or hold the net proceeds on short term deposits for so long as our Directors deem it to be in the interest of our Company and our Shareholders, taken as a whole. In the reasonable opinion of our Directors, there is no minimum amount which must be raised from the Placement. In the event that the Placement does not proceed, such amounts proposed to be provided for the items above will be financed by borrowings and/or internal resources. None of the net proceeds of the Placement will be used to discharge, reduce or retire any indebtedness of our Group, to acquire or refinance the acquisition of an asset other than in the ordinary course of business, or to finance or refinance the acquisition of another business. 60

69 DIVIDEND POLICY Our Company was incorporated on 9 March 2016 and has not distributed any dividend on our Shares since incorporation. None of our Subsidiaries distributed dividends during the Relevant Period. We currently do not have a fixed dividend policy. In considering the form, frequency and amount of future dividends on our Shares in respect of any particular financial year or period, our Directors will take into account the following factors: (a) (b) (c) (d) (e) our financial position, results of operations and cash flow; the ability of our subsidiaries to make dividend payment to our Company; our expected working capital requirements and general financing condition; our actual and projected financial performance; and any other factors deemed relevant by our Directors, (collectively, the Dividend Factors ). Subject to our Constitution and in accordance with the Companies Act, our Company may declare an annual dividend subject to the approval of our Shareholders in a general meeting but no dividend or distribution shall be declared in excess of the amount recommended by our Directors. Subject to our Constitution and in accordance with the Companies Act, our Directors may also from time to time declare an interim dividend without the approval of our Shareholders. Our Company may pay dividends out of our profits. For information relating to taxes payable on dividends, please refer to the section entitled Taxation in this Offer Document. All dividends are paid pro-rata among the Shareholders in proportion to the amount paid up on each Shareholder s Shares, unless the rights attaching to an issue of any Share provide otherwise. Notwithstanding the foregoing, the payment by our Company to CDP of any dividend payable to a Shareholder whose name is entered in the Depository Register shall, to the extent of payment made to CDP, discharge our Company from any liability to that Shareholder in respect of that payment. The amount of dividends declared and paid by us should not be taken as an indication of the dividends payable in the future. No inference shall or can be made from any of the foregoing statements as to our actual future profitability or ability to pay dividends in any of the periods discussed. There can be no assurance that dividends will be paid in the future or of the amount or timing of any dividends that will be paid in the future. The form, frequency and amount of future dividends will depend on the Dividend Factors. 61

70 SHARE CAPITAL Our Company (Registration No C) was incorporated in Singapore on 9 March 2016 under the Companies Act as a private limited company, under the name of Samurai 2K Aerosol Pte. Ltd.. Our Company was converted into a public limited company and the name of our Company was changed to Samurai 2K Aerosol Limited in connection therewith on 16 December As at the date of incorporation, the issued and paid-up share capital of our Company was S$1.00 comprising 1 ordinary share allotted and issued to Mr Ong Yoke En. As at the date of this Offer Document, our issued and paid-up ordinary share capital is S$4,000,000 comprising 80,000,000 Shares. Pursuant to written resolutions passed on 22 November 2016 and 16 December 2016, our Shareholders approved, amongst others, the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) the Restructuring Exercise (including the sub-division of 1 Share in the issued and paid-up share capital of our Company into 20 Shares); the conversion of our Company into a public company limited by shares and the change of our name to Samurai 2K Aerosol Limited ; the adoption of a new set of Constitution; the allotment and issue of the Placement Shares which are the subject of the Placement, on the basis that the Placement Shares, when allotted, issued and fully paid-up, will rank pari passu in all respects with the then existing issued and fully paid-up Shares; the adoption of the Employee Share Option Scheme (details of which are set in the section entitled Employee Share Option Scheme, and in Appendix G Rules of the Employee Share Option Scheme of this Offer Document), and the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to allot and issue Shares upon the exercise of Options granted under the Employee Share Option Scheme and that authority be given to our Directors to grant Options at a discount of up to a maximum discount of 20.0%; the adoption of the Performance Share Plan (details of which are set in the section entitled Performance Share Plan, and in Appendix H Rules of the Performance Share Plan of this Offer Document) and the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to allot and issue Shares upon the vesting of Awards granted under the Performance Share Plan; the listing and quotation of all the Shares (including the Placement Shares to be allotted and issued pursuant to the Placement, the Option Shares and the Award Shares) on Catalist; and the participation of our Executive Directors and Controlling Shareholders, Mr Ong Yoke En and Ms Lim Lay Yong, in the Employee Share Option Scheme; the participation of our Executive Directors and Controlling Shareholders, Mr Ong Yoke En and Ms Lim Lay Yong, in the Performance Share Plan; 62

71 SHARE CAPITAL (j) the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to: (A) (i) issue Shares whether by way of rights, bonus or otherwise; and/or (ii) (iii) make or grant offers, agreements or options (collectively, Instruments ) that might or would require Shares to be issued during the continuance of this authority or thereafter, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures, convertible securities or other instruments convertible into Shares; and/or notwithstanding that such authority may have ceased to be in force at the time that Instruments are to be issued, issue additional Instruments arising from adjustments made to the number of Instruments previously issued in the event of rights, bonus or other capitalisation issues, at any time and upon such terms and conditions and for such purposes and to such persons as our Directors may in their absolute discretion deem fit; and (B) issue Shares in pursuance of any Instruments made or granted by our Directors pursuant to (A) above, while such authority was in force (notwithstanding that such issue of Shares pursuant to the Instruments may occur after the expiration of the authority contained in this resolution), provided that: (i) (ii) (iii) the aggregate number of Shares to be issued pursuant to such authority (including the Shares to be issued in pursuance of Instruments made or granted pursuant to this authority but excluding Shares which may be issued pursuant to any adjustments ( Adjustments ) effected under any relevant Instrument, which Adjustment shall be made in compliance with the provisions of the Catalist Rules for the time being in force (unless such compliance has been waived by the SGX-ST) and the Constitution for the time being of our Company, does not exceed 100.0% of the post-placement issued share capital excluding treasury shares, and provided further that the aggregate number of Shares to be issued other than on a pro-rata basis to Shareholders (including Shares to be issued in pursuance of Instruments made or granted pursuant to such authority but excluding Shares which may be issued pursuant to any Adjustments effected under any relevant Instrument) shall not exceed 50.0% of the post-placement issued share capital excluding treasury shares; in exercising such authority, our Company shall comply with the provisions of the Catalist Rules for the time being in force (unless such compliance has been waived by the SGX-ST) and the Constitution for the time being of our Company; and unless revoked or varied by our Company in general meeting by ordinary resolution, the authority so conferred shall continue in force until the conclusion of the next annual general meeting of our Company or the date by which the next annual general meeting of our Company is required by law to be held, whichever is the earlier. 63

72 SHARE CAPITAL For the purpose of this resolution, the post-placement issued share capital shall mean the total number of issued Shares of our Company (excluding treasury shares) immediately after the Placement, after adjusting for (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided the options or share awards were granted in compliance with the Catalist Rules; and (iii) any subsequent bonus issue, consolidation or sub-division of Shares. As at the date of this Offer Document, our Company has only one class of shares in the capital of our Company, being ordinary shares. A summary of our Constitution relating to, among others, the voting rights of our Shareholders is set out in Appendix D Summary of Constitution of our Company of this Offer Document. There are no founder, management, deferred or unissued Shares reserved for issuance for any purpose. The Placement Shares shall have the same interest and voting rights as our existing Shares that were issued prior to the Placement and there are no restrictions on the free transferability of our Shares except where required by law, the Catalist Rules or the SGX-ST. Save for the Options which may be granted under the Employee Share Option Scheme and the Awards which may be granted under the Performance Share Plan, no person has been, or is entitled to be, given an option to subscribe for or purchase any securities of our Company or any of our subsidiaries. As at the date of this Offer Document, no Options and Awards have been issued pursuant to the Employee Share Option Scheme and the Performance Share Plan respectively. As at the Latest Practicable Date, the Shares held by our Controlling Shareholders and the Placement Shares to be issued are not subject to any charge, mortgage, pledge, lien, hypothecation or any other form of encumbrance. Details of the changes in the issued and paid-up share capital of our Company since incorporation and the resultant issued and paid-up share capital immediately after the Placement are as follows: Purpose Number of new Shares issued Resultant Issued and Paid-Up Share Capital No of Shares (S$) Issued and paid-up capital as at date of incorporation Issue of 240,166 Shares to Ong Yoke En as consideration pursuant to the Company s acquisition of 67% of the shares in the issued and paid-up share capital of PTSP as part of the Restructuring Exercise 240, , ,167 Issue of 274,630 Shares to Ong Yoke En and Lim Lay Yong as consideration pursuant to the Company s acquisition of all the shares in the issued and paid-up share capital of SWHL as part of the Restructuring Exercise 274, , ,797 64

73 SHARE CAPITAL Purpose Number of new Shares issued Resultant Issued and Paid-Up Share Capital No of Shares (S$) Issue of 3,121,201 Shares to Ong Yoke En, Ong How En, Ong Yoke Hoi and Lim Lay Yong as consideration pursuant to the Company s acquisition of all the shares in the issued and paid up share capital of OISB as part of the Restructuring Exercise 3,121,201 3,635,998 3,635,998 Issue of 364,002 Shares to Ong Yoke En as consideration pursuant to the Company s acquisition of all the shares in the issued and paid up share capital of CPMSB as part of the Restructuring Exercise 364,002 4,000,000 4,000,000 Sub-Division 76,000,000 80,000,000 4,000,000 Placement Shares to be issued pursuant to the Placement 20,000, ,000,000 7,558,000 (1) Issued and paid-up capital after the Placement 100,000,000 7,558,000 (1) Note: (1) Takes into consideration the transaction cost of issuance of new shares of approximately S$0.4 million which will be charged against our share capital. Save as disclosed above, there were no changes in the issued and paid-up share capital of our Company since incorporation. 65

74 SHAREHOLDERS OWNERSHIP STRUCTURE Our Shareholders and their respective shareholdings immediately before the Placement (as at the date of this Offer Document) and immediately after the Placement are set out as follows: Directors Before the Placement, Sub-Division and Share Transfers Before the Placement but after the Sub-Division and Share Transfers After the Placement Direct Interest Deemed Interest Direct Interest Deemed Interest Direct Interest Deemed Interest Number of Shares % Number of Shares % Number of Shares % Number of Shares % Number of Shares % Number of Shares % Ong Yoke En (1),(2),(3) 3,110, ,384, (1) 50,384, (1) Lim Lay Yong (1) 750, ,000, (1) 15,000, (1) Dato Loh Shin Siong (3) 4,250, ,250, Dato Chang Chor Choong (3) 4,250, ,250, Lim Siang Kai Hau Hock Khun Sia Yeak Hong Other Shareholders Ong How En (2),(3) 70, ,308, ,308, Ong Yoke Hoi (2),(3) 68, ,308, ,308, Lau Sie Hung (3) 3,500, ,500, Public 20,000, Total 4,000, ,000, ,000,

75 SHAREHOLDERS Notes: (1) Mr Ong Yoke En and Ms Lim Lay Yong are spouses. Pursuant to Section 133(4)(a) of the SFA, a director or CEO of a corporation is only deemed interested in the shares owned by a family member if the family member is not himself a director or CEO of the corporation. Accordingly, Mr Ong Yoke En and Ms Lim Lay Yong are not deemed interested in each other s Shares under the SFA. (2) Mr Ong Yoke En, Mr Ong How En and Ms Ong Yoke Hoi are siblings. Mr Ong How En was previously a shareholder of OISB and became a shareholder of our Company pursuant to the Restructuring Exercise. He was also previously a shareholder of PTSP until 18 October 2016, when he divested all of his shares in PTSP to Mr Soegianto (please see the section entitled Group Structure of this Offer Document for more details). Mr Ong How En is currently employed as a technical manager in our Group. Ms Ong Yoke Hoi was previously a shareholder of OISB and became a shareholder of our Company pursuant to the Restructuring Exercise. Ms Ong Yoke Hoi has not been involved in the operations of our Company nor any of our Subsidiaries since the respective dates of incorporation of our Company and our various Subsidiaries and up to the Latest Practicable Date. (3) On 5 January 2017, the Share Transfers were carried out. As a result of the Share Transfers, (i) Mr Ong Yoke En s shareholding interest changed from 62,209,000 Shares (comprising 77.8% shareholding interest) to 50,384,000 Shares (comprising 63.0% shareholding interest); (ii) Mr Ong How En s shareholding interest changed from 1,413,000 Shares (comprising 1.8% shareholding interest) to 1,308,000 Shares (comprising 1.6% shareholding interest); (iii) Ms Ong Yoke Hoi s shareholding interest changed from 1,378,000 Shares (comprising 1.7% shareholding interest) to 1,308,000 Shares (comprising 1.6% shareholding interest); and (iv) the respective shareholding interests of each of Dato Loh Shin Siong, Dato Chang Chor Choong, and Mr Lau Sie Hung changed from nil to 5.3%, 5.3% and 4.4% respectively. 67

76 SHAREHOLDERS Save as disclosed above and in the section entitled Directors, Executive Officers and Employees of this Offer Document, there are no relationships among our Directors, Substantial Shareholders and Executive Officers. Save as disclosed above, to the best of the knowledge of our Directors, our Company is not directly or indirectly owned or controlled, whether severally or jointly, by any corporation, government or other natural or legal person. The Shares held by our Directors and Substantial Shareholders do not carry different voting rights from the Placement Shares which are the subject of the Placement. There has been no public take-over offer by a third party in respect of our Shares or by our Company in respect of the shares of another corporation or the units of a business trust which has occurred between the date of the incorporation of our Company and the Latest Practicable Date. There are no Shares in our Company that are held by or on behalf of our Company or by the subsidiaries of our Company. Our Directors are not aware of any arrangement the operation of which may, at a subsequent date, result in a change in control of our Company. SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP Save as disclosed in this section and the sections entitled Share Capital and Restructuring Exercise of this Offer Document, there has been no significant changes in the percentage ownership of our Shares from the date of incorporation of our Company until the Latest Practicable Date. MORATORIUM Directors and Controlling Shareholders To demonstrate their commitment to our Group, our Controlling Shareholders (who are also our Executive Directors), namely Mr Ong Yoke En and Ms Lim Lay Yong, have each irrevocably and unconditionally undertaken not to directly or indirectly sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over, encumber, or otherwise dispose of (or enter into any transaction which is designed or which may reasonably be expected to result in any of the foregoing) (a) any part of their respective shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months from the date of admission of our Company to Catalist; and (b) more than 50.0% of their respective shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months thereafter. Dato Loh Shin Siong and Dato Chang Chor Choong, our Non-Executive Directors, have each irrevocably and unconditionally undertaken not to directly or indirectly sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over, encumber, otherwise dispose of (or enter into any transaction which is designed or which may reasonably be expected to result in any of the foregoing) (a) any part of their shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months from the date of admission of our Company to Catalist; and (b) more than 50.0% of their respective shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months thereafter. 68

77 SHAREHOLDERS Other Shareholders Mr Ong How En and Ms Ong Yoke Hoi have each irrevocably and unconditionally undertaken not to directly or indirectly sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over, encumber, otherwise dispose of (or enter into any transaction which is designed or which may reasonably be expected to result in any of the foregoing) (a) any part of their shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months from the date of admission of our Company to Catalist; and (b) more than 50.0% of their respective shareholding interests in our Company (adjusted for any bonus issue or sub-division) for a period of six (6) months thereafter. Mr Lau Sie Hung has irrevocably and unconditionally undertaken, voluntarily, not to directly or indirectly sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over, encumber, or otherwise dispose of (or enter into any transaction which is designed or which may reasonably be expected to result in any of the foregoing) any part of his shareholding interest in our Company (adjusted for any bonus issue or sub-division) for a period of three (3) months from the date of admission of our Company to Catalist. Investors who are connected to the Sponsor As at the date of this Offer Document, there are no investors who are connected to the Sponsor. 69

78 DILUTION Dilution is the amount by which the Placement Price to be paid by our New Investors pursuant to the Placement exceeds our NAV per Share immediately after the Placement. Our NAV per Share as at 30 June 2016, adjusted for the Restructuring Exercise but before adjusting for the estimated net proceeds from the Placement and based on our pre-placement share capital of 80,000,000 Shares, was approximately 4.8 cents. Pursuant to the Placement in respect of 20,000,000 Placement Shares at the Placement Price, our NAV per Share, after adjusting for the estimated net proceeds from the Placement and based on our post-placement share capital of 100,000,000 Shares, would be 6.2 cents. This represents an immediate increase in NAV per Share of 1.4 cents to our existing Shareholders and an immediate dilution in NAV per Share of 13.8 cents to our New Investors. The following table illustrates such dilution per Share: Cents Placement Price 20.0 Unaudited pro forma NAV per Share as at 30 June 2016, adjusted for the Restructuring Exercise but before adjusting for the estimated net proceeds from the Placement and based on our pre-placement Share capital of 80,000,000 Shares (1) 4.8 Increase in NAV per Share attributable to our existing Shareholders 1.4 Adjusted NAV per Share after the Placement (1)(2) 6.2 Dilution in adjusted NAV per Share to New Investors pursuant to the Placement 13.8 Dilution in adjusted NAV per Share to New Investor as a percentage of Placement Price pursuant to the Placement 69.0% Note: (1) The NAV was translated based on the exchange rate of RM3.1080: S$1.00 as at the Latest Practicable Date. (2) The computed NAV per Share does not take into account our actual financial performance from 1 July 2016 up to the Latest Practicable Date. Depending on our actual financial results, our NAV per Share may be higher or lower than the above computed NAV. 70

79 DILUTION The following table summarises the total number of Shares acquired by our existing Shareholders during the period of three (3) years prior to the date of lodgement of this Offer Document with the SGX-ST, acting as agent on behalf of the Authority, the total consideration paid and the average effective cost per Share to them and to our New Investors pursuant to the Placement. Directors Number of Shares acquired Consideration (S$) Average effective cost per Share (cents) Mr Ong Yoke En (1) 62,209,000 3,110, Ms Lim Lay Yong 15,000, , Dato Loh Shin Siong (1) 4,250, , Dato Chang Chor Choong (1) 4,250, , Other Shareholders Mr Ong How En (1) 1,413,000 70, Ms Ong Yoke Hoi (1) 1,378,000 68, Mr Lau Sie Hung (1) 3,500,000 66, Subscribers of Placement Shares 20,000,000 4,000, Note: (1) On 5 January 2017, the Share Transfers were carried out. As a result of the Share Transfers, (i) Mr Ong Yoke En s shareholding interest changed from 62,209,000 Shares (comprising 77.8% shareholding interest) to 50,384,000 Shares (comprising 63.0% shareholding interest); (ii) Mr Ong How En s shareholding interest changed from 1,413,000 Shares (comprising 1.8% shareholding interest) to 1,308,000 Shares (comprising 1.6% shareholding interest); (iii) Ms Ong Yoke Hoi s shareholding interest changed from 1,378,000 Shares (comprising 1.7% shareholding interest) to 1,308,000 Shares (comprising 1.6% shareholding interest); and the respective shareholding interests of each of Dato Loh Shin Siong, Dato Chang Chor Choong, and Mr Lau Sie Hung changed from nil to 5.3%, 5.3% and 4.4% respectively. Save as disclosed above and in the section entitled Restructuring Exercise of this Offer Document, none of our Directors or the Substantial Shareholders of our Company or their respective associates have acquired any Shares during the period of three (3) years prior to the date of lodgement of this Offer Document. 71

80 RESTRUCTURING EXERCISE Pursuant to the Restructuring Exercise undertaken to rationalise and streamline the corporate structure of our Group in preparation for the Placement, our Company became the ultimate holding company of our Group. Details of the Restructuring Exercise are set out below. References to the issuance of Shares in this section (save for the subsection entitled Sub-Division ) were before the Sub-Division. (i) Incorporation of Samurai 2K Aerosol Pte. Ltd. On 9 March 2016, our Company was incorporated in Singapore under the name Samurai 2K Aerosol Pte. Ltd. with an issued and paid-up share capital of S$1.00 divided into one (1) Share. The initial subscriber holding the one (1) Share was Mr Ong Yoke En. (ii) Acquisition of our Subsidiaries a. Acquisition of shares in PTSP Pursuant to a conditional sale and purchase agreement dated 16 November 2016 entered into between our Company and Mr Ong Yoke En, our Company acquired from Mr Ong Yoke En his 67.0% shareholding interest in PTSP (comprising 2,010 shares) for a consideration of S$240,166. The purchase consideration was based on the NTA of PTSP as at 31 March 2016 of IDR3,375,311,486 (or S$358,458 based on the exchange rate of IDR1, to S$ as at 13 October 2016) and was wholly satisfied by the issue of 240,166 Shares to Mr Ong Yoke En. Our Directors are of the opinion that this transaction was carried out on normal commercial terms, on an arm s length basis and was not prejudicial to the interests of our Company. b. Acquisition of shares in SWHL Pursuant to a sale and purchase agreement dated 7 November 2016 entered into between our Company and the shareholders of SWHL, namely Mr Ong Yoke En and Ms Lim Lay Yong, our Company acquired the entire issued and paid-up capital of SWHL comprising 10,000 shares at the aggregate purchase consideration of S$274,630. The purchase consideration was based on the NTA of SWHL as at 31 March 2016 of HK$1,542,868 (or S$274,630 based on the exchange of HK$1.00 to S$0.178 as at 13 October 2016) and was wholly satisfied by the issue of 274,630 Shares to the shareholders of SWHL on a pro rata basis. Our Directors are of the opinion that this transaction was carried out on normal commercial terms, on an arm s length basis and was not prejudicial to the interests of the Company. c. Acquisition of shares in OISB Pursuant to a sale and purchase agreement dated 21 November 2016 entered into between our Company and the shareholders of OISB, namely Ms Ong Chen Hoi (who is the sister of Mr Ong Yoke En), Mr Ong Yoke En, Mr Ong How En and Ms Ong Yoke Hoi, our Company acquired the entire issued and paid-up capital of OISB comprising 500,000 ordinary shares at the aggregate purchase consideration of S$3,121,201. The purchase consideration was determined after taking into consideration the NTA of OISB as at 31 March 2016 of RM9,690,424 (or S$3,185,753 based on the exchange rate of RM to S$1.00 as at 13 October 2016) and was satisfied by the issue of 2,368,966, 70,650, 68,900 and 612,685 Shares to each of Mr Ong Yoke En, Mr Ong How En, Ms Ong Yoke Hoi and Ms Lim Lay Yong respectively at an issue price of S$1.00 per Share. Ms Lim Lay Yong was a nominated recipient of some of the Shares issued 72

81 RESTRUCTURING EXERCISE as consideration for the acquisition. Our Directors are of the opinion that this transaction was carried out on normal commercial terms, on an arm s length basis and was not prejudicial to the interests of our Company. d. Acquisition of shares in CPMSB Pursuant to a sale and purchase agreement dated 26 October 2016 entered into between our Company and the legal and beneficial owners of the shares in CPMSB, Ms Embang Anak Girie and Mr Henry Anak Mula 1 (being the legal owners of the shares) and Mr Ong Yoke En (being the beneficial owner of the shares), our Company acquired the entire issued and paid-up capital of CPMSB comprising two (2) shares at the aggregate purchase consideration of $364,002. The purchase consideration was based on the NTA of CPMSB as at 31 March 2016 of RM1,107,223 (or S$364,002 based on the exchange rate of RM to S$1.00 as at 13 October 2016) and was wholly satisfied by the issue of 364,002 Shares to Mr Ong Yoke En. Our Directors are of the opinion that this transaction was carried out on normal commercial terms, on an arm s length basis and was not prejudicial to the interests of our Company. (iii) Assignment of Intellectual Property Rights from Mr Ong Yoke En to OISB On 13 December 2016, Mr Ong Yoke En entered into a deed of assignment with OISB pursuant to which he assigned and transferred (a) all rights, title and interests, owned by him in trademarks, pending trademark applications, invention patents, innovation patents, utility patents, industrial designs and pending patent applications and (b) all rights, title and interests including all intellectual property rights in relation to (including but not limited to) names, inventions, works, materials, designs, financial and technical information and techniques owned by him to OISB for a consideration of S$1.00. In connection with this, Mr Ong Yoke En has also, in the deed of assignment with OISB, agreed to fully indemnify OISB against all actions, claims, proceedings, costs and damages (including any damages or compensation paid by OISB on the advice of its legal advisers to compromise or settle any claim) and all legal costs or other expenses arising out of any breach of the warranties in the deed of assignment or out of any claim by a third party based on any facts which if substantiated would constitute a breach of the warranties in the deed of assignment. Our Directors are of the opinion that this transaction was not entered into on normal commercial terms nor on an arm s length basis, but was not prejudicial to the interests of our Company and minority Shareholders. As at 16 December 2016, some of the abovementioned intellectual property rights are still in the process of being transferred and registered in OISB s name. Our Company will make the necessary timely announcement(s) upon completion of the transfer and due registration of all such intellectual property rights in OISB s name. 1 These two shareholders, in aggregate, held 100.0% shareholding interest in CPMSB on behalf of Mr Ong Yoke En. 73

82 RESTRUCTURING EXERCISE (iv) Transfer of Dividend Entitlement Following the acquisition of shares in PTSP, our Company became the holder of 2,010 ordinary shares in the issued and paid-up capital of PTSP, comprising 67.0% of the issued shares in PTSP. The remaining 990 ordinary shares in the issued and paid-up capital of the Company, comprising 33.0% of the issued and paid-up capital of PTSP is held by Mr Soegianto ( 33.0% PTSP Shareholding Interest ), Mr Soegianto having purchased 690 shares and 300 shares from Mr Ong Yoke En and Mr Ong How En respectively on or around 18 October On 23 November 2016, Mr Ong Yoke En, Mr Ong How En, Mr Soegianto and our Company entered into a transfer of dividend entitlement agreement, pursuant to which, the following was agreed: (a) (b) (c) in respect of dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing prior to 1 April 2016 (the Pre-FY2017 Dividends ), Mr Soegianto, upon receipt of payment of his share (based on his 33.0% PTSP Shareholding Interest) of such Pre-FY2017 Dividends from PTSP, shall transfer his share of the proceeds of such Pre-FY2017 Dividends to our Company; in respect of dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing from 1 April 2016 to 31 March 2017 (the FY2017 Dividends ), Mr Soegianto, upon receipt of payment of his share (based on his 33.0% PTSP Shareholding Interest) of such FY2017 Dividends from PTSP, shall transfer 50.0% of his share of such FY2017 Dividends to our Company as his designated recipient, such 50.0% quantum having been determined based on the approximately six-month ownership period of Mr Ong Yoke En and Mr Ong How En in relation to the 33% PTSP Shareholding Interest for PTSP s financial year ending 31 March 2017; and in respect of dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing from 1 April 2017 onwards (the Post-FY2017 Dividends ), Mr Soegianto shall remain fully entitled to his share (based on his 33.0% PTSP Shareholding Interest) of such Post-FY2017 Dividends. For the avoidance of doubt, Mr Ong Yoke En and Mr Ong How En have, in the transfer of dividend entitlement agreement, agreed to waive all rights and claims to dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing prior to 1 October 2016, and renounce such entitlement to dividends of PTSP to our Company. The parties had entered into the transfer of dividend entitlement agreement pursuant to mutual commercial agreement amongst themselves that Mr Soegianto shall only be entitled to dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing from 1 October 2016 onwards up to such time he ceases to be a shareholder of PTSP, while Mr Ong Yoke En and Mr Ong How En shall remain entitled to dividends declared and paid by PTSP in respect of profits and retained earnings arising and/or accruing prior to 1 October 2016, which they have in turn agreed to renounce to the Company. As no consideration was paid under the transfer of dividend entitlement agreement, our Directors are of the opinion that this arrangement was not entered into on normal commercial terms nor on an arm s length basis, but was not prejudicial to the interests of our Company and minority Shareholders. Ali Budiardjo, Nugroho, Reksodiputro, the Legal Adviser to our Company as to Indonesian Law, has, in its legal opinion stated that the deed stipulating this arrangement is in compliance with all relevant laws and regulations in Indonesia, including the applicable laws and regulations as to foreign shareholding restrictions. 74

83 RESTRUCTURING EXERCISE (v) Conversion into Public Company On 16 December 2016, our Company was converted into a public company limited by shares and the name of our Company was changed to Samurai 2K Aerosol Limited. Our Company adopted a new Constitution in connection with the conversion. (vi) Sub-Division On 5 January 2017, our Company completed the sub-division of every 1 ordinary Share in the Company into 20 ordinary Shares. Following the completion of the Sub-Division, our Company has a total of 80,000,000 ordinary Shares in its share capital. 75

84 GROUP STRUCTURE Our Group structure after the Restructuring Exercise and as at the date of this Offer Document is as follows: Samurai 2K Aerosol Limited 100.0% 67.0% 100.0% 100.0% OISB PTSP SWHL CPMSB Details of our subsidiaries are as follows: Name of Subsidiary Date and country of incorporation Principal activities Principal place of business Issued and paid-up share capital Effective equity interest held by our Group OISB 30 December 1996 Malaysia CPMSB (2) 17 September 2008 Malaysia PTSP 2 June 2010 Indonesia SWHL (2) 1 August 2011 Hong Kong Processing and trading of paints Malaysia RM500, % Dormant Malaysia RM % Engaging in the business of import trading and distribution Trading of machinery, chemicals and industrial product hardware Indonesia IDR2,811,900,000 (US$300,000) 67.0% (1) Hong Kong HK$10, % Notes: (1) Our Company did not acquire 100.0% of the shares in PTSP because the applicable Indonesian laws and regulations impose a foreign shareholding limitation of 67.0%. As at the Latest Practicable Date, the remaining 33.0% of the shares in PTSP is held by Mr Soegianto, an Indonesian citizen and a third party unrelated to our Group or any of our Shareholders save for his shareholding in PTSP. Mr Soegianto purchased the shares from Mr Ong Yoke En (690 shares) and Mr Ong How En (300 shares) on 18 October Mr Ong Yoke En and Mr Ong How En divested the shares to Mr Soegianto because it is a condition to the grant of the Amendment to Principle Licence (Izin Prinsip Perubahan) No. 3368/1/IP-PB/PMA/2016, Amendment to Business Licence (Izin Usaha Perubahan) No. 750/1/IU-PB/PMA/2016 and Amendment to Business Licence (Izin Usaha Perubahan) No. 781/1/IU-PB/PMA/2016 (regarding all licences pertaining to the addition of the distribution activity to the business activities of PTSP, please see the section entitled General Information on Our Group Permits, Licences and Approvals of this Offer Document for more details) by BKPM that the foreign shareholding of PTSP be capped at 67.0% shareholding interest. Mr Soegianto has confirmed that (a) he is the legal and beneficial shareholder of the 990 shares (comprising the 33.0% shareholding interest) in PTSP; (b) he does not hold any of these shares in PTSP in trust for, as a nominee of, and/or for the benefit of any other person or company; and (c) he does not have any agreement or arrangement (whether formal or otherwise) with any other party in relation to the ownership (beneficial or otherwise) and/or interest in and/or control over these shares in PTSP. (2) We intend to strike off both CPMSB and SWHL. As at the Latest Practicable Date, we have commenced the striking off of SWHL. We have not commenced the striking off in respect of CPMSB as we are currently awaiting tax refunds from the relevant tax authority. None of our Subsidiaries is listed on any stock exchange. We do not have any associated companies. None of our Independent Directors sits on the board of our principal Subsidiaries that are based in jurisdictions other than Singapore. 76

85 SELECTED COMBINED FINANCIAL INFORMATION The following selected Group financial information should be read in conjunction with the full text of this Offer Document, including the Audited Combined Financial Statements and the Unaudited Interim Combined Financial Statements, where the selected Group financial information has been derived from. OPERATING RESULTS OF OUR GROUP Audited Unaudited RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 Revenue 15,946 19,135 30,624 6,495 8,096 Cost of sales (10,613) (12,439) (18,326) (4,340) (4,525) Gross profit 5,333 6,696 12,298 2,155 3,571 Other (expenses)/income (71) Expenses Administrative expenses (1,962) (2,920) (3,850) (685) (2,304) Marketing and distribution expenses (1,267) (1,352) (1,741) (351) (627) Finance costs (155) (221) (268) (54) (95) Profit before tax 1,878 2,395 6,760 1, Tax expenses (539) (446) (1,336) (252) (470) Profit for the year/period 1,339 1,949 5, Other comprehensive income: Item that are or may be reclassified subsequently to profit or loss: Currency translation differences arising from consolidation Total comprehensive income for the year/period attributable to equity holders of the Company 1,391 2,043 5, EPS (based on pre-placement share capital) (sen) (1) EPS (based on post-placement share capital) (sen) (2) Notes: (1) For comparative purposes, EPS (based on the pre-placement share capital) for the Period Under Review have been computed based on the net profit attributable to Shareholders and our pre-placement share capital of 80,000,000 Shares. (2) For comparative purposes, EPS (based on the post-placement share capital) for the Period Under Review have been computed based on the net profit attributable to Shareholders and our post-placement share capital of 100,000,000 Shares. 77

86 SELECTED COMBINED FINANCIAL INFORMATION FINANCIAL POSITION OF OUR GROUP RM 000 Non-current assets As at 31 March 2014 Audited As at 31 March 2015 As at 31 March 2016 Unaudited As at 30 June 2016 Property, plant and equipment 1,816 3,071 5,112 10,748 Intangible asset Deferred tax assets Other receivables 560 Total non-current assets 1,827 3,084 5,712 10,786 Current assets Inventories 2,476 3,374 5,374 5,364 Trade and other receivables 2,786 3,186 6,948 6,529 Cash and bank balances 2,528 3,486 10,191 9,935 Total current assets 7,790 10,046 22,513 21,828 TOTAL ASSETS 9,617 13,130 28,225 32,614 Non-current liabilities Borrowings 389 1,257 1,443 5,769 Deferred tax liabilities Other payables Total non-current liabilities 458 1,389 1,804 6,170 Current liabilities Trade and other payables 2,780 2,746 10,375 9,270 Borrowings 2,191 2,475 4,161 4,516 Tax payables Total current liabilities 5,274 5,294 14,536 14,219 TOTAL LIABILITIES 5,732 6,683 16,340 20,389 NET ASSETS 3,885 6,447 11,885 12,225 Equity Share Capital 817 1,336 1,336 1,336 Currency translation reserve Retained earnings 3,017 4,966 10,390 10,681 TOTAL EQUITY 3,885 6,447 11,885 12,225 NAV per Share (sen) (1) Note: (1) NAV per Share have been computed based on the respective net assets as at 31 March 2014, 31 March 2015, 31 March 2016 and 30 June 2016, and our pre-placement share capital of 80,000,000 Shares. 78

87 SELECTED COMBINED FINANCIAL INFORMATION The following selected pro forma combined financial information of our Group should be read in conjunction with the full text of this Offer Document, including the Audited Combined Financial Statements, the Unaudited Interim Combined Financial Statements and the Unaudited Pro Forma Combined Financial Information, where the selected Group financial information has been derived from. PRO FORMA COMBINED STATEMENTS OF COMPREHENSIVE INCOME (1) Unaudited RM 000 FY2016 1Q2017 Revenue 30,624 8,096 Cost of sales (18,376) (4,538) Gross profit 12,248 3,558 Other income Expenses Administrative expenses (3,850) (2,304) Marketing and distribution expenses (1,741) (627) Finance costs (486) (149) Profit before tax 6, Tax expenses (1,336) (470) Profit for the year/period 5, Other comprehensive income: Item that are or may be reclassified subsequently to profit or loss: Currency translation differences arising from consolidation Total comprehensive income for the year/period attributable to equity holders of the Company 5, EPS (based on pre-placement share capital) (sen) (2) EPS (based on post-placement share capital) (sen) (3) Notes: (1) Please refer to the Unaudited Pro Forma Combined Financial Information for the basis of preparation of the pro forma combined financial information of our Group. (2) For comparative purposes, pro forma EPS (based on the pre-placement share capital) for the Period Under Review have been computed based on the net profit attributable to Shareholders and our pre-placement share capital of 80,000,000 Shares. (3) For comparative purposes, pro forma EPS (based on the post-placement share capital) for the Period Under Review have been computed based on the net profit attributable to Shareholders and our post-placement share capital of 100,000,000 Shares. 79

88 SELECTED COMBINED FINANCIAL INFORMATION UNAUDITED PRO FORMA COMBINED STATEMENTS OF FINANCIAL POSITION (1) RM 000 Non-current assets As at 31 March 2016 As at 30 June 2016 Property, plant and equipment 10,662 10,685 Intangible asset Deferred tax assets Total non-current assets 10,702 10,723 Current assets Inventories 5,374 5,364 Trade and other receivables 6,948 6,529 Cash and bank balances 9,496 9,663 Total current assets 21,818 21,556 TOTAL ASSETS 32,520 32,279 Non-current liabilities Borrowings 6,006 5,769 Deferred tax liabilities Other payables Total non-current liabilities 6,367 6,170 Current liabilities Trade and other payables 10,375 9,270 Borrowings 4,161 4,516 Tax payables 433 Total current liabilities 14,536 14,219 TOTAL LIABILITIES 20,903 20,389 NET ASSETS 11,617 11,890 Equity Share Capital 1,336 1,336 Currency translation reserve Retained earnings 10,122 10,346 TOTAL EQUITY 11,617 11,890 NAV per Share (sen) (2) Notes: (1) Please refer to the Unaudited Pro Forma Combined Financial Information for the basis of preparation of the pro forma combined financial information of our Group. (2) The pro forma NAV per Share have been computed based on the pro forma net assets as at 31 March 2016 and 30 June 2016 of our Group and our pre-placement share capital of 80,000,000 Shares. 80

89 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The following discussion of our results of operations and financial position has been prepared by our management and should be read in conjunction with the full text of this Offer Document, including the Audited Combined Financial Statements, the Unaudited Interim Combined Financial Statements, and the Unaudited Pro Forma Combined Financial Information where the selected Group financial information has been derived from. This discussion contains forward-looking statements that involve risk and uncertainties faced by us. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause our results to differ significantly from those projected in the forward-looking statements include, but are not limited to, those discussed below and elsewhere in this Offer Document, particularly in the section entitled Risk Factors of this Offer Document. Investors are cautioned not to place undue reliance on these forward-looking statements which apply only as at the date hereof. OVERVIEW We are a leading aerosol coating specialist with a focus on high performance coating solutions for the automotive refinishing and refurbishing industry. We are principally engaged in the manufacturing, distribution and marketing of our products under our own brands, including Samurai, Kurobushi, Khameleon, Canbrush, Ninjutsu, Geigi, CanArt and Bushido. Headquartered in Malaysia, our products are manufactured in our production facility located in Johor and are distributed in more than four (4) countries, including Malaysia, Indonesia, Thailand and Philippines. According to the Independent Market Researcher, we are one of the leading market players specialising in aerosol spray paints for two-wheelers with an estimated 27.0% and 5.0% market share in Malaysia and Indonesia, respectively. We focus our marketing and promotion efforts on educating end-users on the usage of our aerosol products using our aerosol paint systems. Our products can be classified into three (3) product segments, namely (i) Paint Standard; (ii) Paint Premium; and (iii) Maintenance and Others. Please refer to the section entitled General Information on Our Group Business Overview and General Information on Our Group Production Process of this Offer Document for more details. Factors affecting our results of operations Our results of operations may be affected by, amongst other, the following factors: (i) Market demand for our products Demand for our products is largely affected by the general macroeconomic conditions of the countries in which we distribute our products. The purchases of our products are influenced by the level of consumer spending and disposal income in the respective countries. The demand for our products also correlates with the number of motor vehicles, the number of vehicle collisions and the overall distance driven in the respective countries in which we distribute our products. 81

90 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (ii) Ability to maintain existing relationship with our distributors and to expand our sales network We rely on our distributors to distribute our products across Malaysia and Indonesia. Each of our distributors is responsible for establishing the sales networks in their respective designated geographical region. As at the Latest Practicable Date, we worked closely with 47 distributors to distribute our products through their sales network. There is no assurance that we will be able to attract a sufficient number of quality distributors to maintain or expand our geographical coverage. There is also no assurance that our distributors have or will have sufficient resources to deal with unexpected changes in the regulatory, economic or business environment or other factors beyond their control. If they are unable to meet their annual sales targets, we may not be able to develop our business profitably or as planned. (iii) Sales volume and average selling prices of our products (including volume discount and cash discounts for prompt payment) The following table sets out the sales volume for each of our product segments for the Period Under Review: ( 000) FY2014 FY2015 FY2016 1Q2016 1Q2017 Paint Standard 2,389 2,845 3, ,009 Paint Premium , Maintenance and Others (1) Total 3,269 3,836 5,488 1,173 1,421 Note: (1) The sales volume for Maintenance and Others segment does not include the volume for the manufacture of products under private labelling and trading of accessories for the Period Under Review. The prices of our products are determined by several factors, including general economic conditions, level of industry competitiveness as a whole and within each sub-geographical location, demand and supply of our products, and availability of direct materials. Other factors which impact our pricing policies also include freight and transportation costs, the credit standing/history of the customers, insurance costs and expected foreign exchange rates movement. As a result, any change in these factors or in the sales orders received for our products may affect our revenue and profitability. 82

91 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The following table sets out the average selling price for each of our product segments for the Period Under Review: (RM) FY2014 FY2015 FY2016 1Q2016 1Q2017 Paint Standard Paint Premium Maintenance and Others (1) Note: (1) The computation of the average selling price for Maintenance and Others segment does not include the revenue contribution from the manufacture of products under private labelling and trading of accessories for the Period Under Review. (iv) Availability and prices of our direct materials Direct material costs accounted for the largest component of our cost of sales. Direct materials comprised mainly aerosol cans, propellant, solvent, pigment and packaging materials. Direct materials accounted for approximately 83.1%, 83.4%, 84.7%, 85.8% and 83.4% of our cost of sales for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. The prices of our direct materials, in particular, aerosol cans, solvent and pigments, are generally subject to market price fluctuations according to changes in the supply and demand conditions from time to time. Should there be any shortage in the supply of or upsurge in market demand for our direct materials, prices of such direct materials may increase. (v) Competition Competition in our industry could increase as a result of new market entrants, or our competitors may be able to price their products more attractively. Our revenue will be affected if we fail to compete successfully with our competitors in terms of pricing, product quality, branding, distribution capability, product availability, packaging and customer service. Please refer to the Risk Factors section of this Offer Document for a more comprehensive discussion of the above and on other factors which may affect our business operations, revenue and overall financial performance. Revenue We generate revenue from the sale of our products across our three product segments. Our net revenue includes total revenue less any price allowances which include discounts for prompt payment as well as volume-based incentives. Our revenue is recognised when our Group has delivered the products to the customer and significant risks and rewards of ownership of the goods have been passed to the customer. 83

92 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The following table sets out the breakdown of our revenue by product segments for the Period Under Review: Revenue by product segments Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 % RM 000 % RM 000 % RM 000 % RM 000 % Paint Standard 10, , , , , Paint Premium 5, , , , , Maintenance and Others , Total 15, , , , , The following table sets out the breakdown of our revenue by geographical segments for the Period Under Review: Revenue by geographical segments Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 % RM 000 % RM 000 % RM 000 % RM 000 % Malaysia 12, , , , , Indonesia 3, , , , , Other countries (1) , Total 15, , , , , Note: (1) Other countries include Thailand, Philippines and the United Kingdom. Our Paint Standard segment includes standard colour aerosol spray paint products under our Samurai, Canbrush, Kurobushi and CanArt brands. Our Paint Premium segment includes fluorescent, candy and metallic colour aerosol spray paint products, high temperature aerosol spray paint products, primer products, epoxy products and our 2K products under our Samurai and Canbrush brands and our multi-colour tone aerosol spray paint under our Khameleon brand. Our Maintenance and Others segment includes cosmetic products under our Geigi brand such as metal and paint polish, tyre shine, motorcycle shampoo and water transfer film and maintenance products under our Ninjutsu brand such as engine degreaser, chain oil, carburettor and gasket cleaner, manufacturing of products under private labelling and trading of accessories such as water transfer film and aerosol spray gun. 84

93 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Our revenue amounted to RM15.9 million, RM19.1 million, RM30.6 million, RM6.5 million and RM8.1 million for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. The increase in revenue from FY2014 to FY2016 was due to (i) the increase in sales volume in the markets which we served from 3.3 million cans in FY2014 to 3.8 million cans in FY2015 and to 5.5 million cans in FY2016; and (ii) the increase in average selling price from RM4.9 per can in FY2014 to RM5.0 per can in FY2015 and to RM5.6 per can in FY2016 due to lower incentives given to our customers, revision in our recommended retail prices in FY2015 and FY2016, and the various new products our Group had launched in FY2016 which had higher recommended retail prices. Cost of Sales Our cost of sales comprised mainly direct material costs, labour costs and manufacturing and other overheads. Our cost of sales amounted to 66.6%, 65.0%, 59.8%, 66.8% and 55.9% of our revenue in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. The following table sets out the breakdown of the cost of sales by (i) direct material costs; (ii) labour costs; and (iii) manufacturing and other overheads for the Period Under Review: Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 % RM 000 % RM 000 % RM 000 % RM 000 % Direct material costs 8, , , , , Labour costs Manufacturing and other overheads 1, , , Total 10, , , , , (i) Direct material costs The cost of our direct materials is the most significant component of our costs of sales. Direct materials accounted for approximately 83.1%, 83.4%, 84.7%, 85.8% and 83.4% of our cost of sales for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Direct materials comprised mainly aerosol cans, propellant, solvent and pigment and packaging material. The increase in direct material costs is in line with the increase in sales volume for the Period Under Review. (ii) Labour costs Labour costs comprised salaries and wages, bonuses and legal welfare expenses. Labour costs accounted for approximately 6.0%, 5.0%, 4.9%, 4.9% and 6.1% of our cost of sales for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. (iii) Manufacturing and other overheads Manufacturing and other overhead expenses comprised mainly depreciation, freight costs, utilities charges and repair and maintenance expenses. Overhead expenses accounted for approximately 10.9%, 11.6%, 10.4%, 9.3% and 10.5% of our cost of sales in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. The relatively higher manufacturing and other overheads in FY2016 was mainly due to the higher freight costs incurred in line with the increase in sales volume in Indonesia. 85

94 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Gross Profit and Gross Profit Margin The following tables provide a breakdown of our gross profit and gross profit margin by product segments for the Period Under Review: Gross profit by product segments Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 000 % RM 000 % RM 000 % RM 000 % RM 000 % Paint Standard 2, , , , Paint Premium 2, , , , , Maintenance and Others , Total 5, , , , , Gross profit margin by product segments Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 Paint Standard 23.6% 25.8% 32.1% 19.1% 37.3% Paint Premium 51.7% 53.2% 52.2% 51.6% 54.7% Maintenance and Others 36.3% 36.6% 49.9% 43.7% 51.0% Overall 33.4% 35.0% 40.2% 33.2% 44.1% Our overall gross profit margins were 33.4%, 35.0%, 40.2%, 33.2% and 44.1% in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. (i) Paint Standard Our gross profit margin for this segment was 23.6%, 25.8%, 32.1%, 19.1% and 37.3% in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Our gross profit margin had increased mainly due to (i) a revision in recommended retail price of our products in FY2015 and FY2016, and (ii) the decrease in costs due to a decrease in prices of crude oil. (ii) Paint Premium Our gross profit margin for this segment was 51.7%, 53.2%, 52.2%, 51.6% and 54.7% in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Our gross profit margin had increased from FY2014 to FY2015 due to lower overheads incurred per can arising from economies of scale in production. 86

95 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (iii) Maintenance and Others Our gross profit margin for this segment was 36.3%, 36.6%, 49.9%, 43.7% and 51.0% in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Our gross profit margin increased from 36.6% in FY2015 to 49.9% in FY2016 due to lower overheads incurred per can arising from economies of scale in production. Other (Expenses)/Income Our other (expenses)/income mainly comprised interest income, gain/(loss) on foreign exchange and gain on disposal of property, plant and equipment. Other operating (expenses)/income amounted to approximately loss of RM0.1 million in FY2014, and income of RM0.2 million, RM0.3 million, RM0.1 million and RM0.2 million in FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Administrative Expenses Administrative expenses consist mainly of staff costs, professional fees, rental fees, upkeep of office, depreciation, utilities, printing and stationery expenses. The administrative expenses accounted for 12.3%, 15.3%, 12.6%, 10.5% and 28.5% of our revenue in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Staff costs include remuneration for key management and administrative staff which accounted for approximately RM1.1 million, RM1.7 million, RM2.3 million, RM0.5 million and RM0.7 million which represented 56.8%, 58.5%, 60.7%, 66.1% and 28.7% of our administrative expenses for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Marketing and Distribution Expenses Marketing and distribution expenses consist mainly of staff costs for our sales team, marketing and advertising expenses and exhibition expenses. The marketing and distribution expenses accounted for 7.9%, 7.1%, 5.7%, 5.4% and 7.7% of our revenue in FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Finance Costs Finance costs comprise mainly interest expense incurred on our borrowings and finance lease liabilities. Finance costs were approximately 1.0%, 1.2%, 0.9%, 0.8% and 1.2% of our revenue for FY2014, FY2015, FY2016, 1Q2016 and 1Q2017, respectively. Income Tax Expenses We are subject to the prevailing tax regulations of the countries in which we operate, namely, Indonesia, Malaysia and Hong Kong, for which the applicable statutory tax rates during the Period Under Review were 25.0%, 25.0% and 16.5% respectively. INFLATION Our financial performance during the Period Under Review was not materially affected by inflation. 87

96 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS REVIEW OF RESULTS OF OPERATIONS FY2014 VS FY2015 Revenue Revenue increased by approximately RM3.2 million, or 20.0%, from RM15.9 million in FY2014 to RM19.1 million in FY2015. The increase in revenue was mainly due to (i) the increase in revenue from our Paint Standard segment by RM2.1 million, or 20.7%, from RM10.2 million in FY2014 to RM12.3 million in FY2015; and (ii) the increase in revenue from our Paint Premium segment by RM0.7 million, or 12.8%, from RM5.4 million in FY2014 to RM6.1 million in FY2015. Revenue contribution from Malaysia increased by RM1.2 million, or 9.8%, from RM12.5 million in FY2014 to RM13.7 million in FY2015 and revenue contribution from Indonesia increased by RM1.7 million, or 54.3%, from RM3.0 million in FY2014 to RM4.7 million in FY2015, respectively. The increase in revenue was mainly attributable to the following: (i) (ii) higher sale volume from 3.3 million cans in FY2014 to 3.8 million cans in FY2015 mainly due to (a) increased marketing efforts through increasing the number of below-the-line marketing such as products training and demonstrations from nil in FY2014 to 129 in FY2015. Marketing and distribution expenses only increased by RM0.1 million in FY2015 as most of the below-the-line marketing expenses related to product samples used during demonstrations and/or product training; (b) increase in sales of approximately RM1.3 million to existing customers as well as sales to approximately 280 new customers amounting to approximately RM1.9 million; and (c) expansion into new geographical regions within Indonesia like Semarang and North Sulawesi, leading to the increase in sales volume in Indonesia; and an increase in average selling price from RM4.9 in FY2014 to RM5.0 in FY2015 due mainly to an increase in recommended retail price in April 2014 by approximately 5.0% in Malaysia, partially offset by an increase in incentives given to our customers in line with the increase in sales volume. Cost of Sales and Gross Profit Margin Cost of sales increased by approximately RM1.8 million, or 17.2%, from RM10.6 million in FY2014 to RM12.4 million in FY2015. The increase in cost of sales was mainly attributable to (i) the increase in direct material costs by RM1.6 million from RM8.8 million in FY2014 to RM10.4 million in FY2015 in line with the increase in the sales volume; and (ii) the increase in manufacturing and overhead expenses by RM0.2 million from RM1.2 million in FY2014 to RM1.4 million in FY2015. As a result of the foregoing, our gross profit increased by RM1.4 million, or 25.6%, from RM5.3 million in FY2014 to RM6.7 million in FY2015. Our overall gross profit margin increased from 33.4% in FY2014 to 35.0% in FY2015 mainly due to the increase in gross profit margin across all our product segments as we increased the average selling price of our products in FY

97 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Other (Expenses)/Income Other income increased by RM0.3 million from recognising a loss of RM0.1 million in FY2014 to recognising a gain of RM0.2 million in FY2015. This was mainly due to (i) a gain on disposal of motor vehicles of approximately RM75,000; (ii) a foreign exchange gain of RM68,000; and (iii) insurance claim of approximately RM13,000 in FY2015. Administrative Expenses Administrative expenses increased by RM0.9 million, or 48.8%, from RM2.0 million in FY2014 to RM2.9 million in FY2015. The increase was mainly due to (i) an increase in directors remuneration and staff salaries by RM0.6 million as a result of annual salary increments; (ii) the increase in professional fees of RM0.2 million for the registration of trademarks and patents; and (iii) the increase in upkeep of facilities of RM0.1 million. Marketing and Distribution Expenses Marketing and distribution expenses increased by RM0.1 million, or 6.7%, from RM1.3 million in FY2014 to RM1.4 million in FY2015. The increase was mainly due to the increase in advertisement expenses on social media to promote our products and the increase in commission paid in line with the increase in our revenue. Finance Costs Finance costs increased by RM0.1 million, or 42.6%, from RM0.1 million in FY2014 to RM0.2 million in FY2015. The increase was mainly attributable to the higher level of borrowings in FY2015. Profit for the Year As a result of the foregoing, our profit for the year increased by RM0.6 million, or 45.6%, from RM1.3 million in FY2014 to RM1.9 million in FY2015. FY2015 VS FY2016 Revenue Revenue increased by approximately RM11.5 million, or 60.0%, from RM19.1 million in FY2015 to RM30.6 million in FY2016. The increase in revenue was due to (i) the increase in revenue from our Paint Standard segment by RM5.8 million, or 47.4%, from RM12.3 million in FY2015 to RM18.1 million in FY2016; and (ii) the increase in revenue from our Paint Premium segment by RM4.4 million, or 71.2%, from RM6.1 million in FY2015 to RM10.5 million in FY2016. Revenue contribution from Malaysia increased by RM4.0 million, or 29.0%, from RM13.7 million in FY2015 to RM17.7 million in FY2016 and revenue contribution from Indonesia increased by RM6.6 million, or 140.0%, from RM4.7 million in FY2015 to RM11.3 million in FY2016, respectively. 89

98 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The increase in revenue was mainly attributable to the following: (i) higher sales volume from 3.8 million cans in FY2015 to 5.5 million cans in FY2016 mainly due to: (a) (b) (c) (d) (e) the increase in marketing efforts including (1) advertising on social media platform beginning from February 2015; (2) increasing the number of below-the-line marketing such as products training and demonstrations from 129 in FY2015 to 264 in FY2016; and (3) increasing the number of sales and marketing personnel in Indonesia by 100.0% from eight (8) as at 31 March 2015 to 16 as at 31 March 2016 with average revenue per sales and marketing personnel in Indonesia increasing from RM0.6 million in FY2015 to RM0.7 million in FY2016. Marketing and distribution expenses only increased by RM0.4 million in FY2016 as most of the below-the-line marketing expenses related to product samples used during demonstrations and/or product training; increase in sales of approximately RM5.4 million to existing customers as well as sales to approximately 230 new customers amounting to approximately RM6.1 million; the expansion into new market segment for re-conditioning of used motorcycles for resale in Indonesia and introduction of new 2K products resulting in the increase in sales volume by approximately 0.4 million cans from 0.9 million in FY2015 to 1.3 million in FY2016 for the Paint Premium segment; consolidation of certain retailers and workshops with low annual sales, where such customers will be served and supplied directly by our Group s appointed exclusive distributors instead of our Group; expansion into new geographical regions within Indonesia like West Jakarta and Surabaya, leading to the increased sales volume in Indonesia; (f) expansion into Thailand and Philippines in December 2015 and March 2016, respectively; and (ii) an increase in average selling price from RM5.0 in FY2015 to RM5.6 in FY2016 mainly due to: (a) (b) (c) (d) (e) previous marketing and branding efforts by our Group and the recognition by our customers of our product quality allowing us to increase our recommended retail prices in October 2015 by 10.0% across all our products in Malaysia; lower incentives given to our customers in Indonesia; appreciation of IDR against RM by approximately 8.3% between FY2015 and FY2016; the higher proportion of sales from Paints Premium and Maintenance and Others segments with higher average selling price; and launch of new products by our Group such as 2K products and products under the Geigi and Ninjutsu brands with higher average selling prices. 90

99 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Cost of Sales and Gross Profit Margin Cost of sales increased by approximately RM5.9 million, or 47.3%, from RM12.4 million in FY2015 to RM18.3 million in FY2016. The increase in cost of sales was mainly attributable to (i) the increase in direct material costs by RM5.2 million in line with the increase in our sales volume; (ii) the increase in labour costs by RM0.3 million due to the increase in headcount for our new production lines; and (iii) the increase in manufacturing and other overhead expenses by RM0.5 million due to the increase in freight costs in line with the increase in sales in Indonesia. As a result of the foregoing, our gross profit increased by RM5.6 million, or 83.7%, from RM6.7 million in FY2015 to RM12.3 million in FY2016. Our overall gross profit margin increased from 35.0% in FY2015 to 40.2% in FY2016 mainly due to (i) appreciation of foreign currency against RM and (ii) launches of new products under Paint Premium and Maintenance and Others segments, which had higher recommended retail prices. Other Income Other income increased by RM0.1 million from RM0.2 million in FY2015 to RM0.3 million in FY2016. This was mainly due to a gain on foreign exchange of RM0.2 million in FY2016. Administrative Expenses Administrative expenses increased by RM1.0 million, or 31.8%, from RM2.9 million in FY2015 to RM3.9 million in FY2016. The increase was mainly due to (i) an increase in staff costs of RM0.7 million as a result of an increase in headcount in line with the increase in business activities; (ii) an increase in rental fee of RM0.1 million as a result of additional warehouse leased in Indonesia and Malaysia; (iii) an increase in legal and professional fees of RM0.1 million; and (iv) increase in travelling expenses of RM0.1 million. Marketing and Distribution Expenses Marketing and distribution expenses increased by RM0.3 million, or 28.8%, from RM1.4 million in FY2015 to RM1.7 million in FY2016. The increase was mainly due to (i) an increase in advertisement expenses by RM0.1 million to promote our new 2K products launched in February 2015; and (ii) an increase in overseas exhibition expenses by RM0.2 million to promote our new products. Finance Costs Finance costs increased by RM0.1 million, or 21.2%, from RM0.2 million in FY2015 to RM0.3 million in FY2016. The increase was mainly attributable to the higher level of borrowings in FY2016. Profit For The Year As a result of the foregoing, our profit for the year increased by RM3.5 million, or 178.3%, from RM1.9 million in FY2015 to RM5.4 million in FY

100 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS 1Q2016 VS 1Q2017 Revenue Revenue increased by approximately RM1.6 million, or 24.6%, from RM6.5 million in 1Q2016 to RM8.1 million in 1Q2017. The increase in revenue was due to (i) the increase in revenue from our Paint Standard segment by RM1.3 million, or 38.0%, from RM3.5 million in 1Q2016 to RM4.8 million in 1Q2017; and (ii) the increase in revenue from our Paint Premium segment by RM0.5 million, or 23.9%, from RM2.3 million in 1Q2016 to RM2.8 million in 1Q2017. Revenue contribution from Indonesia increased by RM1.5 million, or 82.8%, from RM1.8 million in 1Q2016 to RM3.3 million in 1Q2017 and revenue contribution from other countries increased by RM0.3 million, or 300.0%, from RM0.1 million in 1Q2016 to RM0.4 million in 1Q2017, respectively. However, revenue from Malaysia had slightly decreased by RM0.2 million, or 4.4%, from RM4.6 million in 1Q2016 to RM4.4 million in 1Q2017. The increase in revenue was mainly attributable to the following: (i) higher sales volume from 1.2 million cans in 1Q2016 to 1.4 million cans in 1Q2017 mainly due to: (a) (b) (c) increase in marketing efforts including (1) increasing the number of below-the-line marketing such as products training and demonstrations from 27 in 1Q2016 to 95 in 1Q2017; and (2) increasing the number of sales and marketing personnel in Indonesia by 18.8% from 16 as at 31 March 2016 to 19 in 30 June 2016 with average revenue per sales and marketing personnel of RM0.2 million in 1Q2017. Marketing and distribution expenses only increased by RM0.3 million in 1Q2017 as most of the below-the-line marketing expenses related to product samples used during demonstrations and/or product training: increase in sales of approximately RM1.5 million to Indonesia due to increased sales of approximately RM0.8 million to existing customers as well as sales to approximately 70 new customers amounting to approximately RM0.7 million, which were partially offset by decrease in sales of approximately RM0.2 million in Malaysia; consolidation of certain retailers and workshops with low annual sales, where such customers would be served and supplied directly by our Group s appointed exclusive distributors instead of our Group; and (ii) an increase in average selling price from RM5.5 in 1Q2016 to RM5.7 in 1Q2017 as a result of: (a) (b) the increase in recommended retail prices by 10.0% in October 2015 across all our products in Malaysia; lower incentives given to our customers in Indonesia; and (c) appreciation of IDR against RM by approximately 8.0% between 1Q2016 and 1Q

101 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Cost of Sales and Gross Profit Margin Cost of sales increased by approximately RM0.2 million, or 4.3%, from RM4.3 million in 1Q2016 to RM4.5 million in 1Q2017. The increase in cost of sales was mainly attributable to (i) the increase in manufacturing and other overhead expenses by RM0.1 million due to the increase in freight costs in line with the increase in sales to Indonesia; and (ii) the increase in labour costs by RM0.1 million due to the increase in headcount for our new production lines. As a result of the foregoing, our gross profit increased by RM1.4 million, or 65.7%, from RM2.2 million in 1Q2016 to RM3.6 million in 1Q2017. Our overall gross profit margin increased from 33.2% in 1Q2016 to 44.1% in 1Q2017 mainly due to (i) increase in recommended retail prices; and (ii) higher proportion of the higher profit margin products sold. Other Income Other income increased by RM0.1 million from RM0.1 million in 1Q2016 to RM0.2 million in 1Q2017. This was mainly due to a gain on foreign exchange of RM0.2 million in 1Q2017. Administrative Expenses Administrative expenses increased by RM1.6 million, or 236.4% from RM0.7 million in 1Q2016 to RM2.3 million in 1Q2017. The increase was mainly due to (i) increase in staff costs of RM0.5 million; (ii) an increase in agent commission of RM0.1 million for the purchase of factories; and (iii) an increase in legal and professional fees by RM1.0 million including Listing expenses. Marketing and Distribution Expenses Marketing and distribution expenses increased by RM0.2 million, or 78.6%, from RM0.4 million in 1Q2016 to RM0.6 million in 1Q2017. The increase was mainly due to an increase in exhibition expenses by RM0.2 million. Finance Costs Finance costs increased by RM41,000, or 75.9%, from RM54,000 in 1Q2016 to RM95,000 in 1Q2017. The increase was mainly attributable to the higher level of borrowings in 1Q2017. Profit For The Period As a result of the foregoing, our profit for the period decreased by RM0.6 million, or 66.8%, from RM0.9 million in 1Q2016 to RM0.3 million in 1Q

102 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS REVIEW OF PAST FINANCIAL POSITION Non-Current Assets As at 31 March 2016 Our non-current assets comprised mainly property, plant and equipment, intangible assets, deferred tax assets and other receivables. As at 31 March 2016, our non-current assets amounted to approximately RM5.7 million, or 20.2% of our total assets. Our property, plant and equipment amounted to RM5.1 million, or 89.5% of total non-current assets and comprised freehold land, freehold property, furniture, fittings and equipment, motor vehicles, plant and machinery and renovation. Our intangible assets relate to computer software and amounted to RM23,000, or 0.4% of total non-current assets. Our other receivables relate to deposit for purchase of freehold land and property amounting to RM0.6 million, or 9.8% of total non-current assets. The purchase of freehold land and property was completed in 1Q2017 for a purchase consideration of RM5.6 million, of which RM1.0 million had been paid as down payment. The remaining RM4.6 million was funded by bank loans from Alliance Bank Malaysia Berhad. As at 30 June 2016 Our non-current assets comprised mainly property, plant and equipment, intangible assets and deferred tax assets. As at 30 June 2016, our non-current assets amounted to approximately RM10.8 million, or 33.1% of our total assets. Our property, plant and equipment amounted to RM10.7 million, or 99.6% of total non-current assets and comprised freehold land, freehold properties, furniture, fittings and equipment, motor vehicles, plant and machinery and renovation. Current assets As at 31 March 2016 Our current assets comprised cash and bank balances, trade and other receivables and inventories. As at 31 March 2016, our current assets amounted to approximately RM22.5 million, or 79.8% of our total assets. Cash and bank balances were the most significant component of our current assets and amounted to approximately RM10.2 million, or 45.3% of total current assets. Cash and bank balances comprised mainly fixed deposits and cash balances denominated in RM, S$, IDR, HKD, USD and GBP. 94

103 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The trade receivables amounted to approximately RM5.3 million, or 23.6% of our current assets, of which RM0.6 million were past due but not impaired. As at the Latest Practicable Date, approximately RM2,000 of such past due trade receivables remained outstanding. Other receivables included (i) prepayments of RM0.7 million relating to advances for rental and application of trademark and patent fee; (ii) deposits of RM0.1 million (iii) tax recoverable of RM0.6 million relating to prepayment of corporate tax; and (iv) other receivables of RM0.4 million. Inventories amounted to RM5.4 million, or 23.9% of total current assets, and comprised direct materials, packaging materials and finished goods. As at 30 June 2016 Our current assets comprised cash and bank balances, trade and other receivables and inventories. As at 30 June 2016, our current assets amounted to approximately RM21.8 million, or 66.9% of our total assets. Cash and bank balances were the most significant component of our current assets and amounted to approximately RM9.9 million, or 45.5% of total current assets. Cash and bank balances comprised mainly fixed deposits and cash and bank balances denominated in RM, S$, IDR, HKD, USD and GBP. The trade receivables amounted to approximately RM4.2 million, or 19.3% of our current assets, of which RM0.9 million were past due but not impaired. As at the Latest Practicable Date, approximately RM21,000 of such past due trade receivables remained outstanding. Other receivables include (i) prepayments of RM0.8 million relating to advances for rental, listing expenses and application of trademark and patent fee; (ii) tax recoverable of RM0.9 million; (iii) advance to supplier amounting to RM0.4 million; and (iv) other receivables of RM0.2 million. Inventories amounted to RM5.4 million, or 24.6% of total current assets, and comprised direct materials, packaging materials and finished goods. Current liabilities As at 31 March 2016 Our current liabilities comprised borrowings and trade and other payables. As at 31 March 2016, our current liabilities amounted to approximately RM14.5 million, or 89.0% of our total liabilities. Our trade and other payables amounted to RM10.4 million and accounted for 71.4% of our current liabilities as at 31 March 2016 and comprised mainly trade payables of RM4.9 million and other payables of RM5.5 million. Other payables comprised mainly (i) amounts due to directors of RM4.4 million; (ii) accrued expenses of RM0.4 million relating to staff cost; and (iii) other miscellaneous payables of RM0.7 million relating to sundry supplier. Our borrowings amounted to RM4.2 million, or 28.6% of our current liabilities as at 31 March 2016 and comprised mainly term loans, banker s acceptance and finance lease liabilities. Our borrowings as at 31 March 2016 bore interest rates of 1.2% to 12.5% per annum and some of such borrowings were secured over fixed deposits and properties of our Group, and guarantees from 95

104 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS our Directors and Credit Guarantee Corporation Malaysia Berhad under the SME Assistance Guarantee Scheme. Please refer to the sections entitled Capitalisation and Indebtedness and Interested Person Transactions of this Offer Document for more details. As at 30 June 2016 Our current liabilities comprised borrowings, trade and other payables and tax payables. As at 30 June 2016, our current liabilities amounted to approximately RM14.2 million, or 69.7% of our total liabilities. Our trade and other payables amounted to RM9.3 million and accounted for 65.2% of our current liabilities as at 30 June 2016 and comprised mainly trade payables of RM3.9 million and other payables of RM5.3 million. Other payables comprised mainly (i) amounts due to directors of RM4.5 million; (ii) accrued expenses of RM0.3 million relating to staff cost; and (iii) other miscellaneous payables of RM0.5 million relating to sundry supplier and GST payable. Our borrowings amounted to RM4.5 million, or 31.8% of our current liabilities as at 30 June 2016 and comprised mainly term loans, banker s acceptance and finance lease liabilities. Our borrowings as at 30 June 2016 bore interest rates of 1.2% to 12.5% per annum and some of such borrowings were secured over fixed deposits and properties of our Group, and guarantees from our Directors and Credit Guarantee Corporation Malaysia Berhad under the SME Assistance Guarantee Scheme. Please refer to the sections entitled Capitalisation and Indebtedness and Interested Person Transactions of this Offer Document for more details. Non-current liabilities As at 31 March 2016 Our non-current liabilities comprised mainly borrowings, deferred tax liabilities and other payables. As at 31 March 2016, non-current liabilities amounted to RM1.8 million, or 11.0% of our total liabilities. The non-current portion of our borrowings amounted to approximately RM1.4 million, or 80.0% of our non-current liabilities and comprised term loans and finance lease liabilities. The non-current portion of our borrowings bore interest rates ranging from 1.2% to 12.5% per annum and some of such borrowings were secured over fixed deposits and properties of our Group, and guarantees by our Directors and Credit Guarantee Corporation Malaysia Berhad under the SME Assistance Guarantee Scheme. Please refer to section entitled Capitalisation and Indebtedness and Interested Person Transactions of this Offer Document for further details. As at 30 June 2016 Our non-current liabilities comprised mainly borrowings, deferred tax liabilities and other payables. As at 30 June 2016, non-current liabilities amounted to RM6.2 million, or 30.3% of our total liabilities. 96

105 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The non-current portion of our borrowings amounted to approximately RM5.8 million, or 93.5% of our non-current liabilities and comprised term loans and finance leases liabilities. The non-current portion of our borrowings bore interest rates ranging from 1.2% to 12.5% per annum and some of such borrowings were secured over fixed deposits and properties of our Group, and guarantees from our Directors and Credit Guarantee Corporation Malaysia Berhad under the SME Assistance Guarantee Scheme. Please refer to sections entitled Capitalisation and Indebtedness and Interested Person Transactions of this Offer Document for more details. Equity As at 31 March 2016 As at 31 March 2016, shareholders equity amounted to RM11.9 million and comprised (i) share capital of RM1.3 million; (ii) retained earnings of RM10.4 million; and (iii) currency translation reserve of RM0.2 million relating to consolidation of foreign subsidiaries. As at 30 June 2016 As at 30 June 2016, shareholders equity amounted to RM12.2 million and comprised (i) share capital of RM1.3 million; (ii) retained earnings of RM10.7 million; and (iii) currency translation reserve of RM0.2 million relating to consolidation of foreign subsidiaries. LIQUIDITY AND CAPITAL RESOURCES For the Period Under Review and up to the Latest Practicable Date, our growth and operations have been funded by a combination of internal and external sources of funds. Internal sources of funds comprise mainly cash generated from operating activities and funds from shareholders while external sources comprise mainly borrowings from financial institutions. The principal uses of these funds are for working capital purposes, such as the purchase of direct materials, as well as for capital expenditure. Please refer to the section entitled Capitalisation and Indebtedness of this Offer Document for details of our latest available credit facilities, cash and cash equivalents and level of borrowings. Based on the Audited Combined Financial Statements and the Unaudited Interim Combined Financial Statements, respectively, the Group generated cash inflow from operating activities of approximately RM7.9 million and RM0.3 million for FY2016 and 1Q2017, respectively. As at 31 March 2016 and 30 June 2016, we had cash and cash equivalents amounting to approximately RM8.8 million and RM8.3 million respectively and our working capital amounted to approximately RM8.0 million and RM7.6 million respectively. Our gearing ratio (defined as total indebtedness over total equity) was 0.5 times and 0.8 times as at 31 March 2016 and 30 June 2016 respectively. As at the Latest Practicable Date, we had cash and cash equivalents amounting to RM7.4 million and available credit facilities of RM12.0 million, of which RM11.1 million had been utilised and RM0.9 million was unutilised. Please refer to the section entitled Capitalisation and Indebtedness of this Offer Document for more details. 97

106 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS To the best of our Directors knowledge, as at the Latest Practicable Date, we are not in breach of any of the terms and conditions or covenants associated with any credit arrangement or bank loan which could materially affect our financial position and results or business operations or the investments by our Shareholders. Our Directors are of the reasonable opinion that, after having made due and careful enquiry and after taking into account the cash flows generated from our operations, our credit facilities and our existing cash and cash equivalents, the working capital available to our Group as at the date of lodgement of this Offer Document is sufficient to meet our present working capital requirements and for at least 12 months after the admission of our Company to Catalist. The Sponsor is of the reasonable opinion that, after having made due and careful enquiry and after taking into account the cash flow generated from the Group s operations, the Group s credit facilities and the Group s existing cash and cash equivalents, the working capital available to the Group as at the date of lodgement of this Offer Document is sufficient to meet its present working capital requirements and for at least 12 months after the admission of the Company to Catalist. SUMMARY OF COMBINED STATEMENTS OF CASH FLOWS The following table sets out a summary of our Group s net cash flow for the Period Under Review: Audited Unaudited RM 000 FY2014 FY2015 FY2016 1Q2016 1Q2017 Net cash generated from operating activities 909 1,280 7,944 1, Net cash used in investing activities (60) (875) (3,041) (273) (5,167) Net cash generated from/(used in) financing activities ,437 (389) 4,403 Net increase/(decrease) in cash and cash equivalents 1, , (434) Effects of exchange rate changes on cash and cash equivalents (20) 1 Cash and cash equivalents at beginning of financial year/period 620 1,790 2,427 2,427 8,767 Cash and cash equivalents at end of financial year/period 1,790 2,427 8,767 2,840 8,333 FY2014 Net Cash Generated from Operating Activities In FY2014, we recorded net cash generated from operating activities of RM0.9 million, which comprised operating cash flows before changes in working capital of RM2.3 million, net working capital outflow of RM0.9 million, net interest payment of RM0.1 million and net income tax payment of RM0.4 million. 98

107 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS The net working capital outflow was mainly due to an increase of RM0.7 million in inventories and RM0.7 million in trade and other receivables respectively. This was partially offset by an increase in trade and other payables of RM0.4 million. Net Cash Used in Investing Activities In FY2014, we recorded a net cash outflow from investing activities of approximately RM0.1 million which was mainly due to purchases of spare parts for plant and machinery. Net Cash Generated from Financing Activities In FY2014, we recorded a net cash inflow from financing activities amounting to RM0.3 million. This was mainly due to proceeds from bank borrowings of RM1.8 million which was offset by repayment of bank borrowings and obligations under finance lease of RM1.5 million. As at 31 March 2014, our cash and cash equivalents amounted to RM1.8 million. FY2015 Net Cash Generated from Operating Activities In FY2015, we recorded net cash generated from operating activities of RM1.3 million, which comprised operating cash flows before changes in working capital of RM2.8 million, net working capital outflow of RM0.7 million, net interest payment of RM0.2 million and net income tax payment of RM0.6 million. The working capital outflow was mainly due to an increase of RM0.9 million in inventories and decrease of RM0.1 million in trade and other receivables respectively. Net Cash Used in Investing Activities In FY2015, we recorded a net cash outflow from investing activities of RM0.9 million mainly due to purchases of motor vehicle and plant and machinery of RM1.0 million which was partially offset by proceeds from disposal of motor vehicle of RM0.1 million. Net Cash Generated from Financing Activities In FY2015, we recorded a net cash inflow from financing activities of RM0.2 million. This was mainly due to proceeds from bank borrowings of RM1.0 million. This was partially offset by repayment of bank borrowings and obligations under finance lease of RM0.5 million and increase in bank deposits pledged of RM0.3 million. As at 31 March 2015, our cash and cash equivalents amounted to RM2.4 million. 99

108 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS FY2016 Net Cash Generated from Operating Activities In FY2016, we recorded a net cash inflow from operating activities of RM7.9 million, which comprised operating cash flows before changes in working capital of RM7.5 million, net working capital inflow of RM2.0 million, net interest payment of RM0.3 million and net income tax payment of RM1.3 million. The working capital inflow was mainly due to an increase of RM7.6 million in trade and other payables. The increase in the trade and other payables was mainly due to (i) the increase in advances from directors of RM4.4 million for working capital purposes; and (ii) the increase in trade payables of RM2.9 million as a result of the increase in direct materials purchased in FY2016 in line with the increase in sales volume. This was offset by increases in inventories and trade and other receivables of RM2.0 million and RM3.7 million, respectively. Net Cash Used in Investing Activities In FY2016, we recorded a net cash outflow from investing activities of RM3.0 million mainly due to purchase of plant and machinery to expand our Group s production line and deposit of RM0.6 million in relation to the purchase of freehold land and property in FY2017. Net Cash Generated from Financing Activities In FY2016, we recorded a net cash inflow from financing activities of RM1.4 million. This was mainly due to proceeds from banker s acceptance of RM2.2 million which was offset by repayment of bank borrowings and obligations under finance lease of RM0.4 million and increase in bank deposits pledged of RM0.4 million. As at 31 March 2016, our cash and cash equivalents amounted to approximately RM8.8 million. 1Q2017 Net Cash Generated from Operating Activities In 1Q2017, we recorded a net cash inflow from operating activities of RM0.3 million, which comprised operating cash flows before changes in working capital of RM1.0 million, net working capital outflow of RM0.7 million, net interest payment of RM0.1 million and net income tax refund of RM0.1 million. The working capital outflow was mainly due to an increase in trade and other receivables of RM0.3 million and decrease of RM0.4 million in trade and other payables. Net Cash Used in Investing Activities In 1Q2017, we recorded a net cash outflow from investing activities of RM5.2 million mainly due to purchase of freehold land and properties for expansion of our production lines. 100

109 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Net Cash Generated from Financing Activities In 1Q2017, we recorded a net cash inflow from financing activities of RM4.4 million. This was mainly due to proceeds from bank borrowings of RM4.7 million which was partially offset by the increase in bank deposits pledged of RM0.2 million and repayment of bank borrowings and obligations under finance lease of RM0.1 million. As at 30 June 2016, our cash and cash equivalents amounted to approximately RM8.3 million. MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS Capital expenditures Our Group s capital expenditures for the Period Under Review and for the period from 1 July 2016 up to the Latest Practicable Date were as follows: RM 000 Audited Unaudited FY2014 FY2015 FY2016 1Q2017 From 1 July 2016 to the Latest Practicable Date Furniture, fittings and equipment Plant and machinery , Freehold land and properties 5,600 Motor vehicles Renovation Total 54 1,550 2,526 5, The above capital expenditure was financed by a combination of funds generated from our operations and funds obtained from financial institutions. 101

110 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Capital divestments The material divestments made by our Group for the Period Under Review, and for the period from 1 July 2016 up to the Latest Practicable Date were as follows: RM 000 Audited Unaudited FY2014 FY2015 FY2016 1Q2017 From 1 July 2016 to the Latest Practicable Date Motor vehicles 290 Furniture and fittings Renovation Total 290 CAPITAL COMMITMENTS As at the Latest Practicable Date, our Group has capital commitments in respect of renovation for our properties of approximately RM263,000. Our Group intends to finance the capital commitments through internally generated funds. OPERATING LEASE COMMITMENTS As at the Latest Practicable Date, our Group had the following operating lease commitments in respect of rental of properties: Operating lease commitments payables We leased factory and warehouse for our production lines from unrelated third parties under non-cancellable operating lease agreements. These lease agreements are negotiated for terms of three (3) years from 1 August 2015 with an option to extend for three (3) years from the expiry of the lease terms. Please refer to the section entitled General Information on Our Group Properties and Fixed Assets of this Offer Document for details of our leased properties. 102

111 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS We intend to finance our operating lease commitments through internally generated funds. Our future minimum lease payables under non-cancellable operating leases as at 30 June 2016 and as at the Latest Practicable Date are as follows: RM 000 As at 30 June 2016 As at the Latest Practicable Date Not later than one (1) financial year Later than one (1) but not later than five financial years Later than five (5) financial years Operating lease commitments receivables We leased out one of our property to an unrelated third party under a non-cancellable operating lease agreement. Our future minimum lease receivables under non-cancellable operating leases as at 30 June 2016 and as at the Latest Practicable Date are as follows: RM 000 As at 30 June 2016 As at the Latest Practicable Date Not later than one (1) financial year 144 Later than one (1) but not later than five financial years 252 Later than five (5) financial years 396 Our operating lease receivables are negotiated for a fixed term of three (3) years. The operating lease commitments estimated above are determined by using the revision rates as indicated in the lease agreement for the remaining lease term. Save as disclosed above and in the section entitled General Information on Our Group Business Strategies and Future Plans of this Offer Document, we do not have other material plans on capital expenditures, divestments and commitments as at the Latest Practicable Date. 103

112 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS FOREIGN EXCHANGE EXPOSURE Our reporting currency is in RM. While our operations are primarily based in Malaysia and Indonesia, we make purchases from local and overseas suppliers. Our revenue is largely denominated in RM and IDR, while our purchases are largely denominated in RM and USD. The percentage of our revenue and purchases denominated in the various currencies for the Period Under Review is set out below: % of revenue denominated in: Audited Unaudited FY2014 FY2015 FY2016 1Q2016 1Q2017 RM 78.2% 71.4% 60.9% 70.5% 55.0% USD 0.7% IDR 19.1% 24.6% 36.9% 28.8% 40.8% GBP 2.7% 3.6% 1.0% 3.5% SGD 0.4% 0.5% 0.7% 0.7% Total 100.0% 100.0% 100.0% 100.0% 100.0% % of purchases denominated in: RM 70.0% 64.2% 57.3% 60.0% 67.5% USD 30.0% 35.8% 42.6% 40.0% 32.5% SGD 0.1% Total 100.0% 100.0% 100.0% 100.0% 100.0% To the extent that our revenue and purchases are not perfectly matched in the same currency and to the extent that there are timing differences between the time of our purchases and payments and our sales and receipts, we will be exposed to foreign exchange fluctuations against the respective functional currencies of Group entities which may adversely affect our results of operations. Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at the reporting date. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognised in profit or loss. 104

113 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS Our net foreign exchange (losses)/gains for the Period Under Review are as follows: RM 000 FY2014 FY2015 FY2016 1Q2017 Net foreign exchange (losses)/gains (104) Currently, we do not have a formal foreign currency hedging policy with respect to our foreign exchange exposure. As at the date of this Offer Document, we have not used any financial hedging instruments to manage our foreign exchange risk. We will continue to monitor our foreign exchange exposure and may employ hedging instruments to manage our foreign exchange exposure should the need arise in future. If necessary, we will seek the approval of our Board on the policy for entering into any foreign exchange hedging transactions and will put in place adequate procedures which will be reviewed by our Audit Committee. CHANGES TO ACCOUNTING POLICIES There have been no changes in our accounting policies since the incorporation of the Company. CONTINGENT LIABILITIES As at the Latest Practicable Date, our Group did not have any contingent liabilities. 105

114 CAPITALISATION AND INDEBTEDNESS The following table shows the cash and cash equivalents as well as capitalisation and indebtedness of our Group: (i) (ii) (iii) on an actual basis as at 30 June 2016 based on the Unaudited Interim Combined Financial Statements; based on the management accounts of our Group as at 31 October 2016 and as adjusted for the Restructuring Exercise; and based on the management accounts of our Group as at 31 October 2016 and as adjusted for the Restructuring Exercise and the net proceeds from the Placement. You should read this in conjunction with the Audited Combined Financial Statements and the Unaudited Interim Combined Financial Statements and the section entitled Management s Discussion and Analysis of Financial Position and Results of Operations of this Offer Document. (RM 000) As at 30 June 2016 As at 31 October 2016 and as adjusted for the Restructuring Exercise As at 31 October 2016 and as adjusted for the Restructuring Exercise and the net proceeds from the Placement Cash and cash equivalents (1) 8,333 10,209 17,513 Indebtedness Current secured and guaranteed 4,373 3,928 3,928 secured and non-guaranteed unsecured and guaranteed unsecured and non-guaranteed Non-current secured and guaranteed 5,392 5,167 5,167 secured and non-guaranteed unsecured and guaranteed unsecured and non-guaranteed Total indebtedness 10,285 9,569 9,569 Total shareholders equity 12,225 13,690 20,994 Total capitalisation and indebtedness 22,510 23,259 30,563 Note: (1) Excluding pledged fixed deposits. Since 1 November 2016 and up to the Latest Practicable Date, there were no material changes in our capitalisation and indebtedness, save for drawdowns and scheduled repayments of our borrowings as well as changes in our retained earnings arising from the day-to-day operations in the ordinary course of our business. 106

115 CAPITALISATION AND INDEBTEDNESS BORROWINGS As at the Latest Practicable Date, our Group had available banking facilities of approximately RM12.0 million, of which approximately RM0.9 million was unutilised. Our banking facilities of approximately RM11.1 million were utilised, comprising mainly trade facilities and term loan. The following table sets out the breakdown of our banking facilities as at the Latest Practicable Date: Name of Bank Nature of facilities/ Purpose Facilities granted Utilised Unutilised Interest rates Maturity (RM 000) (RM 000) (RM 000) (%) Profile/Date Details of Security RHB Bank Berhad Trade Facilities Banker s Acceptance ( BA ) Trust Receipt ( TR ) Letter of Credit ( LC ) Shipping Guarantee ( SG ) 1,900 1, BA: Banks Cost Fund % p.a. TR: BLR % p.a. LC: 0.1% per month or part thereof or other rate as may be stipulated by the Association of Banks in Malaysia from time to time (minimum RM100 per LC) SG: 0.15% flat or other rate as may be stipulated by the Association of Banks in Malaysia from time to time (minimum RM100 per SG) 120 days Overdraft BLR % p.a. Overdraft BLR + 0.5% p.a. Term Loan BLR 1.5% p.a. Bank Guarantee ( BG ) % per month (minimum RM100 per BG) March 2019 Personal Guarantee by Mr Ong Yoke En. Ms Lim Lay Yong will provide a personal guarantee and our Company will provide a Corporate Guarantee, respectively. Pledge over fixed deposits. Legal charge over the property at No. 4 Jalan Dato Yunus 1 Taman Perindustrian Dato Yunus Sulaiman Lima Kedai, Skudai, Johor, Malaysia. 107

116 Name of Bank Standard Chartered Saadiq Berhad, Malaysia Alliance Bank Malaysia Berhad CAPITALISATION AND INDEBTEDNESS Nature of facilities/ Purpose Facilities granted Utilised Unutilised Interest rates Maturity (RM 000) (RM 000) (RM 000) (%) Profile/Date Details of Security Term Loan % p.a. (Consists of CGC interest at 3.4% p.a.) August 2019 Guaranteed by Credit Guarantee Corporation Malaysia Bhd. Trade Facilities BA TR LC SG 2,100 1, BA: For 1st limit of RM900,000 money market rate % p.a. BA: For subsequent limit of RM1,200,000 money market rate + 1.5% p.a. TR: For 1st limit of RM900,000 BLR % p.a. (minimum of 4.0% p.a.) TR: For subsequent limit of RM1,200,000 BLR + 1.5% p.a. (minimum of 4.0% p.a.) LC: 0.1% per month or part thereof (minimum RM100 per LC) SG: 0.1% flat (minimum RM100 per SG for ABMB issued LC and minimum of RM200 per SG for non-abmb issued LC) Overdraft BLR % p.a. (minimum of 4.0% p.a.) 120 days Personal guarantee by Mr Ong Yoke En and Ms Lim Lay Yong. Legal charge over the property at No. 6 Jalan Dato Yunus 1, Kawasan Perindustrian Dato Yunus Sulaiman Lima Kedai, Gelang Patah, Johor, Malaysia. Legal charge over the property at No. 8 Jalan Dato Yunus 1, Kawasan Perindustrian Dato Yunus Sulaiman Lima Kedai, Gelang Patah, Johor, Malaysia. 108

117 Name of Bank Alliance Bank Malaysia Berhad Mercedes-Benz Services Sdn Bhd CAPITALISATION AND INDEBTEDNESS Nature of facilities/ Purpose Facilities granted Utilised Unutilised Interest rates Maturity (RM 000) (RM 000) (RM 000) (%) Profile/Date Details of Security Forward Foreign Exchange N/A Term Loan 2,240 2,240 BLR 2.1% p.a. (minimum 4.0% p.a.) July 2031 Term Loan 2,240 2,240 Term Loan BLR 2.1% p.a. (minimum 4.0% p.a.) BLR + 0.5% p.a. (minimum of 4.0% p.a.) July 2031 July 2031 A business loan reducing term assurance covered for the joint life of the two guarantors. Pledge of fixed deposits. Term Loan BLR + 1.2% p.a. (minimum of 4.0% p.a.) April 2019 Personal guarantee by Mr Ong Yoke En and Ms Lim Lay Yong. Lien over the machineries financed by the term loan. Hire Purchase % p.a. June 2021 Lien over leased motor vehicle. 109

118 Name of Bank Malayan Banking Berhad TC Capital Resources Sdn Bhd ORIX Credit Malaysia Sdn Bhd CAPITALISATION AND INDEBTEDNESS Nature of facilities/ Purpose Facilities granted Utilised Unutilised Interest rates Maturity (RM 000) (RM 000) (RM 000) (%) Profile/Date Details of Security Hire Purchase % p.a. July 2021 Hire Purchase % p.a. July 2019 Personal guarantee by Mr Ong Yoke En. Lien over leased motor vehicle. Personal guarantee by Mr Ong Yoke En. Lien over leased motor vehicle. Hire Purchase % p.a. January 2017 Personal guarantee by Mr Ong Yoke En. Lien over leased motor vehicle. Hire Purchase % p.a. Hire Purchase % p.a. September 2018 September 2018 Personal guarantee by Mr Ong Yoke En and Ms Lim Lay Yong. Lien over leased forklift. Personal guarantee by Mr Ong Yoke En and Ms Lim Lay Yong. Lien over leased forklift. 110

119 CAPITALISATION AND INDEBTEDNESS Name of Bank Nature of facilities/ Purpose Facilities granted Utilised Unutilised Interest rates Maturity (RM 000) (RM 000) (RM 000) (%) Profile/Date Details of Security Affin Bank Berhad Hire Purchase % p.a. May 2021 Personal guarantee by Mr Ong Yoke En. Lien over leased motor vehicle. Total 12,017 11,

120 CAPITALISATION AND INDEBTEDNESS We intend, subject to the approval of the banks granting the above credit facilities to our Group, to procure the discharge of the personal guarantees provided by Mr Ong Yoke En and Ms Lim Lay Yong and replace the same with corporate guarantees by our Company following the listing of our Company on Catalist. Should any of the financial institutions not approve of such release and we fail to secure alternative facilities on terms similar to those applicable to our current facilities, Mr Ong Yoke En and Ms Lim Lay Yong will continue to guarantee the relevant facilities. To the best of our Directors knowledge and belief, as at the Latest Practicable Date, we are not in breach of any of the terms and conditions or covenants associated with any credit arrangement or bank loan which could materially affect our financial position or financial results or business operations, or the investments of our Shareholders in us, and none of our Controlling Shareholders and Substantial Shareholders Shares have been pledged, charged or mortgaged as collateral to secure any credit facilities. Certain of our credit facilities as described in this section contain provisions which require us to obtain consent from the relevant financial institution prior to any substantial change in the shareholdings of the borrower. As at the Latest Practicable Date, our Group has, in anticipation of the Placement, obtained letters of consent in relation to such provisions from the financial institutions which have provided such facilities. Pursuant to Rule 728 of the Catalist Rules, Mr Ong Yoke En and Ms Lim Lay Yong, being Controlling Shareholders of our Company, have provided undertakings to our Company that they will notify our Company, as soon as they become aware of any share pledging arrangements relating to their respective Shares and of any event which may result in a breach of our Group s loan provisions. Upon notification by any of the Controlling Shareholders, our Company will make the necessary announcement(s) in compliance with the said rule. In the event that any Group company enters into a loan agreement or issues debt securities that contain a condition making reference to shareholding interests of any Controlling Shareholder, or places restrictions on any change in control of our Company, and the breach of this condition or restriction will cause a default in respect of the loan agreement or debt securities, significantly affecting the operations of our Group, we will immediately announce the details of the condition(s) in accordance with Rule 704(33) of the Catalist Rules, making reference to the shareholding interests of such Controlling Shareholder or restrictions placed on any change in control of our Company and the aggregate level of these facilities that may be affected by a breach of such condition or restriction. Please refer to the section entitled Management s Discussion and Analysis of Financial Position and Results of Operations Contingent Liabilities of this Offer Document for details on our contingent indebtedness. Saved as disclosed above, as at the Latest Practicable Date, our Group did not have any banking or credit facilities from financial institutions, or other borrowings and indebtedness. 112

121 GENERAL INFORMATION ON OUR GROUP HISTORY Our Company was incorporated in Singapore on 9 March 2016 under the Companies Act as a private company limited by shares, under the name of Samurai 2K Aerosol Pte. Ltd. Our Company s registration number is C. Our Company was converted into a public limited company and the name of our Company was changed to Samurai 2K Aerosol Limited in connection therewith on 16 December Our Company became the holding company of our Group following completion of the acquisition of OISB, CPMSB, PTSP and SWHL as set out in the section entitled Restructuring Exercise of the Offer Document. For more details, please refer to the section entitled Restructuring Exercise of this Offer Document. Our history dates back to 1997 when our founder, Mr Ong Yoke En, acquired shares in OISB. During the same period, Mr Ong Yoke En also acquired machinery and equipment for OISB to commence operations. Our Group started providing contract manufacturing services in international markets and was recognised in the industry as a private label manufacturer. Our business operations then consisted of four (4) segments, namely DIY adhesives, aerosols, detergents and industrial cleaning chemicals. Our Group s adhesive products, particularly blister packs of superglue, were exported overseas to customers located in the USA, the Czech Republic and the United Kingdom. At the same time, our industrial grade superglue products were sold and widely used by furniture manufacturers in Malaysia. Our aerosol products included spray paint, air fresheners and penetrant sprays which were popular among industrial users. We also exported household detergents to Singapore and Brunei, and our major customers included ABC Bargain Centres and Three Stars Umbrella Factory Stores. Our industrial grade cleaning chemicals were designed to remove stains encountered in a wide range of commercial, manufacturing and industrial applications. In 2005, our Group started to reduce our private label manufacturing activities and began a directional change by refocusing our efforts from the abovementioned activities towards proprietary manufacturing including the development of our own spray paint products for better business prospects. In connection with this directional change, we also established our first proprietary brand, Samurai. In 2006, we extended our customer network to East Malaysia and opened sales branches in Sabah and Sarawak so as to better service our customers located in those regions. In 2008, CPMSB was incorporated in Malaysia to support the branding, marketing, sales and distribution of our proprietary brand, Samurai in Malaysia. Our marketing efforts included participating in trade fairs and exhibitions in Malaysia and increasing our advertising and promotional activities to local retailers and end-users. Subsequently in 2009, our Group acquired the know-how and formulations from Asia Paint (Singapore) Pte Ltd in Singapore with a view to enhancing our ongoing research and development and business efforts to focus on our spray paint products. Our Group originally had to perform dilution on paint concentrates during our manufacturing process. With the acquisition of such know-how and formulations, our Group was able to commence in-house production of our spray paint products. In 2010, PTSP was incorporated in Jakarta, Indonesia to focus on importing and eventually distributing the Group s products in the region. 113

122 GENERAL INFORMATION ON OUR GROUP In 2011, we established another proprietary brand, Canbrush, positioned in the market as a line of household paint in order to capture the household market. With this brand, our Group was able to further expand our sales network to the United Kingdom. Earlier in 2011, a company under the name of Samurai Paint (UK) Ltd. was incorporated in the United Kingdom by Ms Lim Lay Yong and a third party business partner, Ms Liew Siew Wei. Through SPUL, commencing from 2012, we were able to distribute our Group s Canbrush products and penetrate the aerosol spray paint products market in the United Kingdom. SPUL was subsequently voluntarily struck off the Companies Register of the United Kingdom in January In August of the same year, SWHL was incorporated in Hong Kong to source for more competitively priced direct materials. In 2015, our Group achieved a major breakthrough in innovation when we commenced production of our 2K system improving on the user friendliness of an existing technology. The 2K system aerosol can system allows us to pack hardener and resin separately in the same aerosol can. The 2K system also allows these two chemical components to remain stable and to be mixed only as and when activated by the user. Thereafter, our Group commenced the development of, and in early 2016 initiated a soft launch for, an improved version of the 2K system which is designed with a single head instead of two heads which was the case for the original version in This improved version is able to give better and higher performance in terms of the spraying behaviour, as spray paint can only be discharged when the inner sleeve is fully punctured and the hardener and resin contained within are thoroughly mixed. This is in contrast to the original version in 2015 where the spray paint may still be discharged even when the hardener and resin have not been thoroughly mixed. In 2016, our Group decided to voluntarily strike off CPMSB and SWHL in order to streamline our Group s corporate structure and business operations. CPMSB was previously incorporated to support the branding, marketing, sales and distribution of our proprietary brand, Samurai in Malaysia and neighbouring regions. We have since subsumed this function under OISB. SWHL was incorporated to source for more competitively priced direct materials. We have since subsumed this sourcing function under OISB. As at the Latest Practicable Date, we have commenced the striking off process for SWHL. We have not commenced the striking off in respect of CPMSB as we are currently awaiting tax refunds from the relevant tax authority. Our key milestones are as set out below: KEY MILESTONES February 1997 January 1998 March 2001 OISB was acquired by Mr Ong Yoke En, our Executive Director and CEO. We subsequently started private label manufacturing for a full range of household detergent products and started exporting to Singapore. We started private label manufacturing for a significant private labelling product, namely Elephant Glue, and was one of the leading contract packer of industrial grade superglue in Malaysia. We began exporting blister packs of superglue to USA, the Czech Republic and the United Kingdom. 114

123 GENERAL INFORMATION ON OUR GROUP January 2005 September 2006 September 2008 We started to reduce our private label manufacturing activities and began a directional change by refocusing our efforts towards proprietary manufacturing including the development of our own spray paints products and established our first proprietary brand, Samurai. We started selling in Sabah and Sarawak and, in line with this, we started representative sales offices in these regions. Our sales branches in Sabah and Sarawak began operations. We incorporated CPMSB in Malaysia to support the branding, marketing, sales and distribution of our proprietary brand, Samurai in Malaysia and neighbouring regions. December 2009 We acquired paint-mixing and manufacturing know-how and formulations from Asia Paint (Singapore) Pte Ltd. June 2010 March 2011 August 2011 February 2012 January 2015 February 2015 March 2016 March 2016 We started selling in Indonesia after setting up an office in Jakarta, Indonesia, with the incorporation of PTSP. We incorporated SPUL with a third party in order to penetrate the UK market. We expanded our supplier network from Malaysia to include PRC, and SWHL was incorporated in Hong Kong in August to act as the procurement office liaising with PRC suppliers. We exported products under our Canbrush brand to the United Kingdom and began establishing our businesses there. We developed our 2K system which allowed us to pack hardener and resin separately in the same aerosol can. This original version is equipped with two heads. We were awarded the ISO 9001:2008 certification, an internationally recognised quality standard by The Governing Board of Q.A. International Certification Limited for meeting ISO standards in the manufacture of our aerosol paints. We initiated a soft launch for a second version of the 2K system which is designed with a single head. Our Company was incorporated in Singapore. 115

124 GENERAL INFORMATION ON OUR GROUP May 2016 August 2016 August 2016 Our Group s single head 2K system was awarded a Gold medal at the 27th International Invention, Innovation & Technology Exhibition 2016 held in Kuala Lumpur, Malaysia ( ITEX 2016 ) by the Malaysian Invention and Design Society. The single head 2K aerosol spray paint system was also awarded the Malaysian Innovative Product Award 2016 at ITEX Our Group was awarded the Gold medal for the invention and innovation of the single head 2K system at the 2016 International Invention Innovation Competition in Canada, by the Toronto International Society of Innovation & Advanced Skills ( TISIAS ). Mr Ong Yoke En, our Executive Director and CEO, was awarded a Special Innovation Award as a recognition of his excellent and creative invention of the single head 2K aerosol spray paint system by The Moroccan Union of Inventors, an affiliate of the International Federation of Inventors Associations. BUSINESS OVERVIEW We are a leading aerosol coating specialist with a focus on high performance coating solutions for the automotive refinishing and refurbishing industry. We are principally engaged in the manufacture, distribution and marketing of our products under our own brands, including Samurai, Kurobushi, Khameleon, Canbrush, Ninjutsu, Geigi, CanArt and Bushido. Headquartered in Malaysia, our products are manufactured in our production facility located in Johor and are distributed in more than four (4) countries, including Malaysia, Indonesia, Thailand and Philippines. According to the Independent Market Researcher, we are one of the leading market players specialising in aerosol spray paints for two-wheelers with an estimated 27.0% and 5.0% market share in Malaysia and Indonesia, respectively. We focus our marketing and promotion efforts on educating end-users on the usage of our aerosol products. 116

125 GENERAL INFORMATION ON OUR GROUP Our brands As at the Latest Practicable Date, the Company has established and maintains a stable of eight (8) proprietary brands which are categorised into three (3) product segments, being (i) Paint Standard, (ii) Paint Premium and (iii) Maintenance and Others, respectively. The details relating to our proprietary brands are as follows: Brands Samurai/Kurobushi Paint Standard and Paint Premium Product category Segmentation Usage and Features Motorcycle paint The Samurai brand focuses on the motorcycle repainting business as well as the automotive aftermarket. Its range of products gives the best finishing from custom painting to re-touching of original motorcycle colour paint. Our product line under the Samurai brand provides quick drying paint with high gloss and excellent colour retention. The paints under the Samurai brand provide good hiding power, which enables our customers to utilise less paint for more coverage. The uniquely modified paint formulation of the Samurai paint products offers paint that is, more durable, resistant to weather changes and is crack and petrol resistant, which is ideal for exposure to the outdoor environment. The Samurai product range also includes products such as 2K-in-a-Can, plastic primers, putty primers, paint removers, the 1K clear coat, a high-temperature resistant engine part paint, a sticker remover, a two coat system, and water transfer film. The Samurai product range is marketed under the Kurobushi brand in certain jurisdictions such as Indonesia, Vietnam and Thailand. We are also adding new products to the Kurobushi product range. 117

126 GENERAL INFORMATION ON OUR GROUP Brands Khameleon Paint Premium Geigi Ninjutsu Product category Segmentation Usage and Features Maintenance and others Maintenance and others Canbrush Paint Standard and Paint Premium Motorcycle paint Motorcycle cosmetic re-finishing paint Motorcycle maintenance Household paint The Khameleon brand, a line of aerosol products that is manufactured from special mixes of pigments, offers paint with a three-dimensional visual effect. There are seven (7) colour varieties available under the Khameleon brand, each having its own unique five-colour tone depending on the angle of view. The Geigi brand features motorcycle cosmetic re-finishing products that are uniquely designed to keep a customer s motorcycle looking good in the long run and prevent further damage from wear and tear. The full range of products under the Geigi brand includes motorcycle shampoo, tyre shining products, paint polish, metal polish and tyre inflators. The Ninjutsu brand focuses on the motorcycle maintenance market for ongoing care and maintenance to motorcycles. The full range of products under the Ninjutsu brand includes carburettor cleaners, gasket cleaners, brake cleaners, engine degreasers, chain oil and spray grease. The Canbrush brand is positioned as a line of household paint products with a focus on the household market. The Canbrush product range provides non-crack paints that are lead and toluene free. The full range of products under the Canbrush brand includes paint with candy tone colours, fluorescent colours, sparkling colours, standard colours, wood stain, solid wood, premium colours, heat resistance paint (with an ability to withstand temperatures of up to 600 C), as well as anti-rust primers and plastic primers. 118

127 GENERAL INFORMATION ON OUR GROUP Brands CanArt Paint Standard Bushido Paint Premium Our paint systems Product category Segmentation Usage and Features Graffiti paint The CanArt brand focuses on graffiti paint products. The CanArt brand was developed in light of the fact that graffiti art has become an increasingly popular form of decorative design for shops, kindergartens and bars. The paint products under the CanArt brand provide thicker, weatherproof, and fast drying paint coupled with an anti-drip formulation to meet the specific demands of graffiti artists. We currently provide approximately 90 paint colours for selection under the CanArt brand, with the option to provide customised colours specified by our customers. Industrial paint The Bushido product range comprises a series of products with a focus on painting and maintenance coatings in the industrial, construction, marine and agricultural segments. The main products under the Bushido brand provide dual component spray paints which provide protective and anti-corrosive coatings on spray painted products. The Bushido product range includes anti-corrosive paints available in all colours under the RAL colour system, related products for heavy duty line marking and floor coating, anti-slip spray paint products, stain blockers, protective clear coats, top coats and epoxy metal primers. Our current paint systems consists of both single component and dual component systems, being the 1K and 2K systems, respectively. The 1K system, more commonly found in conventional aerosol spray paints, consists of only one component such as paint solutions only. In contrast, the 2K system allows two separate component casings to be placed within one aerosol can. The two component casings found in our 2K systems are filled with paint solution and hardener separately. A chemical reaction occurs when the paint solution is mixed with the hardener prior to spraying. Stronger chemical bonds that are formed during this chemical reaction result in the production of a solid layer of paint with greater hardness. 119

128 GENERAL INFORMATION ON OUR GROUP By virtue of their difference in formulation, the 1K and 2K systems produce paints that display different physical properties such as weather resistance, adhesion, gloss retention, anti-corrosion, drying speed and hardness. Compared to paints produced from the 1K system, paints produced from the 2K system display superior physical qualities as the spray paints are reinforced by stronger chemical bonds. A comparison of the properties of the 1K and 2K systems are set out in the table below: Properties 1K System (1) 2K System (2) Formulation Paint solution only. Paint solution formulated with a separate hardener component. Spray system Single component aerosol spray system. Bonding Drying by way of solvent evaporation: This is the simplest method of drying. The binder in the paint solidifies and dries as the solvent evaporates. A diagrammatic illustration of the molecular bonding structure of the dried paint from the 1K system is set out below: Dual component aerosol spray system, which improves upon the conventional 2K systems utilising spray gun with air compressors. Drying by way of chemical reaction: The paint solution is mixed with hardener prior to spraying. As such, a chemical bonding takes place and a solid layer is formed. The chemical bonds formed through this method is stronger than that formed during solvent evaporation in the 1K system. A diagrammatic illustration of the molecular bonding structure of the dried paint from the 2K system is set out below: Paint mixture includes bonding agent and solvent. When the paint mixture is sprayed onto a surface, the solvent evaporates leaving behind the bonding agents which eventually solidifies into an even layer of coating film. Paint mixture (labelled as A in the above diagram) reacts with hardener (labelled as B in the above diagram) to form strong chemical bonds thereby creating a stronger and harder layer of coating film. 120

129 GENERAL INFORMATION ON OUR GROUP Properties 1K System (1) 2K System (2) Weather Resistance Adhesion Gloss Retention Anti-corrosion Touch Dry The 1K system has a fair ability to resist changes in weather conditions. Paint coating has a fair ability to adhere properly to the material to which it is applied. Paint coating has a fair ability to maintain its gloss. Paint coating has a fair ability to protect underlying metal surfaces from corrosive environments. Paint coating feels dry to the touch within 15 minutes. Hardness Paint coating achieves fair hardness upon drying. The 2K system has excellent ability to resist changes in weather conditions. Paint coating using either epoxy or PU has excellent ability to adhere properly to the material to which it is applied. Paint coating using epoxy has fair ability to maintain its gloss whilst paint coating using PU has a very good ability to maintain its gloss. Paint coating using either epoxy or PU has a good ability to protect underlying metal surfaces from corrosive environments. Paint coating feels dry to the touch within 30 minutes. Paint coating using epoxy achieves excellent hardness upon drying whilst paint coating with the 2K system using PU achieves very good hardness upon drying. Notes: (1) Our 1K system utilises various types of resins including acrylic, alkyd and nitrocellulose. (2) Our 2K system may contain either epoxy resin or polyurethane, which is a resin and hardener mixture. 121

130 GENERAL INFORMATION ON OUR GROUP In addition, our aerosol spray cans with the 2K system may also be configured with either a dual head system or a single head system. A comparison of the dual head system and single head systems are set out in the comparison charts below: Dual Head 2K System Aerosol Spray Paint Each aerosol can has two (2) openings, with one (1) opening located at the top and bottom of the aerosol body. The can body is filled with the paint solution. One end of the can body is integrated with an inner sleeve that contains hardener, while the opposite end is crimped with a valve set that is completed with a spray nozzle. Physical Properties Single Head 2K System Aerosol Spray Paint Like a normal single component aerosol can, the aerosol body has one (1) opening head and is filled with paint ( Component A ). However, the same opening is integrated with an inner sleeve which contains hardener ( Component B ) with a build-in mandrel and suction pipe. The mandrel works to rupture the inner sleeve, mixing Component A and Component B, and the mixed Components A and B will be discharged simultaneously through the suction pipe. 122

131 GENERAL INFORMATION ON OUR GROUP Dual Head 2K System Aerosol Spray Paint Physical Properties Application Single Head 2K System Aerosol Spray Paint 1. The red cap should be pressed against the inner sleeve end until a pop sound is heard. The pop sound indicates that the inner sleeve has been broken by the mandrel. The hardener which is contained within will flow outwards and mix with the paint solution stored in the can body. 2. The aerosol can should be shaken well for two minutes to mix the hardener with the resin. 3. Spray from the nozzle found at the opposite end of the can body. The user cannot determine with certainty whether the inner sleeve has been ruptured by the act of pressing the red cap. This is because paint can still be sprayed from the opposite end of the can body even when the hardener has not flowed out of the inner sleeve to mix with the paint solution in the can body. Features Advantages of the 2K system 3. Replace the red cap with nozzle before spraying. The user is able to determine precisely whether the hardener and paint solution stored in the inner sleeve and the can body respectively are mixed properly. This is because there is only one opening for paint spraying and no discharge of paint would take place until the inner sleeve is fully punctured. Our 2K system is an innovative 2-in-1 concept whereby two separate chemical components such as resin and hardener can be mixed together within an aerosol can. The paint formulation in our 2K systems consists of one portion of hardener for every two portions of resin. The 2K system produces high performing paint that achieves high quality results. Our 2K system aerosol products are user-friendly and can be used independently of additional hardener, catalyst or activator. PRODUCTION PROCESS The production of a can of spray paint involves firstly the manufacture of paint concentrate. The manufactured paint concentrate is then filled into the aerosol cans and assembled with the other necessary components. The direct materials used in this production process are, namely, resins, pigments, additives, solvents and propellants. The other direct materials used in this production process include valve sets, caps and carton boxes. Our direct materials are sourced in Malaysia and imported from other regions like Japan and Europe from various suppliers. We negotiate the pricing with our suppliers and are able to obtain favourable pricing due to bulk procurement. We work with trusted suppliers, who are assessed based on factors such as reputation, quality of products, service, pricing and ability to meet delivery schedules. In addition, we take active steps to ensure that the quality of our direct materials adhere to strict quality control standards. For instance, we have various inspection processes to evaluate the effectiveness and stability of our direct materials. 123

132 GENERAL INFORMATION ON OUR GROUP Recyclable materials such as certain solvents and pigments are recovered from the production waste at the end of each production cycle for further processing and are reused in a range of manufacturing and production applications. Aerosol Spray Paint Manufacturing Process Aerosol spray paint manufacturing is divided into three major processes, namely: (A) (B) (C) paint manufacturing; can filling and assembly; and carton packing. Further details of the abovementioned processes are set out below. A. Paint Manufacturing The direct materials used in the paint manufacturing process are pigments, resins, solvents and additives with the following functions. Direct Materials Pigments Resins Solvents Additives Functions To provide paint colour, hiding power and control gloss. As a binder to hold the pigment particles together and provide adhesion to the surface painted. As a carrier for the pigments and resin. It may be petroleum mineral spirits and aromatic solvents such as esters and ketones. To enhance certain properties of paint such as anti-corrosion, fast drying time and weather resistance. When purchasing the requisite direct materials, our QA personnel will conduct the necessary testing or evaluation exercises to ensure that the direct materials supplied comply with the supplier specifications or our retained standard samples. Accurate measurement of direct materials and preparation The first step of the paint manufacturing process involves weighing of the direct materials on scales precisely to meet the specific weight requirements indicated on the specific paint formula. After weighing all the direct materials for a production batch, different types of solvents are pre-mixed in a mixing tank. Concurrently, solid pigments are broken down by our milling processes into fine particles. Mill-base preparation and pigment dispersion Pigments, which are powders that tend to stick together and form agglomerates, must be broken down and separated into primary particles. As such, resin and additives are used as wetting agents to moisten the pigments to prevent re-sticking of the primary particles. This process is known as pigment dispersion. 124

133 GENERAL INFORMATION ON OUR GROUP High speed mixers are then used for the thorough and homogeneous mixing of the various production materials and dispersion of pigments. During this process, pigments are slowly added to a fixed volume of liquid paint components comprising resin and solvent to form a mill-base. Thereafter, various types of additives are added to the mill-base to complete the dispersion process. Finished paint colour matching and in process testing When the paint manufacturing process is complete, the finished paint product will be inspected to ensure that they are of the correct viscosity and consistency. An experienced QA personnel will then check the paint colour against a desired standard colour and make the appropriate colour adjustments, if necessary. Any rejected paint products will be recycled and remixed to produce either black paint or a darker shade of paint. Prior to mass production of the paint products, quality tests will be conducted by the QC personnel. For example, the QC personnel will spray the paint onto a piece of zinc plate and analyse the various paint properties such as hiding power, drying rate and adhesion. When the QC test is completed, the final paint concentrate is transferred to a filling tank in preparation for the can filling process. B. Can Filling and Assembly Quality Control An aerosol can spray paint product has five (5) major components, namely, tin-plated steel cans, valve sets, caps, marble balls and carton boxes. Each purchaser and their QA personnel will be responsible for performing quality control on each of the direct materials used. In particular, the purchaser will ensure that its aerosol can supplier performs a water bath leak test on each empty can. The QA personnel is responsible for monitoring the measurement of inner sleeves and mandrels of 2K aerosol products for each shipment to ensure that the requisite specifications are met. Prior to purchase, the QA personnel would also perform a pressure drop test on the cap of the aerosol can. Can filling, crimping and gassing During this process, final paint mixture is filled into empty cans containing marble balls. For sealing purposes, valves are crimped onto the rims of aerosol cans and nozzles are subsequently fitted over them. Next, the cans are gassed by injecting liquefied propellant into them. Thereafter, caps are fitted over the valves to prevent accidental activation. A QC personnel will monitor and conduct on-line random checks to ensure that the weight of the aerosol cans complies with specifications. C. Carton Packing The finished aerosol paint cans are then labelled, wrapped and packed into cartons. Generally, a carton comprises a dozen cans. Thereafter, a QA personnel will conduct random sampling tests on the labelled cans. 125

134 GENERAL INFORMATION ON OUR GROUP Work Process The following diagram describes our production process. PAINT MANUFACTURING PREMIX Solvents DISPERSING Pre-milled pigments Resins Additives MIXING thoroughly and homogeneously CAN FILLING AND ASSEMBLY Fill paint into aerosol can Crimp valve onto aerosol can Fill propellant gas CARTON PACKING Fit on cap tightly over valve Label with number stickers Wrap with polyolefin film Pack into cartons Production Capacity and Utilisation As at the Latest Practicable Date, our principal production facility is located in Johor, Malaysia. The premises comprise the production facility, warehouse and office with a total built up area of approximately 5,200 sqm. Our production capacity is generally limited by the number of production lines, the amount of downtime for our machineries and the manpower available. 126

135 GENERAL INFORMATION ON OUR GROUP The following table illustrates the maximum production capacity, actual production output and average utilisation rate in respect of manufacturing of our products between FY2014 and FY2016: Maximum Production Capacity ( 000 cans) Actual Production Output ( 000 cans) Approximate Utilisation Rate (3) (%) FY2014 (1) 4,668 3, FY2015 (1) 4,668 4, FY2016 (2) 7,730 6, Notes: (1) For FY2014 and FY2015, the maximum annual production capacity was calculated based on: (i) 300 operating days per year, of which 250 days were weekdays shifts (the Weekday Shift ) of eight (8) man-hours per Weekday Shift, and the remaining 50 days were weekends shifts (the Weekend Shift ) of six (6) man-hours per Weekend Shift; (ii) (iii) (iv) one (1) Weekday Shift per weekday and one (1) Weekend Shift per weekend; two (2) production lines; and aggregate production output of 2,040 cans per man-hour for the two (2) production lines. (2) For FY2016, the maximum annual production capacity was calculated based on: (i) (ii) (iii) (iv) 300 operating days per year, of which 42 days were Weekday Shifts of 8 man-hours per Weekday Shift, 208 days were Weekday Shifts of 11 man-hours per Weekday Shift, and the remaining 50 days were Weekend Shifts of six (6) man-hours per Weekend Shift; one (1) Weekday Shift per weekday and one (1) Weekend Shift per weekend; four (4) production lines for FY2016; and aggregate production output of 6,300 cans per man-hour for the four (4) production lines. (3) The approximate utilisation rate is calculated based the actual production output of the year divided by the estimated maximum production capacity of that particular year. Our estimated maximum production capacity increased by 65.6% from 4,668,000 cans in FY2015 to 7,730,000 cans in FY2016 due to: (i) (ii) the addition of one (1) new production line in each of January 2016 and February 2016, which increased our aggregate production capacity from 2,040 cans per man-hour to 6,300 cans per man-hour; and the increase in man-hours per Weekday Shift from eight (8) man-hours to eleven (11) man-hours from June 2015, to cope with the increase in demand for our products, where the total number of cans sold increased from approximately 3.3 million cans in FY2014 to approximately 5.5 million cans in FY2016. Please refer to the section entitled Management s Discussion and Analysis of Financial Position and Results of Operations of this Offer Document for more details. Our utilisation rate increased from 75.2% in FY2014 to 90.4% in FY2015 in line with the increased production output to meet the demand for our products. Our utilisation rate decreased from 90.4% in FY2015 to 78.0% in FY2016 due to the increase in our maximum production capacity as aforementioned, and was partially offset by the increased production output by 42.9%, from approximately 4.2 million cans to approximately 6.0 million cans. 127

136 GENERAL INFORMATION ON OUR GROUP Notwithstanding that we have disclosed in the above the estimated maximum production capacity and actual production output, we are able to adjust our estimated maximum production capacity without additional capital expenditure by making adjustments to (i) the number of man-hours per Weekday Shift and/or Weekend Shift; and (ii) the number of shifts per day. This would allow us to achieve an optimum utilisation rate after taking into consideration of other factors such as labour and other associated costs as well as expected demand for our products. MAJOR CUSTOMERS For the Period Under Review, we sold our products to distributors, retailers and wholesalers in Malaysia, Indonesia, Thailand and Philippines. We have a customer base of approximately 1,000 between FY2014 and FY2016. We undertook a review of our customer base and sought to focus our marketing and distribution resources on selected customers that we believe will be able to better promote and distribute our products. As a result, we trimmed our customer base to approximately 600 as at 30 June As at 30 June 2016, we have more than 300 long term customers who have maintained business relationships with us for periods of five (5) or more years. The following table sets out our customers which accounted for 5.0% or more of our Group s total revenue for the Period Under Review: Name of major customer Type of As a percentage of our total revenue (%) Products (1) FY2014 FY2015 FY2016 1Q2017 Malaysia Bun Seng Hardware Sdn Bhd (2) A, B, C Shiang Chin Motor Group (3) A, B, C Ling Yeo Trading Company (4) A, B, C Notes: (1) A refers to products under our Paint Standard segment, B refers to products under our Paint Premium segment and C refers to products under our Maintenance and Others segment. (2) Revenue contribution from Bun Seng Hardware Sdn Bhd decreased from 20.3% in FY2014 to 16.7% in FY2016, mainly due to the increase in our Group s total revenue. (3) Shiang Chin Motor Group refers to Shiang Chin Motor (Lahad Datu) Sdn Bhd and Shiang Chin Motor (Sabah) Sdn Bhd. Revenue contribution from Shiang Chin Motor Group decreased from 5.4% in FY2015 to 2.5% in FY2016, mainly due to the decrease in sales of Shiang Chin Motor Group as they ceased one of their retail operations. (4) Revenue contribution from Ling Yeo Trading Company decreased from 5.0% in FY2014 to 1.7% in FY2016, mainly due to the decrease in sales of Ling Yeo Trading Company. We enter into agreements with our customers that set out all major terms and conditions (including geographical distribution territories, pricing policy, quarterly and yearly sales targets incentives and the volume-based incentives given). Such agreements are renewed on a yearly basis based on, amongst others, prior year sales performance targets, sales volume achieved and the length of relationship we have with such customer. 128

137 GENERAL INFORMATION ON OUR GROUP Save as disclosed above, no other customer accounts for 5.0% or more of our revenue during the Period Under Review. As at the Latest Practicable Date, our Directors are of the opinion that our business or profitability is currently not materially dependent on any particular industrial, commercial or financial contract with any customer. To the best of their knowledge, our Directors are not aware of any information or arrangement which would lead to the cessation or termination of our current relationship with any of our major customers. As at the Latest Practicable Date, none of our Directors, Executive Officers, Substantial Shareholders or their respective Associates has any interest, direct or indirect, in any of the above major customers, nor do the equivalent persons in such major customers have any interest, direct or indirect in any of our Group Companies. To the best of our knowledge and belief, there are no arrangements or understanding with any customers pursuant to which any of our Directors and Executive Officers was appointed. MAJOR SUPPLIERS Direct materials used by our Group comprised mainly aerosol cans, propellant, solvents, pigments and packaging materials. Direct materials accounted for 83.1%, 83.4%, 84.7% and 83.4% of our cost of sales for FY2014, FY2015, FY2016 and 1Q2017, respectively. Please refer to the section entitled Management s Discussion and Analysis of Financial Position and Results of Operations of this Offer Document for more details. The suppliers are evaluated by our management team based on factors such as quality of products, payment terms, competitive pricing and timeliness of delivery. We maintain an updated list of approved suppliers for our key supplies. The following table sets out our suppliers which accounted for 5.0% or more of our Group s total purchases during the Period Under Review: Name of major supplier Products Percentage of our total purchases (%) FY2014 FY2015 FY2016 1Q2017 PRC Shenzhen Huate Packing Co Ltd Jiutai Energy (Zhangjiagang) Co Ltd Guangzhou Panyu MCP Industries Ltd Malaysia KJ Can (Johore) Sdn Bhd Chemstation Distribution Sdn Bhd Direct materials Direct materials Direct materials Direct materials Direct materials

138 GENERAL INFORMATION ON OUR GROUP Name of major supplier Products Percentage of our total purchases (%) FY2014 FY2015 FY2016 1Q2017 Malaysia Synthese (Malaysia) Sdn Bhd Direct materials TN Chemie Sdn Bhd Direct materials Singapore RI Marketing Direct materials During the Period Under Review, the above year-to-year fluctuations in our purchases from amongst our major suppliers were due mainly to competitive pricing reasons as well as changes in the mix of specifications, materials and quality requirements. We generally do not enter into long-term or exclusive agreements with any of our suppliers as this would provide us with the flexibility to evaluate and select suppliers who are able to provide us with high quality products and materials at the most favourable terms. Our Directors are of the view that we are not materially dependent on any of our major suppliers, as the Directors believe that our business and profitability will not be materially affected by the loss of any single supplier, nor are we dependent on any particular industrial, commercial or financial contract with any supplier. Save as disclosed above, there is no other supplier who accounted for 5.0% or more of our total purchases during the Period Under Review. To the best of their knowledge, our Directors are not aware of any information or arrangements which would lead to a cessation or termination of our current relationship with any of our above suppliers. As at the Latest Practicable Date, none of our Directors, Executive Officers, Substantial Shareholders or their respective Associates has any interest, direct or indirect, in any of the above suppliers, nor do the equivalent persons in such major suppliers have any interest, direct or indirect in any of our Group Companies. To the best of our knowledge and belief, there are no arrangements or understanding with any suppliers pursuant to which any of our Directors and Executive Officers was appointed. CREDIT MANAGEMENT Our Group generally extends credit terms of 30 to 90 days to our customers from the date of our invoice. On a selected basis, our Group extends longer credit terms of up to 180 days to selected distributors for marketing reasons, such as promoting certain products and/or expanding into new geographical locations. The credit terms extended to our customers may differ as we grant credit terms based on, amongst others, creditworthiness, level of risk involved, size of order, payment history records and the length of relationship we have with such customer. For instance, we may sell to new customers on cash terms until they have demonstrated a satisfactory payment track record, following which we may extend the appropriate credit terms. 130

139 GENERAL INFORMATION ON OUR GROUP Our average trade receivables turnover days during the Period Under Review were as follows: FY2014 (1) FY2015 (1) FY2016 (1) 1Q2017 (2) Average trade receivables turnover (days) Notes: (1) The average trade receivables turnover is calculated based on the average opening and closing trade receivables balances of the relevant financial year divided by the corresponding revenue multiplied by 365 days. (2) The average trade receivables turnover is calculated based on the average opening and closing trade receivables balances of the relevant financial period divided by the corresponding revenue multiplied by 90 days. The trade receivables turnover days were generally within our credit terms for the Period Under Review. The period to period fluctuations were mainly due to the changes in (i) proportion of revenue derived from cash terms versus credit terms; (ii) frequency and extent of customers making early repayment in view of being granted additional discounts; and (iii) frequency and extent of our marketing efforts in promoting certain products and/or expanding into new geographical locations. We perform ongoing credit evaluation of our debtors financial condition and make specific allowance for impairment of trade receivables based on the expected collectability of our receivables and when the ability to collect an outstanding debt is in doubt. We may also write off an outstanding debt when we are certain that the customer is not able to meet its financial obligations to us, this being after we have exhausted all reasonable efforts on the recovery of such debt (including but not limited to initiating legal proceedings). Our allowance for doubtful receivables and bad debts written off for the Period Under Review were as follows: (RM 000) FY2014 FY2015 FY2016 1Q2017 Bad debts written off As a percentage of revenue (%) As a percentage of PBT (%) Our Directors are of the view that our provision for impairment of trade receivables and/or bad debts written off are sufficient. To the best of their knowledge, our Directors are not aware of any information or development, which may require us to make additional provision for impairment of trade receivables and/or bad debts. 131

140 GENERAL INFORMATION ON OUR GROUP Ageing analysis The ageing schedule for the net trade receivables as at 30 June 2016 is as follows: Age of trade receivables RM 000 % of trade receivables Not past due and not impaired 3, Within 30 days to 60 days to 90 days 1 Net trade receivables 4, Amount collected as at the Latest Practicable Date 4, As the remaining outstanding trade receivables are mainly due from customers with whom our Group has had regular business dealings, our Directors do not foresee issues with the collection of such outstanding debt as at 30 June To the best of their knowledge, our Directors are of the view that our allowance for impairment of trade receivables are adequate and no further allowance for impairment of trade receivables are required as such trade receivables are considered recoverable as these customers are still operational and currently have low insolvency risk. Credit terms from our suppliers Payment terms granted by our suppliers vary from supplier to supplier and are dependent on, amongst others, our relationships with the suppliers and the size of the transactions. In general, our suppliers grant us credit terms of between 30 to 90 days. However, new or overseas suppliers may require payments on or before delivery. Our average trade payables turnover days during the Period Under Review were as follows: FY2014 (1) FY2015 (1) FY2016 (1) 1Q2017 (2) Average trade payables turnover (days) Notes: (1) The average trade payables turnover is calculated based on the average of the opening and closing trade payables balances of the relevant financial year divided by the corresponding cost of sales (excluding direct labour and depreciation) multiplied by 365 days. (2) The average trade payables turnover is calculated based on the average of the opening and closing trade payables balances of the relevant financial period divided by the corresponding cost of sales (excluding direct labour and depreciation) multiplied by 90 days. Our trade payables turnover in days was relatively stable during the Period Under Review. There was a slight decrease in the average trade payables turnover from 75 days in FY2014 to 69 days in FY2015 due to increase in cash purchases from overseas. The subsequent increase in the 132

141 GENERAL INFORMATION ON OUR GROUP average of trade payables days was attributed to the increase in local purchase, especially of aerosol cans, as the local can supplier offered a more competitive price and a longer payment term than the overseas suppliers. INVENTORY MANAGEMENT Our inventory comprises mainly direct materials such as aerosol cans, resins, solvents and propellant, work-in-progress and finished goods. Our inventories amounted to RM2.5 million, RM3.4 million, RM5.4 million and RM5.4 million as at 31 March 2014, 31 March 2015, 31 March 2016 and 30 June 2016, respectively, where a significant portion of our inventories comprised finished goods. Finished goods amounted to RM1.5 million, RM2.0 million, RM2.7 million and RM2.8 million representing 60.1%, 60.6%, 49.9%, and 52.6% of our inventory balances as at 31 March 2014, 31 March 2015, 31 March 2016 and 30 June 2016, respectively. Our inventory level is optimally maintained based on secured orders placed by customers and taking into account our estimated future sales and production needs, price trends of direct materials and our working capital. We stock a minimum supply of all direct materials to prevent potential manufacturing delays that might arise from insufficient materials. In addition, we maintain approximately one and a half month s stock level of finished goods to ensure prompt delivery to our customers. We adopt the weighted average principle of inventory management. Accordingly, we account for the cost of our stocks and direct materials by dividing the costs of goods available for sale by the number of units available for sale. As part of our inventory control practice, our purchasing, production and warehouse team reviews our inventory level on a monthly basis to verify the accuracy of our inventory records and for procurement planning, with reference to, among others, our actual production plan, our storage of direct materials and their prevailing purchase price. We also perform sample inventory counts on a regular basis and a full inventory count is carried out on an annual basis. This ensures the accuracy and reliability of the information in our inventory management system and also allows us to address and reconcile any discrepancies in our inventory records. Our inventories are measured at the lower of costs or net realisable value where cost is determined on a weighted-average basis. Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories when the net realisable value of our inventory is below its corresponding carrying cost. Our average inventory turnover days for the Period Under Review were as follows: FY2014 (1) FY2015 (1) FY2016 (1) 1Q2017 (2) Average inventory turnover (days) Notes: (1) The average inventory turnover days is calculated based on the average opening and closing inventory balances of the relevant financial year divided by the corresponding cost of sales multiplied by 365 days. (2) The average inventory turnover days is calculated based on the average opening and closing inventory balances of the relevant financial year divided by the corresponding cost of sales multiplied by 90 days. 133

142 GENERAL INFORMATION ON OUR GROUP The increase in our average inventory turnover days from 73 days in FY2014 to 86 days in FY2015, 87 days in FY2016 and 107 days in 1Q2017 was mainly due to the increase in our inventory balances in each of FY2015, FY2016 and 1Q2017 as a result of an increase in estimated sales for both the Malaysian and Indonesian markets. The amount of allowance for impairment of inventories and inventories written-off during the Period Under Review were as follows: (RM 000) FY2014 FY2015 FY2016 1Q2017 Allowance for impairment of inventories 50 Inventories written-off Total 50 ORDER BOOK Customers in our industry do not typically commit to definite and/or long-term purchase orders for paint. Accordingly, due to the nature of our business, the concept of an order book is not meaningful. PERMITS, LICENCES AND APPROVALS The following is a description of the material licences (apart from those pertaining to general business requirements) required for the operations of our Group: Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date OISB Licence under the Sales Tax Act Manufacturer s Licence A Royal Customs and Excise Malaysia Licence to act as a licensed manufacturer at No. 4, Jalan Dato Yunus 1, Taman Perindustrian Dato Yunus Sulaiman Lima Kedai,81120 Skudai Johor, Malaysia. Issued on 5 February 1997, to take effect from 1 March Effective until terminated. Approval for registration as taxable person under the Goods and Services Act Royal Customs and Excise Malaysia Approval to register as taxable person under the Goods and Services Act Issued on 25 September 2014, to take effect from 1 April Effective until terminated. Business premise and signboard licence 4603 Johor Bahru Tengah Municipal Council (Majlis Perbandaran) Licence to manufacture dishwasher and chemical (aerosol). Issued on 5 January Effective until 31 December Approval letter for manufacturing licence 020/24221/ /000001ACI Ministry of International Trade and Industry Approval to obtain manufacturing licence for the production of aerosol spray paint. Effective for 6 months from 3 November

143 GENERAL INFORMATION ON OUR GROUP Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date Manufacturing licence A Ministry of International Trade and Industry To operate as a licensed manufacturer for the production of aerosol spray paint. Issued on 4 January Effective until revoked. Manufacturing licence A Ministry of International Trade and Industry To operate as a licensed manufacturer for the production of aerosol spray paint. Issued on 4 January Effective until revoked. Certificate of registration (QAIC/MY/ 849-A) The Governing Board of Q.A. International Certification Limited Certificate pursuant to the approved manufacture of aerosol paint in line with ISO 9001:2008. Issued on 2 February Effective until 2 February (1) PTSP Company Registration Certificate (Tanda Daftar Perusahaan or TDP ) TDP No One-Door Integrated Service (Pelayanan Terpadu Satu Pintu) office of North Jakarta PTSP is registered at Sunter Mas Utara Blok H1 No. 17, RT 021 RW 008, Sunter Jaya Sub-District, Tanjung Priok District, North Jakarta. Issued on 24 June Effective until 18 February (1) Letter of Domicile (Surat Keterangan Domisili Perusahaan or SKDP ) SKDP No. 246/27.1BU.1/ / /e/2016 One-Door Integrated Service (Pelayanan Terpadu Satu Pintu) office of Sunter Jaya Sub-District The registered address of the Company is at Jl. Sunter Mas Utara Blok H1 No. 17 W&U, RT 021 RW 008, Sunter Jaya Sub-District, Tanjung Priok District, North Jakarta. Issued on 26 October Effective until 26 October Taxpayer Registration Number (Nomor Pokok Wajib Pajak or NPWP ) NPWP No Directorate General of Tax Approval to be registered as taxpayer under the income tax regulations. Issued on 21 June No expiration date. Taxable Entrepreneur Confirmation Number (Surat Pengukuhan Pengusaha Kena Pajak or SPPKP ) SPPKP No. PEM /WPJ.21/ KP.0803/2010 Directorate General of Tax A letter issued by the tax office which confirms PTSP as Taxable Entrepreneur, and contains the identity and tax obligations of PTSP. Issued on 12 June No expiration date. Tax Registration Letter (Surat Keterangan Terdaftar or SKT ) SKT No. PEM /WPJ.21/ KP.0803/2012 Pratama Tax Services Office of Jakarta Sunter, North Jakarta, Directorate General of Tax Regional Office, Directorate General of Tax A letter issued by the tax office regarding the registration of PTSP as taxpayer. Issued on 12 June No expiration date. 135

144 GENERAL INFORMATION ON OUR GROUP Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date Foreign Investment Approval Investment Registration Letter No /1/PPM/P MA/2010 BKPM This licence was granted in relation to PTSP s business activities of import trading which are located in North Jakarta, Province of Special Capital Region of Jakarta. Issued on 27 May This foreign investment approval has been implemented under the Business Licence No. 577/1/IU/PMA/PE RDAGANGAN/ Effective as long as deed of establishment of PTSP obtained within six (6) months of issuance of the licence and business licence obtained from BKPM. Business Licence Business Licence No. 577/1/IU/PMA/P ERDAGANGAN/ 2010 BKPM This licence is the implementation of Investment Registration Letter No /1/PPM/PMA/2010. Under this licence, PTSP is permitted to conduct business activities in the field of import trading, including to utilise warehouse/storage. PTSP is prohibited to conduct retail activities. Issued on 16 November 2010, effective from September Effective as long as PTSP conducts its business activities under this Business Licence. Amendment to Business Licence Amendment to Business Licence (Izin Usaha Perubahan) No. 445/1/IU/III/PM A/PERDAGAN GAN/ 2012 BKPM This licence was granted for the amendment to the address of the Head Office and the project location of PTSP. Issued on 13 November No expiration date. Expansion Principle Licence Expansion Principle Licence (Izin Prinsip Perluasan) No. 62/1/IP- PL/PMA/2015 BKPM This licence was granted for the expansion of business activity of PTSP in the field of wholesale trading and change of investment provisions, among others, investment value, financing, capitalisation. structure, and shareholders composition of PTSP. Issued on 26 March PTSP is required to implement the project within one (1) year as of the issuance of this licence. The project implementation period can be extended for another one (1) year. The project was implemented on 27 April 2015 pursuant to the issuance of the Expansion Business Licence (details of which are set out below). 136

145 GENERAL INFORMATION ON OUR GROUP Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date Expansion Business Licence Expansion Business Licence (Izin Usaha Perluasan) No. 65/1/IU- PL/PMA/2015 BKPM This licence was granted for the expansion of business activity of PTSP in the field of wholesale, i.e., type and production capacity, and investment value. Issued on 27 April Effective as long as PTSP conducts its business activities under this Expansion Business Licence. Amendment to Principle Licence Amendment to Principle Licence (Izin Prinsip Perubahan) No. 3368/1/IP- PB/PMA/2016 BKPM This licence was granted in relation to the change of shareholder of PTSP, the change of annual capacity and the addition of distribution activity. Issued on 28 September No expiration date. Amendment to Business Licence (2) Amendment to Business Licence (Izin Usaha Perubahan) No. 750/1/IU- PB/PMA/2016 BKPM This licence was granted in relation to the addition of distribution activity to the business activities of PTSP. Issued on 1 November Effective as long as PTSP conducts its business activities under this Amendment to Business Licence. Amendment to Principle Licence Amendment to Principle Licence No. 3959/1/IP- PB/PMA/2016 BKPM This licence was granted in relation to change of shareholders of PTSP. Issued on 1 November No expiration date. Amendment to Business Licence Amendment to Business Licence (Izin Usaha Perubahan) No. 781/1/IU- PB/PMA/2016 BKPM This licence was granted as a correction of the Amendment to Business Licence (Izin Usaha Perubahan) No. 750/1/IU-PB/PMA/2016 in relation to typo errors in import and distribution commodities of PTSP. Issued on 14 November Effective as long as PTSP conducts its business. Business Location Permit/ Nuisance Permit (Izin Tempat Usaha berdasarkan Undang Undang Gangguan) Governor Regulation of DKI Jakarta No. SK.1152/07/PM A/2012 Civil Service Police Unit (Satuan Polisi Pamong Praja) of Provincial Government of DKI Jakarta Permit to allow PTSP to construct buildings at premises where equipments with steam, gas power or electricity motor are located. Issued on 16 July No expiration date. General Importer s Identification Number (Angka Pengenal Importir Umum or API-U ) API-U No B BKPM An import licence given to PTSP to import goods to be traded in Indonesia. Issued on 30 May Effective as long as PTSP conducts its business, and shall be re-registered every five (5) years or at the latest 30 days prior to 6 May 2020 for the next re-registration. 137

146 GENERAL INFORMATION ON OUR GROUP Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date Customs Identification Number (Nomor Identitas Kepabeanan or NIK ) NIK No Directorate General of Customs Granted to PTSP to conduct its business as an importer (related to customs matters). Issued on 5 August No expiration date. Mandatory Report on Manpower Welfare Facility Registration No. 902/HCKP/ IX/2016 Manpower and Transmigration Agency of North Jakarta A statutory employment document with comprehensive data of facilities for employees provided by PTSP, which shall be reported each year to the Manpower Agency of North Jakarta Administrative City. Received by Manpower and Transmigration Agency of North Jakarta on 7 September The Report is effective from 7 September 2016 to 7 September (1) Mandatory Report on Manpower (Wajib Lapor Tenaga Kerja or WLTK ) WLTK No. 194/16000/III/ 2016 Manpower and Transmigration Agency of North Jakarta A statutory employment document with comprehensive data of utilisation and employment arrangement in PTSP, which shall be reported each year to the Manpower Agency of North Jakarta. Registered by the Manpower Agency of North Jakarta on 11 April The WLTK is effective from 11 April 2016 to 11 April (1) Approval of Company Regulation Approval of Company Regulation No of 2016 Manpower and Transmigration Agency of Special Capital Region of Jakarta Province A statutory employment document containing approval of PTSP s Company Regulation by the Manpower and Transmigration Agency of Special Capital Region of Jakarta Province. Issued on 26 October Effective until 26 October Manpower Social Security (Badan Penyelenggara Jaminan Sosial Ketenagakerjaan or BPJS Ketenagakerjaan ) BPJS Ketenagakerjaan Registration of PTSP and its employees as participants in the manpower social security programs. Issued on 29 February No expiration date. Healthcare Social Security (Badan Penyelenggara Jaminan Sosial Kesehatan or BPJS Kesehatan ) BPJS Kesehatan Registration of PTSP s employees as participants in the health social security programs. Issued on 20 April No expiration date. Expatriate Manpower Utilisation Plan (Rencana Penggunaan Tenaga Kerja Asing or RPTKA ) for Marketing Manager and Finance Manager Minister of Manpower Decree No. KEP 0717S/PPTK/ PTA/2016 Ministry of Manpower Utilisation plan of PTSP for the employment of expatriates as Marketing Manager and Finance Manager of PTSP. Issued on 18 March Effective until 31 December

147 GENERAL INFORMATION ON OUR GROUP Name of Licence/ Permit Licence/ Permit Number Issuing Entity Description Issue Date/ Expiry Date RPTKA for Director Minister of Manpower Decree No. KEP 21315/ PPTK/PTA/2016 Ministry of Manpower Utilisation plan of PTSP for the employment of expatriates as Directors of PTSP. Issued on 1 September Effective until 31 December Statement of Environmental Management and Monitoring Undertaking (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup or SPPL ) Not applicable Service Office of Environment of North Jakarta Undertaking by PTSP on issues relating to the environment. Issued on 31 October No expiration date. Notes: (1) We do not foresee any difficulties in obtaining a renewal of this approval, permit or licence (as the case may be). (2) Ali Budiardjo, Nugroho, Reksodiputro, the Legal Adviser to our Company as to Indonesian Law, has, in its legal opinion, stated that, (i) it is unlikely that PTSP will be subjected to any sanctions in relation to the breach arising from past distributorship activities without the correct business licence as BKPM would prefer to guide companies in breach of their licences rather than imposing the sanctions, details of which are set out below, and even if sanctions were to be imposed, BKPM would likely first issue written warnings; and (ii) based on its past dealings with BKPM and its understanding of the current regulatory regime and policy, it believes that BKPM will maintain this approach (considering not only BKPM s but Indonesian Government s current policy of promoting investment in Indonesia). Pursuant to Minister of Trade Regulation No. 22/M-DAG/PER/3/2016 concerning General Provisions on Distribution of Goods, distributors which do not comply with the obligation to have a licence as a distributor from the relevant authority are subject to gradual imposition of the following administrative sanctions: (a) written warnings; (b) suspension of the business licence; and (c) revocation of the business licence. In addition, pursuant to Head of BKPM Regulation No. 17 of 2015 concerning Guidelines and Procedures for Capital Investment Implementation Control, BKPM may impose administrative sanctions on companies which have not implemented their investment plan in line with their investment licences, in the form of the following: (a) written warnings and/or online warnings; (b) limitation of the business activities; (c) suspension of the business activities and/or capital investment facilities; or (d) cancellation/revocation of the capital investment licences and/or business activities and/or investment facilities. As at the Latest Practicable Date, PTSP has not received any written warnings in relation to the aforementioned. Our Directors are of the view that there would not be any tax differential arising from such past distributorship activities carried out by PTSP. This has been concurred with by our Independent Auditors and Reporting Accountants. Our management has also assessed the impact to the combined financial statements of our Group for the Period Under Review and is satisfied that there will not be any material impact on past revenue in the combined financial statements despite the lack of a business licence which permits the conduct of distributorship activities, based on the following: (i) (ii) (iii) revenue for the Period Under Review is recognised by PTSP when conditions for recognition of revenue from sale of goods set out in the Singapore Financial Reporting Standards 18 Revenue has been satisfied; PTSP may be subjected to administrative sanctions for its past breaches but will not be required to refund and/or reverse the sales to its customers during the Period Under Review; and having considered (aa) the Legal Adviser to our Company as to Indonesian Law s legal opinion as set out above; and (bb) that none of the administrative sanctions will result in an outflow of economic resources, and accordingly, the management is of the view that no provision for liabilities or disclosure of contingent liabilities arising from such past breaches is required to be made in the combined financial statements. Based on the foregoing, our Directors and management are of the view that there is no implication (legal or financial) on the past revenue of PTSP resulting from the past breaches. Save as disclosed above, our Directors have confirmed that, as at the Latest Practicable Date, to the best of their knowledge and belief, our Group has obtained all requisite certifications, approvals and licences necessary for our current operations. 139

148 GENERAL INFORMATION ON OUR GROUP PROPERTIES AND FIXED ASSETS Properties As at the Latest Practicable Date, the properties owned by our Group are set out below: Owner Location Approximate area (sqm) Tenure Use of property Encumbrance OISB OISB OISB No. 6, Jalan Dato Yunus 1, Kawasan Perindustrian Dato Yunus Sulaiman Lima Kedai, Gelang Patah, Johor, Malaysia No. 8, Jalan Dato Yunus 1, Kawasan Perindustrian Dato Yunus Sulaiman Lima Kedai, Gelang Patah, Johor, Malaysia No. 4, Jalan Dato Yunus 1, Taman Perindustrian Dato Yunus Sulaiman Lima Kedai, Skudai, Gelang Patah, Johor, Malaysia 2,600 Freehold Industry A private caveat has been lodged by ABMB and registered on 9 June 2016 A charge in favour of ABMB was registered on 22 August ,600 Freehold Industry A private caveat has been lodged by ABMB and registered on 9 June 2016 A charge in favour of ABMB was registered on 22 August ,600 Freehold Industry A charge in favour of RHB Bank Berhad, Malaysia was registered on 28 July

149 GENERAL INFORMATION ON OUR GROUP As at the Latest Practicable Date, our Group leases the following properties from the following third parties: Lessor Lessee Location Approximate area (sqm) Tenure Use of property Fow Oon Enterprise Sdn Bhd. OISB No. 12, Jalan Dato Yunus 1, Taman Perindustrian Dato Yunus Sulaiman Lima Kedai Gelang Patah, Johor, Malaysia 2,600 From 1 August 2015 to 31 July To be used for the operation of legalised trading business only Mrs Liauw Hang Tjin, Mr Andri Suryanto, and Mrs Anita Rosalina Komala PTSP Jalan Sunter Mas Utara Block H-1 No. 17-W, Sunter Jaya Sub-District, Tanjung Priok District, North Jakarta, DKI Jakarta 130 From 15 October 2015 to 15 October 2020 To be used as a premise for the company s business activity only Mrs Khoe Tjie Ing PTSP Jalan Sunter Mas Utara Block H-1 No. 17-U, Sunter Jaya Sub-District, Tanjung Priok District, North Jakarta, DKI Jakarta 130 From 1 November 2015 to 1 November 2020 To be used as an office area and warehouse for paints only As at the Latest Practicable Date, our Directors were not aware of any breach of any obligations under the abovementioned lease agreements that would result in their termination by the lessor or non-renewal, if required, when they expire. Fixed Assets As at 30 June 2016, (i) our freehold land and properties had a carrying amount of approximately RM6.4 million; and (ii) the remaining property, plant and equipment (comprising furniture, fitting and equipment, motor vehicles, plant and machinery and renovation) had an aggregate carrying amount of approximately RM4.3 million. As at the Latest Practicable Date, save for our properties located at No. 4, Jalan Dato Yunus 1, Taman Perindustrian Dato Yunus Sulaiman Lima Kedai, Skudai, Johor, Malaysia and No. 6 and 8 Jalan Dato Yunus 1, Kawasan Perindustrian Dato Yunus Sulaiman Lima Kedai, Gelang Patah, Johor, Malaysia and most of our motor vehicles, plant and machinery which are subject to hire-purchase financing, none of our properties and fixed assets is subject to any mortgage, pledge or any other encumbrances or otherwise used as security for any bank borrowings. 141

150 GENERAL INFORMATION ON OUR GROUP To the best of our Directors knowledge and belief, there are no regulatory requirements or environmental issues that may materially affect our Group s utilisation of the above properties and fixed assets. INTELLECTUAL PROPERTY RIGHTS Our business and profitability is materially dependent on our intellectual property ( IP ) in relation to our aerosol paints. We have not paid or received royalties for any licence or use of an intellectual property. As at 16 December 2016, our Group has the right to use the following trademarks, patents and industrial designs: Trademarks: Trademark Application/ Registration number Place of registration Class Expiry Date Application/ Registration Status Party which the IP is applied or registered under as at 16 December 2016 D Indonesia 02 (2) Not Applicable Pending OISB Malaysia 02 (2) 26/01/2025 Granted OISB Vietnam 02 (2) Not Applicable Pending OISB D Indonesia 02 (2) 18/07/2018 Granted OISB Vietnam 02 (2) 22/12/2019 Granted OISB Malaysia 02 (2) 22/12/2025 Granted OISB 142

151 GENERAL INFORMATION ON OUR GROUP Trademark Application/ Registration number Place of registration Class Expiry Date Application/ Registration Status Party which the IP is applied or registered under as at 16 December P Singapore 02 (2) 25/11/2024 Granted OISB 4/14356/2015 Myanmar 02 (2) 08/11/2018 Granted OISB Philippines 02 (2) 15/05/2024 Granted OISB USA 02 (2) Not Applicable Pending OISB PRC 02 (2) 06/03/2023 Granted OISB European Union 02 (2), 16 (5), 10/01/2022 Granted OISB 40 (6) Bangladesh 02 (2) Not Applicable KH/66689/2015 Cambodia 02 (2) Not Applicable Pending Pending OISB OISB Laos 02 (2) 20/10/2026 Granted OISB Taiwan 02 (2) Not Applicable Pending OISB Malaysia 02 (2) 08/10/2025 Granted OISB Vietnam 02 (2) Not Applicable Pending OISB Thailand 02 (2) Not Applicable Pending OISB D Indonesia 02 (2) 24/07/2018 Granted OISB Vietnam 02 (2) 22/12/2019 Granted OISB 143

152 GENERAL INFORMATION ON OUR GROUP Trademark Application/ Registration number Place of registration Class Expiry Date Application/ Registration Status Party which the IP is applied or registered under as at 16 December Malaysia 02 (2) 24/01/2026 Granted OISB D Indonesia 01 (1) Not Applicable Pending OISB Malaysia 01 (1) 31/12/2025 Granted OISB Malaysia 03 (3) Not Applicable Pending OISB Vietnam 01 (1) Not Applicable Vietnam 03 (3) Not Applicable Thailand 01 (1) Not Applicable Thailand 03 (3) Not Applicable Pending Pending Pending Pending OISB OISB OISB OISB Philippines 01 (1) 20/10/2026 Granted OISB Philippines 03 (3) 07/07/2026 Granted OISB D Indonesia 03 (3) Not Applicable Pending OISB Malaysia 03 (3) Not Applicable Pending OISB Malaysia 04 (4) 26/08/2024 Granted OISB Vietnam 03 (3) Not Applicable Vietnam 04 (4) Not Applicable Thailand 03 (3) Not Applicable Thailand 04 (4) Not Applicable Pending Pending Pending Pending OISB OISB OISB OISB Philippines 03 (3) 21/07/2026 Granted OISB Philippines 04 (4) 21/07/2026 Granted OISB 144

153 GENERAL INFORMATION ON OUR GROUP Trademark Application/ Registration number Place of registration Class Expiry Date Application/ Registration Status Party which the IP is applied or registered under as at 16 December 2016 (word mark) (7) USA 03 (3) Not Applicable USA 04 (4) Not Applicable Pending Pending OISB OISB D Indonesia 03 (3) Not Applicable Pending OISB D Indonesia 04 (4) Not Applicable Pending OISB CANBRUSH (word mark) Malaysia 02 (2) 22/05/2026 Granted OISB D Indonesia 02 (2) 16/10/2022 Granted OISB Philippines 02 (2) 02/10/2024 Granted OISB European Union 02 (2) 15/10/2022 Granted OISB BUSHIDO (word mark) Thailand 02 (2) 28/01/2024 Granted OISB V Singapore 02 (2) 25/11/2024 Granted OISB PRC 02 (2) 20/02/2026 Granted OISB D Indonesia 02 (2) Not Applicable Pending OISB Malaysia 02 (2) Not applicable Pending OISB (7) Philippines 02 (2) 21/07/2026 Granted OISB Malaysia 02 (2) Not Applicable D Indonesia 02 (2) Not Applicable Pending Pending OISB OISB Philippines 02 (2) 12/05/2026 Granted OISB Notes: (1) Class 01 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of chemicals used in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins; unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesives used in industry. 145

154 GENERAL INFORMATION ON OUR GROUP (2) Class 02 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of paints; varnishes; lacquers preservatives against rust and against deterioration of wood; colourants; mordant; raw natural resins; metals in foil and powder form for use in painting, decorating, printing and art. (3) Class 03 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of bleaching, preparations and other substances for laundry use; cleaning, polishing, scouring and abrasive preparations; soaps; perfumery; essential oils; cosmetics; hair lotions; dentifrices. (4) Class 04 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of industrial oils and greases; lubricants; dust absorbing, wetting and binding compositions; fuels (including motor spirit) and illuminants; candles and wicks for lighting. (5) Class 16 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of Decorating tools for use in painting, namely, paint applicators, paint brushes, paint rollers, sponges for use in applying paint, stencils for use in painting; colour cards; colour charts; colour sample cards; colour wheels; palettes; adhesive masking tape; printed publications all relating to the decoration and furnishing of buildings. (6) Class 40 of the NICE Classification of Goods and Services for the purposes of the registration of trade marks, covering the goods of the tinting (ie. colouring) of paints, varnishes, lacquers and wood stains. (7) As at the date of this Offer Document, the Company does not intend to further pursue the application. Patents: In relation to our single head 2K system, we have the right to use the following invention patents: Patent Jurisdiction Expiry Date Status Party which the IP is applied or registered under as at 16 December 2016 PI Malaysia Not applicable Pending Mr Ong Yoke En (2) PCT/MY2015/ International PCT European Patent Office Not applicable Pending Mr Ong Yoke En (2) Not applicable Pending OISB PRC Not applicable Pending Mr Ong Yoke En (2) 15/034,183 USA Not applicable Pending OISB Japan Not applicable Pending Mr Ong Yoke En (2) Canada Not applicable Pending OISB PI Malaysia Not applicable Pending Mr Ong Yoke En (2) 146

155 GENERAL INFORMATION ON OUR GROUP In relation to our dual head 2K system, we have the right to use the following innovation patents: Utility Innovation Jurisdiction Expiry Date Status Party which the IP is applied or registered under as at 16 December PRC 22/02/2024 Granted Mr Ong Yoke En (2) Australia 23/01/2023 Granted OISB S Indonesia Not applicable Pending OISB UI Malaysia Not applicable Pending Mr Ong Yoke En (2) Philippines 22/01/2022 Granted Mr Ong Yoke En (2) Thailand Not applicable Pending OISB Vietnam Not applicable Pending Mr Ong Yoke En (2) PRC 23/07/2025 Granted Mr Ong Yoke En (2) In relation to our spray can, we have the right to use the following industrial designs: Industrial Design Jurisdiction Class Expiry Date Status Indonesia (3) 21/08/2019 (period extension (1) until 21/08/2024) MY 14-E Malaysia (3) 22/02/2019 (period extension (1) until 22/02/2039) Philippines (3) 22/08/2019 (period extension (1) until 22/08/2029) D B Singapore (3) 21/08/2019 (period extension (1) until 21/08/2029) Party which the IP is applied or registered under as at 16 December 2016 Granted Mr Ong Yoke En (2) Granted Mr Ong Yoke En (2) Granted Mr Ong Yoke En (2) Granted OISB 147

156 GENERAL INFORMATION ON OUR GROUP Industrial Design Jurisdiction Class Expiry Date Status Party which the IP is applied or registered under as at 16 December Thailand Not applicable Pending Mr Ong Yoke En (2) United Kingdom (3) 20/08/2019 (period extension (1) until 20/08/2039) Vietnam (3) 18/12/2019 (period extension (1) until 18/12/2029) Granted OISB Granted Mr Ong Yoke En (2) PRC (3) 22/02/2024 Granted Mr Ong Yoke En (2) PRC (3) 12/11/2025 Granted Mr Ong Yoke En (2) Notes: (1) Extension is dependent on application for renewal and approval of such application by the relevant authorities. (2) All intellectual property registered in Mr Ong Yoke En s name are in the process of being transferred to OISB. (3) Class 09 of the Locarno Classification for the purposes of the registration of industrial design covers packages and containers for the transport or handling of goods. Subclass 01 covers bottles, flasks, pots, carboys, demijohns, and containers with dynamic dispensing means. Subclass 07 covers closing means and attachments. Zaid Ibrahim & Co., the Company s Legal Adviser as to Malaysian Law, has conducted due diligence on the above intellectual property rights that are legally registered in the name of OISB at the Intellectual Property Corporation of Malaysia, and the above intellectual property rights that are pending registration in the name of OISB at the Intellectual Property Corporation of Malaysia, and expresses the opinion only in relation to intellectual property rights that are legally registered in the name of OISB that they (i) are valid, subsisting, and in full force and effect, and (ii) subject to invalidation of any of the registered intellectual property by a third party, are enforceable by OISB. Roosdiono & Partners, of The Energy, 32nd Floor, SCBD Lot 11A, JI. Jend. Sudirman Kav , Jakarta 12190, Indonesia, an Indonesian law firm, was commissioned to, and has conducted, due diligence on (i) the above intellectual property rights that are legally registered in the name of OISB with the Directorate General of Intellectual Property of Indonesia, and (ii) the above intellectual property rights that are pending registration in the name of OISB with the Directorate General of Intellectual Property of Indonesia, and is of the opinion that such intellectual property rights are validly registered or applied for registration, subsisting, enforceable and in full force and effect, unless it is proven otherwise by the Directorate General of Intellectual Property of Indonesia or the relevant courts. Tee IP Sdn. Bhd., of Suite 32-2, Jalan Dwitasik, Dataran Dwitasik, Bandar Sri Permaisuri, Cheras, Kuala Lumpur, Malaysia, a Malaysian intellectual property firm, was commissioned to and has conducted verification of (i) the above intellectual property rights that are legally registered in the name of OISB; and (ii) the above intellectual property rights that are pending registration in the name of OISB, in respect of all other jurisdictions not falling within the jurisdiction of the 148

157 GENERAL INFORMATION ON OUR GROUP Intellectual Property Corporation of Malaysia and the Directorate General of Intellectual Property of Indonesia, and hereby confirm that the above details relating to such intellectual property rights are true, accurate and complete in all aspects. Barring unforeseen circumstances, our Directors do not foresee any difficulties in our Group obtaining the grant and due registration in OISB s name of all intellectual property rights for which registration is pending as at 16 December Our Company will make the necessary timely announcement(s) as and when the intellectual property rights are duly granted and registered. QUALITY ASSURANCE We are committed to ensuring the highest quality standards, and place great emphasis on quality control for our products. All of our aerosol products are entirely manufactured, filled and assembled by us. In respect of products not produced by us, we conduct tests on samples to ascertain that the products meet our quality standards. We understand that any material quality problems in relation to our products may lead the loss of customers and market share, and damage our business reputation. We are currently certified with ISO 9001:2008, a quality management system that we adopt and follow in our manufacturing operations, whereby, amongst other things, we are required to document the manufacturing process flow chart, the identification of positions and corresponding competencies required to perform the relevant job scope, and handling of customer complaints. This gives us full control over product quality and delivery time. As at the Latest Practicable Date, our quality control team consists of: (i) (ii) one (1) senior and experienced quality control manager; and six (6) staff personnel in the quality control team. To ensure the reliable quality of our products, our quality control team closely monitors the various stages of our operations, from selection of suppliers and inspection of direct materials, to sample checking of each batch of finished products. The table below sets forth the quality control measures put in place at different stages of our operations: Stages of operation Selection of suppliers Procurement of direct materials Quality control measures Other than costs considerations, we evaluate our suppliers on a holistic basis by taking into account factors including the suppliers customer service, delivery commitments, reliability and responsiveness. We set strict quality standards for all direct materials. Our research and development team selects the appropriate direct materials based on functionality. In addition, we conduct preliminary inspection of the direct materials by requesting samples from suppliers to ascertain whether they meet our quality standards. 149

158 GENERAL INFORMATION ON OUR GROUP Stages of operation Quality control measures Through various inspection processes, we ensure that our quality standards are met so we can select and use ingredients that are high-quality and safe. Additionally, we conduct on-site inspections of the plants of our new business partners and subject their facilities, technologies, personnel and quality control systems to strict scrutiny before determining whether goods can be procured. Production Quality control in terms of paint production consists of sampling at regular intervals to ensure that the end product meets a set of target criteria, which include desired yield and concentration levels. Colour is checked by an experienced observer and by spectral analysis to see if it matches a standard desired colour. Finished paints are inspected for their density, fineness of grind, dispersion, and viscosity. Outgoing quality control Maintenance of production equipment and machines Staff trainings Random product testings are carried out to ensure that our products are functioning as intended. Finished products are also constantly tested for consistency and conformity. We conduct checks and inspections on our machinery on a regular basis. Quality control focuses on the way that parts fit together and interact and ensures machinery operate smoothly and efficiently. We regularly circulate instruction memoranda to our staff involved in manufacturing activities, to ensure that they are aware of the latest procedures and that proper quality control procedures and instructions are adhered to. As a result of our stringent quality standards, the return of defective products from our customers during the Period Under Review is generally maintained at less than 0.5% of total revenue, save for 1Q2016. We also provide after-sales services to our customers, and will seek to rectify any defects in our products supplied. Our sales return as a percentage of revenue for the Period Under Review were as follows: FY2014 FY2015 FY2016 1Q2016 1Q2017 Sales return (RM 000) % of total revenue 0.2% 0.3% 0.4% 0.8% 0.3% 150

159 GENERAL INFORMATION ON OUR GROUP INSURANCE As at the Latest Practicable Date, we maintain the following material insurance policies to cover, amongst others, risks relating to our business operations, human resources and fixed assets: Malaysia (i) (ii) (iii) (iv) (v) Fire insurance Burglary insurance Motor vehicle insurance Personal accident insurance Marine cargo insurance Indonesia (i) (ii) (iii) Motor vehicle insurance Property all risks insurance Personal accident insurance Our Directors are of the opinion that the above insurance policies are adequate for our existing business operations and we will review and procure the necessary additional insurance coverage as and when the need arises. However, significant damage to our operations, whether as a result of fire or other causes, may still have a material adverse effect on our results of operations or financial condition. No insurance claims have been made by us during the Period Under Review. SEASONALITY Our Group has not experienced any significant seasonality in our business during the Period Under Review. However, we generally experience higher sales ahead of major festive seasons such as Ramadhan and Chinese New Year. SALES AND MARKETING Our sales team is headed by our sales director, Ms Puah Thye Lay and our marketing team is headed by our CEO, Mr Ong Yoke En. Our sales and marketing teams work closely to implement and monitor our marketing strategies and market positioning. Under the leadership of Mr Ong Yoke En, we have deviated from traditional marketing strategies to focus our marketing strategy on providing customer-centric services. Our aim is to achieve close working relationships with our customers by understanding their needs and providing them with customised products. We actively participate in domestic and international exhibitions and trade fairs, such as the International Motorcycle, Scooter and E-Bike Fair in Cologne, Germany, the Specialty Equipment Market Association and The National Hardware Show in Las Vegas, USA. and organise demonstrations of our aerosol products to introduce and promote our products to 151

160 GENERAL INFORMATION ON OUR GROUP existing and potential customers. We also participate in corporate activities for events such as motorcycle races to increase industry awareness of our brand and source for new distribution channels. Concurrently, our sales team establishes important business relationships with wholesalers and retailers when promoting our products to potential and current customers. In addition, while we are currently focusing on our core businesses in Malaysia and Indonesia, we have expanded our businesses to neighbouring countries such as Philippines, Thailand and Vietnam. In addition, we plan to extend our market presence in the United Kingdom to adjacent European countries. We are concurrently seeking opportunities to develop our business in USA. RESEARCH AND DEVELOPMENT Our research and development team is headed by Mr Ong Yoke En and provides critical support to our core business. Since we developed our sole proprietary brands of spray paints in 2005, we have devoted a significant amount of resources to the development of our portfolio of products. As at 30 June 2016, we have five (5) employees who are the key contributors and/or collaborators with our partners pursuant to our research and development efforts. We do not incur any significant or material research and development expenses as we keep our research and development expenses low by undertaking research and development collaborations with collaborators, and such expenses are borne equally by us and other collaborators. We believe that our research and development team and its activities are vital to our efforts to maintain our competitiveness in the rapidly changing industry in which we operate. In particular, our research and development efforts resulted in the development of our 2K system in January The 2K system allows two separate component casings to be placed within one aerosol can. The two component casings found in our 2K systems are paint solution and hardener. As such, our 2K system aerosol products are user-friendly and may be used independently of compressor and spray gun. Our award-winning 2K system has also received much attention in Malaysia and other countries. We are developing a range of high temperature resistant 2K system aerosol spray paint products as such products are currently only available in black and silver colours. These newly developed high temperature resistant spray paints would have colour-stable finishing even at high temperatures of up to 800 o C. We believe that the new range of high temperature resistant 2K system aerosol spray paint products will appeal greatly to end-users who wish to have more colours to choose from when spray painting the exhaust pipes of their motorcycles. Our research and development efforts play an integral part in our strategy to advance environmental sustainability. We devote our resources to the research and development of non-hazardous products that reflect a need for environmental preservation as well as allow us to maintain our market share and competitive advantage. As such, we are developing a range of 2K system isocyanate-free aerosol products that are similar in performance to the traditional isocyanate systems but without the perceived hazards commonly associated with isocyanate products. This isocyanate-free paints are expected to appeal to a large group of household and industrial end-users especially in the USA and European countries. 152

161 GENERAL INFORMATION ON OUR GROUP CORPORATE SOCIAL RESPONSIBILITY Our Group supports our local community in the following ways: We are committed to enhancing the well-being of the community and maintaining a sustainable environment especially in locations where we operate. Where practicable, we opt for environmentally friendly methods in our operations. In particular, we recycle solvents (previously used for the purposes of machine cleaning and hand washing) in the production of the darker coloured paints. Our practice of recycling solvents reduces both the wastes produced and our energy consumption. In addition, we also incorporate environmentally friendly practices into our manufacturing processes. We also recognise our responsibilities to our employees, shareholders, business partners and the communities in which we operate, and are committed to achieving long-term mutually sustainable relationships with our stakeholders. Apart from our environmental efforts, we strive to be socially responsible and we are constantly searching for means to contribute to the community. We support and sponsor various public service campaigns by making donations to charitable organisations. For example, we donated a dialysis machine to Batu Pahat Rotary Haemodialysis Centre in Malaysia in November In addition, our Group contributes to local communities in Malaysia and Indonesia by providing free educational spray painting trainings to students and retired persons for their personal career development. We do not have a fixed corporate social responsibility policy. However, we monitor closely the impact of our activities on the environment, consumers, employees, communities, stakeholders and other members of the public actively and we are constantly searching for means to continue contributing to the community. We shall be required to disclose our corporate social responsibility policies with reference to the SGX-ST s Guide to Sustainability Reporting for Listed Companies. Our Board will establish a corporate social responsibility policy which will include the review and/or recommendation of the following areas of our Group s activities: (i) (ii) (iii) our Group s policy in respect of corporate social responsibility issues; our Group s health, safety and environmental policies and standards; the social impact of our Group s business practices in the communities that we operate in; (iv) policies and practices with regard to key stakeholders (suppliers, customers and employees); and (v) policies and practices with regard to regulators. We recognise that we have a responsibility to the environment that we operate in. We prioritise health, safety and environmental protection throughout our business operations and are dedicated to complying with all relevant legislation and industry practices and standards concerning environment protection in Singapore, Malaysia and other key jurisdictions where our manufacturing operations are currently situated. 153

162 GENERAL INFORMATION ON OUR GROUP AWARDS, ACCOLADES AND CERTIFICATIONS Our Group s commitment to excellence and strong reputation is demonstrated by awards and accreditations we have received, some of which are set out below: Year Awarding Organisation Award/Accolade 2016 Malaysian Invention and Design Society 2016 Malaysian Invention and Design Society Malaysian Innovative Product Award 2016 International Invention and Innovation Exhibition 2016 (ITEX 2016) Gold award 2016 TISIAS 2016 International Invention Innovation Competition Gold medal GOVERNMENT REGULATIONS Our Group s operations in Malaysia and Indonesia are governed by various laws and regulations and subject to various licences, permits and government approvals. Please refer to Appendix E entitled Summary of Relevant Malaysian Laws and Regulations and Appendix F entitled Summary of Relevant Indonesian Laws and Regulations of this Offer Document for a description of the material laws and regulations in Malaysia and Indonesia, respectively, that apply to our Group s business. To the best of our Directors knowledge and belief and save as disclosed in the section Risk Factors Risks relating to our Business, as at the Latest Practicable Date, we have obtained all requisite approvals and are not in breach of any law or regulation applicable to our business operations that would materially affect our business operations. COMPETITION We operate in a highly competitive environment. We generally compete with overseas paint manufacturers and distributors in the paint industry on, amongst others, our spray paint products, track record and our financial standing and resources. Some of our competitors may have longer operating histories, more entrenched expertise, a larger client base, greater financial resources or may otherwise be in a better position to secure and manage large contracts or expand their market share than us. Some of our competitors are: Malaysia DPI Sdn Bhd Nippon Paint (M) Sdn Bhd Aeromix Distribution Sdn Bhd 154

163 GENERAL INFORMATION ON OUR GROUP Indonesia PT Murni Cahaya Pratama PT RJ London Chemical Industries PT Nippon Paint PT Difan Prima Paint To the best of our Directors knowledge, none of our Directors or Substantial Shareholders or their respective Associates is related to or has any interest, direct or indirect, in any of our competitors listed above. Our Directors believe that new entrants to the paint industry will require adequate working capital and funding, to build up a track record, to attract and retain a pool of skilled and experienced staff, in order to compete effectively against existing and new players in the paint industry. To the best of our Directors knowledge, save as disclosed in this Offer Document, there are no known published statistics or official sources of information to establish our market share in the paint industry. INVESTMENT HIGHLIGHTS We believe that we have the following investment highlights: We have an established branding with market-leading position in Malaysia and Indonesia Based on the Industry Report, we are one of the leading market players for two-wheelers aerosol refinishing and refurnishing products with an estimated market share of 27.0% and 5.0% in Malaysia and Indonesia, respectively. Furthermore, we have obtained numerous accolades and awards for our patented 2K Samurai products. We seek to continue to build and strengthen our Samurai brand through social media platforms, workshops and exhibitions. We believe that our established branding and market-leading position foster brand loyalty among our customers and help to market our products to potential customers. We are well-positioned in attractive end-user market segments Based on the Industry Report, the two-wheelers aerosol refinishing and refurnishing industry saw a combined sale of approximately 118 million units of aerosol spray paints in selected countries such as Malaysia, Indonesia, Thailand and Vietnam. Indonesia, being the biggest market, is expected to grow at a CAGR of 9.8% from 2015 to This growth can be attributed to the growing number of two-wheelers and an increasing awareness of aerosol spray paint products in the region. We believed that with our market-leading position in Malaysia and Indonesia, we are well-positioned to capitalise on the growth in the two-wheelers aerosol refinishing and refurnishing industry. 155

164 GENERAL INFORMATION ON OUR GROUP We have an innovative product with patented technology By leveraging on our strong research and development capabilities and registered patents for our key technologies, we have developed an aerosol container system with a two-component design that allows the hardener and paint solution to be mixed just prior to use. As a result, our products are easy to use, deliver a highly durable finish which is chemical, scratch and weather resistant. Further, our innovative nozzle technology allow for a wider and more uniform spray pattern that provide excellent coverage and more control compared to conventional aerosol products. We are committed to research and development to continue to enhance our product offerings. As at 16 December 2016, we have 12 registered patents and industrial designs and another 13 patents and industrial designs pending registration in our IP Territory. Our patents include key technologies such as our dual head and single head 2K systems. Please refer to General Information on our Group Intellectual Property Rights, General Information on our Group Business Overview and General Information on our Group Research and Development of this Offer Document for more details. We have an established and long-term relationship with our distributors, major suppliers and major customers We believe that cultivating and maintaining good business relationships with our distributors, wholesalers and suppliers are crucial to our success. As at 30 June 2016, we have more than 300 long term customers who have maintained business relationships with us for periods of five (5) or more years. As at 30 June 2016, four (4) of our top eight (8) suppliers have supplied us for 10 or more years. We believe that our long-standing relationships with our suppliers can ensure the stability and quality of products supplied. We have an established track record of operational excellence, technological breakthrough and awards Through our focus on our research and development efforts, quality of our products and services, we have established a strong track record of operational excellence and technological breakthroughs since our inception in Our significant achievements include obtaining the ISO9001:2008 certification in the manufacturing of aerosol spray paint, and having a technological breakthrough invention of the single head 2K system to mix two chemicals within an aerosol can whenever required. In addition, we have an excellent track record in industrial design of the dual head 2K system which has generated great interest among the motorcyclists in Southeast Asian countries. Please refer to General Information on our Group Intellectual Property Rights of this Offer Document for more details. 156

165 GENERAL INFORMATION ON OUR GROUP We have an experienced and dedicated management team Our Group is led by an experienced and dedicated management team, under the leadership of our Executive Director and CEO, Mr Ong Yoke En, who has more than 20 years of experience in the aerosol industry. Mr Ong Yoke En s intimate knowledge of the industry, extensive business experience and network have been instrumental in the growth of our Group. Under his leadership, our Group s revenue has grown by approximately RM14.7 million from approximately RM15.9 million in FY2014 to approximately RM30.6 million in FY2016. He is also supported by Ms Lim Lay Yong, our Executive Director and COO, and Ms Puah Thye Lay, Ms Sia Shu Yee, Ms Lee Siong Kim and Mr Voon Kian Woon, our Executive Officers. Please refer to the section entitled Directors, Executive Officers and Employees of this Offer Document for more details. We believe that we are well-positioned to leverage on the extensive experience and business acumen of our management team with more than five (5) years of experience in their respective areas of expertise, to achieve continued long-term growth of our Business. INDUSTRY OVERVIEW, PROSPECTS AND TREND INFORMATION Industry Overview and Prospects We have commissioned the Independent Market Researcher to provide the Industry Report for inclusion in this Offer Document. The Industry Report is set out in Appendix I of this Offer Document and the executive summary is extracted from the Industry Report and set out below. The Industry Report contains certain statements that are forward-looking and are based on underlying assumptions containing variables that may have changed since the date of issue. By their nature, forward-looking statements are subject to risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. No forward-looking statements contained herein should be relied upon as predictions of future events. No assurance can be given that the expectations expressed in these forward-looking statements will prove to be correct. The information in the Industry Report have not been independently verified by us, the Sponsor, Issue Manager and the Placement Agent or any of our and their respective affiliates or advisors. The information may not be consistent with other information compiled. Please see the section entitled Cautionary Note on Forward-looking Statements of this Offer Document for more details. You should be aware that since the date of the Industry Report, there may have been changes in the industry and the various sectors therein which could affect the accuracy or completeness of the information in this section. For the purpose of this section entitled Industry Overview and Prospects, the Southeast Asia countries comprise Malaysia, Indonesia, Thailand and Vietnam and the Forecast Period refers to the period between 2016 to 2020 as set out in the Industry Report. Introduction Aerosol spray paint is a type of paint that comes in a pressurised, sealed container and is usually mixed with an aromatic solvent. There are two variants of aerosol spray paint, namely, one component (i.e. 1K system) and two component (i.e. 2K system). The 1K system is the conventional aerosol spray paint in which the paint is sprayed using a propellant/solvent, which is filled in the container along with the paint while the 2K system has two compartments, one containing resin and the other containing hardener. This hardening agent provides gloss and resistance to the surface. The other advantage of the 2K system is that it does not require an additional clear coat. 157

166 GENERAL INFORMATION ON OUR GROUP Aerosol spray paint is used in a myriad of applications, including automotive, marine, furniture, industrial machinery, windows and door frames, and consumer goods. One of the key applications of aerosol spray paints in Southeast Asia is the repainting of two-wheelers in aftermarket. Value chain The following figure depicts the generally prevailing value chain structure for the aerosol spray paint industry in Southeast Asia. Manufacturer Distributor/ Wholesaler Hardware stores Retail Chains and ecommerce* Dealers Motorcycle accessory shops Motorcycle owners & Workshops Source: Frost & Sullivan Note: *observed only in Malaysia Key stakeholders in the aerosol spray paint industry in Southeast Asia are as follows: Manufacturers are the producers of aerosol spray paint. Manufacturers mostly sell their product directly to the distributor or in some cases to the hardware stores. Also, some manufacturers engage directly with the dealers/retailers and e-commerce companies. Distributors sell their products to wholesalers which in turn sell to retailers or hardware stores in different provinces. Dealers typically comprise paint stores that usually buy from the distributors and wholesalers. Some dealers engage directly with manufacturers as well. E-commerce websites such as Lazada are popular among aerosol spray can customers in Malaysia. 158

167 GENERAL INFORMATION ON OUR GROUP End customers of aerosol spray paints comprise: o o Body shops and/or shed shops that buy aerosol spray paint from dealers and receive a service fee from two-wheeler owners for painting their vehicles. Body shops and shed shops use aerosol spray paints for both partial and full repainting of two-wheelers. Aerosol spray paint is also used by body shops for finishing, as it adds shine and gloss. DIY two-wheeler owners, who typically purchase aerosol spray paint from dealer shops and/or e-commerce websites and paint the vehicle on their own. The decision-making process varies across different countries. For instance, in Malaysia, the end consumers are more aware and use social media to decide on which brand to purchase. On the contrary, in Vietnam, decision-making is primarily influenced and driven by workshops, largely due to lack of awareness among customers. Overall aftermarket is typically segmented into three (3) types of workshops namely, OEMaffiliated, insurance-affiliated, and shed shops, with typical characteristics as outlined below: Workshop Type OEM affiliated Insurance affiliated Shed shops Characteristics Large in size and are affiliated with an OEM These workshops do not undertake paint jobs for two-wheelers Affiliated to an insurance company, and may or may not be associated to an OEM Customers typically visit these workshops and thereafter claim the expenses incurred through insurance Usually smaller than above two types of workshops These are neither affiliated to an OEM nor registered with any automotive or insurance body Customers visiting these workshops have to incur out of pocket expenses. Therefore, most of the repainting jobs carried out for decorative purposes are undertaken at the shed shops In brief, two-wheeler owners typically prefer visiting shed shops for major repainting jobs. For decorative paint jobs and minor touch-ups, preferred options of customers include both shed shops and DIY. Market Overview The total aerosol spray paint market for two-wheelers in aftermarket in leading Southeast Asian countries (Malaysia, Indonesia, Thailand, and Vietnam) is poised to witness healthy growth over the Forecast Period. This market is projected to expand from approximately US$271 million in 2015 to approximately US$428 million by 2020, at a CAGR of 9.6%, which is higher than the expected growth in the overall paints and coatings market in Southeast Asia during the same period (CAGR ~ 7.3% during 2015 to 2020). 159

168 GENERAL INFORMATION ON OUR GROUP The following chart depicts the breakdown of market size trend in value terms for Southeast Asia and each respective country mentioned below. Aerosol Spray Paints Market for Two-Wheelers in the Aftermarket: Market Size (in Million US$), Selected Countries in Southeast Asia, F CAGR ( ) ~ 9.8% CAGR ( ) ~ 3.4% CAGR ( ) ~ 6.2% CAGR ( ) ~ 16.0% In US$ Indonesia stands out as most attractive considering both quantum of market as well as projected growth potential Indonesia Malaysia Thailand Vietnam F 2017F 2018F 2019F 2020F Source: Frost & Sullivan Growth in the aerosol spray paint market is closely pegged to the two-wheeler population. The two-wheeler population is directly associated with the number of repainting jobs. On average, a two-wheeler gets repainted every two (2) to three (3) years in Southeast Asia for maintenance and decorative purposes. Therefore, the expansion of the two-wheeler population (existing and new) has direct implications on the consumption of aerosol spray paint by two-wheelers in aftermarket. The table below depicts the market size in volume terms (million cans) for aerosol spray paint in Southeast Asia and each respective country mentioned below. Particulars CAGR ( ) Southeast Asia % Indonesia % Malaysia % Thailand % Vietnam % Source: Frost & Sullivan Overall, Indonesia stands out as the most attractive country, considering the quantum of the market as well as projected growth potential, in both value and volume terms. 160

169 GENERAL INFORMATION ON OUR GROUP Market drivers In summary, a combination of the following factors is expected to govern and propel growth of the aerosol spray paint market: Rising two-wheeler population Total two-wheeler population in Southeast Asia is projected to grow from approximately 177 million in 2015 to approximately 239 million by 2020, at a CAGR of slightly over 6.0%. In particular, Malaysia s and Indonesia s two-wheeler population are expected to reach 14.4 million and 140 million in 2020, respectively. This expansion in the two-wheeler population can be attributed to inadequate public transportation infrastructure and increasing affordability with rising disposable income in Southeast Asian countries. Furthermore, the overall two-wheeler industry can typically be classified into two categories new sales and resale. Demand of two-wheelers in either category is correlated with economic growth of the respective countries. Steady economic growth (estimated real GDP CAGR 5.0% during 2015 to 2020, for all countries taken together) is likely to translate into expansion in new sales and resale of two-wheelers in Southeast Asia. The total number of two-wheelers on the road is associated with the number of repainting jobs. On average, a two-wheeler is repainted every two (2) to three (3) years in selected geographies for maintenance and decorative purposes. Therefore, the expansion of the two-wheeler population (existing and new) augurs well for consumption of aerosol spray paint for two-wheelers in the aftermarket. Total two-wheeler population (Number of Units in Millions), Selected Countries in Southeast Asia, F CAGR: 8.6% CAGR: 6.2% 239 Millions (units F 2017F 2018F 2019F 2020F Malaysia Indonesia Thailand Vietnam 161

170 GENERAL INFORMATION ON OUR GROUP Total two-wheeler population (Number of Units in Millions), Split between Existing and New Vehicles in Selected Countries in Southeast Asia, F CAGR: 9.5% (Existing two wheelers) CAGR: -2.2% (New registrations) CAGR: 6.2% (Existing two wheelers) CAGR: 5.7% (New registrations) F 2017F 2018F 2019F 2020F Favourable demographics Of the total population in the selected geographical areas, approximately 43.0% lies in the age bracket of 25 to 54 years and approximately 17.0% lies in the age bracket of 15 to 24 years. This young population is likely to constitute a majority of the customers of two-wheelers and also exhibit higher tendency of customising and repainting their twowheelers aimed at aesthetic enhancement. Growing young population in Malaysia, Indonesia, Thailand and Vietnam is expected to bolster demand for two-wheelers and lead to greater consumption of aerosol spray paints over the Forecast Period. Rapid urbanisation The proportion of urban population in Southeast Asia is projected to grow from approximately 50.0% in 2015 to approximately 55.0% by Urbanisation is an overarching trend across all Southeast Asian countries, and is leading to growth in investments across industries, including infrastructure development. This is translating into creation and expansion of cities, mega-cities and mega-regions in all these countries. The projected increase in urbanisation is likely to result in higher need of transportation, thereby, generating greater automotive sales, including two-wheelers. Growing disposable income and favourable demographics A significant proportion (approximately 43.0% as of 2015) of Southeast Asian population lies in the age bracket of 25 to 54 years. This substantial young population corresponds to the working age group as well as the most likely buyers of vehicles. Also, these young buyers exhibit higher tendency of customising and repainting their two-wheelers aimed at aesthetic enhancement. Furthermore, a higher share of the working population across these countries is likely to further boost an already upward trending GDP per capita (an indicator of growing disposable income) in these countries. A combination of rising young population and increasing disposable income augurs well for overall demand for two-wheelers, leading to greater consumption of aerosol spray paints in Southeast Asia. 162

171 GENERAL INFORMATION ON OUR GROUP High accident rate High two-wheeler accident rates in the four (4) Southeast Asian countries generates a greater number of repair and repainting and minor touch-up requirements that in turn bolsters consumption of aerosol spray paints. Substantial decorative and touch-up repaint jobs Around 20.0% to 22.0% of the two-wheelers in the four (4) Southeast Asian countries get partially repainted because of decorative reasons or for small touch-ups required in cases of minor accidents (which are not reported). These minor repainting jobs are either carried out by the consumer themselves or are carried out at the local shed shops. The minor repainting jobs generate significant demand for aerosol spray paints, as using an aerosol spray can for small repainting jobs is economically more viable than using other competing technologies such as spray gun or airbrush. Affordability and convenience of aerosol spray paint As of 2015, the total cost of repainting a two-wheeler in the DIY route was up to US$25 to US$30. In comparison, the total cost of getting a two-wheeler repainted at a workshop was approximately US$50 for basic paint shades alone. The low cost of using an aerosol spray paint in DIY mode is expected to drive more end customers to opt for DIY paint jobs. This expected increase in adoption of DIY mode for repainting jobs is expected to lead to greater consumption of aerosol spray paint, driven by its attractiveness as a convenient and affordable option. Marketing efforts Rising penetration of social media is helping to connect two-wheeler owners with each other and with paint manufacturers. Owners share pictures of their two-wheelers along with information on the way they got it painted. This encourages other owners to re-design and repaint their two-wheelers. Since aerosol spray paint is easy to use and widely available at hardware stores and even e-commerce platforms (in Malaysia for now), the expected surge in the usage of social media is likely to act as a crucial tool for manufacturers to attract, encourage and induce the adoption of aerosol spray paints during the Forecast Period. Additionally, frequently organised motor shows and bike shows such as the Bangkok International Motorbike Festival where a number of world renowned brands showcase their motorcycles and accessories help in educating consumers about two-wheeler maintenance and decoration resulting in an increased awareness of new technologies in the market. This is likely to lead to an increased demand for the 2K system in the Forecast Period. Rising awareness among body shop owners Body shop owners are well aware of the various aerosol spray paint products available in the market and also indicate a healthy propensity to understand and use new aerosol spray paint products launched in the market. Aerosol spray paint manufacturers are increasingly engaging in aggressive product promotions and marketing activities such as roadshows in these countries. This is expected to boost awareness among body shop owners that augurs well for trial usage and adoption of aerosol spray paint. 163

172 GENERAL INFORMATION ON OUR GROUP On the other hand, the aerosol spray paint market is subjected to a set of challenges limiting its growth potential. These include the requirement for a strong distribution network, customer s brand loyalty towards competing brands, lack of awareness among customers, and competing technologies and products. Notwithstanding the abovementioned challenges, continued technological advancements are promoting growth in the aerosol spray paint market. Aerosol spray paint typically competes against spray gun and airbrush that have been the more popular repainting technologies adopted by workshops till now. However, aerosol spray paint, owing to the ease of use and growing availability, is fast becoming a popular choice for DIY applications as well as partial repainting jobs at workshops. Within aerosol spray paint variants, the 2K system is a fairly new technology and it is gaining popularity despite a higher price as compared to the 1K system (in some cases, the 2K system is almost twice the price of the 1K system). This is largely due to the significantly superior output quality and wider application potential of the 2K system over the 1K system. Performance of the 2K system in terms of glossiness is comparable to that of the spray gun, and in terms of drying time, is much better than spray gun and airbrush. Moreover, the 2K system is lower in price and is easier to use compared to the spray gun and airbrush systems. This is reflected in the expected growth potential of the 2K system vis-à-vis the 1K system, over the Forecast Period. The chart below depicts the aerosol spray paint market by technology type for Southeast Asia. Aerosol Spray Paints Market for Two-Wheelers in the Aftermarket: Breakdown of market by technology (1K and 2K), in million US$, Selected Countries in Southeast Asia, F CAGR ( ): 1K ~ 8.3% K K CAGR ( ): 1K ~ 7.2%, 2K ~ 30% F 2017F 2018F 2019F 2020F Source: Frost & Sullivan 164

173 GENERAL INFORMATION ON OUR GROUP Aerosol Spray Paint Market for Two-Wheelers Aftermarket: Estimated Market Share, by volume (%), Malaysia, % 27% Samurai Others 73% Source: Frost & Sullivan Note: Others include DPI Aerosol, Aeromix, Pylox, Arrow, Royal etc. Aerosol Spray Paint Market for Two-Wheelers Aftermarket; Estimated Market Share (%), Indonesia, % Samurai Others 95% Source: Frost & Sullivan Note: Others include: RJ London, Pylox, Ditton, Aerox etc. The 2K system is expected to grow at a CAGR of approximately 30.0% during 2015 to Projected growth of 2K is a little over 4 times that of the 1K system (CAGR of approximately 7.2%) during the same period. In terms of volume, the overall market is likely to witness adjustments to a lower total consumption of cans. This is because a smaller number of 2K system cans is required as compared to 1K system cans for the same painting job. As of 2016, 2K system aerosol spray cans were available in the market in dual head type configuration, whereby one head contains a nozzle to spray the paint and other head is used to release the hardener in the container. However, one of the leading incumbent brands, Samurai paint (with a market share of 27.0% in Malaysia and approximately 5.0% in Indonesia), recently patented its 2K aerosol paint one-head system, which is even easier to use than the 2K dual head. Once launched, 2K single head can be expected to be popular among customers and manufacturers specialising in 2K aerosol spray paints are likely to have the first mover advantage in the Forecast Period. For more details, please refer to the Industry Report as set out in Appendix I of this Offer Document. 165

174 GENERAL INFORMATION ON OUR GROUP Trend Information Based on the revenue and operations of our Group as at the Latest Practicable Date and barring unforeseen circumstances, our Directors have observed the following trends for the financial year ending 31 March 2017: (i) (ii) (iii) we expect higher labour costs as a result of a tight labour market and an increase in headcount in line with the expansion of our business activities; we expect our depreciation cost to increase as a result of our investments in properties and equipment for the expansion of our production lines; and we expect our profitability for the financial year ended 31 March 2017 to be affected by the expected increase in administrative expenses. The increase in administrative expenses is mainly due to: (a) (b) (c) incremental annual cost associated with our listing such as directors and audit fees; one-off listing expenses which are expected to be expensed off in FY2017; and compliance costs as a listed company. Save as disclosed above and in the sections entitled Risk Factors, Management s Discussion and Analysis of Financial Position and Results of Operations and General Information on our Group Prospects of this Offer Document, and barring any unforeseen circumstances, our Directors believe that there are no other known recent trends in production, sales and inventory, the costs and selling prices of our products and services or other known trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material and adverse effect on our revenue, profitability, liquidity or capital resources, or that would cause financial information disclosed in this Offer Document to be not necessarily indicative of our future results of operations or financial position. Please also refer to the section entitled Cautionary Note on Forward-Looking Statements of this Offer Document. BUSINESS STRATEGIES AND FUTURE PLANS We intend to upgrade our production facilities and capabilities As at 30 June 2016, our maximum production capacity is approximately 16 million aerosol products per annum. Please refer to the section entitled General Information on our Group Production Process Production Capacity and Utilisation of this Offer Document for more details. As part of our business strategy to meet the anticipated increase in market demand for our products, we plan to upgrade our production facilities by upgrading our existing manufacturing facilities in Johor, Malaysia, increasing the number of our production lines for certain new products under development and progressively acquiring new equipment and machineries to reduce our reliance on labour. Besides upgrading our production capabilities, the upgraded manufacturing facilities will enable us to separate the storage of flammable direct materials and the finished products, thereby reducing the fire risks associated with our operations. For more details on fire risks, please refer to the risk factor We may be adversely affected if we face any disruptions to the supply of electricity, water, diesel, auxiliary materials, equipment and spare parts due to breakout of fire, energy crisis and/or other unforeseen external factors in the section entitled Risk Factors of this Offer Document. 166

175 GENERAL INFORMATION ON OUR GROUP We intend to utilise approximately S$1.2 million of our net proceeds from the Placement towards our plans to expand our production facilities. We intend to focus on research and development to increase our range of innovative products We constantly seek ways to expand our product range and meet the changing demands of our end-users. As at Latest Practicable Date, we have approximately 800 types of products under our eight (8) different brands. The new products we are researching on and bringing to the market is aimed at bridging the gap between the retail and commercial/industrial market, with a focus on greater ease of use and safety. This includes innovating non-isocyanate paint formulations which lowers the possibility of isocyanate poisoning as well as aerosol products not found in the market. We also intend to leverage on our research and development to further enhance the current version of our single head 2K system. We intend to increase branding and marketing activities to strengthen our market position We are one of the leading market players in the automotive refinishing and refurnishing industry and seek to strengthen our market position by further increasing awareness and recognition of our eight (8) different brands across the retail, commercial and industrial sectors. We believe that this will enable us to achieve strong and sustainable growth in our business and enhance end-user loyalty. Currently, our brands are promoted primarily through traditional media channels such as print, outdoor advertising and word-of-mouth. We intend to increase our branding and marketing activities and supplement our current promotional campaigns and workshops by ramping up on our social media advertisements and promotional initiatives to further engage end-users through contests, promotions and interactive campaigns via online social media platforms. In addition, we are currently exploring the possibility of entering new industry segments, namely, the car refinishing and consumer segments. As part of our plan to penetrate the industry further in the consumer segment, we will be enhancing our shelf presence and product range in consumer retail outlets in Malaysia, Indonesia and possibly other countries in Asia, Europe and North America. We intend to fund the above initiatives from our general working capital. We intend to expand our business through acquisitions, joint ventures or strategic alliances We may expand our business, whether locally or overseas, through acquisitions, joint ventures or strategic alliances with parties which can strengthen our market position and add value to our existing business, as well as enable us to expand into new businesses. Such acquisitions, joint ventures, or strategic alliances, could also bring about greater economies of scale and provide an impetus for future growth. Presently, our Group does not have any specific initiatives or plans with regard to any investments through acquisitions, joint ventures, or strategic alliances, and we have not identified any potential party to acquire its business or to form joint ventures or strategic alliance with. Should such opportunities arise, we will seek approval, where necessary, from our Shareholders and the relevant authorities as required by relevant laws, rules and regulations. 167

176 INTERESTED PERSON TRANSACTIONS In general, transactions between our Group and any of our interested persons (namely, our Directors, CEO, Controlling Shareholders or any of the Associates of such Directors, CEO or Controlling Shareholders) ( Interested Persons and each, an Interested Person ) would constitute interested person transactions for the purposes of Chapter 9 of the Catalist Rules. In line with the rules set out in Chapter 9 of the Catalist Rules, transactions valued at less than S$100,000 may not be taken into account for purposes of disclosure or aggregation in this section entitled Interested Person Transactions of this Offer Document. The following represents transactions our Group has undertaken with Interested Persons during FY2014, FY2015, FY2016, 1Q2017 and the period from 1 July 2016 up to the Latest Practicable Date (collectively, the Relevant Period ). Save as set out in this section entitled Interested Person Transactions and in the section entitled Restructuring Exercise of this Offer Document, none of our Directors, CEO, Controlling Shareholders or their respective Associates was or is interested in any material transaction undertaken by our Group during the Relevant Period. INTERESTED PERSONS AND OTHERS The following persons and corporations are considered Interested Persons for the purposes of this section entitled Interested Person Transactions of this Offer Document: Interested Person Relationship with our Group Ong Yoke En Our Executive Director and CEO and also our Controlling Shareholder. Mr Ong Yoke En is also the spouse of Ms Lim Lay Yong. Lim Lay Yong Our Executive Director and COO and also our Controlling Shareholder. Ms Lim Lay Yong is also the spouse of Mr Ong Yoke En. SPUL Ong How En A company engaged in the business of the trading of aerosol spray paint products in which Ms Lim Lay Yong held 51.0% of the shareholding interest prior to its striking off in January SPUL was thus an associate of our Director, Ms Lim Lay Yong. The remaining 49.0% shareholding interest in SPUL was held by a third-party business partner, Ms Liew Siew Wei. A sibling of Mr Ong Yoke En. Mr Ong How En is thus an Associate of our Director, Mr Ong Yoke En. 168

177 INTERESTED PERSON TRANSACTIONS Apart from the Interested Person Transactions as defined under the Catalist Rules, and for the purposes of completeness of disclosure in this Offer Document, material transactions between our Group and Relevant Persons are set out below: Relevant Person Voon Kian Woon Agency Teng Boon Sang Relationship with our Group A sole proprietorship owned by Mr Voon Kian Woon, an Executive Officer of our Company. The brother-in-law of Mr Ong Yoke En, our CEO and Executive Director and Controlling Shareholder. PAST INTERESTED PERSON TRANSACTIONS (i) Advances to Mr Ong Yoke En from our Group During the Relevant Period, our Group had granted advances to Mr Ong Yoke En from time to time for personal expenses, the details of which are set out below: (RM 000) As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Amount owing to OISB ,286 Amount owing to CPMSB Amount owing to PTSP The largest amount outstanding and owing by Mr Ong Yoke En to our Group during the Relevant Period was RM1.9 million. As these advances were interest-free, unsecured and had no fixed terms of repayment, our Directors are of the view that these transactions were not entered into on normal commercial terms or on an arm s length basis and were not in the interest of our Company and minority Shareholders. As at the date of this Offer Document, all amounts owing from Mr Ong Yoke En have been fully repaid by way of set-off against the amounts owed by our Group to Mr Ong Yoke En. For more details relating to the advances received by our Group from Mr Ong Yoke En and which remain outstanding as at the Latest Practicable Date, please refer to the section entitled Interested Person Transactions Present and On-going Interested Person Transactions of this Offer Document. We do not intend to grant advances to Interested Persons of our Group after our Listing. 169

178 INTERESTED PERSON TRANSACTIONS (ii) Advances from Ms Lim Lay Yong to our Group During the Relevant Period, our Group had received advances for working capital purposes from Ms Lim Lay Yong from time to time as set out below. (RM 000) As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Amount owing from OISB Amount owing from CPMSB Amount owing from SWHL The largest amount outstanding and owing by our Group to Ms Lim Lay Yong during the Relevant Period was RM109,000. As at the Latest Practicable Date, the full outstanding amount of the advances has been settled and our Group does not intend to receive further advances from Interested Persons of our Group after our Listing. As these advances were interest-free, unsecured and had no fixed terms of repayment, our Directors are of the view that these transactions were not entered into on normal commercial terms or on an arm s length basis but were not prejudicial to the interest of our Company and minority Shareholders. (iii) Advances to and from Mr Ong How En During the Relevant Period, our Group had granted advances to, and received advances from Mr Ong How En from time to time. The advances received from Mr Ong How En were for working capital expenses. The advances to Mr Ong How En were for personal expenses. The details of the advances are set out below: Advances to Mr Ong How En from our Group The largest amount outstanding and owing by Mr Ong How En to our Group during the Relevant Period was RM62,000. (RM 000) As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Amount owing to PTSP

179 INTERESTED PERSON TRANSACTIONS Advances from Mr Ong How En to our Group Mr Ong How En made advances to SWHL in FY2014 and FY2015. No advances were made in FY2016 and up to the Latest Practicable Date. The largest amount outstanding and owing by our Group to Mr Ong How En during the Relevant Period was RM107,000. (RM 000) As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Amount owing from SWHL In relation to the advances received from Mr Ong How En, our Directors are of the view that these transactions were not entered into on normal commercial terms or on an arm s length basis but were not prejudicial to the interest of our Company and minority Shareholders. In relation to the advances to Mr Ong How En, our Directors are of the view that these transactions were not entered into on normal commercial terms or on an arm s length basis and were not in the interest of our Company and minority Shareholders. As at the Latest Practicable Date, a net amount of RM62,000 was owing by Mr Ong How En to our Group. As at the date of this Offer Document, all amounts owing from Mr Ong How En have been fully repaid by way of set-off against the amounts owed by our Group to Mr Ong Yoke En. We do not intend to grant further advances to, or receive further advances from, Interested Persons of our Group after our Listing. (iv) Sale of aerosol spray products from OISB to SPUL SPUL was incorporated on 11 March 2011 for purposes of penetrating the United Kingdom market under our Group s Canbrush brand. Pursuant to this, SPUL had purchased aerosol spray products from our Subsidiary, OISB, in FY2014 and FY2015 for sale in the United Kingdom. The details of the transaction amounts during the Relevant Period are set out below: (RM 000) FY2014 FY2015 FY April 2016 to the Latest Practicable Date Sale of aerosol spray products from our Group Our Directors are of the opinion that the above transactions were not undertaken on normal commercial terms or on an arm s length basis as the aerosol spray products were sold to SPUL at prices that were lower than the prevailing market rates and at a lower profit margin to our Group. Notwithstanding this, the above transactions were beneficial for our Group and were not prejudicial to the interests of our Company and minority Shareholders as SPUL enabled our Group to achieve initial market penetration to the United Kingdom without incurring any marketing or administrative expenditure. 171

180 INTERESTED PERSON TRANSACTIONS (v) Sale of used car from Ms Lim Lay Yong to OISB On 2 November 2015, OISB purchased a used car for RM28,000 from Ms Lim Lay Yong. The aggregate value of the car paid by OISB during the Relevant Period is set out below: (RM 000) FY2014 FY2015 FY April 2016 to the Latest Practicable Date Aggregate amount paid by OISB 28 Our Directors are of the opinion that the above transaction was undertaken on normal commercial terms, on an arm s length basis and not prejudicial to the interests of our Company and minority Shareholders, as the price paid by OISB was based on the then prevailing market values for similar vehicles. (vi) Trust arrangement over and transfer of a car between Mr Ong Yoke En and OISB Pursuant to a trust deed dated 3 June 2014 (as amended and supplemented by a supplemental agreement dated 14 November 2016) between Mr Ong Yoke En and OISB, Mr Ong Yoke En agreed that he shall hold a car (Car model: Mercedes Benz E250 CGI-W212C) bearing the registration number JQC 8228 registered under his name in trust for OISB. As at the date of this Offer Document, Mr Ong Yoke En has transferred the legal title to this car to OISB for a nominal consideration of S$1.00. Save for the nominal consideration to be paid by OISB to Mr Ong Yoke En for the transfer of the legal title of the car to OISB, no consideration was paid for the provision of the trust arrangement by Mr Ong Yoke En over the car in favour of OISB and the subsequent transfer of the legal title of the car to OISB. Accordingly, our Directors are of the view that the transaction was not entered into on normal commercial terms or on an arm s length basis but was not prejudicial to the interests of our Company and minority Shareholders. 172

181 INTERESTED PERSON TRANSACTIONS PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS (a) Personal guarantees provided by our Executive Directors As at the Latest Practicable Date, our Executive Directors have provided personal guarantees for loans granted to our Group, the details of which are set out below: Facilities granted to OISB Bank Type of facility Interest rate Guarantors Amount owing as at the Latest Practicable Date (RM 000) Amount guaranteed as at the Latest Practicable Date (RM 000) Largest amount guaranteed during the Relevant Period (RM 000) Alliance Bank Trade facilities BA For 1st limit of RM900,000 money market rate % p.a. Ong Yoke En and Lim Lay Yong 1,797 1,797 1,913 For subsequent limit of RM1,200,000 money market rate + 1.5% p.a. Trade facilities TR For 1st limit of RM900,000 BLR % p.a. (minimum 4.0% p.a.) For subsequent limit of RM1,200,000 BLR + 1.5% p.a. (minimum 4.0% p.a.) Trade facilities LC 0.1% per month or part thereof (minimum RM100 per LC) Trade facilities SG 0.1% flat (minimum RM100 per SG for ABMB issued LC and minimum RM200 per SG for non-abmb issued LC) Alliance Bank Overdraft BLR % p.a. (minimum 4.0% p.a.) Ong Yoke En and Lim Lay Yong 173

182 INTERESTED PERSON TRANSACTIONS Bank Type of facility Interest rate Guarantors Amount owing as at the Latest Practicable Date (RM 000) Amount guaranteed as at the Latest Practicable Date (RM 000) Largest amount guaranteed during the Relevant Period (RM 000) Alliance Bank Forward foreign exchange N.A Ong Yoke En and Lim Lay Yong Alliance Bank Term loan BLR + 1.2% p.a. (minimum 4.0% p.a.) Ong Yoke En and Lim Lay Yong Alliance Bank Term loan BLR 2.1% p.a. (minimum 4.0% p.a.) Ong Yoke En and Lim Lay Yong 2,196 2,196 2,240 Alliance Bank Term loan BLR 2.1% p.a. (minimum 4.0% p.a.) Ong Yoke En and Lim Lay Yong 2,196 2,196 2,240 Alliance Bank Term loan BLR + 0.5% p.a. (minimum 4.0% p.a.) Ong Yoke En and Lim Lay Yong RHB Overdraft BLR + 0.5% p.a. RHB Overdraft BLR % p.a. Ong Yoke En 50 Ong Yoke En 100 RHB Trade facilities BA Banks Cost Fund + 1.5% p.a. Ong Yoke En 1,706 1,706 1,819 Trade facilities TR BLR % p.a. Trade facilities LC 0.1% per month or part thereof or other rate as may be stipulated by the Association of Banks in Malaysia from time to time (minimum RM100 per LC) Trade facilities SG 0.15% flat or other rate as may be stipulated by the Association of Banks in Malaysia from time to time (minimum RM100 per SG) 174

183 INTERESTED PERSON TRANSACTIONS Bank Type of facility Interest rate Guarantors Amount owing as at the Latest Practicable Date (RM 000) Amount guaranteed as at the Latest Practicable Date (RM 000) Largest amount guaranteed during the Relevant Period (RM 000) RHB Term loan BLR 1.5% p.a. RHB BG 0.125% per month (minimum RM100 per BG) Ong Yoke En Ong Yoke En The largest aggregate amount guaranteed by our Executive Directors during the Relevant Period based on month-end balances, was approximately RM9.2 million. The abovementioned Executive Directors have not received any compensation, fees or other benefits for the provision of the personal guarantees. Accordingly, our Directors are of the view that the guarantees are not provided on an arm s length basis and are not on normal commercial terms, but are not prejudicial to the interests of our Company and minority Shareholders. Upon the admission of our Company to Catalist, we intend, subject to the approval of the abovementioned banks, to obtain a release and discharge of these personal guarantees and replace them with corporate guarantees provided by our Group. Our Directors do not expect any material change in the terms and conditions of the relevant facility agreements arising from the release and discharge of the above personal guarantees. In the event that the relevant banks do not agree to the release and discharge of the above personal guarantees, Mr Ong Yoke En and Ms Lim Lay Yong have undertaken to continue to provide such guarantees for no consideration until such time when we are able to secure suitable alternative banking facilities at no less favourable terms from other financial institutions. (b) Guarantees provided by Mr Ong Yoke En for vehicle hire purchases Mr Ong Yoke En has provided personal guarantees to certain third parties ( Finance Companies ) which OISB had entered into vehicle hire purchase agreements with. Pursuant to the guarantees, Mr Ong Yoke En guaranteed the due and punctual payment of all sums payable by OISB to the Finance Companies under, and the due performance by OISB of the terms and conditions in, the respective hire purchase agreements for the hire purchase of vehicles, the details of which are set out below: 175

184 INTERESTED PERSON TRANSACTIONS Finance Company Guarantee Provided For Hire Purchase of Duration of hire purchase Aggregate amount guaranteed Amount guaranteed as at the Latest Practicable Date (RM 000) Largest amount guaranteed during the Relevant Period (RM 000) Malayan Banking Berhad Honda Odyssey 2.4L 7 years, commencing July 2014 RM210,000, payable in monthly instalments Malayan Banking Berhad Honda Accord 2.0AT 5 years, commencing July 2014 RM112,000, payable in monthly instalments TC Capital Resources Sdn. Bhd. Nissan Almera 1.5 (A) 2 years, commencing January 2015 RM42,000, payable in monthly instalments 3 42 ORIX Credit Malaysia Sdn Bhd Used Toyota 02-8FGJ35 Gasoline Forklift 3 years, commencing October 2015 RM37,000, payable in monthly instalments ORIX Credit Malaysia Sdn Bhd Used Toyota TFBR25 Reach Truck 3 years, commencing October 2015 RM40,000, payable in monthly instalments Affin Bank Berhad Hyundai Starex Royale 5 years, commencing June 2016 RM114,000, payable in monthly instalments The largest aggregate amount guaranteed by Mr Ong Yoke En under the hire purchase agreements during the Relevant Period was RM386,000. As no compensation, fees or other benefits have been paid or are payable by our Group to Mr Ong Yoke En for the provision of the personal guarantees, our Directors are of the view that the guarantees are not provided on an arm s length basis and are not on normal commercial terms, but are not prejudicial to the interests of our Company and minority Shareholders. Upon the admission of our Company to Catalist, we intend to request for a discharge of these guarantees and replace them with corporate guarantees provided by our Group. If we are unable to discharge these guarantees, Mr Ong Yoke En has undertaken to continue to provide the guarantees required to secure these hire purchase agreements for no consideration. 176

185 INTERESTED PERSON TRANSACTIONS (c) Guarantees provided by Mr Ong Yoke En to suppliers of OISB Mr Ong Yoke En has provided personal guarantees to secure OISB s payment obligations to its suppliers. Details of such personal guarantees are listed below: Personal guarantee provided to Amount guaranteed As at 31 March 2014 Amount guaranteed As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date (RM 000) (RM 000) (RM 000) (RM 000) (RM 000) Chemstation Distribution Sdn Bhd Asia Paint (Singapore) Pte Ltd no limit ,142 1,059 1,848 no limit The largest aggregate amount guaranteed by Mr Ong Yoke En under the abovementioned guarantees to the suppliers of our Group during the Relevant Period was RM1,848,000. As no compensation, fees or other benefits have been paid or are payable by our Group to Mr Ong Yoke En for the provision of the personal guarantees, our Directors are of the view that the guarantees are not provided on an arm s length basis and are not on normal commercial terms, but are not prejudicial to the interests of our Company and minority Shareholders. Upon the admission of our Company to Catalist, we intend to request for a discharge of these guarantees and replace them with corporate guarantees provided by our Group. If we are unable to discharge these guarantees, Mr Ong Yoke En has undertaken to continue to provide the guarantees required to the abovementioned suppliers of our Group for no consideration. (d) Advances from Mr Ong Yoke En to our Group During the Relevant Period, our Group had received advances from Mr Ong Yoke En from time to time for working capital expenses, the details of which are set out below: (RM 000) As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Amount owing from the Company 4,943 5,078 5,289 Amount owing from OISB Amount owing from PTSP 252 Amount owing from SWHL The largest amount outstanding and owing by our Group to Mr Ong Yoke En during the Relevant Period was RM5.3 million. 177

186 INTERESTED PERSON TRANSACTIONS Save for the advance from Mr Ong Yoke En to our Company which shall be repayable by our Company to Mr Ong Yoke En within one (1) year from the date of disbursement of the advance or such other date as the parties may agree, all the above advances were interest-free, unsecured and had no fixed terms of repayment. As these advances, save for the advance from Mr Ong Yoke En to our Company, were interest-free, unsecured and had no fixed terms of repayment, our Directors are of the view that these transactions were not entered into on normal commercial terms or on an arm s length basis but were not prejudicial to the interest of our Company and minority Shareholders. Pursuant to the set-off of amounts owing by our Group to Mr Ong Yoke En against amounts owing by Mr Ong Yoke En and Mr Ong How En to our Group and the subsequent payment of RM1.0 million to Mr Ong Yoke En after the Latest Practicable Date, as at the date of this Offer Document, a net amount of RM2.3 million was owing by our Group to Mr Ong Yoke En. For more details relating to the advances received by Mr Ong Yoke En and Mr Ong How En from our Group, please refer to the section entitled Interested Person Transactions Past Interested Person Transactions of this Offer Document. The amount owing to Mr Ong Yoke En will be repaid with the approval of our Audit Committee, taking into account the financial position of our Group (including cash flow) and/or any other factors which may affect the financial position of our Group. We do not intend to receive advances from Interested Persons of our Group after our Listing. (e) Guarantees provided by Ms Lim Lay Yong for vehicle hire purchases Ms Lim Lay Yong has provided personal guarantees to certain Finance Companies which OISB had entered into vehicle hire purchase agreements with. Pursuant to the guarantees, Ms Lim Lay Yong guaranteed the due and punctual payment of all sums payable by OISB to the Finance Companies under, and the due performance by OISB of the terms and conditions in, the respective hire purchase agreements for the hire purchase of vehicles, the details of which are set out below: Finance Company Guarantee Provided For Hire Purchase of Duration of hire purchase Aggregate amount guaranteed Amount guaranteed as at the Latest Practicable Date (RM 000) Largest amount guaranteed during the Relevant Period (RM 000) ORIX Credit Malaysia Sdn Bhd Used Toyota 02-8FGJ35 Gasoline Forklift 3 years, commencing October 2015 RM37,000, payable in monthly instalments ORIX Credit Malaysia Sdn Bhd Used Toyota TFBR25 Reach Truck 3 years, commencing October 2015 RM40,000, payable in monthly instalments The largest aggregate amount guaranteed by Ms Lim Lay Yong under the hire purchase agreements during the Relevant Period was RM77,

187 INTERESTED PERSON TRANSACTIONS As no compensation, fees or other benefits have been paid or are payable by our Group to Ms Lim Lay Yong for the provision of the personal guarantees, our Directors are of the view that the guarantees are not provided on an arm s length basis and are not on normal commercial terms, but are not prejudicial to the interests of our Company and minority Shareholders. Upon the admission of our Company to Catalist, we intend to request for a discharge of these guarantees and replace them with corporate guarantees provided by our Group. If we are unable to discharge these guarantees, Ms Lim Lay Yong has undertaken to continue to provide the guarantees required to secure these hire purchase agreements for no consideration. (f) Provision of an indemnity by Mr Ong Yoke En to our Group Some companies in our Group had certain prior breaches and/or non-compliances with applicable laws, rules and/or regulations, including prior breaches of the OSHA, past non-compliance with the EA, previous non-compliance with Indonesian laws relating to the business licence and various past breaches and/or non-compliances with the respective applicable laws, rules and regulations of the various jurisdictions in which the companies in our Group operate. Please refer to the section entitled Risk Factors Risks Relating To Our Business Our business operations are affected by changes in existing and adoption of new Indonesian laws and regulations and/or changes in statutory interpretation of the Indonesian laws and regulations as well as possible inconsistencies between the various Indonesian laws and regulations and/or the corresponding interpretation, Risk Factors Risks Relating To Our Business We may be liable for non-compliances with laws and regulations in Malaysia and Appendix J entitled Abridged Legal Opinion from Zaid Ibrahim & Co of this Offer Document for more details on some of these past non-compliances. In this regard, Mr Ong Yoke En, our Executive Director and CEO, has unconditionally and irrevocably covenanted and undertaken, as a continuing obligation, to keep our Group fully indemnified against all actions, suits, proceedings, costs, loss, penalties, damages (including any damages or compensation paid by our Group to compromise or settle any claim) or liability whatsoever which our Group may howsoever suffer or incur pursuant to, in connection with or arising out of (i) the above past breaches; and/or (ii) any other past breaches of any applicable law, rules, regulations and/or the like which any of the companies in our Group may have committed prior to the admission of our Company to Catalist. No consideration was or shall be paid to Mr Ong Yoke En for the provision of the said indemnity. There were no provisions relating to the termination of the said indemnity. As the provision of the said indemnity is for no consideration, our Directors are of the view that the transaction was not entered into on normal commercial terms or on an arm s length basis but was not prejudicial to the interests of our Company and minority Shareholders. 179

188 INTERESTED PERSON TRANSACTIONS OTHER TRANSACTIONS For purposes of completeness of disclosure, we set out the Other Transactions (which do not fall within the ambit of Chapter 9 of the Catalist Rules) below: (a) Provision of Book-keeping Services by Voon Kian Woon Agency to OISB and CPMSB Mr Voon Kian Woon was the sole proprietor of Voon Kian Woon Agency for the period from August 2011 to June Voon Kian Woon Agency provided book-keeping services to OISB and CPMSB in FY2014 and FY2015 where the fees amounted to approximately RM10,000 and RM4,000 respectively. The aggregate amount paid by OISB and CPMSB to Voon Kian Woon Agency for the book-keeping services during the Relevant Period are set out below: (RM 000) FY2014 FY2015 FY April 2016 to the Latest Practicable Date Aggregate amount paid by OISB 5 2 Aggregate amount paid by CPMSB 5 2 We had ceased engaging Voon Kian Woon Agency for the provision of book-keeping services prior to the date on which Mr Voon Kian Woon joined our Group as our General Manager (Finance), being 1 September Since 1 September 2014, we have not engaged and we do not intend to engage Voon Kian Woon Agency for the provision of book-keeping services to our Group subsequent to our Listing. Our Directors are of the opinion that the above transactions were undertaken on normal commercial terms and on an arm s length basis. The above transactions were not prejudicial to the interests of our Company and minority Shareholders. (b) Provision of insurance agent services by Mr Teng Boon Sang to OISB and CPMSB During the Relevant Period, OISB and CPMSB purchased personal accident insurance policies through Mr Teng Boon Sang, acting as agent of the insurance company which employs him, for the benefit of certain employees. Mr Teng Boon Sang received commission from the insurance company which employs him as an agent. 180

189 INTERESTED PERSON TRANSACTIONS The aggregate insurance premium paid to the insurance company which employs Mr Teng Boon Sang, AIG Malaysia Insurance Berhad, during the Relevant Period are set out below: (RM 000) FY2014 FY2015 FY April 2016 to the Latest Practicable Date Aggregate insurance premium amount paid by OISB Aggregate insurance premium amount paid by CPMSB 3 3 Our Directors are of the opinion that the above transactions were undertaken on normal commercial terms and on an arm s length basis. The above transactions were not prejudicial to the interests of our Company and minority Shareholders. GUIDELINES AND REVIEW PROCEDURES FOR ON-GOING AND FUTURE INTERESTED PERSON TRANSACTIONS Our Audit Committee will review and approve all interested person transactions to ensure that they are on normal commercial terms and on arm s length basis, that is, the transactions are transacted on terms and prices not more favourable to the Interested Persons than if they were transacted with an unrelated third party and are not prejudicial to the interests of our Company and our minority Shareholders in any way. To ensure that all future interested person transactions are carried out on normal commercial terms and will not be prejudicial to the interests of our Company or our minority Shareholders, the following procedures will be implemented by our Group: (a) (b) (c) when purchasing any products or engaging any services from an Interested Person, two other quotations from non-interested Persons will be obtained for comparison to ensure that the interests of our Company and minority Shareholders are not disadvantaged. The purchase price or fee for services shall not be higher than the most competitive price or fee of the two other quotations from non-interested Persons. In determining the most competitive price or fee, all pertinent factors, including but not limited to quality, requirements, specifications, delivery time and track record will be taken into consideration; when selling any products or supplying any services to an Interested Person, the price or fee and terms of two other successful transactions of a similar nature with non-interested Persons will be used as comparison to ensure that the interests of our Company or minority Shareholders are not disadvantaged. The price or fee for the supply of products or services shall not be lower than the lowest price or fee of the two other successful transactions with non-interested Persons; in the case of renting properties from or to an Interested Person, the Board shall take appropriate steps to ensure that the rent is commensurate with the prevailing market rates, including adopting measures such as making relevant inquiries with landlords of similar properties and/or obtaining necessary reports or reviews published by property agents (including an independent valuation report by a property valuer, where considered 181

190 INTERESTED PERSON TRANSACTIONS appropriate). The amount payable shall be based on the most competitive market rental rate of similar properties in terms of size, suitability for purpose and location, based on the results of the relevant inquiries; (d) (e) where it is not possible to compare against the terms of other transactions with unrelated third parties and given that the products or services may be purchased only from an Interested Person, the interested person transaction will be approved prior to entry by either our CEO, if he has no interest in the transaction, or failing which, the Audit Committee, in accordance with our usual business practices and policies. In determining the transaction price payable to the Interested Person for such products and/or service, factors such as, but not limited to, quantity, requirements and specifications will be taken into account; and in addition, we shall monitor all interested person transactions entered into by us and categorise these transactions as follows: (i) a Category 1 interested person transaction is one where the value thereof is equal to or in excess of 3.0% of the latest audited NTA of our Group; and (ii) a Category 2 interested person transaction is one where the value thereof is below 3.0% of the latest audited NTA of our Group. All Category 1 interested person transactions must be approved by our Audit Committee prior to entry whereas Category 2 interested person transactions need not be approved by our Audit Committee prior to entry but shall be reviewed on a quarterly basis by our Audit Committee. Our Audit Committee will review all interested person transactions, if any, on a quarterly basis to ensure that they are carried out on an arm s length basis and in accordance with the procedures outlined above, taking into account all relevant non-quantitative factors. In the event that a member of our Audit Committee is interested in any such transaction, he will abstain from participating in the review and approval process in relation to that particular transaction. We shall prepare all the relevant information to assist our Audit Committee in its review and will keep a register recording all interested person transactions. The register shall also record the basis for entry into the transactions, including the quotations and other evidence obtained to support such basis. In addition, our Audit Committee and our Board will also ensure that all disclosure, approval and other requirements on interested person transactions, including those required by prevailing legislation, the Catalist Rules (in particular, Chapter 9) and relevant accounting standards, are complied with. The annual internal audit plan shall incorporate a review of all interested person transactions entered into at least on an annual basis. Such transactions will also be subject to the approval of our Shareholders if required by and in accordance with Catalist Rules. We will also endeavour to comply with the recommendations set out in the Code of Corporate Governance. These internal audit reports will be reviewed by our Audit Committee to ascertain whether the guidelines and procedures established to monitor interested person transactions have been complied with. Our Audit Committee shall also review from time to time such guidelines and procedures to determine if they are adequate and/or commercially practicable in ensuring that interested person transactions are conducted on normal commercial terms, on an arm s 182

191 INTERESTED PERSON TRANSACTIONS length basis and do not prejudice our interests and the interests of our minority Shareholders. Further, if during these periodic reviews by our Audit Committee, our Audit Committee is of the opinion that the guidelines and procedures as stated above are not sufficient to ensure that interested person transactions will be on normal commercial terms, on an arm s length basis and not prejudicial to our interests and the interests of our minority Shareholders, our Audit Committee will adopt such new guidelines and review procedures for future interested person transactions as may be appropriate. Disclosure will be made in our annual report of the aggregate value of interested person transactions during the relevant financial year under review. 183

192 POTENTIAL CONFLICTS OF INTERESTS In general, a conflict of interest arises when any of our Directors, CEO, Controlling Shareholders or their Associates is carrying on or has any interest in any other corporation carrying on the same business or dealing in similar products or services as our Group. All our Directors have a duty to disclose their interests in respect of any transaction in which they have any personal interest or any actual or potential conflict of interest (including a conflict that arises from their directorship or employment or personal investment in any corporation). Upon such disclosure, such Directors will not participate in any proceedings of our Board and shall abstain from voting in respect of any such transaction where the conflict arises. INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDERS, SUBSTANTIAL SHAREHOLDERS OR THEIR ASSOCIATES Mr Lim Siang Kai Mr Lim Siang Kai, the Non-Executive Chairman and Lead Independent Director of our Company, is also an independent director of Natural Cool Holdings Limited, a Singapore-incorporated company listed on the Catalist. An indirect wholly-owned subsidiary of Natural Cool Holdings Limited, Loh & Sons Paint Co (S) Pte Ltd, is engaged in the manufacture and trading of paint and basic chemicals in Singapore. Mr Lim Siang Kai does not have any direct or indirect shareholding interest in Natural Cool Holdings Limited and Loh & Sons Paint Co (S) Pte Ltd, and is not involved in the operations of and does not have a management role in Natural Cool Holdings Limited or Loh & Sons Paint Co (S) Pte Ltd. In addition, to the best of our knowledge, Natural Cool Holdings Limited and Loh & Sons Paint Co (S) Pte Ltd do not operate in the same product space within the paint industry as our Group, and accordingly, we are of the view that there is no conflict of interest. Save for the above, none of our Directors, Controlling Shareholders, Substantial Shareholders or their respective Associates has any interest, direct or indirect, in any entity carrying on the same business or dealing in similar products or services as our Group. INTERESTS OF EXPERTS No expert (i) is employed on a contingent basis by our Company or our Subsidiaries; (ii) has a material interest, whether direct or indirect, in our Shares or the shares of our Subsidiaries; or (iii) has a material economic interest, whether direct or indirect, in our Company, including an interest in the success of our Placement. 184

193 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES MANAGEMENT REPORTING STRUCTURE The following chart shows our management reporting structure as at the Latest Practicable Date. Board of Directors Lim Siang Kai Ong Yoke En Lim Lay Yong Loh Shin Siong Chang Chor Choong Hau Hock Khun Sia Yeak Hong Ong Yoke En (Chief Executive Officer) Lim Lay Yong (Chief Operating Officer) Sia Shu Yee (Chief Financial Officer) Lee Siong Kim (General Manager Indonesia) Puah Thye Lay (Sales Director) Voon Kian Woon (General Manager Finance) DIRECTORS Our Board of Directors is entrusted with the responsibility for the overall management of our Group. Our Directors particulars as at the date of this Offer Document are listed below: Name Age Address Position Mr Lim Siang Kai 60 c/o 80 Robinson Road #17-02 Singapore Mr Ong Yoke En 47 c/o 80 Robinson Road #17-02 Singapore Ms Lim Lay Yong 46 c/o 80 Robinson Road #17-02 Singapore Dato Loh Shin Siong 49 c/o 80 Robinson Road #17-02 Singapore Dato Chang Chor Choong 42 c/o 80 Robinson Road #17-02 Singapore Non-Executive Chairman and Lead Independent Director Executive Director and CEO Executive Director and COO Non-Executive Director Non-Executive Director 185

194 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Name Age Address Position Mr Hau Hock Khun 44 c/o 80 Robinson Road #17-02 Singapore Mr Sia Yeak Hong 39 c/o 80 Robinson Road #17-02 Singapore Independent Director Independent Director Information on the business and working experience, education and professional qualifications, if any, and area of responsibilities of our Directors is set out below: Mr Lim Siang Kai is our Non-Executive Chairman and Lead Independent Director and was appointed to our Board on 3 October Mr Lim is currently an independent director of ISDN Holdings Limited, Natural Cool Holdings Limited and Joyas International Holdings Limited, all of which are public companies listed on the SGX-ST, and Blue Sky Power Holdings Limited (formerly known as China Print Power Group Limited), which is listed on both the SGX-ST and the Stock Exchange of Hong Kong. Mr Lim has over 30 years of experience in securities, private and investment banking and fund management, having worked in and held various leadership roles in various banks and financial services companies since 1981, including NZI Merchant Bank (Singapore) Limited, Dexia Banque Internationale A Luxembourg, United Overseas Bank Limited and Societe Generale. From 1988 to 1994, Mr Lim was also the president of Kingvic Securities Investment Consulting Enterprise, a firm registered with the Securities and Futures Commission of Taiwan as an authorised securities investment consultant to provide research, analysis or advice on matters related to securities investment. Mr Lim holds a Bachelor of Arts degree and a Bachelor of Social Science (Hons) degree from the National University of Singapore obtained in 1980 and 1981 respectively. He also has a Master of Arts in Economics from the University of Canterbury, New Zealand, which he obtained in Mr Ong Yoke En is our Executive Director and CEO and was appointed to our Board on 9 March Mr Ong has more than 20 years of diverse and strong working experience in the aerosol industry holding leadership positions in various aerosol companies in Malaysia. Mr Ong s intimate knowledge of the industry, extensive business experience and network have been instrumental in the growth of our Group. Mr Ong began his career in 1993 as branch brand executive at Westech Sdn Bhd where he was in charge of the Johor branch which was involved in the sales and distribution of aerosol paints and adhesive products, amongst others. He subsequently joined Ready Chemical Sdn Bhd in 1994 where he was the adhesives manager and was in charge of the sales and marketing of adhesive products. In 1997, Mr Ong joined OISB where he was initially involved in private label manufacturing before subsequently spearheading the initial foray by OISB into the aerosol paint industry in During his tenure with our Group, Mr Ong has built and led the senior executive team and set the strategic direction of our Group. Mr Ong is actively involved in the research and development of our Group s aerosol products. Mr Ong led our Group to achieve a major innovation when we commenced production of our dual head 2K system improving on the user friendliness of an existing technology. Mr Ong also played a key role in our Group s invention of the single head 2K 186

195 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES system which was awarded a gold medal at the ITEX 2016 held in Kuala Lumpur, Malaysia by the Malaysian Invention and Design Society. The single head 2K system was also awarded the Malaysian Innovative Product Award 2016 at ITEX Mr Ong graduated from the Universiti Kebangsaan Malaysia with a Bachelor of Arts in Ms Lim Lay Yong is our Executive Director and COO and was appointed to our Board on 3 October Ms Lim has a diverse and strong working experience having served in various capacities for more than 20 years in marketing and product manufacturing. Ms Lim began her career in 1994 as production executive at Tenco Industries Sdn Bhd which was in the business of, amongst others, manufacturing spray paint. At Tenco Industries Sdn Bhd, Ms Lim gained experience in production and logistics. Subsequently, she joined Bio-Life Sdn Bhd as management executive where she was involved in the marketing of health and skin care products. In 2001, Ms Lim joined OMSB as a marketing manager and was in charge of planning marketing activities including organising roadshows for the company s aerosol products. Ms Lim gained extensive customer relations and marketing experience. Ms Lim later joined CPMSB and served as marketing cum logistics manager, where she supervised several teams such as design, marketing and logistics. As the COO of our Group, Ms Lim oversees the daily operations of our Group. Her responsibilities include monitoring the work of executives in the marketing, purchasing, production, logistics and technical departments, designing and implementing business strategies, plans and procedures, setting comprehensive goals and establishing policies that promote our Company s culture and vision, and managing relationships with vendors. Ms Lim graduated from the Simon Fraser University (Canada) with a Bachelor of Science (Biochemistry) in 1994 and obtained a Graduate Diploma in Health Science (Herbal Medicine) from The University of New England (Australia) in Dato Loh Shin Siong is a Non-Executive Director of our Company and was appointed to the Board on 16 December Dato Loh has business interests in various industries such as food and beverage and property development. In relation to this, Dato Loh is the owner of Loh Sister Restaurant and a director of LSS F&B Trading (M) Sdn. Bhd., where he is in charge of the restaurants overall business development and operations and formulates strategies to improve processes in those restaurants and continually raise the standards of quality and service. Dato Loh is also a director of Pembinaan Silih Kasih Sdn. Bhd., a private company engaged in the business of real estate development, where he is responsible for the management and operations and gained experience in property investment and development. Outside of his business commitments, Dato Loh currently holds office as vice chairman of Ku-Miau Temple, Sungai Tiram, Johor and honorary director of SJK (C) Ban Foo. Dato Loh is a recipient of the Darjah Kebesaran Mahkota Pahang Yang Amat Mulia award awarded by the Sultan Negeri Pahang Darul Makmur Sultan Haji Ahmad Shah. Given his business acumen and experience in leadership roles, our Group believes that Dato Loh would be able to constructively challenge and provide guidance to our Executive Directors in the development of our Group s business strategies and proposals, as well as in reviewing the performance of our management in meeting agreed goals and objectives and monitoring the reporting of performance. 187

196 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Dato Loh was educated at Sekolah Menengah Ulu Tiram, Negeri Johor. Dato Chang Chor Choong is a Non-Executive Director of our Company and was appointed to the Board on 16 December Dato Chang is currently a director at various private companies engaged in businesses across a range of industries including telecommunications, beverages and real estate development. Dato Chang has been a director at Wisdom Power Sdn. Bhd. since September 2009, where he was in charge of the overall management and directions of the company. Together with Dato Loh, Dato Chang is a director of LSS F&B Trading (M) Sdn. Bhd. and Pembinaan Silih Kasih Sdn. Bhd., where he cooperates with Dato Loh in the overall management and operations of the companies. In addition, Dato Chang holds directorships in two other food and beverage companies, namely Rejo Beverage Pte Ltd and SBL Worldwide Trading Pte Ltd, where he is responsible for the formulation and implementation of their respective business strategies and directions. Outside of his business commitments, Dato Chang has been an advisor of Ku-Miau Temple since In 2015, Dato Chang became an honorary director of SJK (C) Ban Foo and a committee member of Persatuan Kebajikan Kasih Sayang (Ai Xin) Kulaijaya, Johor. In addition, Dato Chang is a recipient of the Darjah Kebesaran Mahkota Pahang Yang Amat Mulia award awarded by the Sultan Negeri Pahang Darul Makmur Sultan Haji Ahmad Shah. Given his business acumen and experience in leadership roles, our Group believes that Dato Chang would be able to constructively challenge and provide guidance to our Executive Directors in the development of our Group s business strategies and proposals, as well as in reviewing the performance of our management in meeting agreed goals and objectives and monitoring the reporting of performance. Dato Chang was educated at Sekolah Menengah Kebangsaan Yuk Kwan, Negeri Perak. Mr Hau Hock Khun is our Independent Director and was appointed to our Board on 16 December Mr Hau is currently the managing partner of Messrs H K Hau (previously known as Hau Hock Khun & Co.), a sole proprietorship founded by him in January Mr Hau has more than 17 years of experience in the legal industry and his practice focuses on, amongst others, banking and finance law, Islamic banking law, general corporate and commercial law, company law, conveyancing and land law, probate and administration law and intellectual property law in Malaysia. In addition, Mr Hau is currently an executive director in charge of overall management and operations in a number of private companies, including HTG Energy Sdn Bhd, a company engaged in the business of green energy recycling and power generation, HPI International Sdn Bhd, a company engaged in the business of property development and Goldsen Worldtrade Sdn Bhd, a company engaged in the business of import and export trading. Mr Hau is also currently an independent and non-executive director at Kumpulan H&L High Tech Berhad, a company listed on Bursa Malaysia and engaged in the business of manufacture and sale of precision engineering tools for the electrical and electronic industry; manufacture and sale of palm oil, investment holding of properties and property development. Mr Hau was previously the managing partner of Messrs Ku Abdul Rahman, Ratnam and Hau and Messrs Ooi Sam Heng & Associates prior to setting up his current sole proprietorship. He was also a principal consultant at HPI Consultant, a sole proprietorship specialising in the provision of 188

197 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES advice on international property development projects, and the chief executive officer and executive director of IBISC Incorporated (M) Sdn. Bhd., a private company which was in the business of commercial trading. Mr Hau is a member of the Bar Council of Malaysia, a member of the Malaysia Mediation Centre and an associate member of the U.K. Chartered Institute of Arbitrators (United Kingdom) in He is also the vice chairman of Concept B Incorporated (South Korea) Inc., the developer and manager of the World Buddhist City Property Development project. Mr Hau graduated from Bond University, Australia with a Bachelor of Law in He later obtained a Master of Business Administration (Total Quality Management) from Newport University, USA. Mr Sia Yeak Hong is our Independent Director and was appointed to our Board on 16 December Mr Sia is currently an audit principal at BDO Chartered Accountants, Johor Bahru in Malaysia, where he leads the audit team in the conduct of the assigned audit by planning, directing and coordinating audit activities. Prior to that, he was a partner at YH & Associates, a firm founded by Mr Sia specialising in the business of auditing and consulting, taxation, corporate secretarial and corporate advisory work from 2015 to 2016 and the director of audit and GST at BDO Chartered Accountants, Kuala Lumpur in Malaysia from 2014 to Mr Sia began his career as an assistant manager in Ernst & Young, Johor Bahru from 1999 to 2006 and KPMG Singapore from 2006 to He joined BCB Berhad, a company involved in property development, construction and hotel operations and listed on Bursa Malaysia, as an assistant general manager from 2007 to 2009, before moving to Thosco Treatech Sdn. Bhd., a private company specialising in surface treatments and electroplating, as group financial controller from 2009 to 2010 and thereafter, finance director from 2011 to During his tenure with Ernst & Young, Johor Bahru and KPMG Singapore, Mr Sia was involved in statutory financial audit, financial due diligence, member s voluntary liquidation as well as cross-border financial reporting for various countries. His sector expertise includes manufacturing, plantation, hospitality, trading and property development and construction. In his senior management role in the private sector, he oversaw the financial, operation and internal control operating units of the group. Mr Sia is currently a Chartered Accountant of the Malaysia Institute of Accountants, a member of the Malaysian Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants in Malaysia. Mr Sia graduated from Middlesex University (United Kingdom) with a Bachelor of Arts (Accounting & Finance). EXPERIENCE AND TRAINING OF OUR DIRECTORS Based on our Directors business and working experience (as set out above), our Directors have the appropriate expertise to act as directors of our Company. All of our Directors have been informed of their obligations under the Catalist Rules as well as the relevant Singapore laws and regulations. Our Lead Independent Director, Mr Lim Siang Kai, has prior experience as a director of public listed companies in Singapore and is therefore familiar with the roles and responsibilities of a director of a public listed company in Singapore. All of our other Directors have no prior 189

198 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES experience as a director of a listed company in Singapore but have received relevant training to familiarise themselves with the roles and responsibilities of a director of a listed company on the SGX-ST. Save for Mr Lim Siang Kai who has prior experience as a director of public listed companies in Singapore, all of our Directors will attend the programme conducted by the Singapore Institute of Directors in January The list of present and past directorships of each Director over the last five (5) years up to the Latest Practicable Date, excluding that held in our Company, is set out below: Name Present directorships Past directorships Mr Ong Yoke En Ms Lim Lay Yong Dato Loh Shin Siong Group Companies OISB PTSP SWHL (in the process of being voluntarily struck off) Other Companies Samurai Paint (Malaysia) Sdn Bhd (in the process of being voluntarily struck off) Group Companies OISB SWHL (in the process of being voluntarily struck off) CPMSB Other Companies Nil Group Companies Nil Other Companies LSS F&B Trading (M) Sdn. Bhd. Pembinaan Silih Kasih Sdn. Bhd. Diamond Star Global Sdn. Bhd. Master Natural Herbal Sdn. Bhd. Fossil Food & Beverage Sdn. Bhd. (in the process of being voluntarily struck off) Shanyang Management Sdn. Bhd. Matang Express Services Sdn. Bhd. Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Lim Keng Guan Sdn. Bhd. (voluntarily struck off) Samurai Paint (UK) Limited (voluntarily struck off) Group Companies Nil Other Companies Exbe Marketing Sdn. Bhd. (voluntarily struck off) SLNK Sdn. Bhd. (voluntarily struck off) Guan Ching Beverage International Sdn. Bhd. (voluntarily struck off) 190

199 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Name Present directorships Past directorships Dato Chang Chor Choong Mr Lim Siang Kai Mr Hau Hock Khun Group Companies Nil Other Companies Wisdom Power Sdn. Bhd. Deluxe Percent Sdn. Bhd. Rejo Beverages Pte. Ltd. SBL Worldwide Trading Pte. Ltd. LSS F&B Trading (M) Sdn. Bhd. Otachi Holdings Sdn. Bhd. Pembinaan Silih Kasih Sdn. Bhd. Fossil Food & Beverage Sdn. Bhd. (in the process of being voluntarily struck off) Master Natural Herbal Sdn. Bhd. Technodus Sdn. Bhd. Rima Hotels Holding Sdn. Bhd. Group Companies Nil Other Companies Blue Sky Power Holdings Limited (formerly known as China Print Power Group Limited) Joyas International Holdings Limited Natural Cool Holdings Limited ISDN Holdings Limited Group Companies Nil Other Companies Kumpulan H&L High Tech Berhad HTG Energy Sdn Bhd Majestic Treasures Sdn. Bhd. HPI International Sdn Bhd Goldsen Worldtrade Sdn. Bhd. H&C Bio Industry Sdn. Bhd. Sekendi Carbon Industries Sdn. Bhd. Group Companies Nil Other Companies Exbe Marketing Sdn. Bhd. (voluntarily struck off) SLNK Sdn. Bhd. (voluntarily struck off) Public Exhibition & Expo Sdn. Bhd. (voluntarily struck off) Group Companies Nil Other Companies Foreland Fabritech Holdings Limited Texchem-Pack Holdings (S) Ltd. (now known as Texchem-Pack Holdings (S) Pte. Ltd.) China Angel Food Limited (now known as China Angel Food Pte. Ltd.) China Financial Leasing Group (formerly known as Golden 21 Investment Holdings Limited) Group Companies Nil Other Companies Nil 191

200 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Name Present directorships Past directorships Mr Sia Yeak Hong Group Companies Nil Other Companies Starlight Avenue Sdn. Bhd. Group Companies Nil Other Companies Ecotrafo Malaysia Sdn. Bhd. Maxbill Logistics Sdn. Bhd. Mr Ong Yoke En, our Executive Director and CEO, and Ms Lim Lay Yong, our Executive Director and COO, are spouses. Save as aforesaid, none of our Directors has any family relationship with another Director or with any Executive Officer or Substantial Shareholder of our Company. To the best of our knowledge and belief, there are no arrangements or understandings with any Substantial Shareholders, customers, suppliers or others, pursuant to which any of our Directors was appointed. INDEPENDENCE OF OUR INDEPENDENT DIRECTORS The Code recommends that there should be a strong and independent element on a board of directors which is able to exercise objective judgement on corporate affairs independently, in particular, from the management of the company and 10.0% shareholders. Under the Code, an independent director is defined as one who has no relationship with the company, its related corporations, its 10.0% shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director s independent business judgement with a view to the best interests of the company. Examples of relationships, which are deemed not to be independent, include: (a) (b) (c) (d) a director being employed by the company or any of its related corporations for the current or any of the past three (3) financial years; a director who has an immediate family member who is, or has been in any of the past three (3) financial years, employed by the company or any of its related corporations and whose remuneration is determined by the remuneration committee; a director, or an immediate family member, accepting any significant compensation from the company or any of its related corporations for the provision of services, for the current or immediate past financial year, other than compensation for board service; a director: (i) (ii) who, in the current or immediate past financial year, is or was; or whose immediate family member, in the current or immediate past financial year, is or was, a 10.0% shareholder of, or a partner in (with 10.0% or more stake), or an executive officer of, or a director of, any organisation to which the company or any of its subsidiaries made, or from which the company or any of its subsidiaries received, significant payments or 192

201 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES material services, in the current or immediate past financial year. As a guide, payments aggregated over any financial year in excess of S$200,000 should generally be deemed significant; (e) a director who is a 10.0% shareholder or an immediate family member of a 10.0% shareholder of the company: or (f) a director who is or has been directly associated with a 10.0% shareholder of the company in the current or immediate past financial year. Based on the above, our Company is of the view that each of Mr Lim Siang Kai, Mr Sia Yeak Hong and Mr Hau Hock Khun are independent. EXECUTIVE OFFICERS Our day-to-day operations are entrusted to our Executive Directors who are assisted by our Executive Officers. The particulars of our Executive Officers are set out below: Name Age Address Position Ms Sia Shu Yee 34 5 Jalan Jaya Putra 5/57, Bandar Jaya Putra, LA Garden, Johor Bahru, Johor, Malaysia Mr Voon Kian Woon Jalan Danau 5, Taman Desa Jaya, Johor Bahru, Johor, Malaysia Ms Lee Siong Kim 43 MOI Kelapa Gading, Apartment French Walk, Tower Paris Garden, 21H Jalan Boulevard Barat Raya, Kelapa Gading Jakarta Utara, Indonesia Ms Puah Thye Lay Lorong Seri Impian 10, Taman Seri Impian, Bukit Mertajam, Penang, Malaysia Chief Financial Officer General Manager (Finance) General Manager (Indonesia) Sales Director Information on the business and working experience, education and professional qualifications, if any, and areas of responsibilities of our Executive Officers is set out below: Ms Sia Shu Yee is our Chief Financial Officer and joined our Group in August Prior to joining our Group in August 2015, Ms Sia was a director of SSY Advisory Sdn Bhd, Prostrac Secretarial Services Sdn Bhd and Prostrac Business Solution (Johor Bahru) Sdn Bhd, companies engaged in the businesses of providing accounting, tax and/or secretarial services. In 193

202 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES 2004, Ms Sia started her career as a senior audit at Ernst & Young, Johor Bahru. Between May 2008 and December 2010, Ms Sia was the group accountant/finance manager at BCB Berhad, a company involved in property development, construction and hotel operations and listed on Bursa Malaysia, where she oversees all financial matters such as finance and treasury planning, financial risk management and investor relations. As our Group s Chief Financial Officer, Ms Sia is overall in charge of the finance department and reports to our CEO, Mr Ong Yoke En. Ms Sia graduated from Multimedia University in 2004 with a Bachelor of Accounting (Hons). Mr Voon Kian Woon is our General Manager (Finance) and joined our Group in September Mr Voon began his career as an operator in 2005 at TECH Semiconductor Singapore Pte Ltd, and subsequently worked as an accounts executive in Jordan Managements Sdn Bhd in Mr Voon started his own book-keeping business in 2012 where he provided book-keeping services to small businesses in Malaysia. Among his then customers were OISB and CPMSB. Mr Voon is in charge of, amongst others, preparing financial statements, business activity reports and forecasts. Mr Voon also supervises the accounting team and assists the management in making financial decisions. Mr Voon is currently an affiliate member of the Association of Chartered Certified Accountants ( ACCA ). He passed the professional level of the ACCA examinations in Mr Voon obtained a Bachelor of Science with First Class Honours in Applied Accounting from Oxford Brookes University in Ms Lee Siong Kim is our General Manager (Indonesia) and joined our Group in Ms Lee has more than 10 years of experience in sales and marketing. Ms Lee began her career as general clerk in 1991 in Rediffusion (M) Sdn Bhd, and subsequently as an audit clerk at MBF (M) Berhad in 1992 where she was responsible for preparing audit reports and conducting audit reviews. From 1995 to 1998, Ms Lee was an assistant accountant at Harpers Travel (M) Sdn Bhd. Thereafter in 1998, Ms Lee became a marketing manager at Elektrik Dan Perabot Sin Kee Hin, a furniture business, where she was involved in the expansion and development of the business and marketing strategies of the company. Currently, Ms Lee is responsible for overseas business development of OISB as well as the overall business operations and sales performance of PTSP. Ms Lee was educated at Sekolah Menengah Mantin, Negeri Sembilan. Ms Puah Thye Lay is our Sales Director and joined our Group in Ms Puah has approximately 20 years of sales experience. From May 1997 to March 2000, Ms Puah worked as a branch executive at CCTI Marketing Sdn Bhd, a company engaged in the business of trading baby diapers, where she led a team of salesmen and merchandisers and assisted in the expansion of the business in northern and east coastal regions of Malaysia. From April 2000 to March 2005, Ms Puah worked as a sales executive at Axiomatic Network Sdn Bhd and subsequently joined Supply Mark Sdn Bhd in November Between July 2009 and March 2015, Ms Puah was the Sales Manager of CPMSB. As Sales Director, Ms Puah is in charge of the sales department and is currently involved in the training of our Group s sales team. Ms Puah was educated at Sekolah Menengah Kebangsaan Jit Sin. 194

203 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES The list of present and past directorships of each Executive Officer over the last five (5) years up to the Latest Practicable Date, excluding those held in our Company, is set out below: Name Present directorships Past directorships Ms Sia Shu Yee Mr Voon Kian Woon Ms Lee Siong Kim Ms Puah Thye Lay Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Nil Group Companies Nil Other Companies SBS Venture Sdn Bhd (voluntary winding up) Prostrac Business Solution (Johor Bahru) Sdn Bhd Prostrac Secretarial Services (Johor Bahru) Sdn Bhd Prostrac Secretarial Services Sdn Bhd Join Wish Sdn Bhd M Food Paradise Sdn Bhd SSY Advisory Sdn Bhd Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Nil Group Companies Nil Other Companies Nil None of our Executive Officers has any family relationship with another Executive Officer or with any Director or Substantial Shareholder of our Company. To the best of our knowledge and belief, there are no arrangements or understandings with any Substantial Shareholders, customers, suppliers or others, pursuant to which any of our Executive Officers was appointed. 195

204 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES REMUNERATION The compensation (which includes benefits-in-kind, deferred compensation, directors fees and bonuses) paid to our Directors and our Executive Officers for services rendered to our Group on an individual basis during FY2015 and FY2016 and expected to be paid for the current financial year are set out in the following remuneration bands (1) : FY2017 (2) Names FY2015 FY2016 (estimated) Directors Mr Ong Yoke En Band A Band A Band A Ms Lim Lay Yong Band A Band A Band A Dato Loh Shin Siong Band A Dato Chang Chor Choong Band A Mr Lim Siang Kai Band A Mr Hau Hock Khun Band A Mr Sia Yeak Hong Band A Executive Officers Ms Sia Shu Yee Band A Band A Band A Mr Voon Kian Woon Band A Band A Band A Ms Lee Siong Kim Band A Band A Band A Ms Puah Thye Lay Band A Band A Band A Notes: (1) Remuneration bands: Band A refers to remuneration up to S$250,000. Band B refers to remuneration between S$250,000 and S$500,000. Band C refers to remuneration between S$500,000 and S$750,000. (2) In relation to our Executive Directors, the estimated remuneration to be payable for FY2017 takes into account the annual wage supplement due to the respective Executive Director pursuant to the Service Agreements. Pursuant to the Service Agreements, any performance bonus that may be payable to them will commence from July In relation to our Executive Officers, the estimated remuneration to be payable for FY2017 does not take into account any bonus that may be payable to them. Save as described in the section entitled Directors, Executive Officers and Employees Service Agreements of this Offer Document, as at the date of this Offer Document, we do not have in place any formal bonus or profit-sharing plan or any other profit-linked agreement or arrangement with any of our employees and bonus is expected to be paid on a discretionary basis. Save for the Employee Share Option Scheme and Performance Share Plan, no remuneration was paid or is to be paid in the form of share options to any of our Directors, Executive Officers or employees. As at the Latest Practicable Date, other than the CPF contributions and other statutory contributions in accordance with the respective jurisdictions requirements, no amounts have been set aside or accrued by our Group to provide for pension, retirement or similar benefits for any of our employees. 196

205 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES EMPLOYEES As at the Latest Practicable Date, we have 140 full-time employees. For FY2015 and FY2016, the aggregate remuneration of employees who are related to our Directors, Executive Officers, Substantial Shareholders or their Associates amounted to approximately RM326,000 and RM391,000 respectively (including aggregate remuneration of related employees who have since left our Group amounting to approximately RM61,000 and RM12,000, respectively). For the current financial year ending 31 March 2017, the estimated aggregate remuneration of employees who are related to our Directors, Executive Officers, Substantial Shareholders or their Associates is approximately RM475,000. These employees are namely: (a) (b) (c) (d) Mr Ong How En, the brother of our Executive Director and CEO, Mr Ong Yoke En and the brother-in-law of Ms Lim Lay Yong, our Executive Director and COO. Mr Ong How En is employed as a technical manager in our Group; Mr Timothy Choong Chin Howe, the son of our Executive Officer, Ms Puah Thye Lay. Mr Timothy Choong Chin Howe is employed as an assistant product manager in our Group; Mr Puah Zhi Hao, the nephew of our Executive Officer, Ms Puah Thye Lay. Mr Puah Zhi Hao is employed as a sales executive in our Group; and Mr Chow Suei Wei, the spouse of our Executive Officer, Ms Lee Siong Kim. Mr Chow Suei Wei is employed as an assistant general manager in our Group. Save as disclosed above, as at the date of this Offer Document, none of our employees are related to our Directors, Executive Officers, Substantial Shareholders or their Associates. Pursuant to the Code, we will disclose the total remuneration of all employees that are related to our Directors, Executive Officers, Substantial Shareholders or their Associates in our annual report. The remuneration of our employees who are related to our Directors, Executive Officers, Substantial Shareholders or their Associates will be reviewed annually by our Remuneration Committee to ensure that their remuneration packages are in line with our staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities. Any bonuses, pay increases and/or promotions for these related employees will also be subject to the review and approval of our Remuneration Committee. In addition, any new employment of related employees and the proposed terms of their employment will be subject to the review and approval of our Remuneration Committee. In the event that a member of our Remuneration Committee is related to the employee under review, he will abstain from the review. Our employees are not unionised. The relationship and cooperation between our management and staff has been good and is expected to continue to remain so in the future. There has not been any incidence of work stoppages or labour disputes which affected our operations. 197

206 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES As at the Latest Practicable Date, we do not have any employees based in Singapore. A breakdown of our full-time employees, based in Malaysia and Indonesia, is as follows: Function As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Management Administration Sales and Marketing Production Total The geographical breakdown of our full-time employees is as follows: Location As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Malaysia Indonesia Total The number of our employees increased in line with the growth of our business operations. We do not experience any significant seasonal fluctuations in our number of employees. As at the Latest Practicable Date, we employed 12 temporary employees. We employed 20 and 38 temporary employees to cope with our production in 1Q2017 and FY2016 respectively and did not employ any temporary employee in FY2014 and FY2015. The following table sets out the total number of employees under our Group s production function for the Period Under Review: As at 31 March 2014 As at 31 March 2015 As at 31 March 2016 As at 30 June 2016 As at the Latest Practicable Date Full time Temporary Total

207 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES The decrease in the number of employees in our Group s production function from 64 as at 31 March 2016 to 41 as at 30 June 2016 was due to: (i) (ii) (iii) the expiry of the contracts for 18 temporary workers; the installation of a fully automatic aerosol machine to reduce manpower requirements; and our Company s preference to rely on full-time workers, which led to the further increase in full-time workers to 48 as at the Latest Practicable Date, and a corresponding decrease in temporary workers to 12 as at the Latest Practicable Date, in anticipation of the increase in market demand for our Group s products. SERVICE AGREEMENTS Our Company has entered into separate service agreements (the Service Agreements ) with our Executive Directors, namely, Mr Ong Yoke En and Ms Lim Lay Yong, for an initial period of three (3) years with effect from the date of admission of our Company to the Catalist. Our Company may, at our discretion, extend the initial term by a further period of three (3) years by giving not less than six (6) months notice to the relevant Executive Director prior to the scheduled expiry of the initial three (3)-year period, on terms no less favourable than the existing terms of the Service Agreement. The Service Agreements may not be terminated by either party during the initial term, save that our Company may terminate the Service Agreements during the initial term if: (i) (ii) (iii) (iv) (v) (vi) the relevant Executive Director shall be disqualified to act as a director or an executive officer of the Company under any applicable laws or regulations, the Constitution of the Company, or any rules prescribed by the SGX-ST; the relevant Executive Director commits any act of dishonesty, gross misconduct or wilful neglect of duty or shall commit any continued material breach of the terms of the Service Agreements after written warning (other than a breach which is capable of remedy and has been remedied by the Executive Director to the satisfaction of the Board within 30 days upon him/her being called upon to do so in writing by the Board); the relevant Executive Director commits any fraudulent act, or fails to act, by which the omission is fraudulent, in the performance of his/her duties; the relevant Executive Director is charged for any offence which involves moral turpitude or dishonesty; the relevant Executive Director shall be guilty of any conduct likely to bring himself/herself or any member of our Group into disrepute; the relevant Executive Director shall become bankrupt or make any arrangement or composition with his/her creditors or suffers a receiving order being made against him/her; (vii) any company (other than a member of our Group) in which the relevant Executive Director is a director or an executive officer or a direct or indirect shareholder goes into liquidation or becomes insolvent or suffers the presentation of a winding up petition or analogous proceedings brought against it; 199

208 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES (viii) the relevant Executive Director is convicted of any criminal offence (other than an offence which in the reasonable opinion of the Board does not affect his/her position in our Company); (ix) (x) the relevant Executive Director persistently refuses to carry out any reasonable lawful order given to him/her in the course of his/her employment or persistently fails diligently to attend to his/her duties hereunder; or the relevant Executive Director shall during the initial term be absent (other than during periods of statutory holiday and annual leave) for an aggregate period of 120 working days. After the expiry of the initial term and assuming that our Company extends the initial term for the further period of three (3) years, the Service Agreement may be terminated by either our Company or the relevant Executive Director upon giving to the other party notice in writing of six (6) months or by our Company paying the relevant Executive Director an amount equal to six (6) months salary in lieu of notice. None of the Executive Directors will be entitled to any benefits upon termination of their respective Service Agreements. The Service Agreements cover the terms of employment, specifically salaries and bonuses. Remuneration and Benefits Pursuant to the terms of Mr Ong Yoke En s Service Agreement, Mr Ong Yoke En is entitled to a monthly basic salary of S$25,800 in respect of services relating to our Company and IDR20,000,000 in respect of services relating to PTSP, payable by our Company and PTSP respectively. Mr Ong Yoke En is also entitled under the Service Agreement to an annual wage supplement equivalent to one (1) months basic salary in respect of services relating to our Company (excluding any contribution required to be made by our Company to his CPF account). Pursuant to the terms of Ms Lim Lay Yong s Service Agreement, Ms Lim Lay Yong is entitled to a monthly basic salary of S$19,800 and an annual wage supplement equivalent to one (1) month s basic salary (excluding any contribution required to be made by our Company to her CPF account). Under the terms of their respective Service Agreements, each of Mr Ong Yoke En and Ms Lim Lay Yong is entitled to receive, in addition to their monthly basic salary, a monthly transport allowance of S$3,000 and S$1,000 respectively. Under the terms of their respective Service Agreements, the Executive Directors will each be entitled, notwithstanding the provision of a monthly transport allowance, to be reimbursed for all travelling (including petrol, parking and toll), accommodation, entertainment and other out-ofpocket expenses reasonably incurred by them in or about the discharge of their duties under the Service Agreements. In addition, the Executive Directors shall be entitled to travel on Business Class for all official air passage. Under the terms of their respective Service Agreements, the Executive Directors will also each be entitled to full medical, dental and vision insurance, including hospitalisation and surgical coverage, and to such other benefits generally accorded to them as may be determined by the Board and/or the Remuneration Committee (with the relevant Executive Director, being interested in the matter, abstaining from voting on any such resolution). 200

209 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES In addition, Mr Ong Yoke En is entitled to the use of a country club membership appropriate for his roles and responsibilities as may be approved by the Board and the use of a company car appropriate for his roles and responsibilities with full reimbursement of all expenses incurred in relation to the use of such car. Under the terms of their respective Service Agreements, the Executive Directors will be paid a variable performance bonus based on the Group s consolidated audited PBT, provided always that: (a) the PBT shall not include: (i) (ii) profits or losses arising from the revaluation of fixed assets; profits or losses arising from the sale of fixed assets; and (b) the PBT is calculated prior to the payment of any variable performance bonus to all Executive Directors. The amount of variable performance bonus payable to each Executive Director will be determined as follows: PBT < RM7.5 million Nil >= RM7.5 million 3.5% of the PBT >= RM10.5 million 4.5% of the PBT >= RM13.5 million 6.0% of the PBT Variable Performance Bonus The variable performance bonus will only be paid to the Executive Director after our Company s audited accounts have been approved and adopted by the Shareholders of our Company, but in no event shall such payment be made later than 30 days after such approval and adoption by the Shareholders of our Company. The abovementioned salary, annual wage supplement, transport allowance and variable performance bonus shall be subject to annual review by the Board and/or the Remuneration Committee, and may be amended after such review by the Board and/or the Remuneration Committee. If the Executive Director is a member of the Remuneration Committee, he/she shall not participate in the deliberation or vote on any matter in which he is interested. Directors fees do not form part of the terms of the Service Agreements as these require the approval of Shareholders in our Company s annual general meeting. Each of the Executive Directors have agreed with our Company that all of the terms relating to each of their remuneration and benefits as set out above in this section entitled Service Agreements Remuneration and Benefits shall only take effect from 1 July Prior to 1 July 2017, Mr Ong Yoke En will be entitled to a monthly basic salary of RM28,000 in respect of services relating to our Company and IDR15,000,000 in respect of services relating to PTSP while Ms Lim Lay Yong will be entitled to a monthly basic salary of RM18,

210 DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES Non-Competition Pursuant to their respective Service Agreements, each Executive Director has undertaken with our Company that, except with prior written consent of our Company, he/she shall not, for as long as he/she is an employee of our Company and for the period of 12 months from the date of ceasing to be an employee of our Company: (a) (b) (c) participate or otherwise be engaged or interested, directly or indirectly, in the business of development, manufacture and/or sale of aerosol paints, paint-related products and aerosol packaging components, within (i) Singapore, (ii) Malaysia, (iii) Indonesia, (iv) Hong Kong and/or (iv) any other city or municipality in any country in which our Group carries on such business. In this regard, participation includes in fact exercising control over any entity engaged in such business, holding 15.0% or more of the issued share capital of any entity (excluding treasury shares and preference shares) engaged in such business, or exercising control over 15.0% or more of the voting shares of any entity engaged in such business; either on his/her own account or in conjunction with or on behalf of any other person, firm or company, solicit or entice away or attempt to solicit or entice away from our Group the custom of any person, firm, company or organisation who shall at any time during the period of 12 months prior to the date he/she ceases to be an employee of our Company have been a customer, client, agent or correspondent of our Group or in the habit of dealing with our Group; and either on his/her own account or in conjunction with or on behalf of any other person, firm or company, solicit or entice away or attempt to solicit or entice away from our Group any person who is an officer, manager or senior employee of our Group with whom he/she had dealings in the course of his/her employment at any time during the period of 12 months prior to the date he/she ceases to be an employee of our Company, whether or not such person would commit a breach of his/her contract of employment by reason of leaving such employment. In addition, each Executive Director has undertaken with our Company that, except with the prior written consent of our Company, he/she will not, at any time from the date of commencement of the Service Agreement, make use of or disclose or divulge to any third party any information relating to our Group other than any information properly available to the public or disclosed or divulged pursuant to an order of a court of competent jurisdiction. Had the Service Agreements been in place with effect from the beginning of FY2016, the aggregate remuneration paid to our Executive Directors for FY2016 would have been approximately RM2.1 million instead of approximately RM0.6 million and our PBT for FY2016 would have decreased from approximately RM6.8 million to approximately RM5.3 million. Save as disclosed above, there are no other existing or proposed service agreements between our Company and Subsidiaries and any of our Directors. There are no existing or proposed service agreements entered or to be entered into by our Directors with our Company or any of our Subsidiaries which provide for benefits upon termination of employment. 202

211 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN In conjunction with our listing on Catalist, we have adopted a share option scheme known as the Employee Share Option Scheme, as well as a performance share plan known as the Performance Share Plan, which were approved by our Shareholders on 16 December The rules of our Employee Share Option Scheme and Performance Share Plan are set out in Appendix G Rules of the Employee Share Option Scheme and Appendix H Rules of the Performance Share Scheme of this Offer Document respectively. These rules comply with the requirements set out in the Catalist Rules and the Companies Act. Both the Employee Share Option Scheme and the Performance Share Plan will provide eligible participants with an opportunity to participate in the equity of our Company so as to motivate them to higher standards of performance through increased dedication and loyalty, and to give recognition to those who have contributed significantly to the growth and performance of our Group. Both the Employee Share Option Scheme and the Performance Share Plan form an integral and important component of a compensation plan and are designed primarily to reward and retain employees and Directors of our Group whose services are vital to our success. The purpose of adopting more than one share plan is to give the Company greater flexibility to align the interests of our executives, especially key executives, with those of Shareholders. The Employee Share Option Scheme and the Performance Share Plan are designed to complement each other in our Group s efforts to reward, retain and motivate employees to achieve better performance. The aim of implementing more than one incentive plan is to increase our Group s flexibility and effectiveness in its continuing efforts to reward, retain and motivate employees to achieve better performance by providing our Group with a more comprehensive set of remuneration tools and further strengthen our competitiveness in attracting and retaining local and foreign talent. Unlike the Employee Share Option Scheme whereby participants are required to pay the exercise price of the Options, the Performance Share Plan allows our Group to provide an incentive for participants to achieve certain specific performance targets by awarding fully paid Shares to participants after these targets have been met. In addition, the assessment criteria for granting Option(s) under the Employee Share Option Scheme are more general (e.g. based on length of service and general performance of our Group) and do not relate to specific performance targets imposed by our Group. On the other hand, the assessment criteria for granting of awards under the Performance Share Plan will be based on specific performance targets or time-based service conditions or a combination of both. EMPLOYEE SHARE OPTION SCHEME The Employee Share Option Scheme complies with the relevant rules as set out in Chapter 8 of the Catalist Rules. As at the Latest Practicable Date, no Options have been granted under the Employee Share Option Scheme. Capitalised terms used herein shall, unless otherwise defined, bear the same meanings as defined in Appendix G Rules of the Employee Share Option Scheme of this Offer Document. Objectives of the Employee Share Option Scheme The objectives of the Employee Share Option Scheme are as follows: (a) to motivate Participants to optimise their performance standards and efficiency and to maintain a high level of contribution to our Group; 203

212 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (b) (c) (d) (e) to retain key employees whose contributions are important to the long-term growth and profitability of our Group; to attract potential employees with relevant skills to contribute to our Group and create value for our Shareholders; to align the interest of Participants with the interests of our Shareholders; and to instill loyalty to, and a stronger sense of identification with the long-term growth and profitability of, our Group. Summary of the Employee Share Option Scheme A summary of the rules of the Employee Share Option Scheme is set out as follows: Eligibility The Employee Share Option Scheme allows for participation by Employees (including Executive Directors) and Non-Executive Directors who have attained the age of 21 on or before the Offering Date, provided that such person shall not be an undischarged bankrupt or have entered into a composition with his creditors. Controlling Shareholders or Associates of Controlling Shareholder(s) who meet the criteria above are eligible to participate in the Employee Share Option Scheme provided that each of (i) their participation of; and (ii) the terms of any Option to be granted and the actual or maximum number of Shares under the Option to be issued or transferred to them, shall be separately approved by independent Shareholders for each such person in separate resolutions and for each grant of options. Save always that it shall not be necessary, to obtain the approval of the independent Shareholders for the participation in the Employee Share Option Scheme of Controlling Shareholders and/or Associates of Controlling Shareholders who are at the relevant time, already Participants. Controlling Shareholders and Associates of Controlling Shareholder(s) shall abstain from voting on any resolution in relation to their participation in the Employee Share Option Scheme. Save as prescribed by the Catalist Rules, there shall be no restriction on the eligibility of any Participant to participate in any other share option scheme or share scheme, implemented or to be implemented by any company within our Group. Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted, the terms of eligibility for participation in the Employee Share Option Scheme may be amended from time to time at the absolute discretion of our Committee. For instance, Section 77 of the Act provides that in relation to non-employees of the Company, any options granted after 29 December 1967 by a public company in respect of unissued shares of the grantor after a period of five years have elapsed from the date on which the option was granted shall be void. Accordingly, in respect of any Options granted to our Non-Executive Directors, the Options shall be voided five years from the date of grant of such Options. 204

213 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Limitations on the size of the Employee Share Option Scheme The aggregate number of Shares which the Committee may grant Options on any date, when added to (i) the number of Shares issued and issuable and/or transferred or transferable in respect of all Options granted under the Employee Share Option Scheme; and (ii) the number of Shares issued and issuable and/or transferred or transferable in respect of all options granted or awards granted under any other share option schemes or share schemes of our Company (including the Performance Share Plan), shall not exceed 15.0% of the total number of issued Shares (excluding Shares held by our Company as treasury shares) on the day immediately preceding the Offering Date of the Option. Our Company believes that this 15.0% limit gives our Company sufficient flexibility to decide the number of Shares, which Options may be granted on, to offer existing and new employees. The number of eligible Participants is expected to grow over the years. In line with its goals of ensuring sustainable growth, our Company is constantly reviewing its position and considering the expansion of our talent pool, which may involve employing new employees. As a result, the employee base and the number of eligible Participants will increase. The number of Shares offered under the Options granted must also be significant enough to serve as a sufficiently attractive incentive and meaningful reward for an Employee s or Non-Executive Director s contribution to our Group. However, it does not necessarily mean that the Committee will definitely issue and/or transfer Shares up to the prescribed limit. The Committee shall exercise its discretion in deciding the number of Shares to be offered to each Grantee, which will depend on the performance and value of such Grantee to our Group. The aggregate number of Shares which may be issued and/or transferred in respect of all Options granted under the Employee Share Option Scheme to Controlling Shareholders and Associates of Controlling Shareholder(s) shall not exceed 25.0% of the total number of Shares available under the Employee Share Option Scheme. The number of Shares which may be issued and/or transferred in respect of all Options granted under the Employee Share Option Scheme to each Controlling Shareholder or Associate shall not exceed 10.0% of the Shares available under the Employee Share Option Scheme. Entitlement The aggregate number of Shares in respect of which Options may be offered to each Grantee shall be determined at the discretion of the Committee, which will take into consideration criteria such as rank, past performance, years of service and potential development of the Grantee: Grant of Options Under the Rules, there are no fixed periods for the grant of Options. As such, the Committee may, at its absolute discretion, grant Options any time during the period when the Employee Share Option Scheme is in force. However, no Option shall be granted during the period of 30 days immediately preceding the date of announcement of our Company s interim and/or final results (as the case may be). In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, the Committee may only grant Options on or after the second Market Day from the date on which the announcement is released. 205

214 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Acceptance of Options The offer of Options shall be accepted within 30 days from the Offering Date. If not accepted before the end of the 30-day period, offers of Options made to Grantees shall automatically lapse. The Grantee must pay to us a nominal consideration of S$1.00 or such amount as the Committee may decide, upon acceptance of an offer. Exercise of Options and Exercise Price The Options granted under the Employee Share Option Scheme may have exercise prices that are, at the Committee s discretion, set at (i) the Market Price; or (ii) a discount to the Market Price (the quantum of such discount to be determined by the Committee at its absolute discretion, subject to a maximum discount of 20.0% and provided that Shareholders in general meeting have authorised, in a separate resolution, the making of offers and grant of options under the Employee Share Option Scheme at a discount not exceeding the aforesaid maximum discount). Options with exercise prices fixed at Market Price may be exercised after the first anniversary of the Offering Date, while Options with exercise prices set at a discount to the Market Price may be exercised after the second anniversary of the Offering Date. All unexercised Options granted under the Employee Share Option Scheme shall expire on the 10th anniversary of the Offering Date unless the Committee determines a shorter expiry period. Lapse of Options Special provisions in the Rules deal with the lapse or earlier exercise of Options granted in circumstances which include the termination of the Participant s employment in our Group, bankruptcy of the Participant, the death of the Participant, a take-over of our Company and the winding-up of our Company. Rights of Shares arising from exercise of the Options Subject to prevailing legislation, our Company will deliver Shares to Participants upon exercise of their Options by way of (i) an issue of new Shares; (ii) a transfer of existing Shares then held by our Company as treasury shares; or (iii) a combination of (i) and (ii). In determining whether to issue new Shares to Participants upon exercise of their Options, our Company will take into account factors such as (but not limited to) the number of Shares to be delivered, the prevailing market price of the Shares and the cost to our Company of issuing new Shares or transferring existing Shares. Shares arising from the exercise of Options are subject to all provisions of the Constitution of our Company and shall rank pari passu in all respects with the then existing Shares except for any dividends, rights, allotments or other distributions, the Record Date of which is prior to the date such Option is exercised. Duration of the Employee Share Option Scheme The Employee Share Option Scheme shall continue in operation for a maximum duration of 10 years commencing from the Adoption Date. However, subject to compliance with any applicable laws and regulations in Singapore, the Employee Share Option Scheme may continue beyond the period above with the approval of the Shareholders by way of ordinary resolution in general meeting and the relevant authorities. 206

215 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Abstention from voting Shareholders who are eligible to participate in the Employee Share Option Scheme must abstain from voting on any shareholders resolution relating to the Employee Share Option Scheme (including, where applicable, implementation of the Scheme, discount quantum, and participation by and Options granted to Controlling Shareholders and their Associates) and should not accept nominations as proxy or otherwise for voting unless specific instructions have been given in the proxy form on how the vote is to be cast. Adjustments and modifications to the Employee Share Option Scheme Adjustments If a variation in the issued share capital of our Company (whether by way of a capitalisation of profits or reserves or rights issue or reduction, subdivision, consolidation or distribution, or issues for cash or for share or otherwise than for cash or otherwise howsoever) should take place, then: (a) (b) the Exercise Price, class and/or number of Shares comprised in the Option to the extent unexercised and the rights attached thereto; and/or the class and/or number of Shares in respect of which additional Options may be granted to Participants, shall be adjusted in such manner as Committee may determine to be appropriate including retrospective adjustments where such variation occurs after the date of exercise of an Option but the Record Date relating to such variation precedes such date of exercise and, except in relation to a capitalisation issue, upon the written confirmation of the Auditors (acting only as experts and not as arbitrators), that in their opinion, such adjustment is fair and reasonable. No such adjustment shall be made if as a result the Participant receives a benefit that a Shareholder does not receive. The issue of securities as consideration for an acquisition of any assets or private placement of securities by our Company, the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on the SGX-ST during the period when a share purchase mandate granted by our Shareholders (including any renewal of such mandate) is in force, and the issue of Shares or other securities convertible into or with rights to acquire or subscribe for Shares pursuant to any share option schemes or share schemes of the Company shall (including the Employee Share Option Scheme and the Performance Share Plan) not normally be regarded as a circumstance requiring adjustment unless the Committee considers an adjustment to be appropriate or equitable. Modifications and alterations The Employee Share Option Scheme may be modified and/or altered from time to time by a resolution of the Committee, subject to due compliance with the requirements of the Catalist Rules and the prior approval of the SGX-ST and such other regulatory authorities as may be necessary. No alteration shall be made to the Employee Share Option Scheme to the advantage of the Participants, except with the prior approval of Shareholders in a general meeting. 207

216 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Financial effects of the Employee Share Option Scheme The Employee Share Option Scheme will increase our issued share capital to the extent of the new Shares that will be issued and allotted pursuant to the exercise of the Options. Under Singapore Financial Reporting Standard 102 Share-based Payment ( FRS 102 ), the fair value of employee services received in exchange for the grant of the Options would be recognised as a charge to profit or loss. For equity-settled share-based payment transactions, the total amount to be charged to profit or loss over the vesting period is determined by reference to the fair value of each Option granted at the Offering Date and the number of Options vested by the vesting date, with a corresponding credit to the reserve account. Before the end of the vesting period, at each accounting year end, the estimation of the number of Options that are expected to vest by the vesting date is subject to revision, and the impact of the revision will be recognised in the profit or loss with a corresponding adjustment to the reserve account over the remaining vesting period. After the vesting date, no subsequent adjustment to the total equity is made. The proceeds net of any directly attributable transaction costs are credited to share capital when the Options are exercised. During the vesting period, the EPS would be reduced by both the expenses recognised and the potential Shares to be issued under the Employee Share Option Scheme. When the Options are exercised, the NTA will be increased by the amount of cash received for exercise of the Options. On a per Share basis, the effect is accretive if the Exercise Price is above the NTA per Share but dilutive otherwise. There will be no cash outlay expended by us at the time of grant of such Options as compared to the payment of cash bonuses. However, any Options granted to subscribe for new Shares have a fair value attached to them at the time of grant. The fair value of an Option is the estimated value of the Option on its date of grant and may be derived by applying a variety of valuation techniques or pricing models. Insofar as such Options are granted at a consideration that is less than their fair value at the time of grant, there will be a cost to our Company in that we will receive from the Participant upon the grant of the Option a consideration that is less than the fair value of the Option. Share capital The Employee Share Option Scheme will result in an increase in our Company s issued share capital when new Shares are issued to Participants. The number of new Shares issued will depend on, amongst others, the size of the Options granted under the Employee Share Option Scheme. Whether and when the Options granted under the Employee Share Option Scheme will be exercised will depend on the Exercise Price of the Options, when the Options will vest, as well as the prevailing trading price of the Shares. In any case, the Employee Share Option Scheme provides that the number of Shares to be issued or transferred under the Employee Share Option Scheme, when aggregated with the aggregate number of Shares over which options or awards are granted under any other share option schemes or share schemes of our Company (including the Performance Share Plan), will be subject to the maximum limit of 15.0% of the issued share capital (excluding treasury shares) of our Company on the date preceding the grant of an Option from time to time. If instead of issuing new Shares to participants, existing Shares are purchased for delivery to participants, the Employee Share Option Scheme will have no impact on our Company s issued share capital. 208

217 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN NTA As described in paragraph (3) below on EPS, the grant of Options will be recognised as an expense, the amount of which will be computed in accordance with FRS 102. When new Shares are issued pursuant to the exercise of Options, the NTA will increase by the amount of cash received from the Participants upon the exercise of the Options. However, if instead of issuing new Shares to Participants, existing Shares are purchased for delivery to Participants, the NTA would be impacted by the cost of the Shares purchased. EPS The Employee Share Option Scheme is likely to result in a charge to earnings over the period from the date of grant of Options to the vesting date. New Shares issued pursuant to any exercise of the Options will have a dilutive impact on our EPS. Rationale for discount The ability to offer Incentive Options to Participants with Exercise Prices set at a discount to the Market Price will operate as a means to recognise the performance of Participants as well as to motivate them to continue to excel while encouraging them to focus more on improving the profitability and return of our Group above a certain level which will benefit all Shareholders when these are eventually reflected through share price appreciation. Incentive Options would be perceived in a more positive light by the Participants, inspiring them to work hard and produce results in order to be offered such Incentive Options, as only employees who have made outstanding contributions to the success and development of our Group would be granted Incentive Options. At present, it is envisaged that Incentive Options may be granted principally under the following circumstances: (a) (b) Firstly, where it is considered more effective to reward and retain talented employees by way of an Incentive Option rather than a Market Price Option. This is to reward outstanding performers who have contributed significantly to our Group s performance and the Incentive Option serves as an additional incentive. Market Price Options may not be attractive and realistic in the event of an overly buoyant market and inflated share prices. Hence, during such period, the ability to offer Incentive Options would allow our Company to grant Options on a more realistic and economically feasible basis. Furthermore, Options granted at a discount will give an opportunity to employees to realise some tangible benefits even if external events cause the share price to remain largely static. Secondly, where it is more meaningful and attractive to acknowledge a Participant s achievements through an Incentive Option rather than paying him a cash bonus. For example, Incentive Options may be used to compensate employees and to motivate them during economic downturns when wages (including cash bonuses and annual wage supplements) are frozen or cut, or they could be used to supplement cash rewards in lieu of larger cash bonuses or annual wage supplements. Accordingly, it is possible that meritbased cash bonuses or rewards may be combined with Market Price Options or Incentive Options, as part of eligible employees compensation packages. The Employee Share Option Scheme will provide our Group employees with an incentive to focus more on improving the profitability of our Group thereby enhancing shareholder value when these are eventually reflected through any price appreciation of our Shares after the vesting period. 209

218 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (c) Thirdly, where due to speculative forces and having regard to the historical performance of the Share price, the Market Price of the Shares at the Offering Date may not be reflective of financial performance indicators such as return on equity and/or earnings growth. The Committee shall have the absolute discretion (i) to grant Incentive Options; (ii) to determine the level of discount (subject to a maximum discount of 20.0% of the Market Price and provided that Shareholders in general meeting have authorised, in a separate resolution, the making of offers and grants of options under the Employee Share Option Scheme at a discount not exceeding the aforesaid maximum discount); and (iii) the Grantees to whom Incentive Options shall be offered, provided that where such Grantee is a Controlling Shareholder or his Associate, our independent Shareholders at a general meeting shall have authorised, in separate resolutions for each person, the actual number and terms of Options to be granted to that Grantee. In deciding the quantum of any discount (subject to the aforesaid limit), the Committee will have regard to the performance of our Company and our Group, the individual performance of the Participant, the contribution of the Participant to the success and development of our Company and/or our Group and the prevailing market conditions. Flexibility in determining the quantum of discount would also enable the Committee to tailor the incentives in the grant of Incentive Options to be commensurate with the performance and contribution of each Participant, and to provide incentives for better performance, greater dedication and loyalty of the Participants. Rationale for the participation of Non-Executive Directors Although Non-Executive Directors are not involved in the day-to-day running of our operations, they play an invaluable role in furthering the business interests of our Group by contributing their experience and expertise. The participation by Non-Executive Directors in the Employee Share Option Scheme will provide our Company a further avenue to acknowledge and recognise their services and contributions to our Group as it may not always be possible to compensate them fully or appropriately by increasing the directors fees or other forms of cash payment. For instance, Non-Executive Directors may bring strategic or other value to our Company which may be difficult to quantify in monetary terms. The grant of Options to Non-Executive Directors will allow our Company to attract and retain experienced and qualified persons from different professional backgrounds to join our Group as Non-Executive Directors, and to motivate our existing Independent Directors to take extra efforts to promote the interests of our Group. In deciding whether to grant Options to Non-Executive Directors, the Committee will take into consideration, among other things, the services and contributions made to the growth, development and success of our Group and the years of service of a particular Non-Executive Director. The committee may also, where it considers relevant, take into account other factors such as the economic conditions and our Group s performance. It is envisaged that Options granted, and the corresponding Shares to be delivered on the exercise of such Options based on the criteria set out above will be relatively small, in terms of the frequency and numbers. Based on this, the Directors are of the view that the participation by Non-Executive Directors in the Employee Share Option Scheme will not compromise the independent status of those who are Independent Directors. 210

219 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Rationale for the participation of Controlling Shareholders and their Associates Our Company acknowledges that the services and contributions of employees, who are Controlling Shareholders or Associates of Controlling Shareholder(s), are important to the development and success of our Group. The extension of the Employee Share Option Scheme to confirmed employees who are Controlling Shareholders or Associates of Controlling Shareholder allows our Group to have a fair and equitable system to reward employees who have actively contributed to the progress and success of our Group. The participation of Controlling Shareholders and Associates of Controlling Shareholder(s) in the Employee Share Option Scheme will serve both as a reward to them for their dedicated services to our Group and a motivation for them to take a long-term view of our Group. Although Participants who are Controlling Shareholders or Associates of Controlling Shareholder(s) may already have shareholding interest in our Company, the extension of the Employee Share Option Scheme to include them ensures that they are equally entitled as the other employees of our Group to take part and benefit from this system of remuneration. We are of the view that a person who would otherwise be eligible should not be excluded from participating in the Employee Share Option Scheme solely by reason that he or she is a Controlling Shareholder or an Associate of Controlling Shareholder(s). As a safeguard against abuse, all members of the Board (and not just members of the Committee) who are neither Controlling Shareholders nor their Associates will be involved in deliberations in respect of Options to be granted to or held by Controlling Shareholders and their Associates and the term of such Options. Furthermore, the specific approval of our independent Shareholders in separate resolutions at a general meeting is required for each of (i) the participation of such persons in the Employee Share Option Scheme; and (ii) the actual or maximum number of Shares under the Options and terms of Options granted to Controlling Shareholders or Associates of Controlling Shareholder(s), in respect of each such Participant. For the purposes of obtaining such approval from the independent Shareholders, our Company shall procure that the letter to Shareholders in connection therewith shall set out (a) clear justifications for the participation of such Controlling Shareholders or Associates of Controlling Shareholder(s); and (b) clear rationale for the terms of the Options to be granted to such Controlling Shareholders or Associates of Controlling Shareholder(s) (including the rationale for any discount to the Market Price, if so proposed). As at the Latest Practicable Date, our Executive Directors, Mr Ong Yoke En and Ms Lim Lay Yong, who fall within the category of Controlling Shareholders and their Associates, have been identified for purpose of participation in the Employee Share Option Scheme. Shareholder approval has been obtained for the aforementioned participation in the Employee Share Option Scheme. If other Controlling Shareholders or their Associates are in future so identified, specific approval of the independent Shareholders in general meeting by separate resolutions will be sought for such participation in the Employee Share Option Scheme and the terms of the Option grant. Reporting requirements Announcements Under the Catalist Rules, an immediate announcement must be made on the date of grant of an Option and the announcement must provide details of the grant, including the following: (a) date of grant; 211

220 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (b) (c) (d) (e) (f) exercise price of the Options granted; number of Options granted; market price of the Shares on the date of grant; number of Options granted to each Director and Controlling Shareholder (and each of their Associates), if any; and the validity period of the Options. Annual reports Our Company will make such disclosures in its annual report for so long as the Employee Share Option Scheme continues in operation: (a) (b) the names of the members of the Committee administering the Employee Share Option Scheme; in respect of the following Participants: (i) (ii) (iii) Directors; Controlling Shareholders and their Associates; and Participants, other than those in paragraph (b)(i) and (ii) above, who received 5.0% or more of the total number of Options available under this Scheme, the following information will be required: (AA) the name of the Participant; (BB) the aggregate number of Options which have been granted to such Participant during the financial year under review (including terms); (CC) the aggregate number of Options which have been granted to such Participant since the commencement of the Employee Share Option Scheme to the end of the financial year under review; (DD) the aggregate number of Options which have been exercised since the commencement of the Employee Share Option Scheme to the end of the financial year under review; and (EE) the aggregate number of Options outstanding as at the end of the financial year under review; (c) the number and proportion of Incentive Options granted at the following discounts to the Market Price in the Financial Year under review: (i) (ii) Incentive Options granted at up to 10.0% discount; and Incentive Options granted at between 10.0% but not more than 20.0% discount; and 212

221 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (d) such other information as may be required by the Catalist Rules or the Act, provided that if any of the above requirements are not applicable, an appropriate negative statement should be included therein. Administration The Committee shall be responsible for the administration of the Employee Share Option Scheme and shall consist of our Directors. As at the date of this offer document, the Committee shall be the Remuneration Committee. The Committee shall have the power, from time to time, to make and vary such rules (not being inconsistent with the Employee Share Option Scheme) for the implementation and administration of the Employee Share Option Scheme as it thinks fit. In compliance with the requirements of the Catalist Rules, any participant of the Employee Share Option Scheme who is a member of the Committee shall not be involved in the deliberation or decision in respect of Options granted to or to be granted to him PERFORMANCE SHARE PLAN As at the Latest Practicable Date, no Awards have been granted under the Performance Share Plan. The Performance Share Plan complies with the relevant rules as set out in Chapter 8 of the Catalist Rules. Capitalised terms used throughout this section, unless otherwise defined, shall bear the meanings defined in Appendix H Rules of the Performance Share Plan of this Offer Document. Objectives of the Performance Share Plan The objectives of the Performance Share Plan are as follows: (a) (b) (c) foster an ownership culture within our Group which aligns the interests of our employees with the interests of shareholders; motivate participants of the Performance Share Plan to achieve our key financial and operational goals of our Group and/or their respective business units; and make total employee remuneration sufficiently competitive to recruit and retain staff having skills that are commensurate with our ambition to become a world-class company. Summary of the Performance Share Plan A summary of the rules of the Performance Share Plan is set out as follows: Eligibility Executives who have attained the age of 21 years and hold such rank as may be designated by the Committee from time to time shall be eligible to participate in the Performance Share Plan and who have, as at the Award Date, been in full time employment of the Group for a period of at least 12 months (or in the case of any Executive Director, such shorter period as the Committee may determine), provided that none shall be an undischarged bankrupt as at the Award Date. 213

222 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Controlling Shareholders of our Company or Associates of such Controlling Shareholders who meet the criteria above are also eligible to participate in the Performance Share Plan if their participation and awards are approved by independent Shareholders in separate resolutions for each such person and, in respect of each such person, in separate resolutions for each of (i) his participation and (ii) the actual or maximum number of Shares and terms of any Awards to be granted to him, provided always that it shall not be necessary to obtain the approval of the independent Shareholders of the Company for the participation in the Performance Share Plan of a Controlling Shareholder or his Associate who is, at the relevant time, already a Participant. Administration The Performance Share Plan shall be administered by the Committee with such powers and duties conferred to it by the Board. A member of the Committee who is also a participant of the Performance Share Plan must not be involved in its deliberation in respect of the award granted or to be granted to him. Limitation on the size of the Performance Share Plan The aggregate number of Shares which may be issued or transferred pursuant to awards granted under the Performance Share Plan, when aggregated with the aggregate number of Shares over which options or awards are granted under any other share option schemes or share schemes of our Company (including the Employee Share Option Scheme), shall not exceed 15.0% of the total number issued Shares (excluding Shares held by our Company as treasury shares) from time to time. Our Company believes that this 15.0% limit gives our Company sufficient flexibility to decide the number of Shares which may be issued or transferred pursuant to the Awards. The number of eligible Participants is expected to grow over the years. In line with its goals of ensuring sustainable growth, our Company is constantly reviewing its position and considering the expansion of our talent pool, which may involve employing new employees. As a result, the employee base and the number of eligible Participants will increase. The number of shares under the Awards must also be significant enough to serve as a sufficiently attractive incentive and meaningful reward for an Employee s contribution to our Group. However, it does not necessarily mean that the Committee will definitely issue and/or transfer Shares under the Awards up to the prescribed limit. The Committee shall exercise its discretion in deciding the number of Shares to be offered to each Participant, which will depend on the performance and value of such Participant to our Group. Entitlement Subject to the following, the aggregate number of Shares which may be issued and/or transferred pursuant to awards granted under the Performance Share Plan shall be determined at the absolute discretion of the Committee, which shall take into account criteria such as his rank, job performance and potential for future development, the Participant s contribution to the success and development of the Group and extent of effort with which the Performance Condition may be achieved within the Performance Period: (a) the aggregate number of Shares which may be issued and/or transferred in respect of all Awards under the Performance Share Plan to Controlling Shareholders and Associates of Controlling Shareholder(s) shall not exceed 25.0% of the total number of Shares available under the Performance Share Plan; and 214

223 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (b) the number of Shares which may be issued and/or transferred in respect of all Awards under the Performance Share Plan to each Controlling Shareholder or Associate shall not exceed 10.0% of the Shares available under the Performance Share Plan. Awards Awards represent the right of a participant to receive fully paid Shares free of charge, provided that certain prescribed performance targets (if any) are met and upon expiry of the prescribed performance period. Shares which are allotted and issued or transferred to a participant pursuant to the release of an award shall not be transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part, during a specified period (as prescribed by the Committee in the award letter), except to the extent approved by the Committee. Details of Awards The Committee shall decide, in relation to each award to be granted to a participant: (a) (b) (c) (d) (e) the date on which the award is to be granted; the number of Shares which are the subject of the award; the performance target(s) and the performance period during which such performance target(s) are to be satisfied, if any; the extent to which Shares, which are the subject of that award, shall be released on each prescribed performance target(s) being satisfied (whether fully or partially) or exceeded or not being satisfied, as the case may be, at the end of the performance period; and any other condition which the Committee may determine in relation to that award. Timing of Awards While the Committee has the discretion to grant awards at any time in the year, it is currently anticipated that awards would in general be made once a year. An award letter confirming the award and specifying, amongst others, the number of Shares which are the subject of the award, the prescribed performance target(s), the performance period during which the prescribed performance target(s) are to be attained or fulfilled and the schedule setting out the extent to which Shares will be released on satisfaction of the prescribed performance target(s), will be sent to each participant as soon as reasonably practicable after the making of an award. Vesting of Awards Subject to the applicable laws, our Company will deliver Shares to participants upon vesting of their awards by way of either (i) an issue of new Shares; or (ii) a transfer of Shares then held by our Company in treasury. In determining whether to issue new Shares to participants upon vesting of their awards, our Company will take into account factors such as (but not limited to) the number of Shares to be delivered, the prevailing market price of the Shares and the cost to our Company of issuing new Shares or delivering existing Shares. 215

224 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN The financial effects of the above methods are discussed below. Termination of Awards Special provisions in the rules of the Performance Share Plan deal with the lapse or earlier vesting of awards apply in circumstances which include the termination of the participant s employment, the bankruptcy of the participant and the winding-up of the Company. Rights of Shares arising Placement Shares allotted and issued and existing Shares procured by our Company for transfer on the release of an award shall be eligible for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Shares, the record date for which is on or after the relevant date of issue or, as the case may be, delivery, and shall in all other respects rank pari passu with other existing Shares then in issue. Duration of the Performance Share Plan The Performance Share Plan shall continue in force at the discretion of the Committee, subject to a maximum period of 10 years commencing on the date on which the Performance Share Plan is adopted by our Company in general meeting, provided always that the Performance Share Plan may continue beyond the above stipulated period with the approval of Shareholders in general meeting and of any relevant authorities which may then be required. Notwithstanding the expiry or termination of the Performance Share Plan, any awards made to participants prior to such expiry or termination will continue to remain valid. Abstention from voting Shareholders who are eligible to participate in the Performance Share Plan must abstain from voting on any shareholders resolution relating to the Performance Share Plan (including, where applicable, implementation of the Plan and participation by and Awards granted to Controlling Shareholders and their Associates) and should not accept nominations as proxy or otherwise for voting unless specific instructions have been given in the proxy form on how the vote is to be cast. Adjustments and Modifications to the Performance Share Plan The following describes the adjustment events under, and provisions relating to alterations of, the Performance Share Plan. Adjustments If a variation in the issued ordinary share capital of our Company (whether by way of a capitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation, distribution or otherwise) shall take place, then: (a) (b) the class and/or number of Shares which are the subject of an Award to the extent not yet vested; and/or the class and/or number of Shares in respect of which future Awards may be granted under the Performance Share Plan, 216

225 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN shall be adjusted by the Committee to give such Participant the same proportion of the equity capital of our Company as that to which he was previously entitled, in such manner as the Committee may determine to be appropriate, provided that no adjustment shall be made if, as a result, the participant receives a benefit that a Shareholder of our Company does not receive. Unless the Committee considers an adjustment to be appropriate, (a) the issue of securities as consideration for an acquisition or a private placement of securities; (b) the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on the SGX-ST during the period when a share purchase mandate granted by our Shareholders (including any renewal of such mandate) is in force; (c) the issue of Shares or other securities convertible into or with rights to acquire or subscribe for Shares to its employees pursuant to any share option scheme or share plan approved by Shareholders in general meeting, including the Performance Share Plan; or (d) any issue of Shares arising from the exercise of any warrants or the conversion of any convertible securities issued by our Company, shall not normally be regarded as a circumstance requiring adjustment. Any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by our Company s auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable. Modifications and alterations The Performance Share Plan may be modified from time to time by a resolution of the Committee subject to the prior approval of the SGX-ST and such other regulatory authorities as may be necessary. However, no modification shall adversely affect the rights attached to any Award prior to such modification or alteration except with the consent in writing of such number of Participants who, if their Awards were released to them upon the Performance Conditions for their Awards being satisfied in full, would become entitled to not less than three-quarters in number of all the Shares which would fall to be Vested upon Release of all outstanding Awards. No alteration shall be made to certain rules of the Performance Share Plan to the advantage of the Participants except with the prior approval of Shareholders in general meeting. Financial Effects of the Performance Share Plan The Performance Share Plan is considered a share-based payment that falls under FRS 102 where participants will receive Shares and the awards would be accounted for as equity-settled share-based transactions, as described in the following paragraphs. The fair value of employee services received in exchange for the grant of the awards would be recognised as a charge to profit or loss over the period between the grant date and the vesting date of an award. The total amount of the charge over the vesting period is determined by reference to the fair value of each award granted at the grant date and the number of Shares vested at the vesting date, with a corresponding credit to the reserve account. Before the end of the vesting period, at each accounting year end, the estimate of the number of awards that are expected to vest by the vesting date is revised, and the impact of the revised estimate is recognised in profit or loss with a corresponding adjustment to the reserve account over the remaining vesting period. After the vesting date, no subsequent adjustment to the total equity is made. 217

226 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN The amount charged to profit or loss would be the same whether our Company settles the Awards by issuing new Shares or by purchasing existing Shares. The amount charged to profit or loss also depends on whether or not the performance target attached to an award is measured by reference to the market price of the Shares. This is known as a market condition. If the performance target is a market condition, the probability of the performance target being met is taken into account in estimating the fair value of the award granted at the grant date, and no adjustments to the amounts charged to profit or loss are made whether or not the market condition is met. However, if the performance target is not a market condition, the fair value per share of the awards granted at the grant date is used to compute the amount to be charged to profit or loss at each accounting date, based on an assessment by our Chief Financial Officer at that date of whether the non-market conditions would be met to enable the awards to vest. Thus, where the vesting conditions do not include a market condition, there would be no cumulative charge to profit or loss if the awards do not ultimately vest. The following sets out the financial effects of the Performance Share Plan. Share capital The Performance Share Plan will result in an increase in our Company s issued share capital when new Shares are issued to participants. The number of new Shares issued will depend on, amongst others, the size of the awards granted under the Performance Share Plan. In any case, the Performance Share Plan provides that the number of Shares to be issued or transferred under the Performance Share Plan, when aggregated with the aggregate number of Shares over which options are granted under any other share option schemes of our Company, will be subject to the maximum limit of 15 per cent. of our Company s total number of issued Shares (excluding Shares held by our Company as treasury shares) from time to time. If instead of issuing new Shares to participants, existing Shares are purchased for delivery to participants, the Performance Share Plan will have no impact on our Company s issued share capital. NTA As described in paragraph (3) below on EPS, the Performance Share Plan is likely to result in a charge to our Company s profit or loss over the period from the grant date to the vesting date of the awards. The amount of the charge will be computed in accordance with FRS 102. When new Shares are issued under the Performance Share Plan, there would be no effect on the NTA due to the offsetting effect of expenses recognised and the increase in share capital. However, if instead of issuing new Shares to participants, existing Shares are purchased for delivery to participants, the NTA would be impacted by the cost of the Shares purchased. It should be noted that the delivery of Shares to participants under the Performance Share Plan will generally be contingent upon the eligible participants meeting prescribed performance targets and conditions. EPS The Performance Share Plan is likely to result in a charge to earnings over the period from the grant date to the vesting date, computed in accordance with FRS 102. It should again be noted that the delivery of Shares to participants of the Performance Share Plan will generally be contingent upon the participants meeting the prescribed performance targets and conditions. The issuance of new Shares under the Performance Share Plan will have a dilutive impact on our EPS. 218

227 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Rationale for participation of Controlling Shareholders and their Associates It is the intention of the Company that all employees of the Group, including those who are Controlling Shareholders and their Associates, should be remunerated for their contribution to the Group on the same basis with no differentiation between employees who are Controlling Shareholders or their Associates, and employees who are not. The extension of the Performance Share Plan to allow Controlling Shareholders and their Associates to participate in the Performance Share Plan will ensure that they are equally entitled, with the other employees who are not Controlling Shareholders or their Associates, to take part and benefit from this system of remuneration. The Company is of the view that the Controlling Shareholders and their Associates should not be unduly discriminated against by virtue only of their shareholdings in the Company. The Company is also of the view that the extension of the Performance Share Plan to Controlling Shareholders and their Associates will enhance their long-term commitment to the Group as it will ensure that they will continue to have a stake in the Company even if they decrease their shareholdings in the Company in the future. The Directors are of the view that the participation in the Performance Share Plan by Controlling Shareholders and their Associates: (i) will act as an additional incentive for Controlling Shareholders and their Associates, who are employees and Directors of any company within the Group, to improve their performance, as the value of the Awards will be best realised when the results of their performance correlate directly with higher values of the Shares; and (ii) is in the best interests of the Company as such Controlling Shareholders and their Associates are able to help to set the vision and direction of the Group, define objectives and roles of management and thus stand in a unique position to contribute to the growth and prosperity of the Group. As a safeguard against abuse, all members of the Board (and not just members of the Committee) who are neither Controlling Shareholders nor their Associates will be involved in deliberations in respect of Awards to be granted to or held by Controlling Shareholders and their Associates and the terms and conditions, including the performance conditions and vesting periods attached to such Awards. Furthermore, specific approval of the independent Shareholders in general meeting by a separate resolution is required for the grant of Awards to Controlling Shareholders and their Associates as well as the actual number of and terms of such Awards. As at the Latest Practicable Date, our Executive Directors, Mr Ong Yoke En and Ms Lim Lay Yong, who fall within the category of Controlling Shareholder and their Associates, have been identified for the purposes of participation in the Performance Share Plan. Shareholder approval has been obtained for their aforementioned participation in the Performance Share Plan. Please see the section entitled Share Capital for details. If other Controlling Shareholders or their Associates are in future so identified, specific approval of the independent Shareholders in general meeting by separate resolutions will be sought for such grant of Awards as well as the actual number of Shares to be comprised thereunder and the terms thereof. Reporting requirements Announcements Under the Catalist Rules, an immediate announcement must be made on the date of the grant of an Award and provide details of the grant, including the following: (a) (b) date of grant; market price of our Shares on the date of grant of the Award; 219

228 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN (c) (d) (e) number of Shares granted under the Award; number of Shares granted to our Directors and our Controlling Shareholders (and each of their Associate) under the Award, if any; and the vesting period in relation to the Award. Annual Reports The following disclosures (as applicable) will be made by our Company in our annual report for so long as the Performance Share Plan continues in operation: (a) (b) the names of the members of the Committee administering the Performance Share Plan; in respect of the following Participants: (i) (ii) (iii) Directors; Controlling Shareholders and their Associates; and Participants (other than those in paragraph (b)(i) and (b)(ii) above) who have received Shares pursuant to the vesting of Awards granted under the Performance Share Plan which, in aggregate, represent 5.0% or more of the total number of Shares available under the Performance Share Plan, the following information will be required: (AA) the name of the Participant; (BB) the aggregate number of Shares comprised in Awards which have been granted to such Participant during the financial year under review (including terms); (CC) the aggregate number of Shares comprised in Awards which have been granted to such Participant since the commencement of the Performance Share Plan to the end of the financial year under review; (DD) the aggregate number of Shares comprised in Awards which have been issued and/or transferred to such Participants pursuant to the vesting of Awards under the Performance Share Plan since the commencement of the Performance Share Plan to the end of the financial year under review; and (EE) the aggregate number of Shares comprised in Awards which have not been vested as at the end of the financial year under review; and (c) such other information as may be required by the Catalist Rules or the Act, provided that if any of the above requirements are not applicable, an appropriate negative statement should be included therein. 220

229 EMPLOYEE SHARE OPTION SCHEME AND PERFORMANCE SHARE PLAN Administration The Committee shall be responsible for the administration of the Performance Share Plan and shall consist of our Directors. As at the date of this Offer Document, the Committee shall be the Remuneration Committee. The Committee shall have the power, from time to time, to make and vary such rules (not being inconsistent with the Performance Share Plan) for the implementation and administration of the Performance Share Plan as it thinks fit including, but not limited to: (a) (b) imposing restrictions on the number of Awards that may be vested within each financial year; and amending performance targets, if by so doing it would be a fairer measure of performance for a Participant or for the Performance Share Plan as a whole. In compliance with the requirements of the Catalist Rules, any participant of the Performance Share Plan who is a member of the Committee shall not be involved in the deliberation or decision in respect of Awards granted to or to be granted to him. 221

230 CORPORATE GOVERNANCE Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to our Shareholders, and will use best efforts to implement the good practices recommended in the Code. Our Board of Directors has established three committees, namely, the Audit Committee, the Nominating Committee and the Remuneration Committee. We have seven (7) Directors on our Board of Directors, of which three (3) are Independent Directors. We have appointed Mr Lim Siang Kai as our Non-Executive Chairman and Lead Independent Director. As Non-Executive Chairman and Lead Independent Director, he is the contact person for Shareholders in situations where there are concerns or issues which communication through normal channels with our CEO, Executive Directors and/or CFO has not resolved or where such communication is inappropriate. Mr Lim Siang Kai will also take the lead in ensuring compliance with the Code. Our Independent Directors do not have any existing business or professional relationships of a material nature with our Group, our other Directors or Substantial Shareholders. Our Independent Directors are also not related to our other Directors and/or Substantial Shareholders. Board Practices Our Directors have no fixed term of office. They are to be appointed by our Shareholders at a general meeting and an election of Directors is held annually. One third (or the number nearest to one third) of our Directors are required to retire from office at least once every three (3) years. However, a retiring Director is eligible for re-election at the meeting at which he retires. More details on the appointment and retirement of Directors can be found in Appendix D Summary of Constitution of our Company of this Offer Document. Audit Committee Our Audit Committee comprises our Independent Directors, Mr Lim Siang Kai, Mr Hau Hock Khun and Mr Sia Yeak Hong. The Chairman of our Audit Committee is Mr Lim Siang Kai. At least two (2) members of the Audit Committee, including the Chairman of the Audit Committee, should have recent and relevant accounting or related financial management expertise or experience. Our Audit Committee will assist our Board of Directors with regards to discharging its responsibility to safeguard our Company s assets, maintain adequate accounting records, and develop and maintain effective systems of internal controls with an overall objective to ensure that our management has created and maintained an effective control environment in our Group. Our Audit Committee will provide a channel of communication between our Board of Directors, our management and our external auditors on matters relating to audit. Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to the Shareholders. Our Audit Committee shall meet periodically to perform the following functions, amongst others: (a) (b) assist our Board in the discharge of its responsibilities on financial reporting matters; review, with the internal and external auditors, the audit plans, scope of work, their evaluation of the system of internal accounting controls, their management letter and our management s response, and results of our audits compiled by our internal and external auditors; 222

231 CORPORATE GOVERNANCE (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) review the interim and annual financial statements and results announcements before submission to our Board for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, the going concern statement, compliance with financial reporting standards as well as compliance with the Catalist Rules and any other statutory/regulatory requirements; review the effectiveness and adequacy of our internal controls, including financial, operational, compliance and informational technology controls, and risk management systems and ensure coordination between our internal and external auditors, and our management, reviewing the assistance given by our management to the auditors, and discuss problems and concerns, if any, arising from the interim and final audits, and any matters which the auditors may wish to discuss (in the absence of our management where necessary); review the scope and results of the external audit, and the independence and objectivity of the external auditors; review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our Group s operating results or financial position, and our management s response; make recommendations to the Board on the proposals to the Shareholders on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors; review significant financial reporting issues and judgements with the CFO and the external auditors so as to ensure the integrity of the financial statements of our Group and any formal announcements relating to our Group s financial performance before their submission to our Board of Directors; to review and report to the Board at least annually the adequacy and effectiveness of our Group s material internal controls with the CFO and the internal and external auditors, including financial, operational, compliance and information technology controls, and risk management systems via reviews carried out by the internal auditors; monitor and review the implementation of recommendations from external and internal auditors, if any, to address any control weakness; review and approve transactions falling within the scope of Chapter 9 and Chapter 10 of the Catalist Rules (if any); review any potential conflicts of interests; review and approve all hedging policies and instruments (if any) to be implemented by our Group; undertake such other reviews and projects as may be requested by our Board and report to our Board its findings from time to time on matters arising and requiring the attention of our Audit Committee; 223

232 CORPORATE GOVERNANCE (o) (p) review and establish procedures for receipt, retention and treatment of complaints received by our Group pertaining to, amongst others, criminal offences involving our Group or its employees, questionable accounting, auditing, business, safety or other matters that impact negatively on our Group; and generally to undertake such other functions and duties as may be required by statute or the Catalist Rules, and by such amendments made thereto from time to time. Apart from the duties listed above, the Audit Committee shall commission an annual internal controls audit until such time that it is satisfied that the internal controls of our Group are sufficiently robust and effective in mitigating any key internal control weaknesses our Group may have. Prior to decommissioning such annual internal controls audit, our Board shall report to the Sponsor and the SGX-ST on the basis for deciding to decommission the annual internal controls audit, as well as the measures taken to rectify key weaknesses in and/or strengthen the internal controls of our Group. Thereafter, our Audit Committee shall commission such audits as and when it deems fit for the purposes of satisfying itself that the internal controls of our Group have remained robust and effective. Upon the completion of an internal control audit, our Board shall make the appropriate disclosures via the SGXNET of any weaknesses in our Group s internal controls which may be material or of a price-sensitive nature, as well as any follow-up actions to be taken by our Board. Our Audit Committee shall also commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rules or regulations which has or is likely to have a material impact on our Group s operating results and/or financial position. Each member of our Audit Committee shall abstain from reviewing any particular transaction or voting on such resolution in respect of which he is or may be interested in. In preparation for our Group s listing, our Audit Committee has held discussions with our CFO together with our Independent Auditors and Reporting Accountants in relation to our Group s internal controls. During the course of discussions, our Audit Committee was given a broad overview of our Group s current internal control procedures, with emphasis on our Group s internal controls of cash and bank balances and procedures on the reconciliation and confirmation of bank balances. Our Board of Directors has also noted that no material internal control weaknesses have been raised by our Independent Auditors and Reporting Accountants in the course of their audit of the financial statements of our Group for the past three financial years ended 31 March 2014, 2015 and Following our Group s listing on Catalist, our Audit Committee will continually review the effectiveness of the internal control procedures within our Group and, if necessary, outsource our Group s internal audit function to ensure the adequacy and sufficiency of internal controls procedures within our Group. Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by management, various Board Committees and the Board, our Board of Directors, after making all reasonable enquiries and to the best of its knowledge and belief, with the concurrence of our Audit Committee, is of the opinion that the internal controls and risk management systems of our Group are effective and adequate to address the financial, operational, compliance and information technology risks. 224

233 CORPORATE GOVERNANCE Our Audit Committee having: (a) (b) (c) (d) conducted a discussion with Ms Sia Shu Yee, our CFO; reviewed Ms Sia Shu Yee s qualifications and past working experience (as described in the section entitled Directors, Executive Officers and Employees Executive Officers of this Offer Document); observed Ms Sia Shu Yee s familiarity and diligence in relation to the financial matters and information of our Group; and noted the absence of negative feedback from our Independent Auditors and Reporting Accountants, is of the view that Ms Sia Shu Yee is suitable for the position of CFO and she will be able to discharge her duties satisfactorily. Our Audit Committee confirms that, after making all reasonable enquiries, and to the best of the knowledge and belief of our Audit Committee, nothing has come to the attention of the members of our Audit Committee to cause them to believe that Ms Sia Shu Yee does not have the competence, character and integrity expected of a CFO of a listed issuer. Nominating Committee The Nominating Committee comprises our Independent Directors, Mr Lim Siang Kai, Mr Hau Hock Khun and Mr Sia Yeak Hong. The Chairman of our Nominating Committee is Mr Sia Yeak Hong. Our Nominating Committee will be responsible for the following functions, amongst others: (a) (b) (c) (d) (e) (f) reviewing and approving any new employment of related persons and proposed terms of their employment; recommending to the Board on Board appointments, including the re-nomination of our existing Directors for re-election in accordance with our Constitution at each annual general meeting and having regard to the Director s contribution and performance; determining annually, and as and when circumstances require, whether or not a Director of our Company is independent; in respect of a Director who has multiple board representations on various companies, if any, to review and decide whether or not such Director is able to and has been adequately carrying out his duties as Director, having regard to the competing time commitments that are faced by the Director when serving on multiple Boards and discharging his duties towards other principal commitments; deciding whether or not a Director of our Company is able to and has been adequately carrying out his duties as a director; to decide how the Board s performance may be evaluated and propose objective performance criteria, as approved by the Board that allows comparison with its industry peers, and address how the Board has enhanced long-term shareholders value; 225

234 CORPORATE GOVERNANCE (g) (h) (i) reviewing and approving the employment of persons related to our Directors, Executive Officers or Substantial Shareholders and the proposed terms of their employment; reviewing the succession plans for our Executive Directors and Executive Officers; and reviewing the training and professional development programmes for our Board. The Nominating Committee will decide how our Board s performance is to be evaluated and propose objective performance criteria, subject to the approval of our Board, which addresses how our Board has enhanced long-term shareholders value. Our Board will also implement a process to be carried out by the Nominating Committee for assessing the effectiveness of our Board as a whole and for assessing the contribution by each individual Director to the effectiveness of our Board. Each member of the Nominating Committee shall abstain from voting on any resolutions in respect of the assessment of his performance or re-nomination as director of our Company. In the event that any member of the Nominating Committee has an interest in a matter being deliberated upon by the Nominating Committee, he will abstain from participating in the review and approval process relating to that matter. Nominating Committee s view of our Independent Directors Our Nominating Committee, after having considered the following: (a) (b) (c) (d) (e) the principal occupation and commitments of our Independent Directors, including the number of listed company board representations that each of them has; the attendance to-date at board meetings of listed companies that each of our Independent Directors serves as independent directors; the confirmations by our Independent Directors that they are able to devote sufficient time and attention to the matters of our Group; the professional experience and expertise of our Independent Directors; and the composition of our Board, is of the view that Mr Lim Siang Kai, Mr Hau Hock Khun and Mr Sia Yeak Hong are able to commit sufficient time and resources to discharge their respective duties, and are suitable as our Independent Directors. Each of our Independent Directors had also informed the respective nominating committees of the listed companies whom they serve as directors with regard to their appointment as our Independent Directors. Remuneration Committee Our Remuneration Committee comprises our Independent Directors, Mr Lim Siang Kai, Mr Hau Hock Khun and Mr Sia Yeak Hong. The Chairman of our Remuneration Committee is Mr Hau Hock Khun. The role of our Remuneration Committee shall be to recommend to our Board a framework of remuneration for our Directors and Executive Officers, and determine specific remuneration packages for each of our Executive Directors, Non-Executive Directors and Executive Officers. 226

235 CORPORATE GOVERNANCE The quantum of the bonus of our Executive Directors and CEO will be subject to the approval of our Remuneration Committee. The bonus for our Executive Officers will be determined solely by our Executive Directors and CEO. The Remuneration Committee s recommendations shall then be submitted for endorsement by our entire Board. The scope of responsibilities of our Remuneration Committee encompasses all aspects of remuneration, including but not limited to, our Executive Directors service agreements, fees, salaries, allowances, bonuses, options and benefits in kind. Our Remuneration Committee shall also review the remuneration of senior management and employees related to our Directors. Each member of our Remuneration Committee shall abstain from voting on any resolutions in respect of his or her remuneration package and also in respect of any employee related to him. The remuneration of employees who are related to our Directors and Substantial Shareholders will also be reviewed annually by our Remuneration Committee to ensure that their remuneration packages are in line with our staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities. Additionally, it should be noted that the Employee Share Option Scheme and the Performance Share Plan will be administered by our Remuneration Committee. Our Remuneration Committee will review our obligations arising in the event of termination of service contracts entered into between our Group and our Executive Directors or Executive Officers, as the case may be, to ensure that the service contracts contain fair and reasonable termination clauses which are not overly onerous to our Group. If necessary, our Remuneration Committee shall seek expert advice within and/or outside our Company on remuneration matters. Our Remuneration Committee shall ensure that the existing relationships, if any, between our Company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants. Our Remuneration Committee will also perform an annual review of the remuneration packages in order to maintain their attractiveness to retain and motivate our Directors and Executive Officers, and to align their interests with the long-term interests of our Company. 227

236 EXCHANGE CONTROLS Singapore There are no exchange controls in Singapore. Malaysia Exchange control in Malaysia is implemented under the FSA and the IFSA and the government authority is the Foreign Exchange Administration Department ( FEA ) of Bank Negara. Payments or repatriation of moneys from our subsidiaries in Malaysia to us are considered payments from residents to non-residents for the purposes of exchange control. Under Notice 4 of the current foreign exchange rules ( FER ) issued by the FEA, a resident is allowed to make or receive payment in RM in Malaysia to or from a non-resident under the following circumstances: (a) (b) (c) (d) (e) (f) (g) (h) settlement of an RM asset including any income and profit due from the RM asset; settlement of trade in goods; settlement of services, in any manner; income earned or expense incurred in Malaysia; settlement of a commodity Murabahah transaction between a resident and non-resident participant undertaken through a resident commodity trading service provider; settlement of reinsurance for domestic insurance business or Retakaful for domestic Takaful business between a resident and a person licensed to undertake Labuan insurance or Takaful business; settlement of a non-financial guarantee denominated in RM issued by a person licensed to undertake Labuan banking business in favour of a resident; or for any purpose between immediate family members. With respect to foreign currencies, payment may be made and received between a resident and a non-resident for any purpose, other than for: (a) (b) (c) a derivative denominated in foreign currency offered by the resident save where it has been approved by Bank Negara or allowed under the issuance, buying or selling of financial instrument or Islamic financial instrument in Notice 5 of the FER issued by Bank Negara; a derivative denominated in foreign currency offered by the non-resident; or a derivative denominated in or referenced to RM save where it has been approved by Bank Negara or allowed under the issuance, buying or selling of financial instrument or Islamic financial instrument in Notice 5 of the FER issued by Bank Negara. 228

237 EXCHANGE CONTROLS Notwithstanding that payments may not be made or received between a resident and a non-resident under a derivative denominated in foreign currency offered by the non-resident, payment in foreign currency is allowed for: (a) (b) (c) a derivative denominated in foreign currency, other than exchange rate derivative with reference to RM, purchased by a licensed onshore bank for its own account; an interest rate swap denominated in foreign currency between a resident and Labuan banks to manage interest rate exposure arising from borrowing in foreign currency as set out in Part A of Notice 2 of the FER issued by Bank Negara on borrowing by resident; or derivative denominated in foreign currency, other than exchange rate derivatives, offered on a Specified Exchange stipulated under the CMSA undertaken through a resident futures broker by a resident with firm commitment. For the purpose of payment arising from the settlement of services, a resident is allowed to receive such payment in foreign currency from a non-resident in any manner. If the payment between a resident and a non-resident is for purposes otherwise than allowed above, the parties would be required to obtain the express written consent of Bank Negara to proceed with such payment. Based on the Supplementary FX Rules, we are allowed to: (a) (b) hedge our foreign currency exposure; and cancel our hedging position, for USD/RM and CNH/RM currency pairs with a licensed onshore bank without documentary evidence up to an aggregate net open position limit of RM6.0 million per licensed onshore bank. Pursuant to the Supplementary FX Rules, a resident exporter is allowed to retain up to 25.0% of foreign currency proceeds from its exports of goods. The balance of foreign currency proceeds from the exports of goods shall be converted into RM with a licensed onshore bank. Exchange controls relating to borrowing in foreign currency or from non-residents Also, as at the Latest Practicable Date, resident companies are free to borrow any amount in foreign currency from licensed onshore banks or through the issuance of foreign currency debt securities to another resident. Resident companies are only allowed to borrow in foreign currency of up to RM100 million equivalent in aggregate from other non-residents. The RM100 million equivalent is based on the aggregate borrowing of the resident entity and other resident entities within its group of entities with parent-subsidiary relationship. Resident companies are also allowed to borrow any amount in foreign currency from their resident or non-resident entities within its group of entities or resident or non-resident direct shareholders unless the borrowing is from non-resident financial institutions or non-resident special purpose vehicles which are set up to obtain borrowing from any person which is not part of the resident entity s group of entities. With respect to borrowing in ringgit from non-residents, a resident company is allowed to borrow in ringgit up to RM1,000,000 in aggregate for use in Malaysia from any non-resident other than a non-resident financial institution and the RM1,000,000 shall be based on the aggregate borrowing of the resident company and other resident entities within its group of entities with 229

238 EXCHANGE CONTROLS parent-subsidiary relationship. Notwithstanding this, a resident company is allowed to borrow in ringgit in any amount to finance activities in the real sector in Malaysia from a non-resident entity within its group of entities or its non-resident direct shareholder but it does not apply to borrowing in ringgit by a resident company from a non-resident financial institution or a non-resident special purpose vehicle which is used to obtain borrowing from any person which is not part of the resident company s group of entities. Indonesia Law No. 24 Year 1999 dated 17 May 1999 concerning the Foreign Exchange Flow and Exchange Rate System ( Law No. 24/1999 ) provides that a person may freely hold, use and transfer foreign exchange. The transfer of foreign exchange to and from abroad is, however, subject to the reporting requirement to Bank Indonesia as stated in Bank Indonesia Regulation No. 16/22/PBI/2014 dated 31 December 2014 concerning the Reporting of Foreign Exchange Flow Activities and the Application of Prudence Principles in the Management of Offshore Loan Activities by Non-Bank Corporation ( PBI No. 16/22/2014 ) which revokes the previous PBI that stipulate the same matter, namely Bank Indonesia Regulation No. 14/21/PBI/2012 dated 21 December Under the PBI No. 16/22/2014, any individuals, legal entities or other institutions which are domiciled or plan to be domiciled in Indonesia for at least 1 year ( Resident ) which performs the Foreign Exchange Flow Activities, whether for its own interest or for other party s interest must submit the Foreign Exchange Flow Activities report to Bank Indonesia. Foreign Exchange Flow Activities include all activities causing the movement of financial asset and liabilities between Resident and non-resident, including the movement of Foreign Financial Asset and Foreign Financial Liability between Residents as stipulated in Law No. 24/1999. In this context, Foreign Financial Asset is defined as the asset of resident towards non-resident, either in foreign currency or Rupiah, among others, in the form of cash in foreign currency, saving, trade or business receivables, commercial papers and capital participation. Whereas Foreign Financial Liability is defined as the liability of Resident towards non-resident, either in foreign currency or Rupiah, among others, it can be in the form of offshore loan and equity from the non-resident. For certain transactions, Bank Indonesia restricts the use of Indonesian currency. For export financing and offshore loans, Bank Indonesia also requires that any export and offshore borrowing proceeds (in foreign currency) must be drawn down through domestic banks appointed by Bank Indonesia licensed as a foreign exchange bank, as stipulated under Bank Indonesia Regulation No. 16/10/PBI/2014 dated 14 May 2014 concerning Acceptance of Export s Proceeds and Withdrawal of Offshore Loan s Proceeds as amended by Bank Indonesia Regulation No. 17/23/PBI/2015 dated 23 December Bank Indonesia does not require the proceeds in foreign currency to be converted into Indonesian Rupiah or to be kept for a specified time period. The rule seeks to bring the Indonesian export s proceeds into an Indonesia banking system, but maintains the free foreign exchange movement policy. Additionally, in March 2015, Bank Indonesia issued Bank Indonesia Regulation No. 17/3/PBI/2015 concerning Mandatory Use of Rupiah within the Republic of Indonesia ( PBI No. 17/3/2015 ), as further explained by Bank Indonesia Circular Letter No. 17/11/DKSP concerning Mandatory Use of Rupiah within the Republic of Indonesia ( SEBI ). PBI No. 17/3/2015 and SEBI No. 17/11/DKSP lay down the rule that any transaction carried out in Indonesia, both by residents or non-residents must be in Indonesian Rupiah, and parties are prohibited from refusing to accept the Indonesian Rupiah as payment if rupiah must be used for such a transaction. PBI No. 17/3/2015 and SEBI No. 17/11/DKSP also prohibit the use of dual price denomination using Indonesian Rupiah and another currency. 230

239 EXCHANGE CONTROLS The following types of transactions are specifically exempted under PBI No. 17/3/2015 and SEBI No. 17/11/DKSP: Transactions that implement the state budget. Acceptance or disbursement of grants from or to overseas, where the payer or recipient is located outside of Indonesia. Certain international trade transactions. Bank savings in foreign currency. International financing transactions. Foreign currency transactions entered into under laws and regulations that apply to specific business or industry sectors. Infrastructure project finance approved by Bank Indonesia where the project is a strategic project endorsed by the central or regional government, as evidenced by a statement letter issued by the relevant government body. According to the Bank Indonesia, capital contribution in a foreign investment company ( FIC ) is exempted from the obligation to use Indonesian Rupiah. The same applies to the transfer of shares in an FIC, either by a local or foreign shareholder. However, the salary of foreign nationals paid by an FIC is subject to the mandatory obligation to use Indonesian Rupiah. Such a salary can only be exempted from this obligation if it is paid by the foreign shareholders or investors of the FIC. However, the Bank Indonesia may take a different stance in the future. The Central Bank Circular specifies that if there are difficulties for businesses with specific characteristics, it can use discretion to issue policies based on special considerations. The mandatory use of the Indonesian Rupiah for all cash and non-cash transactions and other requirements under PBI No. 17/3/2015 and SEBI No. 17/11/DKSP took effect on 1 July There is no restriction for Indonesian residents to open and hold offshore accounts. Hong Kong There are no exchange controls in Hong Kong. 231

240 DESCRIPTION OF OUR SHARES The statements below provide, among other things, a description of Shareholders voting rights, restrictions on the transferability of shareholdings, Shareholders rights to share in any surplus in the event of liquidation, and information about our share capital. ORDINARY SHARES AND PREFERENCE SHARES Our Constitution provide that we may, subject to the provisions of the Companies Act and the prevailing rules of the SGX-ST, issue shares of a different class with preferential, deferred, qualified or other special rights, privileges or conditions as our Board of Directors may determine and may issue preference shares which are, or at our option are, subject to redemption, subject to certain limitations. We, however, will not be issuing different classes of ordinary shares pursuant to the Placement or otherwise. As at the date of this Offer Document, the total issued and paid-up share capital of our Company is S$4,000,000 comprising 80,000,000 Shares, all of which are fully paid up. There are no preference shares in issue. All of our ordinary shares are in registered form. We may, subject to the provisions of the Companies Act and the Catalist Rules, purchase our own Shares. However, we may not, except in circumstances permitted by the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our own ordinary shares. NEW ORDINARY SHARES New Shares may only be issued with prior approval from a general meeting of our Shareholders. Our Shareholders may by ordinary resolution give our Directors authority to allot and issue Shares and/or convertible securities in our Company. The maximum number of Shares to be issued upon conversion is determinable at the time of the issue of such convertible securities (whether by way of rights, bonus or otherwise). Shares and/or convertible securities may be issued at any time and from time to time thereafter to such persons and on such terms and conditions and for such purposes as our Directors may in their absolute discretion deem fit, provided always that the aggregate number of Shares (including Shares to be issued pursuant to such convertible securities) must not exceed 100.0% of the issued share capital of our Company, of which the aggregate number of Shares (including Shares to be issued pursuant to such convertible securities) issued other than on a pro rata basis to existing Shareholders shall not exceed 50.0% of the issued share capital of our Company (the percentage of issued share capital being based on the issued share capital at the time of passing of the resolution after adjusting for new Shares arising from the conversion of any convertible securities or share options in issue at the time such authority is given and for any subsequent consolidation or subdivision of Shares). Unless revoked or varied by our Shareholders at a general meeting, such authority shall continue in force until the conclusion of the next annual general meeting of our Company or the expiration of the period within which the next annual general meeting of our Company is required by law to be held, whichever is the earlier. SHAREHOLDERS Only persons who are registered in our register of Shareholders and, in cases in which the person so registered is CDP, the persons named as the Depositors in the Depository Register maintained by CDP for our Shares, are recognised as shareholders. For the purpose of determining the number of votes which a Shareholder who is an account-holder directly with CDP or a Depository Agent, or his proxy, may cast at any general meeting on a poll, the reference to Shares held or represented shall, in relation to Shares of that Shareholder, be the 232

241 DESCRIPTION OF OUR SHARES number of Shares entered against his name in the Depository Register maintained by CDP 72 hours (or such other length of time as may be required and/or permitted under the Companies Act) before the time of the relevant general meetings as certified by CDP to us. We will not, except as required by law, recognise any equitable, contingent, future or partial interest in any ordinary share or other rights for any ordinary share other than the absolute right thereto of the registered holder of the ordinary share or of the person whose name is entered in the Depository Register for that ordinary share. We may close the register of Shareholders for any time or times if we provide the SGX-ST with at least five (5) clear Market Days notice. However, the register may not be closed for more than 30 days in aggregate in any calendar year. We would typically close the register to determine our Shareholders entitlement to receive dividends and other distributions. TRANSFER OF ORDINARY SHARES Our Board of Directors may decline to register any transfer of ordinary shares which are not fully paid Shares or ordinary shares on which we have a lien. Our Board of Directors may also decline to register any instrument of transfer unless, among other things, it has been duly stamped and is presented for registration together with the share certificate and such other evidence of title as they may require. Ordinary shares may be transferred by a duly signed instrument of transfer in any form approved by our Directors and the SGX-ST. There is no restriction on the transfer of fully paid Shares except where required by law or the Catalist Rules or by-laws of the SGX-ST. A Shareholder may transfer any ordinary shares held through the SGX-ST book-entry settlement system by way of a book-entry transfer without the need for any instrument of transfer. We will replace lost or destroyed certificates for Shares if we are properly notified and if the applicant pays a fee which will not exceed S$2.00 and furnishes any evidence and indemnity that our Board of Directors may require. A Shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxies need not be a Shareholder. A person who holds Shares through the SGX-ST book-entry settlement system will only be entitled to vote at a general meeting as a Shareholder if his name appears on the Depository Register maintained by CDP 72 hours (or such other length of time as may be required and/or permitted under the Companies Act) before the general meeting. VOTING RIGHTS Except as otherwise provided in our Constitution, two (2) or more Shareholders must be present in person or by proxy to constitute a quorum at any general meeting. Under our Constitution: if required by the Catalist Rules, all resolutions at general meetings shall be voted by poll; on a show of hands, every Shareholder present in person or by proxy shall have one (1) vote (provided that in the case of a Shareholder who is represented by two proxies, only one (1) of the two (2) proxies as determined by that Shareholder or, failing such determination, by the chairman of the meeting (or by a person authorised by the chairman) shall be entitled to vote on a show of hands); and on a poll, every Shareholder present in person or by proxy shall have one (1) vote for each Share which he holds or represents. 233

242 DESCRIPTION OF OUR SHARES In the event that voting by poll is not required by the Catalist Rules, a poll may nevertheless be demanded in certain circumstances, including: by the chairman of the meeting; by any two (2) Shareholders present in person or by proxy and entitled to vote; or by any Shareholder present in person or by proxy and representing not less than 10.0% of the total voting rights of all Shareholders having the right to attend and vote at the meeting. A poll on the election of a chairman of a meeting or on a question of adjournment shall be taken immediately. In the case of a tied vote, whether on a show of hands or a poll, the chairman of the meeting shall be entitled to a casting vote. GENERAL MEETINGS OF SHAREHOLDERS We are required to hold an annual general meeting every year. Our Board of Directors may convene an extraordinary general meeting whenever it thinks fit and must do so if Shareholders representing not less than 10.0% of the total voting rights of all Shareholders request in writing that such a meeting be held. In addition, two (2) or more Shareholders holding not less than 10.0% of our issued share capital may call a meeting. Unless otherwise required by law or by our Constitution, voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example, for the appointment of directors. A special resolution, requiring the affirmative vote of at least 75.0% of the votes cast at the meeting, is necessary for certain matters under Singapore law, such as the voluntary winding up of our Company, amendments to our Constitution, a change of our Company s corporate name and a reduction in our share capital. We must give at least 21 days notice in writing for every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions generally require at least 14 days notice in writing. For so long as our Shares are listed on Catalist, at least 14 days notice of any general meeting shall be given in writing to the SGX-ST and by advertisement in the daily press. The notice must be given to every Shareholder holding shares conferring the right to attend and vote at the meeting and must set forth the place, the day and the hour of the meeting and, in the case of special business, the general nature of that business. All general meetings shall be held in Singapore. LIMITATIONS ON RIGHTS TO HOLD OR VOTE SHARES Singapore law and our Constitution do not impose any limitations on the right of non-resident or foreign Shareholders to hold or exercise voting rights attached to our Shares. DIVIDENDS We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we may not pay dividends in excess of the amount recommended by our Board of Directors. Our Board of Directors may also declare an interim dividend without the approval of our Shareholders. We must pay all dividends out of our profits. All dividends we pay to our Shareholders are pro rata in amount in proportion to the amount paid-up on each Shareholder s Shares, unless the rights attaching to an issue of any Share provide otherwise. 234

243 DESCRIPTION OF OUR SHARES Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to each Shareholder at his registered address appearing in our register of members or (as the case may be) the Depository Register. However, our payment to CDP of any dividend payable to a Shareholder whose name is entered in the Depository Register shall, to the extent such payment is made to CDP, discharge us from any liability to that Shareholder in respect of that payment. BONUS AND RIGHTS ISSUE Our Board of Directors may, with the approval from our Shareholders at a general meeting, capitalise any amounts standing to the credit of our reserve funds or otherwise available for distribution or accounts to the credit of the profit and loss account and distribute the same as bonus Shares credited as paid-up to the Shareholders in proportion to their shareholdings. Our Board of Directors may also issue bonus Shares to participants of any share incentive or option scheme or plan implemented by our Company and approved by our Shareholders in such manner and on such terms as our Board of Directors shall think fit. Our Board of Directors may also issue rights to take up additional Shares to Shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached to such issue and the regulations of any securities exchange upon which our Shares are listed. TAKE-OVERS The Companies Act, the Securities and Futures Act and the Singapore Take-over Code regulate the acquisition of ordinary shares of public companies and contain certain provisions that may delay, deter or prevent a future take-over or change in control of our Company. If any person acquires an interest resulting in him, either on his own or together with parties acting in concert with him, holding 30.0% or more of our voting shares, or, if any person holding, either on his own or together with parties acting in concert with him, between 30.0% and 50.0% (both inclusive) of our voting Shares acquires (either on his own or together with parties acting in concert with him) more than 1.0% of our voting Shares within any six (6)-month period, such person must extend a take-over offer for the remaining voting shares in accordance with the provisions of the Singapore Take-over Code. Parties acting in concert comprise individuals or companies who, pursuant to an arrangement or understanding (whether formal or informal), co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate effective control of that company. Certain persons are presumed (unless the presumption is rebutted) to be acting in concert with each other. They are as follows: a company and its related companies, the associated companies of any of the company and its related companies and companies whose associated companies include any of these companies; any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the entities set out immediately above for the purchase of voting rights; a company and its directors (together with their close relatives, related trusts and companies controlled by any of the directors, their close relatives and related trusts); a company and its pension funds and share schemes; 235

244 DESCRIPTION OF OUR SHARES a person and any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, but only in respect of the investment account which such person manages; a financial or other professional adviser including a stockbroker, with its clients in respect of shares held by (i) the adviser and persons controlling, controlled by or under the same control as the adviser and (ii) all the funds managed by the adviser on a discretionary basis, where the shareholdings of the adviser and any of those funds in the client total 10.0% or more of the client s equity share capital; directors of a company (together with their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for the company may be imminent; partners; an individual and his close relatives, related trusts, any person who is accustomed to act in accordance with his instructions and companies controlled by the individual, his close relatives, his related trusts or any person who is accustomed to act in accordance with his instructions; and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the persons set out immediately above for the purchase of voting rights. A mandatory offer for consideration other than cash must, subject to certain exceptions, be accompanied by a cash alternative at not less than the highest price paid by the offeror or parties acting in concert with the offeror within the six (6) months preceding the acquisition of shares that triggered the mandatory offer obligation. Under the Singapore Take-over Code, where effective control of a public company incorporated in Singapore is acquired or consolidated by a person, or persons acting in concert, a general offer to all other shareholders is normally required. An offeror must treat all shareholders of the same class in an offeree company equally. A fundamental requirement is that shareholders in the company subject to the take-over offer must be given sufficient information, advice and time to consider and decide on the offer. LIQUIDATION OR OTHER RETURN OF CAPITAL If the Company liquidates or in the event of any other return of capital, holders of the Shares will be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special rights attaching to any other class of shares then existing. INDEMNITY As permitted by Singapore law, our Constitution provides that, subject to the Companies Act, we will indemnify our Board of Directors and officers against any liability incurred in defending any proceedings, whether civil or criminal, which relate to anything done or omitted to have been done as an officer, director or employee and in which judgement is given in his favour or if the 236

245 DESCRIPTION OF OUR SHARES proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part or in which he is acquitted or in connection with any application for relief which is granted to him by the court. We may not indemnify directors and officers against any liability which by law would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust of which they may be guilty in relation to the Company. SUBSTANTIAL SHAREHOLDINGS Under the Securities and Futures Act, a person has a substantial shareholding in our Company if he has an interest (or interests) in one (1) or more voting shares (excluding treasury shares) in our Company and the total votes attached to that share or those shares, is not less than 5.0% of the aggregate of the total votes attached to all voting shares (excluding treasury shares) in our Company. The Securities and Futures Act requires our Substantial Shareholders, or if they cease to be our Substantial Shareholders, to give notice to us of particulars of the voting shares in our Company in which they have or had an interest (or interests) and the nature and extent of that interest or those interests, and of any change in the percentage level of their interest. In addition, the deadline for a Substantial Shareholder to make disclosure to our Company under the Securities and Futures Act is two (2) business days after he becomes aware: that he is or (if he had ceased to be one) had been a Substantial Shareholder; of any change in the percentage level in his interest; or that he had ceased to be a Substantial Shareholder, there being a conclusive presumption of a person being aware of a fact or occurrence at the time at which he would, if he had acted with reasonable diligence in the conduct of his affairs, have been aware. Following the above, we will in turn announce or otherwise disseminate the information stated in the notice to the SGX-ST as soon as practicable and in any case, no later than the end of the Singapore business day following the day on which we received the notice. Percentage level, in relation to a Substantial Shareholder in our Company, means the percentage figure ascertained by expressing the total votes attached to all the voting shares in our Company in which the Substantial Shareholder has an interest (or interests) immediately before or (as the case may be) immediately after the relevant time as a percentage of the total votes attached to all the voting shares (excluding treasury shares) in our Company, and, if it is not a whole number, rounding that figure down to the next whole number. While the definition of an interest in our voting shares for the purposes of substantial shareholder disclosure requirements under the Securities and Futures Act is similar to that under the Companies Act, the Securities and Futures Act provides that a person who has authority (whether formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of, a voting share is regarded as having an interest in such share, even if such authority is, or is capable of being made, subject to restraint or restriction in respect of particular voting shares. 237

246 DESCRIPTION OF OUR SHARES MINORITY RIGHTS The rights of minority shareholders of Singapore incorporated companies are protected under Section 216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon application by any Shareholder of the Company, as they think fit to remedy any of the following situations: our affairs are being conducted or the powers of our Board of Directors are being exercised in a manner oppressive to, or in disregard of the interests of, one (1) or more of our Shareholders; or we take an action, or threaten to take an action, or the Shareholders pass a resolution, or threaten to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one (1) or more of our Shareholders, including the applicant. Singapore courts have wide discretion as to the relief they may grant and that relief is in no way limited to the relief listed in the Companies Act. Without prejudice to the foregoing, Singapore courts may among other things: direct or prohibit any act or cancel or vary any transaction or resolution; regulate the conduct of our affairs in the future; authorise civil proceedings to be brought in our name, or on our behalf, by a person or persons and on such terms as the court may direct; provide for the purchase of a minority Shareholder s Shares by our other Shareholders or by the Company and, in the case of a purchase of Shares by us, a corresponding reduction of our share capital; or provide that the Company be wound up. 238

247 TAXATION SINGAPORE TAXATION The following is a discussion of certain tax matters relating to Singapore income tax, capital gains tax, stamp duty, estate duty and GST consequences in relation to the purchase, ownership and disposal of our Shares based on the current tax laws in Singapore. The discussion is limited to a general description of certain tax consequences in Singapore with respect to ownership of our Shares by Singapore investors, and does not purport to be a comprehensive nor exhaustive description of all of the tax considerations that may be relevant to a decision to purchase our Shares. It is also not intended to be and does not constitute legal or tax advice. The discussion below is based on the assumption that our Company is a tax resident in Singapore for Singapore income tax purposes. The laws, regulations and interpretations, may change at any time, and any change could be made on a retroactive basis. These laws and regulations are also subject to various interpretations and no assurance can be given that the relevant tax authorities or the courts of Singapore will agree with the explanations or conclusions set out below or that changes in such laws and regulations will not occur. Prospective subscribers should consult their tax advisers and/or legal advisers concerning the tax consequences of owning and disposing of our Shares. Neither our Company, our Directors nor any other persons involved in this Placement accepts responsibility for any tax effects or liabilities resulting from the subscription, purchase, holding or disposal of our Shares. Income Tax Individual Taxpayers An individual taxpayer (both resident and non-resident) is subject to Singapore income tax on income accrued in or derived from Singapore, subject to certain exceptions. Foreign-sourced income received or deemed received by a Singapore tax resident individual is generally exempt from income tax in Singapore (except for such income received through a partnership in Singapore) if the Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the individual. Certain Singapore-sourced investment income received or deemed received by individuals is also exempt from tax. Currently, a Singapore tax resident individual is subject to tax at the progressive rates, ranging from 0.0% to 22.0% with effect from the YA A non-singapore tax resident individual is normally taxed at the prevailing tax rate of 22% for director s fees and other income, while Singapore employment income for a non-singapore tax resident is taxed at a flat rate of 15.0% or at resident rates, whichever yields a higher tax. An individual is regarded as a tax resident in Singapore if in the calendar year preceding the YA, he was physically present in Singapore or exercised an employment in Singapore (other than as a director of a company) for 183 days or more, or if he ordinarily resides in Singapore. Corporate Taxpayers A company is regarded as resident in Singapore for Singapore tax purposes if the control and management of its business is exercised in Singapore. As a general rule, the control and management of a company s business is vested in its board of directors and hence the place of residence of the company is usually where the board meetings are held. 239

248 TAXATION Singapore tax resident companies are subject to Singapore income tax on income accruing in or derived from Singapore and on foreign-sourced income received or deemed received in Singapore, subject to certain exceptions. Foreign-sourced income in the form of dividends, branch profits and service income received or deemed to be received in Singapore by Singapore tax resident companies are exempt from Singapore income tax if the following prescribed conditions are met: (i) (ii) (iii) such income is subject to tax of a similar character to income tax under the law of the jurisdiction from which such income is received; at the time the income is received in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which the income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is not less than 15.0%; and the Singapore Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the Singapore tax resident. Non-Singapore tax resident companies are subject to income tax on income accruing in or derived from Singapore, and on foreign-sourced income received or deemed received in Singapore, but generally only where such taxpayer is considered to be operating in or from Singapore. The corporate tax rate in Singapore for both resident and non-resident companies is currently 17.0%. Corporate tax exemption will apply to the first S$300,000 of a company s normal chargeable income as follows: (i) (ii) 75.0% of up to the first S$10,000 of a company s normal chargeable income; and 50.0% of up to the next S$290,000 of a company s normal chargeable income. The remaining chargeable income (after the above partial tax exemption) will be fully taxable at the prevailing corporate tax rate of 17.0%. In Budget 2016, the Minister for Finance announced that a corporate tax rebate of 50.0% of the corporate income tax payable, capped at S$20,000 per YA, will be available to corporate tax payers for the YAs 2016 and The aforementioned rebate will not apply to income derived by a non-singapore tax resident company that is subject to final withholding tax. For newly incorporated Singapore tax resident companies with no more than 20 individual shareholders of which at least one is an individual holding at least 10.0% of the total number of issued ordinary shares throughout the basis period relating to the year of assessment of claim, the full sum of the first S$100,000 and one-half of up to the next S$200,000 of a company s chargeable income is exempt from corporate tax for the first three (3) years of assessment. 240

249 TAXATION Dividend Distributions Singapore adopts the One-Tier Corporate Taxation System ( One-Tier System ), Under the One-Tier System, the tax collected from corporate profits is a final tax and the after-tax profits of the company resident in Singapore can be distributed to the shareholders as tax exempt (one-tier) dividends. Such dividends are tax exempt in the hands of the shareholders. Singapore does not currently impose withholding tax on dividends paid to resident or non-resident shareholders. Foreign shareholders are advised to consult their own tax advisers to take into account the tax laws of their respective home countries/countries of residence and the applicability of any double taxation agreement which their country of residence may have with Singapore. Capital Gains Tax In general, there is no tax on capital gains in Singapore. Thus, any gains derived from the disposal of our Shares acquired for long-term investment will not be taxable in Singapore if they are capital in nature. On the other hand, where the taxpayer is deemed by the IRAS to be carrying on a trade or business of dealing in shares in Singapore, gains from disposal of shares are of an income nature (rather than capital gains) and thus subject to Singapore income tax. Subject to certain conditions being met, gains derived from the disposal of ordinary shares by companies, during the period 1 June 2012 to 31 May 2022* (both dates inclusive) will not be subjected to Singapore tax, if the divesting company holds a minimum shareholding of 20.0% of the ordinary shares in the company whose shares are being disposed for a minimum continuous period of 24 months. Other than the above, there are no specific laws or regulations which deal with the characterisation of capital gains, and hence, gains may be construed to be of an income nature and subject to tax especially if they arise from activities which the IRAS regards as the carrying on of a trade in Singapore. Foreign sellers are advised to consult their own tax advisers to take into account the applicable tax laws of their respective home countries or countries of residence as well as the provisions of any applicable double taxation agreement. Stamp Duty There is no stamp duty payable on the subscription of our Shares. Where an instrument of transfer is executed in respect of our Shares, stamp duty is payable on such instrument of transfer at the rate of 0.2% of the purchase consideration or market value of our Shares, whichever is higher. 241

250 TAXATION The purchaser is liable for stamp duty, unless otherwise agreed. No stamp duty is payable if no instrument of transfer is executed or the instrument of transfer is executed outside Singapore. However, stamp duty would be payable if the instrument of transfer which is executed outside Singapore is subsequently received in Singapore. Stamp duty is not applicable to electronic transfers of our Shares through the CDP system. * This is the extended date as proposed in Budget The existing legislation provides for the exemption to expire on 31 May Estate Duty Singapore estate duty has been abolished with effect from 15 February Goods and Services Tax The sale of our Shares by a GST-registered investor belonging in Singapore to another person belonging in Singapore is an exempt supply and would not be subject to GST. Any GST incurred by the GST-registered investor in respect of such exempt supplies is not recoverable from the Comptroller of GST, Singapore. Where our Shares are sold by a GST-registered investor to a person belonging to a country other than Singapore, the sale is a zero-rated supply (i.e. subject to GST at zero rate). Any GST incurred by a GST-registered investor in making a zero-rated supply may be recoverable as input GST from the Comptroller of GST, Singapore, subject to the conditions. Services such as brokerage, handling and clearing services rendered by a GST-registered person an investor belonging in Singapore in connection with the investor s purchase, sale or holding of our Shares will be subject to GST at the standard rate of 7.0%. Similar services rendered contractually to an investor belonging outside Singapore should qualify for zero-rating (i.e. subject to GST at zero rate) provided that the investor is not physically present in Singapore at the time the services are performed and the services do not directly benefit a person who belongs in Singapore. Investors should seek their own tax advice on the recoverability of GST incurred on expenses in connection with purchase and sale of our Shares. MALAYSIAN TAXATION The following discussion describes the material Malaysian tax on dividend and tax on gains from sale: Dividend Distributions The single-tier tax system was introduced in Budget 2008 to replace the imputation system with effect from year of assessment Under this system, corporate income is taxed at corporate level and this is a final tax. Companies may declare single tier exempt dividend that would be exempt from tax in the hands of their shareholders. Malaysia does not currently impose withholding tax on dividends paid to resident or non-resident shareholders. 242

251 TAXATION Resident companies are currently taxed at the rate of 25.0% (reduced to 24.0% with effect from year of assessment 2016) while resident companies which have paid-up capital in respect of ordinary shares of RM2.5 million and less are taxed at the following scale rates: Chargeable income Current tax rate Year of Assessment 2016 The first RM500, % 19.0% In excess of RM500, % 24.0% The companies must not be part of a group of companies where any of their related companies have a paid-up capital of more than RM2.5 million. Gains on Disposal of the Shares in a Malaysian company There is no capital gains tax in Malaysia except for real property gains tax which is charged upon gains arising from the disposal of real property in Malaysia or shares in a real property company incorporated in Malaysia. A real property company is defined as: (a) (b) a controlled company which, as at 21 October 1988, owns real property or shares or both, the defined value of which is not less than 75.0% of the value of its total tangible assets; or a controlled company to which subparagraph (a) is not applicable, but which, at any date after 21 October 1988, acquires real property or shares or both whereby the defined value of real property or shares or both owned at that date is not less than 75.0% of the value of its total tangible assets. Provided that where at any date the company disposes of real property or shares or both whereby the defined value of real property or shares or both owned at that date and thereafter is less than seventy-five per cent of the value of its total tangible assets, that company shall not be regarded as real property company as from that date. Any gains from the sale of shares in a Malaysian company by a person who deals in shares may be regarded as income and is subject to income tax under the Malaysia Income Tax Act, INDONESIAN TAXATION The following is a summary of the principal Indonesian tax consequences relevant to the prospective investor based on Indonesian tax laws and their implementing regulations in force as at the date of this Offer Document. The summary does not address any laws other than the tax laws of the Republic of Indonesia. General Resident taxpayers, individual or corporate, are subject to income tax in Indonesia on worldwide income. Foreign tax may be claimed as a tax credit subject to a limitation rule. Generally, an individual is considered to be a non-resident of Indonesia if the individual does not reside in Indonesia or does not intend to stay in Indonesia for more than 183 days within a twelve-month period. A company will be considered a non-resident of Indonesia if the company is not established or domiciled in Indonesia. In determining the residency and tax status of an individual or corporation, consideration will also be given to the provision of any applicable agreement for 243

252 TAXATION the avoidance of double taxation ( tax treaty ) which Indonesia has concluded with other countries. In this section, both non-resident individuals and non-resident corporations will be referred to as non-resident taxpayers. Corporate income tax is imposed at a flat rate of 25.0% (for fiscal year 2010 onwards). This rate applies to Indonesian companies and foreign companies operating in Indonesia through a permanent establishment. The tax rate is reduced by 5 percentage points for qualified companies which listed in stock exchange in Indonesia. Small and medium-scale companies (that is, companies having gross turnover of up to IDR 50 billion) are entitled to a 50.0% reduction of the tax rate. The reduced rate applies to taxable income corresponding to gross turnover of up to IDR 4,800,000,000. Subject to the provisions of any applicable tax treaty, non-resident taxpayers, namely individuals or corporations not domiciled or established in Indonesia, which derive income sourced in Indonesia from, among other things, interest, royalties or dividends from Indonesia, are subject to a final withholding tax on that income at the rate of 20.0%, so long as the income is not effectively connected with a permanent establishment of such individuals or corporations in Indonesia. If the income is effectively connected with a permanent establishment in Indonesia, such income shall be regarded as income earned by the permanent establishment. Income earned by the permanent establishment is subject to the income tax rate applied to income earned by an Indonesian corporate tax resident, which is 25.0%. Further, branch profit tax of 20.0% will be imposed on the net profit after income tax. Taxation of Dividends Dividends paid to Indonesian resident corporate taxpayers are subject to withholding tax at the rate of 15.0%. This tax is an advance payment of the dividend recipient s income tax liability. Tax exemption may apply if certain requirements are fulfilled that the dividends are paid from retained earnings and the recipient s share ownership in the payer of the dividends represents a minimum of 25.0% paid-in capital. Dividends exempted from tax are not subject to the 15.0% withholding tax. Dividends received by Indonesian resident individual taxpayers are subject to a final tax with a maximum rate of 10.0%. Dividends remitted overseas are subject to a final 20.0% withholding tax, unless an applicable tax treaty provides a lower rate. Under the current tax treaty between Indonesia and Singapore, the reduced withholding tax rate on dividend distributions from an Indonesian subsidiary is 10.0% in condition that the dividend recipient s has a minimum of 25.0% of the payer of the dividend s capital otherwise 15.0% of tax rate should apply. Capital Gains on disposal of shares A 0.1% final withholding tax is imposed on proceeds of sales of publicly listed shares through the Indonesian stock exchange. An additional tax at a rate of 0.5% of the share value is levied on sales of founder shares associated with a public offering. Capital gains derived by resident shareholders from disposal of non-listed Indonesian company are included in taxable income and are subject to tax at the applicable income tax rate. Capital gains derived by non-resident shareholders are subject to tax at a rate of 20.0%. The law provides that the 20.0% tax is imposed on an amount of deemed income. The Minister of Finance of Indonesia established the deemed income for sales of unlisted shares which equals 25.0% of the 244

253 TAXATION gross sale proceeds, resulting in an effective tax rate of 5.0% of the gross sale proceeds. This rule applies to residents of non-treaty countries and to residents of treaty countries if the applicable treaty allows Indonesia to tax the income. Sale or transfer by non-residents of shares in conduit companies or special purpose companies established or resided in tax haven jurisdictions that have special-relationship with an Indonesian entity or an Indonesian permanent establishment of a foreign entity, is deemed to be a sale or transfer of shares of the Indonesian entity or the permanent establishment (as mentioned above). Anti-Avoidance Rule on the Tax Treaty Indonesia has concluded tax treaties with a number of countries. The relevant tax treaty may also affect the definition of non-resident taxpayers. Where a tax treaty exists and the eligibility requirements of that treaty are satisfied, a reduced rate of withholding tax may be applicable in the case of interest, royalty and dividends. This is also subject to there being no misuse of the tax treaties and the non-resident taxpayers meeting the administrative requirements under the Indonesian tax regulations. Some tax treaties also provide an exemption from Indonesian tax on any capital gains of non-resident taxpayers arising from alienation of certain properties in Indonesia. To obtain the benefit of an applicable tax treaty, the non-resident taxpayer must be the beneficial owner of the income received from Indonesia and comply with the eligibility requirements of the tax treaty and the specific requirements in Indonesia. Value-added tax ( VAT ) An amendment of the VAT Law was signed into law by the President of the Republic of Indonesia on 15 October 2009, following ratification from the parliament in mid-september The amendment, as provided under Law Number 42 Year 2009, is the third amendment of the 1983 VAT law (Law Number 8 Year 1983). The changes have come into effect on 1 April VAT is imposed on delivery of most goods and services at a rate of 10.0%. Government regulations can adjust the rate to as low as 5.0% and as high as 15.0%. Delivery of certain goods (including coal) or services is not subject to VAT. Any VAT paid for acquisition of goods and/or services that relates to non VAT-able sales is non-creditable and can only be treated as part of expenditures. Under the current VAT legislations, Indonesian Government provides VAT relief in the form of VAT exemption on importation or acquisition of certain strategic goods. Stamp duty According to Government Regulation No. 24 of 2000, generally legal documents or other documents with monetary value are subject to stamp duty. Currently, the nominal amount of the Indonesian stamp duty is IDR 6,000 for legal documents or other documents having a value greater than IDR 1,000,000, IDR 3,000 for transactions having a value ranging from more than IDR 250,000 up to IDR 1,000,000 and free for the transactions having a value up to IDR 250,000. Generally, the stamp duty is due at the time the document is executed. Stamp duty is payable by the party that benefits from the executed document unless both parties state otherwise. 245

254 TAXATION Estate duty Land and Building tax is imposed on individuals, companies or organisations that have certain rights to or obtain benefits from land, or possess, control or obtain benefits from ownership of land and buildings. The tax is based on the government assessed value (rateable value) of the land and buildings as determined by the Ministry of Finance. The current tax on land and buildings could be up to 0.3% of the rateable value. 246

255 CLEARANCE AND SETTLEMENT Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement system of CDP, and all dealings in and transactions of our Shares through the SGX-ST will be effected in accordance with the terms and conditions for the operation of Securities Accounts with the CDP, as amended, modified or supplemented from time to time. Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf of persons who maintain, either directly or through Depository Agents, Securities Accounts with CDP. Persons named as direct Securities Account holders and Depository Agents in the Depository Register maintained by CDP, rather than CDP itself, will be treated, under our Constitution and the Companies Act, as members of our Company in respect of the number of Shares credited to their respective Securities Accounts. Persons holding our Shares in Securities Accounts with CDP may withdraw the number of Shares they own from the book-entry settlement system in the form of physical share certificates. Such share certificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-ST, although they will be prima facie evidence of title and may be transferred in accordance with our Constitution. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as our Directors may decide, is payable to the Share Registrar for each share certificate issued and a stamp duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our Shares or S$0.20 per S$100 or part thereof of the last transacted price where it is withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade on Catalist must deposit with CDP their share certificates together with the duly executed and stamped instruments of transfer in favour of CDP, and have their respective Securities Accounts credited with the number of Shares deposited before they can effect the desired trades. A fee of S$10.00 is payable upon the deposit of each instrument of transfer with CDP. The above fees may be subject to such charges as may be in accordance with CDP s prevailing policies or the current tax policies that may be in force in Singapore from time to time. Transactions in our Shares under the book-entry settlement system will be reflected by the seller s Securities Account being debited with the number of Shares sold and the buyer s Securities Account being credited with the number of Shares acquired. No transfer stamp duty is currently payable for our Shares that are settled on a book-entry basis. A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of % of the transaction value. The clearing fee, instrument of transfer deposit fee and share withdrawal fee may be subject to GST at the prevailing rate of 7.0% (or such other rate prevailing from time to time). Dealing in our Shares will be carried out in Singapore dollars and will be effected for settlement on CDP on a scripless basis. Settlement of trades on a normal ready basis on Catalist generally takes place on the third Market Day following the transaction date, and payment for the securities is generally settled on the following business day. CDP holds securities on behalf of investors in Securities Accounts. An investor may open a direct account with CDP or a sub-account with a Depository Agent. The Depository Agent may be a member company of the SGX-ST, bank, merchant bank or trust company. 247

256 GENERAL AND STATUTORY INFORMATION INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS 1. Save as disclosed below, none of our Directors, Executive Officers or Controlling Shareholders is or was involved in any of the following events: (a) (b) (c) (d) (e) (f) (g) (h) (i) has or had at any time during the last 10 years, an application or a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within two years from the date he ceased to be a partner; has or had at any time during the last 10 years, an application or a petition under any law of any jurisdiction filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within two years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding-up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency; has any unsatisfied judgements against him; has or had ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose; has or had ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach; has or had at any time during the last 10 years, judgement entered against him in any civil proceeding in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part; has or had ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust; has or had ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust; has ever been the subject of any order, judgement or ruling of any court, tribunal or governmental body permanently or temporarily enjoining him from engaging in any type of business practice or activity; 248

257 GENERAL AND STATUTORY INFORMATION (j) has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of affairs of: (i) (ii) (iii) (iv) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; any business trust which has been investigated for breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, in connection with any matter occurring or arising during the period when he was so concerned with the entity or business trust; and (k) has ever been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Authority or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere. Specific disclosures on litigation commenced by Multiview Enterprises Sdn Bhd On or about 1997, Multiview Enterprises Sdn Bhd commenced a civil suit and obtained judgement against Mr Ong Yoke En for the repayment of a sum of RM4,500 due and owing to Multiview Enterprises Sdn Bhd in relation to the acquisition of shares by a Mr Ong King Fatt in Ready Chemical (M) Sdn Bhd, a subsidiary of Multiview Enterprises Sdn Bhd. Multiview Enterprises Sdn Bhd had sought repayment of the sum of RM4,500 from Mr Ong Yoke En as he had acted as a guarantor for Mr Ong King Fatt. Mr Ong Yoke En has made full settlement of the said judgement debt including court costs of RM235. On 12 December 2003, a civil suit originally commenced by Multiview Enterprises Sdn Bhd against OISB in 1999 was struck out by the judicial commissioner presiding on that case. A summons in chambers was thereafter filed by Multiview Enterprises Sdn Bhd on 26 December 2003 to reinstate the case. Such summons in chambers filed by Multiview Enterprises Sdn Bhd was again struck out by the court in As background, and to the best of our Company s knowledge, this civil suit related to an alleged passing off dispute relating to an OEM product manufactured by OISB at that time for one of its customers. OISB had, in the same year and after the commencement of the civil suit, stopped manufacturing this OEM product. For the avoidance of doubt, it was OISB s customer and not OISB which sold the product which was the subject of the dispute. 2. There is no shareholding qualification for Directors under our Constitution. 3. No option to subscribe for shares in, or debentures of, our Company or any of our subsidiaries has been granted to, or was exercised by, any Director or Executive Officer within the last two (2) years preceding the date of this Offer Document. 249

258 GENERAL AND STATUTORY INFORMATION 4. Save as disclosed in the sections entitled Restructuring Exercise and Interested Person Transactions of this Offer Document, no Director or expert is interested, directly or indirectly, in the promotion of, or in any property or assets which have, within the two (2) years preceding the date of this Offer Document, been acquired or disposed of by or leased to us or any of our subsidiaries, or are proposed to be acquired or disposed of by or leased to us or any of our subsidiaries. 5. No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any firm in which such Director or expert is a partner or any corporation in which such Director or expert holds shares or debentures, in cash or shares or otherwise, by any person to induce him to become, or to qualify him as, a Director, or otherwise for services rendered by him or by such firm or corporation in connection with the promotion or formation of our Company. SHARE CAPITAL 6. As at the Latest Practicable Date, there is only one class of shares in the capital of our Company, being ordinary shares in the share capital of our Company. There is no founder, management or deferred share. Our existing Shares do not carry voting rights which are different from the Placement Shares. The rights and privileges attached to our Shares are stated in our Constitution. 7. Save as disclosed below and in the sections entitled Share Capital and Restructuring Exercise of this Offer Document, there were no changes in the share capital or the number and classes of shares of our Company or our subsidiaries within the three (3) years preceding the Latest Practicable Date. Date of issue Number of ordinary shares issued Consideration Purpose of issue Resultant issued share capital The Company 9 March S$1.00 Incorporation S$1.00 OISB 13 December December December December December February November ,166 S$240, Restructuring Exercise 274,630 S$274, Restructuring Exercise 3,121,201 S$3,121, Restructuring Exercise 364,002 S$364, Restructuring Exercise S$240, S$514, S$3,635, S$4,000, RM2.00 Incorporation RM ,998 RM99, Shareholder investment RM100, ,000 Nil Bonus issue RM240,

259 GENERAL AND STATUTORY INFORMATION Date of issue Number of ordinary shares issued Consideration Purpose of issue Resultant issued share capital CPMSB 24 December September September ,000 RM40, Shareholder investment 220,000 RM220, Shareholder investment PTSP 11 June ,000 IDR937,300, (US$100,000.00) RM280, RM500, RM2.00 Incorporation RM March ,000 IDR1,874,600, (US$200,000.00) Incorporation IDR937,300, (US$100,000) Shareholder investment Rp2,811,900, (US$300,000) SWHL 1 August HK$1.00 Incorporation HK$ November ,999 HK$9, Shareholder investment HK$10, Save as disclosed above and in the sections entitled Share Capital Restructuring Exercise and Employee Share Option Scheme and Performance Share Plan of this Offer Document, no shares in, or debentures of, our Company or any of our subsidiaries have been issued, or are proposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash, during the last three years preceding the date of this Offer Document. THE CONSTITUTION OF OUR COMPANY 9. Our Company is registered in Singapore with the Accounting and Corporate Regulatory Authority with registration number C. 10. A summary of our Constitution relating to, among others, Directors powers to vote on contracts in which they are interested, Directors remuneration, Directors borrowing powers, Directors retirement, Directors share qualification, rights pertaining to shares, convening of general meetings and alteration of capital are set out in Appendix D Summary of Constitution of our Company of this Offer Document. Our Constitution is available for inspection at our registered office in accordance with paragraph 27 in the section entitled General and Statutory Information Documents Available for Inspection of this Offer Document. 251

260 GENERAL AND STATUTORY INFORMATION MATERIAL CONTRACTS 11. The following contracts, not being contracts entered into in the ordinary course of business, have been entered into by us within the two (2) years preceding the date of lodgement of this Offer Document and are or may be material: a. Sale and purchase agreement dated 21 November 2016 in respect of the acquisition of shares in OISB. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. b. Sale and purchase agreement dated 26 October 2016 in respect of the acquisition of shares in CPMSB. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. c. Conditional sale and purchase agreement dated 16 November 2016 in respect of the acquisition of shares in PTSP. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. d. Sale and purchase agreement dated 7 November 2016 in respect of the acquisition of shares in SWHL. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. e. Deed of assignment dated 13 December 2016 in respect of the transfer of intellectual property from Mr Ong Yoke En to OISB. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. f. Deed of indemnity dated 23 November 2016 provided by Mr Ong Yoke En to our Group. Please refer to the section entitled Interested Person Transactions Present and Ongoing Interested Person Transactions of this Offer Document for more details. g. Transfer of dividend entitlement agreement dated 23 November 2016 in respect of the transfer of entitlement to dividends of PTSP to our Company. Please refer to the section entitled Restructuring Exercise of this Offer Document for more details. LITIGATION 12. Our Group has not been involved in any legal or arbitration proceedings, including those which are pending or known to be contemplated, which may have, or which have had in the 12 months immediately preceding the date of lodgement of this Offer Document, a material effect on the financial position or profitability of our Group. Our Directors have no knowledge of any proceedings pending or threatened against our Company or any member of our Group or any facts likely to give rise to any litigation, claims or proceedings which might materially affect the financial position or profitability of our Group. 252

261 GENERAL AND STATUTORY INFORMATION MISCELLANEOUS 13. There has been no previous issue of Shares by our Company or offer for sale of our Shares to the public within the two years preceding the date of this Offer Document. 14. Save as disclosed in the section entitled Sponsorship, Management and Placement Agreements of this Offer Document, no commission, discount or brokerage has been paid or other special terms granted within the two years preceding the Latest Practicable Date or is payable to any Director, promoter, expert, proposed director or any other person for subscribing for and/or purchasing or agreeing to subscribe for and/or purchase or procuring or agreeing to procure subscription for and/or purchase of any shares in or debentures of our Company or any of our subsidiaries. 15. No expert is employed on a contingent basis by our Company or any of our subsidiaries, has a material interest, whether direct or indirect, in the shares of our Company or our subsidiaries, or has a material economic interest, whether direct or indirect, in our Company, including an interest in the success of the Placement. 16. Application monies received by our Company in respect of successful applications (including successful applications which are subsequently rejected) will be placed in a separate non-interest bearing account with the Receiving Banker. Any refund of all or part of the application monies to unsuccessful or partially successful applicants will be made without any interest or any share of revenue or any other benefit arising therefrom. 17. Save as disclosed in this Offer Document, the financial condition and operations of our Group are not likely to be affected by any of the following: (a) (b) (c) (d) known trends or demands, commitments, events or uncertainties that will result in or are reasonably likely to result in our Group s liquidity increasing or decreasing in any material way; material commitments for capital expenditure; unusual or infrequent events or transactions or any significant economic changes that may materially affect the amount of reported income from operations; and known trends or uncertainties that have had or that we reasonably expect to have a material favourable or unfavourable impact on revenues or operating income. 18. Save as disclosed in the section entitled Risk Factors and in the Audited Combined Financial Statements, the Unaudited Interim Combined Financial Statements and the Unaudited Pro Forma Combined Financial Statements of this Offer Document, our Directors are not aware of any event which has occurred between 30 June 2016 and the Latest Practicable Date, which may have a material effect on the financial position and results of operations of our Group or the financial information provided in this Offer Document. 19. We currently have no intention of changing the auditors of the companies in our Group after the listing of our Company on Catalist. 253

262 GENERAL AND STATUTORY INFORMATION CONSENTS 20. Baker Tilly TFW LLP, the Independent Auditors and Reporting Accountants have given and have not withdrawn their written consent to the issue of this Offer Document with the inclusion herein of Appendix A Independent Auditor s Report and the Audited Combined Financial Statements for the Financial Years ended 31 March 2014, 2015 and 2016, Appendix B Independent Auditor s Review Report and the Interim Condensed Unaudited Combined Financial Statements for the Three-Month Period ended 30 June 2016, and Appendix C Unaudited Pro Forma Combined Financial Information for the Financial Year ended 31 March 2016 and the Three-Month Period ended 30 June 2016, of this Offer Document in the form and context in which they are respectively included and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. 21. Zaid Ibrahim & Co, the Legal Adviser to our Company as to Malaysian law, has given and has not withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its statement in the section entitled General Information on our Group Intellectual Property Rights and the opinion as set out in Appendix J Abridged Legal Opinion from Zaid Ibrahim & Co of this Offer Document in the form and context in which it is included, and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. 22. Roosdiono & Partners has given and has not withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its statement in the section entitled General Information on our Group Intellectual Property Rights of this Offer Document in the form and context in which it is included, and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. 23. Ali Budiardjo, Nugroho, Reksodiputro, the Legal Adviser to our Company as to Indonesian law, has given and has not withdrawn its consent to the issue of this Offer Document with the inclusion herein of its statement in the sections entitled Risks relating to our Business Our business operations are affected by changes in existing and adoption of new Indonesian laws and regulations and/or changes in statutory interpretation of the Indonesian laws and regulations as well as possible inconsistencies between the various Indonesian laws and regulations and/or the corresponding interpretation, Restructuring Exercise and General Information on Our Group Permits, Licences and Approvals of this Offer Document in the form and context in which it is included, and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. 24. The Sponsor, Issue Manager and Placement Agent, the Solicitors to the Placement and Legal Adviser to our Company as to Singapore Law, the Legal Adviser to our Company as to Hong Kong Law, the Solicitors to the Sponsor, Issuer Manager and Placement Agent, the Share Registrar, the Receiving Banker and the Principal Banker have each given and have not withdrawn their written consents to the issue of this Offer Document with the inclusion herein of their names and references thereto in the form and context in which they respectively appear in this Offer Document and to act in such respective capacities in relation to this Offer Document. 254

263 GENERAL AND STATUTORY INFORMATION 25. Each of the Solicitors to the Placement and Legal Adviser to our Company as to Singapore Law, the Legal Adviser to our Company as to Hong Kong Law, the Solicitors to the Sponsor, Issue Manager and Placement Agent, the Share Registrar, the Receiving Banker and the Principal Banker do not make, or purport to make, any statement in this Offer Document or any statement upon which a statement in this Offer Document is based and each of them makes no representation regarding any statement in this Offer Document and, to the maximum extent permitted by law, expressly disclaim and take no responsibility for any liability to any person which is based on, or arises out of, the statements, information or opinions in, or omissions from, this Offer Document. 26. Frost & Sullivan (Singapore) Pte Ltd, the Independent Market Researcher, has given and has not withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its statement in the sections entitled General Information on our Group Prospects and Trend Information Prospects, Offer Document Summary Business Overview, General Information on Our Group Business Overview and its Industry Report in Appendix I Industry Report in the form and context in which it is included and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. 27. Tee IP Sdn. Bhd. has given and has not withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its statement in the section entitled General Information on our Group Intellectual Property Rights of this Offer Document in the form and context in which it is included, and references to its name in the form and context in which it appears in this Offer Document and to act in such capacity in relation to this Offer Document. RESPONSIBILITY STATEMENT BY OUR DIRECTORS 28. This Offer Document has been read and approved by our Directors and they collectively and individually accept full responsibility for the accuracy of the information given in this Offer Document and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this Offer Document constitutes full and true disclosure of all material facts about the Placement and our Group, and our Directors are not aware of any facts the omission of which would make any statement in this Offer Document misleading. Where information in this Offer Document has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of our Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Offer Document in its proper form and context. In this regard, the Sponsor advised the Directors to engage the independent auditors and reporting accountants to perform agreed-upon procedures to ensure that such information has been accurately and correctly extracted from these sources and/or reproduced in this Offer Document in its proper form and context. DOCUMENTS AVAILABLE FOR INSPECTION 29. The following documents or copies thereof may be inspected at our registered office at 80 Robinson Road, #17-02, Singapore during normal business hours for a period of six (6) months from the date of registration of this Offer Document by the SGX-ST acting as agent on behalf of the Authority: (a) the Constitution of our Company; 255

264 GENERAL AND STATUTORY INFORMATION (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) the Audited Combined Financial Statements as set out in Appendix A of this Offer Document; the Unaudited Interim Combined Financial Statements as set out in Appendix B of this Offer Document; the Unaudited Pro Forma Combined Financial Information as set out in Appendix C of this Offer Document; the Employee Share Option Scheme as set out in Appendix G of this Offer Document; the Performance Share Plan as set out in Appendix H of this Offer Document; the Industry Report as set out in Appendix I of this Offer Document; the material contracts referred to in the section entitled General and Statutory Information Material Contracts of this Offer Document; the letters of consent referred to in the section entitled General and Statutory Information Consents of this Offer Document; the Service Agreements referred to in the section entitled Directors, Executive Officers and Employees Service Agreements in this Offer Document; the legal opinion, dated 6 January 2017, from Zaid Ibrahim & Co referred to in the section entitled General Information on our Group Intellectual Property Rights, an abridged version of which is set out in Appendix J Abridged Legal Opinion from Zaid Ibrahim & Co of this Offer Document; the legal opinion, dated 6 January 2017, from Ali Budiardjo, Nugroho, Reksodiputro referred to in the sections entitled Risks relating to our Business Our business operations are affected by changes in existing and adoption of new Indonesian laws and regulations and/or changes in statutory interpretation of the Indonesian laws and regulations as well as corresponding interpretation, Restructuring Exercise and General Information on Our Group Permits, Licences and Approvals of this Offer Document; the report on intellectual property for OISB, last dated 6 January 2017, from Roosdiono & Partners. Please refer to the section entitled General Information on our Group Intellectual Property Rights of this Offer Document; and (n) the report on intellectual property for OISB, amongst others, dated 16 December 2016 from Tee IP Sdn. Bhd.. Please refer to the section entitled General Information on our Group Intellectual Property Rights of this Offer Document. 256

265 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016

266 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-1

267 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Management s Responsibility for the Combined Financial Statements Auditor s Responsibility A-2

268 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Opinion Restriction on distribution and use A-3

269 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Item that are or may be reclassified subsequently to profit or loss: A-4

270 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-5

271 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-6

272 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-7

273 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-8

274 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-9

275 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-10

276 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 FRS 115 Revenue from Contracts with Customers FRS 109 Financial Instruments A-11

277 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-12

278 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Depreciation A-13

279 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Classification and initial measurement Subsequent measurement Derecognition Impairment A-14

280 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Sale of goods Interest income A-15

281 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Finance leases Operating leases Defined contribution plans Employee leave entitlements A-16

282 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Functional and presentation currency A-17

283 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Transactions and balances Translation of Group entities financial statements A-18

284 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Impairment of trade receivables Income taxes A-19

285 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-20

286 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-21

287 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-22

288 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 A-23

289 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Held by the Company A-24

290 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Current Non-current A-25

291 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Non-current Current A-26

292 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Obligations under finance lease A-27

293 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Non-current A-28

294 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Current Non-current A-29

295 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Income Others Where the Group is a lessee A-30

296 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Financial assets Financial liabilities A-31

297 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Foreign currency risk Financial assets Financial liabilities Financial assets Financial liabilities A-32

298 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Foreign currency risk (cont d) Financial assets Financial liabilities Interest rate risk A-33

299 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Interest rate risk (cont d) Credit risk Financial assets that are neither past due nor impaired Financial assets that are past due and/or impaired A-34

300 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Credit risk (cont d) Financial assets that are past due and/or impaired (cont d) Liquidity risk A-35

301 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Liquidity risk (cont d) A-36

302 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Business segments A-37

303 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Business segments (cont d) A-38

304 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Business segments (cont d) A-39

305 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Business segments (cont d) Geographical information A-40

306 APPENDIX A INDEPENDENT AUDITOR S REPORT AND THE AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 MARCH 2014, 2015 AND 2016 Information about major customers A-41

307 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016

308 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-1

309 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Interim Financial Reporting Review of Interim Financial Information Performed by the Independent Auditor of the Entity B-2

310 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-3

311 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Item that are or may be reclassified subsequently to profit or loss: B-4

312 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-5

313 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-6

314 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-7

315 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Interim Financial Reporting B-8

316 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 FRS 115 Revenue from Contracts with Customers FRS 109 Financial Instruments FRS 116 Leases B-9

317 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-10

318 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-11

319 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-12

320 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-13

321 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-14

322 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Held by the Company B-15

323 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Non-current B-16

324 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Current Obligations under finance lease B-17

325 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Non-current B-18

326 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Current Non-current B-19

327 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Others Where the Group is a lessee B-20

328 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-21

329 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-22

330 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-23

331 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Geographical information Information about major customers B-24

332 APPENDIX B INDEPENDENT AUDITOR S REVIEW REPORT AND THE INTERIM CONDENSED UNAUDITED COMBINED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 B-25

333 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016

334 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Management s Responsibility for the Unaudited Pro Forma Combined Financial Information Our Independence and Quality Control Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities, Singapore Standard on Quality Control 1 C-1

335 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Practitioner s Responsibility Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus C-2

336 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Opinion Restriction on distribution and use C-3

337 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Item that will not be reclassified subsequently to profit or loss: C-4

338 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Item that will not be reclassified subsequently to profit or loss: C-5

339 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 C-6

340 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 C-7

341 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 C-8

342 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 C-9

343 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Interim Financial Reporting Review of Interim Financial Information Performed by the Independent Auditor of the Entity C-10

344 APPENDIX C UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016 AND THE THREE-MONTH PERIOD ENDED 30 JUNE 2016 Unaudited pro forma combined statements of financial position Unaudited pro forma combined statements of comprehensive income Unaudited pro forma combined statements of cash flows C-11

345 APPENDIX D SUMMARY OF CONSTITUTION OF OUR COMPANY The following statements are brief summaries of the more important rights and privileges of Shareholders conferred by the laws of Singapore and our Constitution. These statements summarise the material provisions of our Constitution, but are qualified in their entirety by reference to our Constitution and the laws of Singapore. Where portions of our Constitution are reproduced below, defined terms bear the meanings ascribed to them in our Constitution. The following summarises certain provisions of our Constitution relating to: (i) the power of a Director to vote on a proposal, arrangement or contract in which he is interested: Regulation 109(2) A Director shall not vote in respect of any contract or proposed contract or arrangement or any other proposal whatsoever in which he has any personal material interest, directly or indirectly. A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting. (ii) the remuneration of our Directors: Regulation 86 The ordinary fees of the Directors shall from time to time be determined by an Ordinary Resolution of the Company and shall not be increased except pursuant to an Ordinary Resolution passed at a General Meeting where notice of the proposed increase shall have been given in the notice convening the General Meeting and shall (unless such resolution otherwise provides) be divisible among the Directors as they may agree, or failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such fees is payable shall be entitled only to rank in such division for a proportion of fees related to the period during which he has held office. Regulation 87 (A) (B) Any Director who holds any executive office, or who serves on any committee of the Directors, or who otherwise performs services which in the opinion of the Directors are outside the scope of ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or otherwise as the Directors may determine. The fees (including any remuneration under Regulation 87(A) above) in the case of a Director other than an Executive Director shall be payable by a fixed sum and shall not at any time be by commission on or percentage of the profits or turnover, and no Director whether an Executive Director or otherwise shall be remunerated by a commission on or percentage of turnover. (iii) the borrowing powers exercisable by our Directors: Regulation 116 Subject as hereinafter provided and to the provisions of the Act, the Directors may exercise all the powers of the Company to borrow money, to mortgage or charge its undertaking, property and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. D-1

346 APPENDIX D SUMMARY OF CONSTITUTION OF OUR COMPANY (iv) the retirement or non-retirement of a Director under an age limit requirement: There are no specific provisions in our Constitution relating to the retirement or non-retirement of a Director under an age limit requirement. (v) the shareholding qualification of a Director: Regulation 85 A Director shall not be required to hold any shares of the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at General Meetings. (vi) any change in capital: Regulation 10 Subject to the Act and this Constitution, no shares may be issued by the Directors without the prior approval of the Company in General Meeting but subject thereto and to Regulation 13, and to any special rights attached to any shares for the time being issued, the Directors may allot or grant options over or otherwise dispose of the same to such persons on such terms and conditions and for such consideration or for no consideration and at such time and subject or not to the payment of any part of the amount thereof in cash as the Directors may think fit, and, subject to the Applicable Laws, any shares may be issued with such preferential, deferred, qualified or special rights, privileges or conditions as the Directors may think fit, and preference shares which may be issued at the option of the Company are liable to be redeemed, the terms and manner of redemption being determined by the Directors, Provided always that: (a) (b) (c) no shares shall be issued to transfer a controlling interest in the Company without the prior approval of the members in General Meeting; (subject to any direction to the contrary that may be given by the Company in General Meeting) any issue of shares for cash to members holding shares of any class shall be offered to such members in proportion as nearly as may be to the number of shares of such class then held by them and the provisions of the second sentence of Regulation 13(A) with such adaptations as are necessary shall apply; and the rights attaching to shares of a class other than ordinary shares shall be expressed in the resolution creating the same. (vii) any change in the respective rights of the various classes of shares including the action necessary to change the rights, indicating where the conditions are different from those required by the applicable law: Regulation 12 (A) Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of the Act, be varied or D-2

347 APPENDIX D SUMMARY OF CONSTITUTION OF OUR COMPANY abrogated either with the consent in writing of the holders of three-quarters of the total number of issued shares of the class or with the sanction of a Special Resolution passed at a separate General Meeting of the holders of the shares of the class (but not otherwise) and may be so varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding-up. To every such separate General Meeting, all the provisions of this Constitution relating to General Meetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be two persons at least holding or representing by proxy at least one-third of the total number of issued shares of the class, Provided always that where the necessary majority for such a Special Resolution is not obtained at such General Meeting, consent in writing if obtained from the holders of three-quarters of the total number of issued shares of the class concerned within two months of such General Meeting shall be as valid and effectual as a Special Resolution carried at such General Meeting. The foregoing provisions of this Regulation shall apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the special rights whereof are to be varied. (B) (C) The repayment of preference capital other than redeemable preference capital, or any alteration of preference shareholders rights, may only be made pursuant to a Special Resolution of the preference shareholders concerned, Provided always that where the necessary majority for such a Special Resolution is not obtained at the General Meeting, consent in writing if obtained from the holders of three-fourths of the preference shares concerned within two months of the General Meeting, shall be as valid and effectual as a special resolution carried at the General Meeting. The special rights attached to any class of shares having preferential rights shall not, unless otherwise expressly provided by the terms of issue thereof, be deemed to be varied by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu therewith but in no respect in priority thereto. (viii) any time limit after which a dividend entitlement will lapse and an indication of the party in whose favour this entitlement then operates: Regulation 133(C) The payment by the Directors of any unclaimed dividends or other moneys payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. All dividends unclaimed after being declared may be invested or otherwise made use of by the Directors for the benefit of the Company and any dividend unclaimed after a period of six years from the date of declaration of such dividend may be forfeited and if so shall revert to the Company but the Directors may at any time thereafter at their absolute discretion annul any such forfeiture and pay the dividend so forfeited to the person entitled thereto prior to the forfeiture. D-3

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349 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS Environmental Quality Act 1974 ( EQA ) (a) Licence to occupy prescribed premises and prescribed conveyances Section 18(1) of the EQA provides that the Minister charged with the responsibility for environment protection after consultation with the Environment Quality Council may by order prescribe the premises the occupation or use of which any person shall, unless he is the holder of a licence issued in respect of those premises, be an offence under the EQA. Pursuant to the above, the prescribed premises listed in the Environmental Quality (Prescribed Premises) (Scheduled Wastes Treatment and Disposal Facilities) Order 1989 are (a) off-site storage facilities, (b) off-site treatment facilities, (c) off-site recovery facilities, (d) scheduled waste incinerators, (e) land treatment facilities and (f) secure landfills. As reference, the definitions are as follows: (i) (ii) (iii) (iv) (v) (vi) land treatment facility means premises used for the land treatment of any scheduled waste, such as sludge farming; off-site recovery facility means premises occupied or used for the retrieval of material or product from any scheduled waste which is not produced on those premises; off-site treatment facility means premises occupied or used for the processing of any scheduled waste which is not produced on those premises; scheduled waste incinerator means premises occupied or used for the thermal destruction of any scheduled waste; secure landfill means premises occupied or used for the disposal of any scheduled waste on land; and off-site storage facility means premises occupied or used for the storage, collection or transfer of any scheduled waste which is not produced on those premises. Section 19 of the EQA states that no person shall (i) carry out any work on any vehicle or ship, or premises that would cause the vehicle or ship or premises to become a prescribed conveyance or prescribed premises, as the case may be or (ii) construct on any land any building designed for or used for a purpose that would cause the land or building to become a prescribed premises, without the prior written permission of the Director General of Environmental Quality ( Director General ). Application for licence must be made after obtaining written permission or approval. The Environmental Quality (Prescribed Conveyance)(Scheduled Wastes) Order 2005 categorised conveyance as any vehicle or ship of any description which is (i) propelled by a mechanism contained within itself, (ii) constructed or adapted to be used on land or water and (iii) used for the movement, transfer, placement or deposit of scheduled wastes. Pursuant to section 41 of the EQA, every omission or neglect to comply with, and every act done or attempted to be done contrary to, the provisions of the EQA or any regulations made thereunder or any breach of the conditions and restrictions subject to, or upon which, any E-1

350 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS licence is issued under the EQA or any regulations made thereunder shall be an offence against the EQA and in respect of any such offence for which no penalty is expressly provided the offender shall be liable to a fine not exceeding RM10,000 or to imprisonment for a period not exceeding 2 years or to both. (b) Environmental Impact Assessment reports Section 34A(2) of the EQA provides that any person intending to carry out any prescribed activity must appoint a qualified person to conduct an environmental impact assessment and to submit a report thereof to the Director General in the manner as the Director General may prescribe. The qualified person who submits the report shall be responsible for the environmental impact assessment and its recommendations, ensure that the report and the recommendation do not contain any false or misleading information and take a professional indemnity insurance for any liability arising from the environmental impact assessment and its recommendations. The following are the relevant prescribed activities stated in the Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 2015, enacted pursuant to the EQA: (i) (ii) chemical industry production capacity of each product or combined products of 100 tonnes or more per day; waste treatment and disposal on scheduled waste: (A) (B) (C) (D) (E) (F) construction of recovery plant off-site; construction of wastewater treatment plant off-site; construction of storage facility off-site; construction of thermal treatment plan; construction of off-site recovery plant for lead acid battery wastes; or construction of off-site recovery plant or treatment facility that generates amount of wastewater which is located at the upstream of public water supply intake. Pursuant to section 34A(8) of the EQA, any person who contravenes section 34A of the EQA shall be guilty of an offence and shall be liable to a fine not exceeding RM500,000 or to imprisonment for a period not exceeding 5 years or to both and to a further fine of RM1,000 for every day that the offence is continued after a notice by the Director General requiring him to comply with the act specified therein has been served upon him. E-2

351 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS (c) Written notification to the Director General Generally, an owner of occupier of a premise must not, without giving prior written notification to the Director General under the Environmental Quality (Clean Air) Regulations 2014 ( Clean Air Regulations ): (i) (ii) (iii) (iv) (v) (vi) carry out any change in operation of his premises; carry out any work on any premises that may result in a source of emission; construct on any land, any building or premises designed or used for a purpose that may result in a new source of emission; make, cause or permit to be made any change of, to, or in any plant, machine or equipment used or installed at the premises that causes a material change in the quantity or quality of emission from an existing source; carry out any changes or modifications to an existing air pollution control system; or construction of secure landfill facility. The written notification must be submitted to the Director General not less than 30 days before the commencement of such work in such form as determined by the Director General. Regulation 29 of the Clean Air Regulations states that, any person who contravenes or fails to comply with any provisions of the Clean Air Regulations shall be guilty of an offence and shall be liable to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding 2 years or to both. Occupational Safety and Health Act 1994 ( OSHA ) There are no licences or certificates issued pursuant to the OSHA. However, there are obligations imposed under the OSHA, including but not limited to: (a) (b) to ensure, so far as is practicable, the safety, health and welfare at work of all employees; without prejudice to the above, the matters to which the duty extends include in particular: (i) (ii) (iii) the provision and maintenance of plant and systems of work that are, so far as is practicable, safe and without risks to health; the making of arrangements for ensuring, so far as is practicable, safety and absence of risks to health in connection with the use or operation, handling, storage and transport of plant and substances; the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is practicable, the safety and health at work of employees; E-3

352 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS (iv) (v) so far as is practicable, as regards any place of work under the control of the employer or self-employed person, the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of the means of access to and egress from it that are safe and without such risks; and the provision and maintenance of a working environment for employees that is, so far as is practicable, safe, without risks to health, and adequate as regards facilities for their welfare at work; and (c) except in such cases as may be prescribed, to prepare and as often as may be appropriate revise a written statement of general policy with respect to the safety and health at work of employees and the organisation and arrangements for the time being in force for carrying out that policy, and to bring the statement and any revision of it to the notice of all employees. Contravention of any of the above provisions shall, on conviction, be liable to a fine not exceeding RM50,000 or to imprisonment for a term not exceeding 2 years or to both. Factories and Machinery Act 1967 Section 19(1) of the Factories and Machinery Act 1967 ( FMA ) prescribes that no person shall operate or cause or permit to be operated any machinery in respect of which a certificate of fitness is prescribed, unless there is in force in relation to the operation of the machinery a valid certificate of fitness issued under the FMA. Operating any machinery without a valid certificate will result in an inspector appointed under the FMA serving upon the person a notice in writing prohibiting the operation of the machinery or may render the machinery inoperative until such time as a valid certificate of fitness is issued. In addition, failure to obtain a valid certificate of fitness is considered an offence under the FMA and shall, on conviction, be liable to a fine not exceeding RM150,000 or to imprisonment for a term not exceeding three (3) years or to both. Section 34(2) of the FMA further provides that no person shall except within the written permission of the inspector begin to use any premises as a factory until one (1) month after he has served on the inspector a written notice in the prescribed form. This is not applicable to any person who takes over a factory from another person if there is no change in the nature of the work carried on in the factory provided that the first person shall within 1 month of such taking over have served on the inspector written notice in the prescribed form. Industrial Co-ordination Act 1975 Section 3(1) of the Industrial Co-ordination Act 1975 ( ICA ) provides that, no person shall engage in any manufacturing activity unless he is issued a licence in respect of such manufacturing activity. Manufacturing activity is defined under the ICA as the making, altering, blending, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal and includes the assembly of parts and ship repairing but shall not include any activity normally associated with retail or wholesale trade. E-4

353 APPENDIX E SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS Pursuant to section 3(2) of the ICA, any person who fails to comply with the provision of subsection (1) is guilty of an offence and is liable on conviction to a fine not exceeding RM2,000 or to a term of imprisonment not exceeding 6 months and to a further fine not exceeding RM1,000 for every day during which such default continues. Poisons Act 1952 We may require permit to use poison which is issued subject to the provisions of the Poisons Act 1952 and other related regulations. Employee Provident Fund Act 1991 Pursuant to section 43(1) of the Employee Provident Fund Act 1991 ( EPFA ), it is compulsory for employees and their employers to make monthly contributions on the amount of wages at the rate respectively set out in the Third Schedule of the EPFA to the Employment Provident Fund which is a statutory retirement fund. The contributions are made to the account of the individual employee. Employees Social Security Act 1969 Monthly contributions will also have to be made to Social Security Organisation Fund ( SOCSO ) both by the employer and employees irrespective of the amount of wages as per the rates set out in the Third Schedule of the Employees Social Security Act 1969 ( ESSA ). The SOCSO administers: (a) (b) the Employment Injury Insurance Scheme which provides employees with coverage by way of cash benefits and medical care in the event of any disablement or death due to employment injury; and the Invalidity Pension Scheme which provides 24-hours coverage to employees against invalidity and death due to any cause before attaining the age of 60 years. E-5

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355 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS General Trade On March 11, 2014, the President of the Republic of Indonesia passed Law No. 7 of 2014 on Trade ( Law No. 7/2014 ). Law No. 7/2014 requires all businesses operating in Indonesia to secure proper licences issued by the Minister of Trade, who may transfer or delegate its authority over licensing to regional governments or a particular technical agency. Proper licences include relevant business licences, special licences, registration, recognition and approval. One of the basic licences that must be secured is Trade Business Licence (Surat Izin Usaha Perdagangan), which is regulated under the Minister of Trade Regulation No. 36/M-DAG/PER/9/2007 on Trade Business Licence Issuance, most recently amended by Regulation No. 39/M-DAG/PER/12/2011 ( Regulation No. 36/2007 ). The Trade Business Licence will remain valid and can be used for as long as the company carries on its trade business activities. Trade Business Licences are of three types: 1. Small-scale Trade Business Licence, for companies with capital < Rp 200 million; 2. Middle-scale Trade Business Licence, for companies with capital between Rp 200 million and IDR 500 million; and 3. Large-scale Trade Business Licence, for companies with capital > Rp 500 million. If a business conducts its activities without securing proper licences, penalties of up to four years of imprisonment and an Rp 10 billion fine may be applied. On 24th December 2014, the Minister of Trade enacted the Minister Regulation Number 96/M-DAG/PER/12/2014 on the Delegation of Authority to Issue Investment Licence on the Field of Trading to the Head of Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM ) as the Implementation of Integrated One Stop Service which lastly amended by the Minister Regulation Number 10/M-DAG/PER/1/2015 ( Regulation No. 96/2014 ). According to this regulation, the issuance of trading business licence will be the authority of the Head of BKPM. This means that for every foreign investment company, it is not required to have SIUP as its trading business licence as regulated under Regulation No. 36/2007, but it is required to have business licence issued by BKPM. Government s Price Policy According to Article 26 of Law No. 7/2014, under certain conditions that may disrupt national trading activities, Government shall ensure the supply and price stabilisation of important and essential goods to maintain price affordability at consumer level and protect the revenue of the producer of such goods. Further, Article 26 paragraph (3) of the Law No. 7/2014 stipulates that Minister of Trade may set price policy, logistics and stock management, as well as import and export management. F-1

356 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS Law No. 40 of 2007 regarding Indonesian Limited Liability Company (the Company Law ) There are several types of the business organisations in Indonesia, such as Civil Partnership (Persekutuan Perdata), Commercial Partnership (Firma) and Limited Partnership (Comanditaire Venootschap or C.V.). However, in accordance with the Investment Law, foreign investments shall be made through a PMA Company (Penanaman Modal Asing) the ( PMA Company ) which constitutes a form of a Limited Liability Company as set forth below. A Limited Liability Company is regulated under the Company Law. The Limited Liability Company can be in the form of a privately owned company or a publicly listed company. The Limited Liability Company s capital is divided into shares that can be owned by local or foreign investors. The share ownership of foreign investment in an Limited Liability Company is subject to certain restrictions. The Company Law provides that shares must confer on shareholders the following rights: To attend and vote at any general shareholders meetings; To receive dividends and a share of the assets following liquidation; To exercise other rights provided by the Company Law, such as the right to call a general meeting of shareholders or file a lawsuit against members of the board of directors ( BOD ) and/or the board of commissioners ( BOC ) causing losses to the company due to their fault or negligence. If there are shares that have different rights from the automatic rights attaching to shares, then the Constitution must stipulate the classification of the shares. Under Article 53, paragraph 4 of the Company Law, the following are the classifications of shares (besides common shares): Shares with a voting right or without a voting right; Shares with a special right to propose a candidate for a member of the BOD and/or a member of the BOC; Shares that after a definite period of time are withdrawn or exchanged for another class of share; Shares that confer upon the holder the right to receive a dividend in advance of a shareholder with another class of share with respect to distribution of dividends on a cumulative or non-cumulative basis; and Shares that confer upon the holder the right to receive a distribution of the remaining assets of a company in liquidation in advance of a shareholder with another class of share. Various classes of shares do not necessarily indicate that the classes stand alone and apart from one another, and they may be a combination of two or more classes. F-2

357 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS In addition, companies must be established by 2 or more persons by a notarial deed made in the Indonesian Language and each founder of a company must subscribe at the time the company is established. The status as a legal entity will be obtained by the company on the date that the Decree of Ministry of Law and Human Rights concerning the company s ratification is issued. Pursuant to Indonesian Company Law, there is a mandatory two-tier management system consisting of a board of directors (BOD) and a board of commissioners (BOC). The BOD is responsible for the management of the company in accordance with the company s interests and objectives, and is authorised to represent the company both in and outside court. The BOC s main duty is to supervise the way the BOD discharges its management responsibilities and to provide advice. The BOD and BOC of a foreign investment company (FIC) can all be non-nationals. However, if there is a director handling human resources or personnel matters, they must be an Indonesian national. If the officer handling human resources/personnel matters is at the managerial level (below the BOD), all members of the BOD can be foreign persons. However, there must be at least one director who must be residing in Indonesia. A director is personally liable for, among other things: Negligence in performing his duties as the director of the company, which causes losses to the company; Failure to report his, or any of his family members, share ownership in the company or in any other company; and Committing any fraudulent or negligent act that causes the company to become insolvent. The company must have an objective and purpose of the business activity which do not conflict with the provisions of laws, regulations, public order, and/or morality. In addition, the Company Law stipulates that the minimal subscribed and paid up capital of 25% of the authorised capital. Law No. 25 of 2007 regarding Investment (the Investment Law ) In relation to the investment, the Investment Law defines foreign investment as an investment to do business in Indonesia by a foreign investor by means of using all foreign capitalisation or by engagement in a joint venture ( JV ) with a domestic investor. The form of business entity allowed to be established by foreign investors is a PMA Company which is a limited liability company. Foreign capital investment in Indonesia is mainly governed by the BKPM. BKPM grants approvals for foreign capital investments and serves as the main service centre for foreign capital investment in Indonesia. The PMA Company shall have at least 2 founders or shareholders. The decision on whether it will be incorporated as a 100% foreign owned PMA Company or as a JV company with an Indonesian partner, will be based on the business fields that the foreign investor will enter, and the Negative List (as set forth below) will serve as the guidance for foreign investors in determining the shareholding composition of the PMA Company. F-3

358 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS The Negative List basically states the maximum share composition allowed to be owned by a foreign individual, foreign government institution and foreign corporation in a PMA Company which will prescribe that from time to time that not all lines of business of types of business are open for foreign participation/foreign investment in the form of a foreign capital investment company (i.e. PMA Company) (which is issued from time to time as the situation requires). Under the Negative List, there are restrictions on foreign investments in certain lines of business or types of businesses which are categorised as: (a) absolutely closed to foreign investments, (b) joint venture requirements, and (c) limitations on ownership percentage, partnership requirements, requirement of particular location, and requirement of special permits. Accordingly, business sectors or types of business not included in the Negative List can be considered to be open a 100% foreign owned company. Additionally, in order to enhance the quality of licensing and non-licensing services, the BKPM launched the three-hour Investment Licensing Services at One-Stop Services in Indonesia Investment Co-ordinating Board on 11 January The three-hour investment licensing services is for investors who have an investment plan that is valued at over IDR100 billion and/or employs at least 1,000 employees. The three-hour services will consist of four phases: Phase 1. This phase is to ensure that all of the required information and documents are provided by the investors; Phase 2. This phase is for processing the investment licence, tax payer identification number (nomor pokok wajib pajak), deed of establishment and its approval from the Minister of Law and Human Rights (subject to the Notary s issuance process); Phase 3. This phase is for processing the company registration certificate (tanda daftar perusahaan) and foreign manpower utilisation permit (rencana penggunaan tenaga kerja asing); and Phase 4. This phase is for processing the importer-producer identification number (angka pengenal importir produsen) and custom identification number (nomor induk kepabeanan). As at 11 January 2016, there are seven companies that have utilised the three-hour services with a total investment value of IDR17.85 trillion. The companies are from the following sectors: Industrial; Real estate; Power plan; Ports; and Livestock production. F-4

359 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS Capital Investment Registration Foreign investors who will be making capital investments in Indonesia shall file a registration application with the BKPM Integrated Service before or after obtaining the legal status of a limited liability company. In completing the registration of investment, recommendations from technical ministries or other related government agencies having tasks and responsibilities in certain sectors/lines of business will be required. The current investment regulations do not regulate the minimum capital of a PMA Company. In practice, a PMA Company should be established with a feasible/workable paid-up capital according to the line of business it is to engage in. BKPM usually evaluates a PMA Company by how much its investment would be for the line of business it wishes to engage in (not by its paid up capital). However, recently the BKPM requires a PMA Company to have a minimum of Rp 10,000,000,000 as an investment value. The investment value means capital plus any loans with a normally maximum ratio that s acceptable for BKPM. The above is under the consideration that such certain fields would only require small paid-up capital. However, BKPM might impose a higher minimum equity and different equity-to-loan ratio. In essence, BKPM will approve the investment that is considered normal in the industry that the investors are applying for. After obtaining the licence from BKPM, a PMA generally must submit: i. The investment activity report (LKPM) to the BKPM. The report must be submitted: quarterly, if the FIC has not yet obtained a business licence (Izin Usaha) from the BKPM; or biannually, if it has obtained a business licence from the BKPM. ii. An annual financial statement to the Department of Trade. Labour Laws Indonesian employment law is governed under Law No. 13 of 2003 dated 25 April 2003 regarding Manpower ( Labour Law ) and various implementing regulations issued by the Indonesian central government and Indonesian provincial governments. The Indonesian employment law also refers to several decrees of Indonesian Constitutional Court which declare certain provisions of the Labour Law unconstitutional and valid except for certain provisions as stipulated under those decrees, among others, the termination of an employee who committed a serious violation and criminal sanctions and non-limitation period to claim the payment of wages. An employer with more than 10 employees is obligated to prepare to a Company Regulation (Peraturan Perusahaan). In order to be effective, such Company Regulation must be legalised by the Minister of Manpower or by another government official appointed to act on behalf of the Minister of Manpower. The Company Regulation shall be valid for a period of 2 years and may be renewed. F-5

360 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS Upon the establishment and registration of a labour union at the Ministry of Manpower and Transmigration, the labour union, if it so desires, is entitled to propose for an establishment of a Collective Labour Agreement. The Collective Labour Agreement is made between a labour union/group of labour union and employer/group of employer to replace the Company Regulation upon execution of such Collective Labour Agreement. The Collective Labour Agreement is also valid for 2 years and is extendable for 1 year at the most. In the case where there are several companies in a group and each Company is a legal entity, a Collective Labour Agreement shall be made and negotiated by the employer and labour union of each of the Company. Under the Mandatory Manpower Report Law (Law No. 7 of 1981 dated 31 July 1981 regarding Compulsory Manpower Report), every company must annually file a manpower report with the Ministry of Manpower or other designated authority (i.e Regional Manpower Office) setting out the status of employment (such as details of number and highest and lowest salary of the employees of the Company). Failure to comply with this obligation could give rise to a fine of up to IDR1,000,000 or imprisonment for up to three months. Based on the Labour Law, a company is prohibited from paying wages to its employee which is lower than minimum wages determined by the government pursuant to specific provincial regulations. Law No. 24 of 2011 dated 25 November 2011 regarding Social Security Organisation Board (Badan Penyelenggara Jaminan Sosial or BPJS ) stipulates that every person, either Indonesian or foreigner, who works in Indonesia for more than 6 months is required to become a participant of social security program. Employers are required to register itself and their employees as participants in BPJS for the appropriate type of the social security. In the event that the employer fails to register the employees, the employees are entitled to register themselves as participants of the BPJS at the cost of the employer. The BPJS consists of BPJS of Health and BPJS of Manpower. The employers are also obligated to collect contribution from the employees and pay the contribution to BPJS. A criminal sanction may be imposed to the employers who violate the foregoing obligation. The sanction is imprisonment at the maximum of 8 years or fines at the maximum of IDR1,000,000. Environmental Regulation Environmental protection in Indonesia is governed by various laws, regulations and decrees. On October 3, 2009, Law No. 32 of 2009 on Protection and Management of Environment ( Law No. 32/2009 ) replaced Law No. 23 of 1997 on Environmental Management. However, the implementing regulations in respect of Law No. 32/2009 have not yet been issued to date. Therefore, the existing regulations, including Law No. 32/2009, Government Regulation No. 27 of 1999 on Environmental Impact Analysis (Analisa Mengenai Dampak Lingkungan or AMDAL ) and Decree of the State Minister of Environmental Affairs No. 05 of 2012 on Types of Businesses/Activities that Require Environmental Impact Analysis ( Minister Decree No. 05/2012 ) are still applicable to the extent they do not conflict with Law No. 32/2009. Minister Decree No. 05/2012 stipulates, among other matters, that companies whose operations have an environmental or social impact must obtain and maintain an AMDAL document, which according to Government Regulation No. 27 of 2012 on Environmental Licences ( Government Regulation No. 27/2012 ) consists of Guidelines on Environmental Impact Analysis (Kerangka F-6

361 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS Acuan Analisis Dampak Lingkungan or KA ANDAL), an Environmental Impact Analysis (Analisis Dampak Lingkungan or ANDAL), an Environmental Management Plan (Rencana Pengelolaan Lingkungan or RKL) and an Environmental Monitoring Plan (Rencana Pemantauan Lingkungan or RPL). Where the AMDAL document is not required, a company must prepare an Environmental Management Effort (Upaya Pengelolaan Lingkungan) and an Environmental Monitoring Effort (Upaya Pemantauan Lingkungan). Law No. 32/2009 introduced the environmental licence (Izin Lingkungan). Pursuant to Law No. 32/2009, any company that has an AMDAL or UKL/UPL must also submit an application to obtain an environmental licence (Izin Lingkungan) issued by the Ministry of Environmental Affairs, governor, mayor or regent, as applicable. Government Regulation No. 27/2012 stipulates that the application for an environmental licence must be submitted along with its supporting documents, including: (i) AMDAL or UKL/UPL documents, (ii) deed of incorporation of the business entity, and (iii) profile of business/activity The granting of an environmental licence is based on either (i) an environmental feasibility study carried out by an independent third party, which is approved by the AMDAL Assessment Commission (Komisi Penilai Amdal), the Minister of Environmental Affairs, governor, mayor or regent, as applicable or (ii) a recommendation in a UKL and UPL issued by the appropriate Government or regional government institution responsible for the environmental management and control of the relevant area. The environmental licence shall be issued by the Minister of Environmental Affairs, governor, mayor or regent, as the case may be, at the same time during the issuance of the Decree of AMDAL worthiness (AMDAL approval) or UKL/UPL Recommendation. Law No. 32/2009 requires that by October 3, 2011 all companies that have business licences but do not have an AMDAL, UKL/UPL must complete an environmental audit, if they need an AMDAL, or prepare an environment management document, if they need a UKL/UPL. Decree of the State Minister of Environmental Affairs No. 14 of 2010 ( Minister Decree No. 14/2010 ) constitutes that the companies that must complete an environmental audit shall prepare the Environment Evaluation Document (DELH), and the companies that have business licences but do not have an UKL/UPL shall prepare the Environment Management Document (DPLH). Furthermore, Law No. 32/2009 requires companies to convert their AMDAL or UKL/UPL into an environmental licence by October 3, Additionally, under Law No. 32/2009, an environmental licence is a prerequisite for a business licence. Moreover, the process for obtaining an environmental licence is regulated under Government Regulation No. 27/2012. By virtue of Minister Decree No. 05/2012, the following business activities are required to obtain and maintain AMDAL, among others: (a) (b) (c) (d) (e) (f) Reclamation of Coastal Area and Small Islands; Construction of buildings; Construction of Navy Base, Air Force Base, and Combat Training Center; Cultivation of food crops, plantation food crops, or fish; Forest product utilisation; Railway construction with or without the station; F-7

362 APPENDIX F SUMMARY OF RELEVANT INDONESIAN LAWS AND REGULATIONS (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) The construction of passengers terminal and road transportation freight terminal; Airport construction for fixed wing including its facilities; Construction and Operation of Outer Space port; The Construction of Rocket Launching Facilities on land and other purposes; Cement Industry (which is made through clinker production); Pulp industry or pulp and paper industry which is integrated with Industrial Plant Forest, capacity of; Upstream petrochemicals Industry; Shipbuilding Industry by using graving dock system; Domestic Liquid Waste; Construction of drainage pipeline (primary and/or secondary) at settlement area; Clean water network in big cities/metropolitan; and The construction of Housing and Settlement Area by certain Manager. Other businesses and/or actions that are not required to maintain AMDAL as stipulated in the Environmental Law must conduct environmental management efforts and environmental monitoring efforts and obtain UKL-UPL. Additionally, other businesses and/or actions that are not required to maintain both AMDAL and UKL-UPL must maintain an Environment Management Statement Letter (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup or SPPL ). The SPPL consists of a statement regarding the company s undertaking to monitor and manage the environmental impact of its business and/or activities which are exempted from the AMDAL or UKL-UPL requirement. Under Indonesian environmental regulations, remedial and preventative measures and sanctions (such as the obligation to rehabilitate tailings areas, the imposition of substantial criminal penalties and fines and the cancellation of approvals) may be imposed to remedy or prevent pollution caused by operations. The sanctions range from three to 15 years of imprisonment applicable to the management of the relevant company and/or fines ranging from Rp500.0 million to Rp15.0 billion. A monetary penalty may be imposed in lieu of performance of an obligation to rehabilitate damaged areas. Law No. 32/2009 also requires licensing of all waste disposal, storage and handling. Waste disposal may only be conducted in specified locations determined by the Minister of Environmental Affairs. Waste water disposal is further regulated by Government Regulation No. 82 of 2001 on Water Quality Management and Water Pollution Control ( Government Regulation No. 82/2001 ). Government Regulation No. 82/2001 requires responsible parties to submit reports regarding their disposal of waste water detailing their compliance with the relevant regulations. Such reports are to be submitted to the relevant mayor or regent, with a copy provided to the Minister of Environmental Affairs, on a quarterly basis. F-8

363 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 1. NAME OF THIS SHARE OPTION SCHEME This Scheme shall be called the Employee Share Option Scheme. 2. DEFINITIONS In this Scheme, except where the context otherwise requires, the following words and expressions shall have the following meanings: Acceptance Period Act Adoption Date Auditors Board Catalist Catalist Rules CDP CPF Committee Company Control The period within which an Option may be accepted, as described in Rule 7.2 The Companies Act, Chapter 50 of Singapore as amended, modified or supplemented from time to time The date on which this Scheme is adopted by our Company in general meeting The auditors of our Company for the time being The Board of Directors of our Company for the time being The Catalist Board of the SGX-ST Section B: Rules of Catalist of the Listing Manual of the SGX-ST, as amended, modified, or supplemented from time to time The Central Depository (Pte) Limited Central Provident Fund The remuneration committee of our Board, or such other committee comprising Directors duly authorised and appointed by our Board to administer this Scheme Samurai 2K Aerosol Limited The capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of our Company G-1

364 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME Controlling Shareholder A Shareholder who: (a) (b) holds directly or indirectly 15.0% or more of the total number of issued Shares (excluding Shares held by the Company as treasury shares) (unless otherwise determined by the SGX-ST that a person who satisfies this subparagraph is not a Controlling Shareholder); or in fact exercises Control over the Company Director A person holding office as a director of our Company for the time being Employee A confirmed employee of our Group, including Executive Directors, selected by the Committee to participate in this Scheme in accordance with Rule 4 Executive Director A director of our Company and/or any of its Subsidiaries, as the case may be, who performs an executive function Exercise Price Financial Year Grantee Group Incentive Option Market Day The price at which a Participant shall subscribe for or acquire each Share upon the exercise of an Option as determined in accordance with Rule 8 Each period of 12 months or more or less than 12 months, at the end of which the balance of accounts of our Company are prepared and audited, for the purpose of laying the same before an annual general meeting of our Company The person to whom an offer of an Option is made Our Company and its Subsidiaries (as they may exist from time to time) An Option granted with the Exercise Price set at a discount to the Market Price A day on which the SGX-ST is open for trading of securities G-2

365 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME Market Price Market Price Option A price equal to the average of the last dealt prices for the Shares on the SGX-ST over the five (5) consecutive Trading Days immediately preceding the Offering Date of that Option, as determined by the Committee by reference to the daily official list or any other publication published by the SGX-ST, rounded to the nearest whole cent in the event of fractional prices An Option granted with the Exercise Price set at the Market Price Non-Executive Director A director of our Company and/or any of its Subsidiaries, as the case may be, including an independent director, who is not an Executive Director Offering Date Option Option Period The date on which an Option is granted pursuant to Rule 6 A Market Price Option or an Incentive Option, as the case may be The period for the exercise of an Option as set out in Rule 9.1 Participant A person who is selected by the Committee to participate in this Scheme in accordance with the provisions herein and/or a holder of an Option Record Date Rules Scheme SGX-ST Shareholders Shares The date as at the close of business on which the Shareholders must be registered in order to participate in any dividends, rights, allotments or other distributions The rules of this Scheme as amended, modified or supplemented from time to time The Employee Share Option Scheme, as amended, modified or supplemented from time to time The Singapore Exchange Securities Trading Limited The registered holders of Shares except where the registered holder is CDP, the term Shareholders shall, in relation to such Shares, mean the persons to whose securities accounts maintained with CDP are credited with the Shares Ordinary shares in the capital of our Company G-3

366 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME Subsidiary Trading Day A company which is for the time being a subsidiary of our Company as defined by Section 5 of the Act A day on which the Shares are traded on Catalist Currencies and Units S$ Singapore dollars % Per centum or percentage The terms Depositor, Depository Register and Depository Agent shall have the meanings ascribed to them respectively by Section 130A of the Act. The term Associate shall have the meaning ascribed to it by the Catalist Rules. Words denoting the singular shall, where applicable, include the plural and vice versa and words denoting the masculine gender shall, where applicable, include the feminine and neuter gender. References to persons shall include corporations. References to Rules and Schedules shall be construed as references to Rules of and the Schedules to this Scheme. Any reference in this Scheme to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and used in this Scheme shall, where applicable, have the same meaning assigned to it under the Act. Any reference in this Scheme to a time of day shall be a reference to Singapore time unless otherwise stated. 3. OBJECTIVES OF THIS SCHEME 3.1 This Scheme is a share incentive scheme and is subject to the prevailing laws of Singapore at all times. It will provide an opportunity for Employees and Non-Executive Directors, who satisfy the eligibility criteria in Rule 4, to participate in the equity of our Company. 3.2 This Scheme recognises the fact that the services of such Employees and Non-Executive Directors are important to the success and continued well-being of our Group. Implementation of this Scheme will enable our Company to give recognition to the contributions made by such Employees and Non-Executive Directors. At the same time, it will give such Employees and Non-Executive Directors an opportunity to have a direct interest in our Company and will also help to achieve the following positive objectives: (i) (ii) (iii) to motivate Participants to optimise performance standards and efficiency and to maintain a high level of contribution to our Group; to retain key employees whose contributions are important to the long-term growth and profitability of our Group; to attract potential employees with relevant skills to contribute to our Group and create value for our Shareholders; G-4

367 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME (iv) (v) to align the interest of Participants with the interests of our Shareholders; and to instill loyalty to, and a stronger sense of identification with the long-term growth and profitability of our Group. 4. ELIGIBILITY 4.1 The following persons shall be eligible to participate in this Scheme at the absolute discretion of the Committee: (i) (ii) Employees (including our Executive Directors) who are not on probation and have attained the age of 21 years on or before the Offering Date; and Non-Executive Directors who have attained the age of 21 years on or before the Offering Date. The Participant must not be an undischarged bankrupt and must not have entered into a composition with his creditors. 4.2 Controlling Shareholders and their Associates (notwithstanding that they may meet the eligibility criteria in Rule 4.1 above) shall not participate in this Scheme unless each of the following: (i) (ii) their participation; and the actual or maximum number of Shares under the Option to be issued or transferred to them and the terms of any Option to be granted to them, has been approved by independent Shareholders in general meeting in separate resolutions for each such person, and in respect of each such person, in separate resolutions for each of (i) his participation; and (ii) the actual or maximum number of Shares and terms of any Options to be granted to him, provided always that it shall not be necessary to obtain the approval of the independent Shareholders for the participation in this Scheme of a Controlling Shareholder or his Associate who is, at the relevant time, already a Participant. Controlling Shareholders and Associates of Controlling Shareholder(s) shall abstain from voting on any resolution in relation to their participation in the Employee Share Option Scheme. For the purposes of obtaining such approval from the independent Shareholders, our Company shall procure that the letter to Shareholders in connection therewith shall set out (a) clear justifications for the participation of such Controlling Shareholders or Associates of Controlling Shareholders; and (b) clear rationale for the terms of the Options to be granted to such Controlling Shareholders or Associates of Controlling Shareholders (including the rationale for any discount to the Market Price, if so proposed). 4.3 Save as prescribed by the Catalist Rules, there shall be no restriction on the eligibility of any Participant to participate in any other share option or share incentive scheme, implemented or to be implemented by any company within our Group. G-5

368 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 4.4 Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted, the terms of eligibility for participation in this Scheme may be amended from time to time at the absolute discretion of the Committee. 5. LIMITATIONS OF ON THE SIZE OF THIS SCHEME 5.1 The aggregate number of Shares over which the Committee may grant Options on any date, when added to the number of Shares issued and issuable and/or transferred or transferable in respect of all Options granted under this Scheme and the number of Shares issued and issuable and/or transferred or transferable in respect of all options or awards granted under any other share option schemes or share schemes of the Company, shall not exceed 15.0% of the total number of issued Shares (excluding Shares held by the Company as treasury shares) on the day immediately preceding the Offering Date of the Option. 5.2 The aggregate number of Shares which may be issued and/or transferred in respect of all Options granted under this Scheme to Controlling Shareholders and their Associates shall not exceed 25.0% of the total number of Shares available under this Scheme. 5.3 The number of Shares which may be issued and/or transferred in respect of all Options granted under this Scheme to each Controlling Shareholder or his Associate shall not exceed 10.0% of the Shares available under this Scheme. 5.4 Subject to Rule 4 and Rule 10, the aggregate number of Shares in which Options may be offered to a Grantee for subscription or acquisition in accordance with this Scheme shall be determined at the discretion of the Committee, which shall take into account criteria such as rank, past performance, years of service and potential development of the Grantee. 6. OFFERING DATE 6.1 The Committee may, at its absolute discretion, save as provided in Rule 4 and Rule 5, offer to grant Options to such Grantees at any time during the period when this Scheme is in force. However, no Option shall be granted during the period of 30 days immediately preceding the date of announcement of our Company s interim and/or final results (as the case may be). In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, Options may only be granted on or after the second Market Day from the date on which the aforesaid announcement is released. 6.2 The Letter of Offer to grant an Option shall be in, or substantially in, the form set out in Schedule A, subject to such modification as the Committee may determine from time to time. 7. ACCEPTANCE OF OFFER 7.1 An Option shall be personal to the Participant to whom it is granted and shall not be transferred (other than to a Participant s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, unless with the prior approval in writing of the Committee. G-6

369 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 7.2 The grant of any Option under Rule 6 shall be accepted by the Grantee within 30 days from the Offering Date of that Option. The grant of an Option must be accepted by completing, signing and returning of the Acceptance Form in, or substantially in, the form set out in Schedule B, accompanied by payment of S$1.00 or such amount as the Committee may decide as consideration, subject to such modification as the Committee may determine from time to time. 7.3 If a grant of an Option is not accepted in the manner as provided in Rule 7.2, such offer shall, upon expiry of the 30-day period, automatically lapse and become null and void and of no effect. 7.4 Unless the Committee determines otherwise, an Option shall automatically lapse and become null and void and of no effect, and shall not be capable of acceptance if: (i) (ii) (iii) (iv) (v) it is not accepted strictly in the manner as provided in Rule 7.2 within the 30-day period; the Grantee dies prior to his acceptance of the Option; the Grantee is adjudicated a bankrupt or enters into composition with his creditors prior to his acceptance of the Option; the Grantee being an Employee ceases to be in the employment of our Group or (being a Non-Executive Director) ceases to be a director of the Group, in each case, for any reason whatsoever prior to his acceptance of the Option; or our Company is liquidated or wound-up prior to the Grantee s acceptance of the Option. 7.5 In the event that an Option results in a contravention of any applicable law or regulation, such grant shall be null and void and of no effect and the relevant Participant shall have no claim whatsoever against our Company. 8. EXERCISE PRICE 8.1 Subject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect of which an Option is exercisable shall be determined by the Committee at its absolute discretion, and shall be fixed by the Committee at: (i) (ii) the Market Price; or a price which is set at a discount to the Market Price, the quantum of such discount to be determined by the Committee at its absolute discretion, provided that the maximum discount which may be given in respect of any Option shall not exceed 20.0% of the Market Price in respect of that Option, provided that the Shareholders in general meeting shall have authorised, in a separate resolution, the making of offers and grants of Options under the Scheme at a discount not exceeding the maximum discount as aforesaid. G-7

370 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 8.2 In making any determination under Rule 8.1(ii) on whether to give a discount and the quantum of such discount, the Committee shall be at liberty to take into consideration such criteria as the Committee may, at its absolute discretion, deem appropriate, including but not limited to: (i) (ii) (iii) (iv) the performance of our Company and our Group; the individual performance of the Participant; the contribution of the Participant to the success and development of our Company and/or our Group; and the prevailing market conditions. 9. RIGHT TO EXERCISE OF OPTION 9.1 Except as provided in this Rule 9 and Rule 10 and any other conditions as may be introduced by the Committee from time to time and subject always to the Act, each Option shall be exercisable, in whole or in part, as follows: (i) (ii) in the case of a Market Price Option, during the period commencing after the first anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date; and in the case of an Incentive Option, during the period commencing after the second anniversary of the Offering Date and expiring on the tenth anniversary of such Offering Date, or such shorter period(s) if so determined by the Committee. 9.2 In the event of an Option being exercised in part only, the balance of the Option not thereby exercised shall continue to be exercisable in accordance with the Rules until such time as it shall lapse in accordance with the Rules. 9.3 Subject to Rule 9.4, an Option shall, to the extent unexercised, immediately lapse and become null and void and a Participant shall have no claim against our Company: (i) (ii) (iii) (iv) upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option; in the event of misconduct on the part of the Participant, as determined by the Committee at its absolute discretion; subject to Rules 9.4, 9.5 and 9.6, upon the Participant ceasing to be in the employment of our Group, for any reason whatsoever; or in the event that the Committee, at its absolute discretion, deems it appropriate that such Option granted to a Participant shall lapse on the grounds that any of the objectives of this Scheme (as set out in Rule 3) have not been met. G-8

371 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME For the purpose of Rule 9.3(iii), a Participant shall be deemed to have ceased to be so employed as of the date the notice of termination of employment is tendered by or is given to him, unless such notice is withdrawn prior to its effective date. For the avoidance of doubt, no Option shall lapse pursuant to Rule 9.3(iii) in the event of any transfer of employment of a Participant between companies in the Group. 9.4 If a Participant ceases to be employed by our Group by reason of: (i) (ii) (iii) (iv) (v) (vi) ill health, injury or disability (in each case, evidenced to the satisfaction of the Committee); redundancy; retirement at or after the legal retirement age; retirement before the legal retirement age with the consent of the Committee; the company by which he is employed or to which he is seconded, as the case may be, ceasing to be a company within our Group, or the undertaking or part of the undertaking of such company being transferred otherwise than to another company within our Group; or his transfer to any government ministry, governmental or statutory body or corporation at the direction of any company within our Group, or for any other reason approved in writing by the Committee, he may, at the absolute discretion of the Committee, exercise any unexercised Options within the relevant Option Period, and upon the expiry of such period, the Option shall immediately lapse and become null and void. 9.5 Where a Participant who is an Executive Director ceases to be an employee of our Group for any reason whatsoever, he may, at the absolute discretion of the Committee, exercise any unexercised Options within the relevant Option Period, and upon the expiry of such period, the Option shall immediately lapse and become null and void. 9.6 If a Participant dies and at the date of his death holds any unexercised Option, such Option may, at the absolute discretion of the Committee, be exercised by the duly appointed legal personal representatives of the Participant from the date of his death to the end of the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void. G-9

372 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 10. TAKE-OVER AND WINDING-UP OF OUR COMPANY 10.1 Notwithstanding Rule 9 but subject to Rule 10.5, in the event of a take-over being made for the Shares, a Participant (including Participants holding Options which are then not exercisable pursuant to the provisions of Rule 9.1) shall be entitled to exercise in full or in part any Option held by him and as yet unexercised, in the period commencing on the date on which such offer is made or, if such offer is conditional, the date on which such offer becomes or is declared unconditional, as the case may be, and ending on the earlier of: (i) (ii) the expiry of six (6) months thereafter, unless prior to the expiry of such 6-month period, at the recommendation of the offeror and with the approvals of the Committee and the SGX-ST, such expiry date is extended to a later date (being a date falling not later than the date of expiry of the Option Period relating thereto); or the date of the expiry of the Option Period relating thereto, whereupon any Option then remaining unexercised shall immediately lapse and become null and void, provided always that if during such period the offeror becomes entitled or bound to exercise the rights of compulsory acquisition of the Shares under the provisions of the Act and, being entitled to do so, gives notice to the Participants that it intends to exercise such rights on a specified date, the Option shall remain exercisable by the Participants until such specified date or the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so exercised by the said specified date shall lapse and become null and void provided that the rights of acquisition or obligation to acquire shall have been exercised or performed, as the case may be. If such rights of acquisition or obligations have not been exercised or performed, all Options shall subject to Rule 9 remain exercisable until the expiry of the Option Period relating thereto If under the Act, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of our Company or its amalgamation with another company or companies, each Participant (including Participants holding Options which are then not exercisable pursuant to the provisions of Rule 9.1) shall be entitled, notwithstanding Rule 9 but subject to Rule 10.5, to exercise any Option then held by him during the period commencing on the date upon which the compromise or arrangement is sanctioned by the court and ending either on the expiry of 60 days thereafter or the date upon which the compromise or arrangement becomes effective, whichever is later (but not after the expiry of the Option Period relating thereto), whereupon the Option shall lapse and become null and void If an order is made for the winding-up of our Company on the basis of its insolvency, all Options to the extent unexercised, shall lapse and become null and void In the event of a members voluntary winding-up (other than amalgamation or reconstruction), the Participants (including Participants holding Options which are then not exercisable pursuant to the provisions of Rule 9.1) shall, subject to Rule 10.5, be entitled within 30 days of the passing of the resolution of such winding-up (but not after the expiry of the Option Period relating thereto), to exercise any unexercised Option, after which period such unexercised Option shall lapse and become null and void. G-10

373 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 10.5 If in connection with the making of a general offer referred to in Rule 10.1 or the scheme for the reconstruction referred to in Rule 10.2 or the winding-up referred to in Rule 10.4, arrangements are made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable) for the compensation of Participants, whether by the continuation of their Options or the payment of cash or the grant of other Options or otherwise, a Participant holding an Option, as yet not exercised, may not, at the discretion of the Committee, be permitted to exercise that Option as provided for in this Rule To the extent that an Option is not exercised within the periods referred to in this Rule 10, it shall lapse and become null and void. 11. EXERCISE OF OPTIONS, ALLOTMENT OR TRANSFER AND LISTING OF SHARES 11.1 An Option may be exercised during the Option Period, in whole or in part (provided that an Option may be exercised in part only in respect of 100 Shares or any multiples thereof), by a Participant giving notice in writing to our Company in, or substantially in, the form set out in Schedule C (the Exercise Notice ), each case being subject to such modifications as the Committee may from time to time determine. Every Exercise Notice must be accompanied by a remittance for the full amount of the aggregate Exercise Price in respect of the Shares which have been exercised under the Option, the relevant CDP charges (if any) and any other documentation the Committee may require. All payments shall be made by cheque, cashier s order, bank draft or postal order made out in favour of our Company or such other mode of payment as may be acceptable to our Company. An Option shall be deemed to be exercised upon the receipt by our Company of the Exercise Notice duly completed, the relevant documentation required by the Committee and the aggregate Exercise Price Subject to the Act and the Catalist Rules, the Company shall have the flexibility to deliver Shares to Participants upon the exercise of their Options by way of: (i) (ii) an allotment of new Shares; and/or subject to applicable laws, the transfer of existing Shares, including any Shares acquired by the Company pursuant to a share purchase mandate and/or held by the Company as treasury shares. In determining whether to issue new Shares or to deliver existing Shares to Participants upon the exercise of their Options, the Company will take into account factors such as (but not limited to): (a) (b) (c) (d) the prevailing market price of the Shares; the prevailing market price of the Shares relative to the financial performance of the Company; the cash position of the Company; the projected cash needs of the Company; G-11

374 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME (e) (f) (g) the dilution impact (if any); the cost to the Company of either issuing new Shares or purchasing existing Shares; and the liquidity of the Shares based on the average daily trading volume of the Shares, and in particular whether the repurchase by the Company of existing Shares to deliver to Participants upon exercise of their Options would materially impact upon the market price of the Shares Subject to: (i) (ii) such consents or other required actions of any competent authority under any regulations or enactments for the time being in force as may be necessary (including any approvals required from the SGX-ST); and compliance with the Act, the Rules and the Constitution of our Company, our Company shall, as soon as practicable after the exercise of an Option by a Participant but in any event within 10 Market Days after the date of the exercise of the Option in accordance with Rule 11.1, allot the relevant Shares or, as the case may be, transfer existing Shares (which includes where desired any Shares held by our Company as treasury shares), in respect of which such Option has been exercised by the Participant and where required, or as the case may be, within five (5) Market Days from the date of such allotment, despatch the relevant share certificates to CDP for the credit of the securities account of that Participant by ordinary post or such other mode of delivery as the Committee may deem fit Our Company shall, if necessary, as soon as practicable after the exercise of an Option, apply to the SGX-ST and any other stock exchange on which the Shares are quoted or listed for permission to deal in and for quotation of the Shares which may be issued upon exercise of the Option and the Shares (if any) which may be issued to the Participant pursuant to any adjustments made in accordance with Rule Shares which are all allotted or transferred on the exercise of an Option by a Participant shall be issued or transferred, as the Participant may elect, in the name of CDP to the credit of the securities account of the Participant maintained with CDP, the Participant s securities sub-account with a CDP Depository Agent or the CPF investment account maintained with a CPF agent bank Shares allotted and issued, and existing Shares procured by our Company for transfer, upon the exercise of an Option shall be subject to all provisions of the Constitution of our Company and shall rank pari passu in all respects with the then existing issued Shares except for any dividends, rights, allotments or other distributions, the Record Date of which is prior to the date such Option is exercised Except as set out in Rule 11.3 and subject to Rule 12, an Option does not confer on a Participant any right to participate in any new issue of Shares. G-12

375 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 12. ALTERATION OF CAPITAL 12.1 If a variation in the issued share capital of our Company (whether by way of a capitalisation of profits or reserves or rights issue or reduction, subdivision, consolidation or distribution, or issues for cash or for shares or otherwise than for cash or otherwise howsoever) should take place, then: (i) (ii) the Exercise Price, class and/or number of Shares comprised in the Option to the extent unexercised and the rights attached thereto; and/or the class and/or number of Shares in respect of which additional Options may be granted to Participants, shall be adjusted in such manner as the Committee may determine to be appropriate or equitable including retrospective adjustments where such variation occurs after the date of exercise of an Option but the Record Date relating to such variation precedes such date of exercise and, except in relation to a capitalisation issue, upon the written confirmation of the Auditors (acting only as experts and not as arbitrators), that in their opinion, such adjustment is fair and reasonable Unless the Committee considers an adjustment to be appropriate or equitable, the following shall not be regarded as a circumstance requiring adjustment under the provisions of this Rule 12: (i) (ii) (iii) the issue of securities as consideration for an acquisition of any assets or private placement of securities by our Company; the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on Catalist during the period when a share purchase mandate granted by Shareholders (including any renewal of such mandate) is in force; or the issue of Shares or other securities convertible into or with rights to acquire or subscribe for Shares pursuant to any share option schemes or share schemes of the Company Notwithstanding the provisions of Rule 12.1 above: (i) (ii) no such adjustment shall be made if as a result the Participant receives a benefit that a Shareholder does not receive; and any adjustment must (except in relation to a capitalisation issue) be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable Upon any adjustment required to be made, our Company shall notify each Participant (or his duly appointed personal representative(s)) in writing and deliver to him (or, where applicable, his duly appointed personal representative(s)) a statement setting forth the new G-13

376 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME Exercise Price thereafter in effect and the class and/or number of Shares thereafter comprised in the Option so far as unexercised and the maximum entitlement in any one Financial Year. Any adjustment shall take effect upon such written notification being given The restriction on the number of Shares to be offered to any Grantee under Rule 5 above, shall not apply to the number of additional Shares or Options over additional Shares issued by virtue of any adjustment to the number of Shares and/or Options pursuant to this Rule ADMINISTRATION 13.1 This Scheme shall be administered by the Committee at its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of Options granted or to be granted to him The Committee shall have the power, from time to time, to make or vary such arrangements, guidelines and/or regulations (not being inconsistent with this Scheme) for the implementation and administration of this Scheme as it thinks fit including, but not limited to, imposing restrictions on the number of Options that may be exercised within particular sections of the relevant Option Period Any decision or determination of the Committee, made pursuant to any provision of this Scheme (other than a matter to be certified by the Auditors), shall be final, binding and conclusive (including any decisions pertaining to quantum of discount applicable to an Incentive Option or to disputes as to the interpretation of this Scheme or any rule, regulation, or procedure thereunder or as to any rights under this Scheme). The Committee shall not be required to furnish any reasons for any decision or determination made by it. 14. NOTICES AND ANNUAL REPORT 14.1 Any notice given by a Participant to our Company shall be sent by post or delivered to the registered office of our Company or such other address as may be notified by our Company to the Participant in writing Any notice, documents or correspondence given by our Company to a Participant shall be sent to the Participant by hand or sent to him at his home address stated in the records of the Company or the last known address of the Participant, and if sent by post shall be deemed to have been given on the day immediately following the date of posting Our Company shall in relation to this Scheme, as required by law, the SGX-ST or other relevant authority, make the following disclosures in its annual report to Shareholders: (i) (ii) the names of the members of the Committee administering this Scheme; in respect of the following Participants (which for the avoidance of doubt, shall include Participants who have exercised all their Options in any particular Financial Year): (a) Directors; G-14

377 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME (b) (c) Controlling Shareholders and their Associates; and Participants, other than those in (a) and (b) above, who received 5.0% or more of the total number of Options available under this Scheme, the following information will be required: (AA) (BB) the name of the Participant; the aggregate number of Options which have been granted to such Participant during the financial year under review (including terms); (CC) the aggregate number of Options which have been granted to such Participant since the commencement of the Employee Share Option Scheme to the end of the financial year under review; (DD) the aggregate number of Options which have been exercised since the commencement of the Employee Share Option Scheme to the end of the financial year under review; (EE) the aggregate number of Options outstanding as at the end of the financial year under review; (iii) the number and proportion of Incentive Options granted at the following discounts to the Market Price in the Financial Year under review: (a) (b) Incentive Options granted at up to 10% discount; and Incentive Options granted at between 10% but not more than 20% discount; (iv) (v) such other information as may be required by the Catalist Rules or the Act; and an appropriate negative statement in the event the disclosure of any of the abovementioned information is not applicable. 15. MODIFICATIONS TO THIS SCHEME 15.1 Any or all of the provisions of this Scheme may be modified and/or altered at any time and from time to time by resolution of the Committee except that: (i) (ii) any modification or alteration which would be to the advantage of Participants under this Scheme shall be subject to the prior approval of Shareholders at a general meeting; and no modification or alteration shall be made without due compliance with the Catalist Rules, the prior approval of the SGX-ST or (if required) any other stock exchange on which the Shares are quoted or listed, and such other regulatory authorities as may be necessary. G-15

378 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME For the purposes of Rule 15.1(i), the opinion of the Committee as to whether any modification or alteration would alter adversely the rights attaching to any Option shall be final and conclusive Notwithstanding anything to the contrary contained in Rule 15.1, the Committee may at any time by resolution (and without any other formality save for the prior approval of the SGX-ST) amend or alter this Scheme in any way to the extent necessary to cause this Scheme to comply with any statutory provision or the provisions or the regulations of any regulatory or other relevant authority or body (including the SGX-ST) Written notice of any modification or alteration made in accordance with this Rule 15 shall be given to all Participants. 16. TERMS OF EMPLOYMENT UNAFFECTED 16.1 This Scheme or any Option shall not form part of any contract of employment between our Company, or any Company within our Group and any Participant and the rights and obligations of a Participant under the terms of the office or employment with such company within our Group shall not be affected by his participation in this Scheme or any right which he may have to participate in it or any Option which he may hold and this Scheme or any Option shall afford such an individual no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever This Scheme shall not confer on any person any legal or equitable rights (other than those constituting the Options themselves) against our Company or our Group directly or indirectly or give rise to any cause of action at law or in equity against our Company and/or our Group. 17. DURATION OF THIS SCHEME 17.1 This Scheme shall continue to be in force at the discretion of the Committee, for a maximum period of 10 years commencing on the Adoption Date. Subject to compliance with any applicable laws and regulations in Singapore, this Scheme may be continued beyond the above stipulated period with the approval of the Shareholders by ordinary resolution at a general meeting and of any relevant authorities which may then be required This Scheme may be terminated at any time by the Committee or by resolution of the Shareholders at a general meeting subject to all other relevant approvals which may be required and if this Scheme is so terminated, no further Options shall be offered by our Company hereunder The termination, discontinuance or expiry of this Scheme shall be without prejudice to the rights accrued to Options which have been granted and accepted as provided in Rule 7.2, whether such Options have been exercised (whether fully or partially) or not. G-16

379 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 18. TAXES All taxes (including income tax) arising from the exercise of any Option granted to any Participant under this Scheme shall be borne by the Participant. 19. COSTS AND EXPENSES OF THIS SCHEME 19.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares pursuant to the exercise of any Option in CDP s name, the deposit of share certificate(s) with CDP, the Participant s securities account with CDP or the Participant s securities sub-account with a CDP Depository Agent or CPF investment account with a CPF agent bank Save for the taxes referred to in Rule 18 and such costs and expenses expressly provided in this Scheme to be payable by the Participants, all fees, costs, and expenses incurred by our Company in relation to this Scheme including but not limited to the fees, costs and expenses relating to the issue and allotment of the Shares pursuant to the exercise of any Option shall be borne by the Company. 20. DISCLAIMER OF LIABILITY Notwithstanding any provisions herein contained and subject to the Act, the Board, the Committee and our Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in respect of any matter under or in connection with this Scheme including but not limited to our Company s delay or failure in issuing and allotting or transferring the Shares or in applying for or procuring the listing of and quotation for the Shares on Catalist in accordance with Rule 11.4 (and any other stock exchanges on which the Shares are quoted or listed). 21. ABSTENTION FROM VOTING Shareholders who are eligible to participate in this Scheme must abstain from voting on any Shareholders resolution relating to the Scheme and should not accept nominations as proxy or otherwise for voting unless specific instructions have been given in the proxy form on how the vote is to be cast. In particular, Shareholders who are eligible to participate in the Scheme shall abstain from voting on the following resolutions, where applicable: (i) implementation of the Scheme; (ii) the maximum discount which may be given in respect of any Option; and (iii) participation by and grant of Options to Controlling Shareholders and their Associates. 22. DISPUTES For the avoidance of doubt, any dispute or difference of any nature in connection with this Scheme shall be referred to the Committee and its decision shall be final and binding in all respects. G-17

380 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 23. CONDITION OF OPTION Every Option shall be subject to the condition that no Shares shall be issued and/or transferred pursuant to the exercise of an Option if such issue and/or transfer would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore or any other relevant country having jurisdiction in relation to the issue and/or transfer of Shares hereto. 24. GOVERNING LAW This Scheme shall be governed by and construed in accordance with the laws of the Republic of Singapore. Our Company and the Participants, by accepting the offer of the grant of Options in accordance with this Scheme, submit to the exclusive jurisdiction of the courts of the Republic of Singapore. G-18

381 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME EMPLOYEE SHARE OPTION SCHEME LETTER OF OFFER SCHEDULE A Serial No: Date: To: [Name] PRIVATE AND CONFIDENTIAL [Designation] [Address] Dear Sir/Madam We are pleased to inform you that you have been nominated to participate in the Employee Share Option Scheme (the Scheme ) by the Committee appointed by the Board of Directors of Samurai 2K Aerosol Limited (the Company ) to administer the Scheme. Terms as defined in the Scheme shall have the same meaning when used in this Letter. Accordingly, an offer is hereby made to grant you an Option, in consideration of the payment of a sum of S$1.00, to subscribe for and be allotted and/or transferred Shares at the Exercise Price of S$ per Share. The Option shall be subject to the terms of this Letter of Offer and the Scheme (as the same may be amended from time to time pursuant to the terms and conditions of the Scheme). A copy of the Scheme is available for inspection at the business address of the Company. The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in part, except with the prior approval of the Committee. If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on failing which this offer will forthwith lapse. Yours faithfully for and on behalf of Samurai 2K Aerosol Limited Name: Designation: G-19

382 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME EMPLOYEE SHARE OPTION SCHEME ACCEPTANCE FORM SCHEDULE B Serial No: Date: To: The Committee Employee Share Option Scheme [c/o The Company Secretary] [Address] Closing Time and Date for Acceptance of Offer : No. of Shares in respect of which Option is Offered : Exercise Price per Share : S$ Total Amount Payable on acceptance of Option (exclusive of the relevant CDP charges (as defined below)) : S$ I have read your Letter of Offer dated (the Offering Date ) and agree to be bound by the terms thereof and of the Employee Share Option Scheme ( Scheme ) stated therein. I confirm that my acceptance of the Option will not result in the contravention of any applicable law or regulation in relation to the ownership of shares in the Company or options to subscribe for such shares. I hereby accept the Option to subscribe for ordinary shares in the capital of Samurai 2K Aerosol Limited (the Company ) (the Shares ) at S$ per Share and enclose a *cheque/banker s draft/cashier s order/postal order no. for S$ being payment for the purchase of the Option. I understand that I am not obliged to exercise the Option. I also understand that I shall be responsible for all the fees of The Central Depository (Pte) Limited ( CDP ) relating to or in connection with the issue and allotment and/or transfer of any Shares in CDP s name, the deposit of share certificate(s) with CDP, my securities account with CDP or my securities sub-account with a Depository Agent or CPF investment account with a CPF agent bank (collectively, the CDP Charges ). I confirm as at the date hereof: (a) I am not less than 21 years old and not an undischarged bankrupt, nor have I entered into a composition with any of my creditors; G-20

383 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME (b) (c) I satisfy the eligibility requirements to participate in the Scheme as defined in Rule 4 of the Scheme; and I satisfy the other requirements to participate in the Scheme as set out in the Rules of the Scheme. I hereby acknowledge that you have not made any representation or warranty or given me any expectation of employment or continued employment to induce me to accept the offer and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to the offer. I agree to keep all information pertaining to the grant of the Option to me confidential. PLEASE PRINT IN BLOCK LETTERS Name in full: Designation: Address: Nationality: *NRIC/Passport No.: Signature: Date: Note: * Delete where inapplicable G-21

384 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME EXERCISE NOTICE SCHEDULE C To: The Committee Employee Share Option Scheme [c/o The Company Secretary] [Address] Total Number of ordinary shares (the Shares ) at S$ per Share under an option granted on (the Offering Date ) : Number of Shares previously allotted and issued or transferred thereunder : Outstanding balance of Shares which may be allotted and issued or transferred thereunder : Number of Shares now to be subscribed and/or acquired (in multiples of 100) : 1. Pursuant to your Letter of Offer dated and my acceptance thereof, I hereby exercise the Option to subscribe for Shares in Samurai 2K Aerosol Limited (the Company ) at S$ per Share. 2. I hereby request the Company to allot and issue or transfer to me the number of Shares specified in paragraph 1 in the name of The Central Depository (Pte) Limited ( CDP ) to the credit of my Securities Account with CDP/*Securities Sub-Account with a Depository Agent/*CPF investment account with a CPF Agent Bank specified below and to deliver the share certificates relating thereto to CDP at my own risk. I further agree to bear such fees or other charges as may be imposed by CDP/CPF (the CDP charges ) and any stamp duties in respect thereof: *(a) Direct Securities Account Number : *(b) Securities Sub-Account Number : *(c) Name of CDP Depository Age : *(d) CPF Investment Account Number : *(e) Name of CPF Agent Bank : G-22

385 APPENDIX G RULES OF THE EMPLOYEE SHARE OPTION SCHEME 3. I enclose a *cheque/cashier s order/bank draft/postal order No. for S$ in payment for Exercise Price of S$ for the total number of the said Shares and the applicable CDP charges. 4. I agree to subscribe for the Shares subject to the terms of the Letter of Offer, the Employee Share Option Scheme (as the same may be amended pursuant to the terms thereof from time to time) and the Constitution of the Company. 5. I declare that I am subscribing for the Shares for myself and not as a nominee for any other person. PLEASE PRINT IN BLOCK LETTERS Name in full: Designation: Address: Nationality: *NRIC/Passport No.: Signature: Date: Note: * Delete where inapplicable G-23

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387 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 1. NAME OF THE PLAN The Plan shall be called the Performance Share Plan. 2. DEFINITIONS 2.1 In the Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings: Act Adoption Date Associate Auditors The Companies Act, Chapter 50 of Singapore as amended, modified or supplemented from time to time. The date on which the Plan is adopted by the Company in general meeting. Shall have the meaning assigned to it in the Catalist Rules. The auditors of the Company for the time being. Award A contingent award of Shares granted under Rule 5. Award Date Award Letter Catalist Rules CDP Committee Company Control In relation to an Award, the date on which the Award is granted pursuant to Rule 5. A letter in such form as the Committee shall approve confirming an Award granted to a Participant by the Committee. Section B of the Listing Manual of the SGX-ST, as amended, modified or supplemented from time to time. The Central Depository (Pte) Limited. The remuneration committee of our Board, or such other committee comprising Directors duly authorised and approved by our Board to administer this Performance Share Plan. Samurai 2K Aerosol Limited, a company incorporated in Singapore. The capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of the Company. H-1

388 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN Controlling Shareholder A person who holds directly or indirectly fifteen (15) per cent. or more of the total number of issued Shares (excluding Shares held by the Company as treasury shares) (unless otherwise determined by the SGX-ST that a person who satisfies this subparagraph is not a controlling shareholder); or in fact exercises Control over the Company. Director Executive A person holding office as a director of our Company for the time being. Any employee of the Group (including any Executive Director who meets the relevant criteria and who shall be regarded as a Group Executive for the purposes of the Plan) selected by the Committee to participate in the Plan in accordance with Rule 4. Executive Director A director of the Company and/or any of its subsidiaries, as the case may be, who performs an executive function. Group Participant Performance Condition Performance Period Plan Release The Company and its subsidiaries. An Executive who has been granted an Award. In relation to an Award, the condition specified on the Award Date in relation to that Award. The period, as may be determined by the Committee at its discretion, during which the Performance Condition is to be satisfied. The Performance Share Plan, as the same may be modified or altered from time to time. In relation to an Award, the release at the end of the Performance Period relating to that Award of all or some of the Shares to which that Award relates in accordance with Rule 7 and, to the extent that any Shares which are the subject of the Award are not released pursuant to Rule 7, the Award in relation to those Shares shall lapse accordingly, and Released shall be construed accordingly. H-2

389 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN Release Schedule Released Award Retention Period SGX-ST Shares Trading Day Vesting Vesting Date In relation to an Award, a schedule in such form as the Committee shall approve, setting out the extent to which Shares which are the subject of that Award shall be Released on the Performance Condition being satisfied (whether fully or partially) or exceeded or not being satisfied, as the case may be, at the end of the Performance Period. An Award which has been released in accordance with Rule 7. Such retention period as may be determined by the Committee and notified to the Participant at the grant of the relevant Award to that Participant. The Singapore Exchange Securities Trading Limited. Ordinary shares in the capital of the Company. A day on which the Shares are traded on the Singapore Exchange. In relation to Shares which are the subject of a Released Award, the absolute entitlement to all or some of the Shares which are the subject of a Released Award and Vest and Vested shall be construed accordingly. In relation to Shares which are the subject of a Released Award, the date (as determined by the Committee and notified to the relevant Participant) on which those Shares have Vested pursuant to Rule Words importing the singular number shall, where applicable, include the plural number and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders. 2.3 Any reference to a time of a day in the Plan is a reference to Singapore time. 2.4 Any reference in the Plan to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and not otherwise defined in the Plan and used in the Plan shall have the meaning assigned to it under the Act or any statutory modification thereof, as the case may be. H-3

390 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 3. OBJECTIVES OF THE PLAN 3.1 The Plan is subject to the prevailing laws of Singapore at all times and has been proposed in order to: (a) (b) (c) foster an ownership culture within the Group which aligns the interests of Executives with the interests of shareholders; motivate Participants to achieve key financial and operational goals of the Company and/or their respective business units; and make total employee remuneration sufficiently competitive to recruit and retain staff having skills that are commensurate with the Company s ambition to become a world-class company. 4. ELIGIBILITY OF PARTICIPANTS 4.1 The following persons shall be eligible to participate in the Plan at the absolute discretion of the Committee: (a) (b) Executives (including Executive Directors) who, as of the Award Date, have attained the age of twenty-one (21) years and hold such rank as may be designated by the Committee from time to time and who have, as of the Award Date, been in full time employment of the Group for a period of at least twelve (12) months (or in the case of any Executive Director, such shorter period as the Committee may determine), provided that none shall be an undischarged bankrupt as at the Award Date; and Subject to Rule 4.2, persons who are qualified under Rule 4.1(a) above and who are also Controlling Shareholders or Associates of Controlling Shareholders, 4.2 Controlling Shareholders and their Associates who satisfy the criteria set out in Paragraph 4.1 above shall be eligible to participate in the Plan provided that: (a) (b) their participation; and the actual or maximum number of Shares and terms of any Awards to be granted to them, have been approved by independent shareholders of the Company at a general meeting in separate resolutions for each such person and, in respect of each such person, in separate resolutions for each of (i) his participation and (ii) the actual or maximum number of Shares and terms of any Awards to be granted to him, provided always that it shall not be necessary to obtain the approval of the independent shareholders of the Company for the participation in the Plan of a Controlling Shareholder or his Associate who is, at the relevant time, already a Participant. 4.3 Save as prescribed by the Catalist Rules, there shall be no restriction on the eligibility of any Participant to participate in any other share option or share incentive scheme, implemented or to be implemented by any company within our Group. Subject to the Act and any requirements of the SGX-ST, the terms of eligibility for participation in the Plan may be amended from time to time at the absolute discretion of the Committee. H-4

391 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 5. GRANT OF AWARDS 5.1 Subject as provided in Rule 8, the Committee may grant Awards to Executives as the Committee may select, in its absolute discretion, at any time during the period when the Plan is in force. 5.2 The number of Shares which are the subject of each Award to be granted to a Participant in accordance with the Plan shall be determined at the absolute discretion of the Committee, which shall take into account criteria such as his rank, job performance and potential for future development, his contribution to the success and development of the Group and the extent of effort with which the Performance Condition may be achieved within the Performance Period. 5.3 The Committee shall decide in relation to an Award: (a) (b) (c) (d) (e) (f) (g) the Participant; the Award Date; the Performance Period; the number of Shares which are the subject of the Award; the Performance Condition; the Release Schedule; and any other condition which the Committee may determine in relation to that Award. 5.4 The Committee may amend or waive the Performance Period, the Performance Condition and/or the Release Schedule in respect of any Award: (a) (b) in the event of a take-over offer being made for the Shares or if under the Act, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies or in the event of a proposal to liquidate or sell all or substantially all of the assets of the Company; or if anything happens which causes the Committee to conclude that: (i) (ii) a changed Performance Condition and/or Release Schedule would be a fairer measure of performance, and would be no less difficult to satisfy; or the Performance Condition and/or Release Schedule should be waived, and shall notify the Participants of such change or waiver. H-5

392 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 5.5 As soon as reasonably practicable after making an Award, the Committee shall send to each Participant an Award Letter confirming the Award and specifying in relation to the Award: (a) (b) (c) (d) (e) (f) the Award Date; the Performance Period; the number of Shares which are the subject of the Award; the Performance Condition; the Release Schedule; and any other condition which the Committee may determine in relation to that Award. 5.6 Participants are not required to pay for the grant of Awards. 5.7 An Award or Released Award shall be personal to the Participant to whom it is granted and, prior to the allotment and/or transfer to the Participant of the Shares to which the Released Award relates, shall not be transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval of the Committee and if a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an Award or Released Award without the prior approval of the Committee, that Award or Released Award shall immediately lapse. 6. EVENTS PRIOR TO THE VESTING DATE 6.1 An Award shall, to the extent not yet Released, immediately lapse without any claim whatsoever against the Company: (a) (b) (c) in the event of misconduct on the part of the Participant as determined by the Committee in its discretion; subject to Rule 6.2(b), upon the Participant ceasing to be in the employment of the Group for any reason whatsoever; or in the event of an order being made or a resolution passed for the winding-up of the Company on the basis, or by reason, of its insolvency. For the purpose of Rule 6.1(b), the Participant shall be deemed to have ceased to be so employed as of the date the notice of termination of employment is tendered by or is given to him, unless such notice shall be withdrawn prior to its effective date. 6.2 In any of the following events, namely: (a) the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of an Award; H-6

393 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN (b) where the Participant ceases to be in the employment of the Group by reason of: (i) (ii) (iii) (iv) (v) (vi) ill health, injury or disability (in each case, evidenced to the satisfaction of the Committee); redundancy; retirement at or after the legal retirement age; retirement before the legal retirement age with the consent of the Committee; the company by which he is employed or to which he is seconded, as the case may be, ceasing to be a company within the Group, or the undertaking or part of the undertaking of such company being transferred otherwise than to another company within the Group, as the case may be; (where applicable) his transfer of employment between companies within the Group; (vii) his transfer to any government ministry, governmental or statutory body or corporation at the direction of any company within the Group; or (viii) any other event approved by the Committee; (c) (d) the death of a Participant; or any other event approved by the Committee, the Committee may, in its absolute discretion, preserve all or any part of any Award and decide as soon as reasonably practicable following such event either to Vest some or all of the Shares which are the subject of any Award or to preserve all or part of any Award until the end of the Performance Period and subject to the provisions of the Plan. In exercising its discretion, the Committee will have regard to all circumstances on a case-by-case basis, including (but not limited to) the contributions made by that Participant and the extent to which the Performance Condition has been satisfied. 6.3 Without prejudice to the provisions of Rule 5.4, if before the Vesting Date, any of the following occurs: (a) (b) (c) a take-over offer for the Shares becomes or is declared unconditional; a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies being approved by shareholders of the Company and/or sanctioned by the court under the Act; or an order being made or a resolution being passed for the winding-up of the Company (other than as provided in Rule 6.1(c) or for amalgamation or reconstruction), H-7

394 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN the Committee will consider, at its discretion, whether or not to Release any Award, and will take into account all circumstances on a case-by-case basis, including (but not limited to) the contributions made by that Participant. If the Committee decides to Release any Award, then in determining the number of Shares to be Vested in respect of such Award, the Committee will have regard to the proportion of the Performance Period which has elapsed and the extent to which the Performance Condition has been satisfied. Where Awards are Released, the Committee will, as soon as practicable after the Awards have been Released, procure the allotment or transfer to each Participant of the number of Shares so determined, such allotment or transfer to be made in accordance with Rule RELEASE OF AWARDS 7.1 Review of Performance Condition (a) As soon as reasonably practicable after the end of each Performance Period, the Committee shall review the Performance Condition specified in respect of each Award and determine at its discretion whether it has been satisfied and, if so, the extent to which it has been satisfied, and provided that the relevant Participant has continued to be an Executive from the Award Date up to the end of the Performance Period, shall Release to that Participant all or part (as determined by the Committee at its discretion in the case where the Committee has determined that there has been partial satisfaction of the Performance Condition) of the Shares to which his Award relates in accordance with the Release Schedule specified in respect of his Award on the Vesting Date. If not, the Awards shall lapse and be of no value. If the Committee determines in its sole discretion that the Performance Condition has not been satisfied or (subject to Rule 6) if the relevant Participant has not continued to be an Executive from the Award Date up to the end of the relevant Performance Period, that Award shall lapse and be of no value and the provisions of Rules 7.2 to 7.4 shall be of no effect. The Committee shall have the discretion to determine whether the Performance Condition has been satisfied (whether fully or partially) or exceeded and in making any such determination, the Committee shall have the right to make computational adjustments to the audited results of the Company or the Group, to take into account such factors as the Committee may determine to be relevant, including changes in accounting methods, taxes and extraordinary events, and further the right to amend the Performance Condition if the Committee decides that a changed performance target would be a fairer measure of performance. (b) (c) Shares which are the subject of a Released Award shall be Vested to a Participant on the Vesting Date, which shall be a Trading Day falling as soon as practicable after the review by the Committee referred to in Rule 7.1(a) and, on the Vesting Date, the Committee will procure the allotment or transfer to each Participant of the number of Shares so determined. Subject to the prevailing legislation and the provisions of the Catalist Rules, the Company will deliver Shares to Participants upon vesting of their Awards by way of an issue of new Shares or the transfer of existing Shares held as treasury shares to the Participants. H-8

395 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN (d) (e) In determining whether to issue new Shares or to purchase existing Shares for delivery to Participants upon the vesting of their Awards, the Company will take into account factors such as the number of Shares to be delivered, the prevailing market price of the Shares and the financial effect on the Company of either issuing new Shares or purchasing existing Shares. Where new Shares are allotted upon the Vesting of any Award, the Company shall, as soon as practicable after such allotment, apply to the SGX-ST for permission to deal in and for quotation of such Shares. 7.2 Release of Award Shares which are allotted (as an issue of new Shares) or transferred (as a transfer of Shares then held by the Company in treasury) on the Release of an Award to a Participant shall be issued in the name of, or transferred to, CDP to the credit of the securities account of that Participant maintained with CDP or the securities sub-account of that Participant maintained with a Depository Agent, in each case, as designated by that Participant. 7.3 Ranking of Shares New Shares allotted and issued, and existing Shares procured by the Company for transfer, on the vesting of an Award shall: (a) (b) be subject to all the provisions of the Constitution of the Company; and rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date for which is on or after the relevant Vesting Date, and shall in all other respects rank pari passu with other existing Shares then in issue. For the purposes of this Rule 7.3, Record Date means the date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to or rights of holders of Shares. 7.4 Moratorium Shares which are allotted and issued or transferred to a Participant pursuant to the Release of an Award shall not be transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part, during the Retention Period, except to the extent set out in the Award Letter or with the prior approval of the Committee. The Company may take steps that it considers necessary or appropriate to enforce or give effect to this disposal restriction including specifying in the Award Letter the conditions which are to be attached to an Award for the purpose of enforcing this disposal restriction. H-9

396 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 8. LIMITATION ON THE SIZE OF THE PLAN 8.1 The aggregate number of Shares which may be issued or transferred pursuant to Awards granted under the Plan on any date, when aggregated with the aggregate number of Shares over which options or awards are granted under any other share option schemes or share schemes of the Company, shall not exceed fifteen (15) per cent. of the total number of issued Shares (excluding Shares held by the Company as treasury shares) on the day preceding that date. 8.2 The aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan to Participants who are Controlling Shareholders and their Associates shall not exceed twenty-five (25) per cent. of the Shares available under the Plan. 8.3 The number of Shares which may be issued or transferred pursuant to Awards under the Plan to each Participant who is a Controlling Shareholder or his Associate shall not exceed ten (10) per cent. of the Shares available under the Plan. 8.4 Shares which are the subject of Awards which have lapsed for any reason whatsoever may be the subject of further Awards granted by the Committee under the Plan. 9. ADJUSTMENTS 9.1 If a variation in the issued ordinary share capital of the Company (whether by way of a capitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation, distribution or otherwise) shall take place, then: (a) (b) the class and/or number of Shares which are the subject of an Award to the extent not yet Vested; and/or the class and/or number of Shares in respect of which future Awards may be granted under the Plan, shall be adjusted by the Committee to give such Participant the same proportion of the equity capital of the Company as that to which he was previously entitled, in such manner as the Committee may determine to be appropriate, provided that no adjustment shall be made if as a result, the Participant receives a benefit that a shareholder of the Company does not receive. 9.2 Unless the Committee considers an adjustment to be appropriate, (a) the issue of securities as consideration for an acquisition or a private placement of securities; (b) the cancellation of issued Shares purchased or acquired by the Company by way of a market purchase of such Shares undertaken by the Company on the SGX-ST during the period when a share purchase mandate granted by shareholders of the Company (including any renewal of such mandate) is in force; (c) the issue of Shares or other securities convertible into or with rights to acquire or subscribe for Shares to its employees pursuant to any share option scheme or share plan approved by shareholders in general meeting, including the Plan; or (d) any issue of Shares arising from the exercise of any warrants or the conversion of any convertible securities issued by the Company, shall not normally be regarded as a circumstance requiring adjustment. H-10

397 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 9.3 Notwithstanding the provisions of Rule 9.1, any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable. 9.4 Upon any adjustment required to be made pursuant to this Rule 9, the Company shall notify the Participant (or his duly appointed personal representatives where applicable) in writing and deliver to him (or his duly appointed personal representatives where applicable) a statement setting forth the class and/or number of Shares thereafter to be issued or transferred on the Vesting of an Award. Any adjustment shall take effect upon such written notification being given. 10. ADMINISTRATION OF THE PLAN 10.1 The Plan shall be administered by the Committee in its absolute discretion with such powers and duties as are conferred on it by the board of directors of the Company, provided that no member of the Committee shall participate in any deliberation or decision in respect of Awards to be granted to him or held by him The Committee shall have the power, from time to time, to make and vary such arrangements, guidelines and/or regulations (not being inconsistent with the Plan) for the implementation and administration of the Plan, to give effect to the provisions of the Plan and/or to enhance the benefit of the Awards and the Released Awards to the Participants, as it may, in its absolute discretion, think fit. Any matter pertaining or pursuant to the Plan and any dispute and uncertainty as to the interpretation of the Plan, any rule, regulation or procedure thereunder or any rights under the Plan shall be determined by the Committee Neither the Plan nor the grant of Awards under the Plan shall impose on the Company or the Committee or any of its members any liability whatsoever in connection with: (a) the lapsing of any Awards pursuant to any provision of the Plan; (b) the failure or refusal by the Committee to exercise, or the exercise by the Committee of, any discretion under the Plan; and/or (c) any decision or determination of the Committee made pursuant to any provision of the Plan Any decision or determination of the Committee made pursuant to any provision of the Plan (other than a matter to be certified by the Auditors) shall be final, binding and conclusive (including for the avoidance of doubt, any decisions pertaining to disputes as to the interpretation of the Plan or any rule, regulation or procedure hereunder or as to any rights under the Plan). The Committee shall not be required to furnish any reasons for any decision or determination made by it The Committee shall ensure that the rules of the Plan are in compliance with the Act and the applicable laws and regulations in Singapore, including but not limited to, the Catalist Rules. H-11

398 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 11. NOTICES AND COMMUNICATIONS 11.1 Any notice required to be given by a Participant to the Company shall be sent or made to the registered office of the Company or such other addresses (including electronic mail addresses) or facsimile number, and marked for the attention of the Committee, as may be notified by the Company to him in writing Any notices or documents required to be given to a Participant or any correspondence to be made between the Company and the Participant shall be given or made by the Committee (or such person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to him by hand or sent to him at his home address, electronic mail address or facsimile number according to the records of the Company or the last known address, electronic mail address or facsimile number of the Participant Any notice or other communication from a Participant to the Company shall be irrevocable, and shall not be effective until received by the Company. Any other notice or communication from the Company to a Participant shall be deemed to be received by that Participant, when left at the address specified in Rule 11.2 or, if sent by post, on the day following the date of posting or, if sent by electronic mail or facsimile transmission, on the day of despatch. 12. MODIFICATIONS TO THE PLAN 12.1 Any or all the provisions of the Plan may be modified and/or altered at any time and from time to time by a resolution of the Committee, except that: (a) (b) (c) no modification or alteration shall alter adversely the rights attached to any Award granted prior to such modification or alteration except with the consent in writing of such number of Participants who, if their Awards were Released to them upon the Performance Conditions for their Awards being satisfied in full, would become entitled to not less than three-quarters in number of all the Shares which would fall to be Vested upon Release of all outstanding Awards upon the Performance Conditions for all outstanding Awards being satisfied in full; the definitions of Executive, Executive Director, Participant, Performance Period and Release Schedule and the provisions of Rules 4, 5, 6, 7, 8, 9, 10 and this Rule 12 shall not be altered to the advantage of Participants except with the prior approval of the Company s shareholders in general meeting; and no modification or alteration shall be made without the prior approval of the SGX-ST and such other regulatory authorities as may be necessary. For the purposes of Rule 12.1(a), the opinion of the Committee as to whether any modification or alteration would adversely affect the rights attached to any Award shall be final, binding and conclusive. For the avoidance of doubt, nothing in this Rule 12.1 shall affect the right of the Committee under any other provision of the Plan to amend or adjust any Award and without due compliance with the Catalist Rules and such other laws and regulations as may be applicable. H-12

399 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 12.2 Notwithstanding anything to the contrary contained in Rule 12.1, the Committee may at any time by resolution (and without other formality, save for the prior approval of the SGX-ST) amend or alter the Plan in any way to the extent necessary or desirable, in the opinion of the Committee, to cause the Plan to comply with, or take into account, any statutory provision (or any amendment or modification thereto, including amendment of or modification to the Act) or the provision or the regulations of any regulatory or other relevant authority or body (including the SGX-ST) Written notice of any modification or alteration made in accordance with this Rule 12 shall be given to all Participants. 13. TERMS OF EMPLOYMENT UNAFFECTED The terms of employment of a Participant shall not be affected by his participation in the Plan, which shall neither form part of such terms nor entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for any reason. 14. DURATION OF THE PLAN 14.1 The Plan shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten (10) years commencing on the Adoption Date, provided always that the Plan may continue beyond the above stipulated period with the approval of the Company s shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required The Plan may be terminated at any time by the Committee or, at the discretion of the Committee, by resolution of the Company in general meeting, subject to all relevant approvals which may be required and if the Plan is so terminated, no further Awards shall be granted by the Committee hereunder The expiry or termination of the Plan shall not affect Awards which have been granted prior to such expiry or termination, whether such Awards have been Released (whether fully or partially) or not. 15. TAXES All taxes (including income tax) arising from the grant or Release of any Award granted to any Participant under the Plan shall be borne by that Participant. 16. COSTS AND EXPENSES OF THE PLAN 16.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment or transfer of any Shares pursuant to the Release of any Award in CDP s name, the deposit of share certificate(s) with CDP, the Participant s securities account with CDP, or the Participant s securities sub-account with a Depository Agent. H-13

400 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN 16.2 Save for the taxes referred to in Rule 15 and such other costs and expenses expressly provided in the Plan to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the Plan including but not limited to the fees, costs and expenses relating to the allotment and issue, or transfer, of Shares pursuant to the Release of any Award shall be borne by the Company. 17. DISCLAIMER OF LIABILITY Notwithstanding any provisions herein contained, the Committee and the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, including but not limited to the Company s delay in issuing, or procuring the transfer of, the Shares or applying for or procuring the listing of new Shares on the SGX-ST in accordance with Rule 7.1(c). 18. DISCLOSURES IN ANNUAL REPORTS The following disclosures (as applicable) will be made by the Company in its annual report for so long as the Plan continues in operation: (a) (b) the names of the members of the Committee administering the Plan; in respect of the following Participants: (i) (ii) (iii) Directors; Controlling Shareholders and their Associates; and Participants (other than those in paragraphs (b)(i) and (b)(ii) above) who have received Shares pursuant to the Release of Awards granted under the Plan which, in aggregate, represent 5% or more of the aggregate of the total number of Shares available under the Plan, the following information will be required: (AA) (BB) (CC) (DD) the name of the Participant; the aggregate number of Shares comprised in Awards which have been granted to such Participant during the financial year under review (including terms); the aggregate number of Shares comprised in Awards which have been granted to such Participant since the commencement of the Performance Share Plan to the end of the financial year under review; the aggregate number of Shares comprised in Awards which have been issued and/or transferred to such Participants pursuant to the vesting of Awards under the Performance Share Plan since the commencement of the Performance Share Plan to the end of the financial year under review; H-14

401 APPENDIX H RULES OF THE PERFORMANCE SHARE PLAN (EE) the aggregate number of Shares comprised in Awards which have not been vested as at the end of the financial year under review; and (c) such other information as may be required by the Catalist Rules or the Act, provided that if any of the above requirements are not applicable, an appropriate negative statement should be included therein. 19. DISPUTES Any disputes or differences of any nature arising hereunder shall be referred to the Committee and its decision shall be final and binding in all respects. 20. ABSTENTION FROM VOTING Shareholders who are eligible to participate in this Plan must abstain from voting on any Shareholders resolution relating to the Plan and should not accept nominations as proxy or otherwise for voting unless specific instructions have been given in the proxy form on how the vote is to be cast. In particular, Shareholders who are eligible to participate in the Plan shall abstain from voting on the following resolutions, where applicable: (i) implementation of the Plan; and (ii) participation by and grant of Options to Controlling Shareholders and their Associates. 21. GOVERNING LAW The Plan shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting grants of Awards in accordance with the Plan, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore. 22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT, CHAPTER 53B No person other than the Company or a Participant shall have any right to enforce any provision of the Plan or any Award by the virtue of the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore. H-15

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403 APPENDIX I INDUSTRY REPORT Independent Market Research Report on the Aerosol Spray Paint for Two-Wheelers in Aftermarket in Selected Markets Final Report 31 st October 2016 I-1

404 APPENDIX I INDUSTRY REPORT October 2016 Frost & Sullivan The market research process for this study has been undertaken through secondary/desktop research as well as primary research, which involves discussing the status of the industry with leading participants and experts. The research methodology used is the Expert Opinion Consensus Methodology. Quantitative market information was sourced from interviews by way of primary research, and therefore, the information is subject to fluctuations due to possible changes in the business and industry climate. Frost & Sullivan s estimates and assumptions are based on varying levels of quantitative and qualitative analyses, including industry journals, company reports and information in the public domain. Forecasts, estimates, predictions, and other forward-looking statements contained in this report are inherently uncertain because of changes in factors underlying their assumptions, or events or combinations of events that cannot be reasonably foreseen. Actual results and future events could differ materially from such forecasts, estimates, predictions, or such statements. This study has been prepared for used by Samurai 2K Aerosol Limited ( the Company ), including but not limited to an initial public offering and listing on Catalist, the sponsorsupervised board of the Singapore Exchange Securities Trading Limited ( SGX-ST ) ( the Listing ). Save for the inclusion of this study in the business communication documents and the documents in relation to the Listing (including but not limited to the Offer Document) and any information issued by the Company and in such presentation materials prepared by or on behalf of the Company (reviewed by Frost & Sullivan) in relation to the Listing, and in relation to its future communication or presentation to existing or prospective business partners, affiliates, customers, or financing body, no part of it may be otherwise given, lent, resold, or disclosed to noncustomers without our written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without our permission. Frost & Sullivan has prepared this study in an independent and objective manner, and it has taken adequate care to ensure its accuracy and completeness. We believe that this study presents a true and fair view of aerosol spray paint market for 2 wheelers focusing on aftermarket in select Southeast Asian countries within the limitations of, among others, secondary statistics and primary research, and it does not purport to be exhaustive. Our research has been conducted with an overall industry perspective, and it may not necessarily reflect the performance of individual companies in the industry. Frost & Sullivan shall not be liable for any loss suffered because of reliance on the information contained in this study as may be required by applicable laws and regulations. This study should also not be considered as a recommendation to buy or not to buy the shares of any company or companies as mentioned in it or otherwise. Authorized Signatory Sanjay Singh Vice President Frost & Sullivan (S) Pte Ltd 100 Beach Road #29-01/11 Shaw Tower Singapore Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 2 I-2

405 APPENDIX I INDUSTRY REPORT Table of Contents 1 DEFINITION AND SEGMENTATION OF PAINTS & COATINGS MARKET OVERVIEW OF MACROECONOMIC INDICATORS IN SOUTHEAST ASIA... 6 Gross Domestic Product (GDP) Growth... 6 Population Growth And Favourable Demographics... 9 Growth in Per Capita Disposable Income Urbanization Conclusion AEROSOL SPRAY PAINT MARKET DYNAMICS Market Overview And Market Sizing Of Overall Paints & Coatings Industry In SEA Value Chain For Aerosol Spray Paint Industry In Selected Southeast Asian Countries Key Drivers For Aerosol Spray Paint Market Key Challenges For Aerosol Spray Paint Market Key Entry Barriers Key Technology Trends Market Sizing For Aerosol Spray Paints Market for Two-Wheelers in the Aftermarket in Southeast Asia Outlook Of Overall Southeast Asian Aerosol Spray Paint Market OVERVIEW OF AEROSOL SPRAY PAINT MARKET FOR TWO-WHEELERS IN AFTERMARKET IN MALAYSIA Regulatory Framework Market Size - Aerosol Spray Paint Market for Two-Wheelers Aftermarket Competitive Landscape OVERVIEW OF AEROSOL SPRAY PAINT MARKET FOR TWO-WHEELERS IN AFTERMARKET IN INDONESIA Regulatory Framework Market Size - Aerosol Spray Paint Market for Two-Wheelers Aftermarket Competitive Landscape OVERVIEW OF AEROSOL SPRAY PAINT MARKET FOR TWO-WHEELERS IN AFTERMARKET IN VIETNAM Regulatory Framework Market Size - Aerosol Spray Paint Market for Two-Wheelers Aftermarket OVERVIEW OF AEROSOL SPRAY PAINT MARKET FOR TWO-WHEELERS IN AFTERMARKET IN THAILAND Regulatory Framework Market Size Aerosol Spray Paint Market for Two-Wheelers Aftermarket APPENDIX Key Profiles Of Regional Players In Aerosol Spray Paint Market For Two-Wheelers (Aftermarket) Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 3 I-3

406 APPENDIX I INDUSTRY REPORT 1 DEFINITION AND SEGMENTATION OF PAINTS & COATINGS MARKET Paints are applied on a substrate to protect it from exposure to the external environment, thereby increasing its service life. Furthermore, paints also add aesthetic value to the surface. For the purpose of this study, the paints & coatings market has been segmented as follows: Aerosol Spray Paint It is a type of paint which comes in a pressurized, sealed container and is usually mixed with an aromatic solvent. It is widely used in the automotive and two-wheeler aftermarket 1, in several hardware and industrial applications, and for creating graffiti. Key applications of aerosol spray paint cans include: Automotive touchups (including repainting scratches on cars and two wheelers) Marine repaint on boat surface Furniture including wooden and vinyl Industrial machinery Windows and doorframes Consumer goods Aerosol spray paint comes in 2 variants namely, 1K and 2K type system. Both the systems contain similar ingredients, but 2K system contains an additional hardening agent present in a separate compartment within the container. This hardening agent provides gloss and resistance to the surface. The other advantage of 2K system is that it does not require an additional clear coat. Automotive OEM Coatings Automotive OEM coatings include coatings used for cars, buses, trucks, two-wheelers, and other automobiles. Coatings applied on aircrafts are grouped under other industrial coatings and coatings used for pre-finished metal sheets and plastic bodies of automobiles are not included in this segment. Automotive coating typically consists of an electro-coat (base coat), a primer, and a top coat (clear coat). Automotive Refinish Coatings Automotive refinish coatings include all coatings applied on automobiles (cars, buses, trucks, etc.) and their parts including subsequent coatings applied during body collision repairs in automotive OEM plants. Can Coatings Can coatings include coatings applied on beverage cans for both decorative and protective purposes. Coatings are applied on the inside to prevent the metal from reacting with the contents of the can and on the outside for decorative purposes. Coil Coatings Pre-finish metal coatings, or coil coatings, are pre-applied on continuous metal sheets, strips, and coils which are later sold to the OEM manufacturers 1 Secondary market concerned with supplying goods and services used in repair and maintenance of vehicles, after the sale of vehicles by the original equipment manufacturer (OEM) Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 4 I-4

407 APPENDIX I INDUSTRY REPORT Decorative Coatings Otherwise known as architectural coatings, this segment includes all coatings applied on new and existing buildings for decorative purposes. Products reach consumers (painters, contractors, project owners, etc.) either through wholesalers, retailers, or directly, depending on the requirements. Frost & Sullivan s classification includes do-it-yourself (DIY) paint, architectural timber finishes, and road marking paint in this category. Decorative coatings are usually thinner coatings, unlike protective or industrial coatings. Marine Coatings These coatings are applied on new and existing commercial ships, vessels, cargo ships, etc., and mostly anti-corrosive or anti-fouling coatings are preferred. Coatings for offshore oil rigs and equipment are included under protective coatings. Powder Coatings Powder coatings are used in a variety of applications that include all coatings where the resins and pigments are in their dry, formulated state and are sprayed on the parts or the surface to be coated. Pre-decorative Coatings Pre-decorative products usually refer to coatings/materials used for surface preparation (leveling and finishing of uneven substrate) or restoration of surface (holes or joints) before basecoat and topcoat are applied. This would include putty, skim coats, and various types of fillers. Protective Coatings Also known as heavy duty or high-performance coatings, these coatings are applied on steel structures, steel bridges, off-shore oil rigs and equipment, chemical and petroleum plants, piping, and other structures where anti-corrosive coatings or other coatings with high resistance to wear-and-tear are required. Protective coatings have a much thicker film than decorative coatings), typically 3-4mm. Resin technology includes polyurethane, polyester, and epoxy types. Examples: heat resistant coatings for pipes and flares, heavy-duty floor paint for factories, warehouses, or airport hangars, and highperformance coatings for oil rigs and related equipment. Industrial Wood Coatings This segment includes those industrial wood coatings used for in-factory coating of wooden surfaces, including wooden furniture, wooden flooring, and other wooden surfaces. Cellulose lacquers, thinners, binders, etc., are included in this category. These are usually transparent protective coating. Other Industrial Coatings This segment includes all other types of coatings that cannot be categorized under any of the abovementioned categories. It typically includes general industrial coatings, plastic coatings, electronic coatings, aircraft coatings, and others. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 5 I-5

408 APPENDIX I INDUSTRY REPORT 2 OVERVIEW OF MACROECONOMIC INDICATORS IN SOUTHEAST ASIA GROSS DOMESTIC PRODUCT (GDP) GROWTH 2 Overall Southeast Asia Real GDP growth in Southeast Asia 3 was approximately 4.6% in , significantly higher than the global average of around 3.1% over the same period. Going forward, the Southeast Asian economy is poised to maintain its growth trajectory of approximately 5% CAGR from 2015 to 2020, driven largely by improving macro-economic outlook in Indonesia, sustained expansion through surging investments (especially in manufacturing and construction) in Vietnam, and near term 4 political stability in Thailand. Malaysia, however, bears a subdued economic outlook, due to a negative impact from weak oil prices, as well as lingering political issues. The following chart illustrates the Compound Annual Growth Rate (CAGR) of real GDP growth rates in selected economies. 10.0% Going forward. The Southeast Asian economy is poised to maintain its growth trajectory of approximately 5% CAGR from 2015 to 2020 Real GDP Growth Rates, Selected Countries in Southeast Asia, F Real GDP Growth (%) 8.0% 6.0% 4.0% 2.0% 6.2% 6.2% 6.0% 7.4% 5.3% 5.5% 5.6% 4.7% 5.0% 4.8% 4.9% 6.0% 5.0% 4.4% 5.3% 5.5% 5.8% 6.0% 4.8% 4.8% 4.9% 5.0% 0.0% F 2017F 2018F 2019F 2020F Malaysia Indonesia Thailand Vietnam Source: International Monetary Fund (IMF) Note: The GDP growth rates in the above chart are based on 2010 constant prices in US$. The resulting growth rates when the GDP is converted to their respective national currencies will be different from those presented above There are two main segments for two-wheelers in the selected geographies - new sales and resale of two wheelers. Demand in both these market segments is correlated with economic growth. So, during economic slowdown, demand in both markets, especially new sales, tends to drop. On the other hand, steady economic growth translates into expansion in new sales and resale of two wheelers, driven by an increase in customers affordability. Overall, Indonesia and Vietnam are projected to drive the two wheeler sales with a total of approximately 41 million and approximately 15 million two-wheelers expected to be added respectively during The growth in two wheeler sales is projected to be moderate in Thailand (approximately 3%) and the growth is expected to drop in Malaysia (from 2 GDP is the monetary value of all the finished goods and services produced within a country s borders in a specific time period, usually calculated on an annual basis. It includes all private and public consumption, government outlays, investments, and exports less imports that occur within a defined territory. 3 Southeast Asia for the purpose of the report is said to comprise Malaysia, Indonesia, Thailand and Vietnam. 4 Till around 2017 when elections are planned to be held Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 6 I-6

409 APPENDIX I INDUSTRY REPORT 5% to 3%) owing to factors such as GST and weakening of ringgit. Driven by promising GDP growth, these SEA countries are expected to be promising markets for aerosol spray paints, especially for twowheelers aftermarket, between 2016 to 2020 (the Forecast Period ). Malaysia Malaysia is an upper-middle income economy 5 and was one of the 13 countries identified by the Commission on Growth and Development in its 2008 Growth Report to have recorded an average growth of more than 7% per year for 25 years or more. The gross domestic profit (GDP) of a country is driven by external and domestic demand. For Malaysia, external demand has been weak in 2015 and is expected to continue to be weak in The slow paced external growth is attributed to the slowdown in China, weak demand from the European Union and the US Federal Reserve s slowing down policy. In 2015, the country s net exports declined by 3.7%, making domestic demand the key driver of growth. However, even domestic demand in 2015 was moderate and grew by 5.1% as compared to 5.9% in Hence, real GDP growth was moderated to 5.0% in 2015 as compared to 6.0% in Similar to 2015, amid slow global economy, domestic consumption is expected to be the driver of growth in The International Monetary Fund (IMF) has trimmed the future growth rate by 0.2 percentage points from the earlier 4.4%. According to the IMF, Malaysia s GDP is projected to grow at a CAGR of 4.8% from 2015 to 2020, reaching 416 billion in The consumer sentiment index (CSI 6 ) increased in Q by 9.1 points to 72.9 as compared to Q but it is still below the threshold level of confidence (CSI above 100 is considered to bring optimism in the consumers), primarily due to concerns around job security and rising prices. A combination of the aforementioned factors is expected to result in people showcasing restricted purchasing behavior. This subdued consumer sentiment, is likely to result in a postponement of discretionary purchases including two-wheelers affecting in a muted growth of the two-wheeler industry and other cosmetic spends on the same such as decorative and touch-ups in the country during the Forecast Period. This is consequentially likely to impact the aerosol spray paint market over the said period. Indonesia Indonesia had an economic growth of around 6% from , supported by robust growth in consumption, investments, and exports. Total investment in Indonesia increased from 32.9 % of the GDP in 2010 to 35.1% of the GDP in Improved economic climate and recovery from the global financial crisis of 2008 were the harbingers of growth in the country. Decline in global commodity prices and China s slowdown in 2013 had an adverse impact on Indonesia s economic growth and it slowed down from 6% in 2012 to 4.7% in 2015 with the GDP (at constant 2010 price) being US$987 billion in Consequently, Indonesia s trade balance had been negatively affected as China is one of Indonesia s top trading partners. Total exports to China have fallen from US$22.6 billion in 2013 to US$15 billion in Imports have also fallen due to negative market sentiment, which has dampened the demand for imported goods in Indonesia. Total imports in Indonesia dropped from US$186 billion in 2013 to US$143 billion in The reduction in both exports and imports is an indicator of a slowdown in both domestic and global demand. 5 According to the World Bank, upper middle-income economies are those with a per capita Gross National Income (GNI) between $4,036 and $12, Malaysian Institute of Economic Research 7 Source: Ministry of Trade Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 7 I-7

410 APPENDIX I INDUSTRY REPORT The government has made attempts to boost the economy by introducing economic packages to stimulate investments through deregulations to ease the cost of doing business. The government is also providing financial incentives such as reduced taxation and in some cases, exemptions on valueadded tax (VAT) for specific sectors. These measures by the government have resulted in a positive outlook for the future with its GDP projected to grow at a CAGR of 5.5% during and reach US$1,290 billion by Indonesia s economic outlook coupled with a positive consumer sentiment is likely to favorably impact household expenditure especially in purchasing durable goods such as electronical appliances, two wheelers, etc. Historically, consumer confidence index (CCI) 8 has had a positive correlation with sale of two wheelers. In 2015, sale of two wheelers was the lowest in 5 years (6.48 million units) corresponding with low CCI of 97.5 (lowest in five years) falling from in As of 2016, CCI improved to and is projected to improve during the Forecast Period. This is in-turn likely to boost automotive sales, including new and used vehicles sales, over the said period. This growth in automotive sales is likely to translate into more vehicles in operation, consequentially resulting in a positive impact on consumption of paint in aftermarket over the Forecast Period. Thailand Thailand became an upper-middle income economy in 2011, graduating from a low-income economy in less than four decades. According to the World Bank, Thailand has been one of the most widely cited developmental success stories, with sustained strong growth and poverty reduction, particularly in the 1980s. Between the late 1980s and early 1990s, Thailand s economy grew at a YoY rate of 7.5%, which helped in creating jobs and reducing poverty. However, as of 2016, Thailand s economy is plagued by long term uncertainty in political environment, leading to subdued investments. As a result, Thailand is likely to register restrained economic growth prospects over the Forecast Period. Overall, Thailand s GDP is projected to grow at a CAGR of 3.1% from 2015 to 2020, reaching 457 billion in 2020 (the lowest CAGR among the SEA countries in comparison). Thai economy is gradually recovering from the slump in Automotive industry in Thailand accounted for approximately 12% of the national GDP (2014) and is an important sector for the government. Consumer Confidence Index (CCI) 9 in July 2016 was 72.5, which although lower than 71.6 as of June 2016 and significantly lower than the 18 year average stated above, is indicative of the onset of a positive consumer outlook. Despite this, favourable government policy to promote investments, developments to accommodate technology changes in transforming Thailand as global green automotive production base etc are likely to result in improved consumer sentiments which in turn is expected to marginally drive automotive purchases in the Forecast Period. Vietnam Vietnam enjoyed a remarkable transition from being a poor country to a middle-income country since the economic reforms initiated in 1986 (commonly referred to as Đổi Mới). According to the World Bank, the country grew from a per capita income of around $100 in 1986 to approximately $2,100 by the end of Indonesia Consumer Confidence Index: 9 CCI measures consumer s outlook on current and future economic conditions, job prospects and income expectations. A high CCI is considered positive for the economy Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 8 I-8

411 APPENDIX I INDUSTRY REPORT Vietnam is also reducing its reliance on the agriculture sector. The share of agriculture in its GDP has reduced from 25% in 2000 to 17% in , with a corresponding less than proportional increase in the share of industry from 36% to 38% during the same period. In an effort to provide an impetus to external demand, Vietnam has entered into many free trade agreements with the Eurasian Economic Union, the European Union, South Korea, and the Trans- Pacific Partnership. However, the World Bank has revised down its expectation for Vietnam s annual economic growth for 2016 to 6.2% from its previous estimate of 6.5% due to the prolonged drought and salinity in the Mekong Delta and weaker global demand. Vietnam has the most promising economic outlook among the selected geographies displaying a GDP growth of approximately 6.2 to 6.3% during with an exception of 2015 where the year-onyear growth was 6.7%. Vietnam has been recording a high consumer confidence index score (CCI) 11 of (as of June 2015), reflecting a healthy economic outlook. However, Vietnamese, in general, make big purchases only after covering the essential living expenses. A high CCI coupled with high economic growth is expected to result in a buoyant environment for the two wheeler industry in the Forecast Period. This in turn is likely to drive the demand for aerosol spray paint in the aftermarket over the said period. POPULATION GROWTH AND FAVOURABLE DEMOGRAPHICS Collective population of the selected Southeast Asian countries is projected to grow by CAGR of 1.25% from about 440 million in 2015 to about 473 million by Among the four countries, Indonesia is the most populous country and accounted for approximately 57% of the total combined population, as of Chart below depicts the population of selected countries from Growth in population coupled with a significant proportion of population in the working age group is expected to fuel vehicle purchases resulting inan offtake for aerosol spray paint in the Forecast Period Population (in Millions), Selected Countries in Southeast Asia, F Million CAGR ~ 1.6% CAGR ~ 1.5% CAGR ~ 0.6% Malaysia Indonesia Thailand Vietnam CAGR ~ 1.1% 96.5 Source: UNDESA-PA; Compiled by Frost & Sullivan 10 World Bank data 11 ANZ- Roy Morgan Vietnam consumer confidence index Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 9 I-9

412 APPENDIX I INDUSTRY REPORT A growth in the population coupled with a significant proportion of the population belonging to the working age bracket of 25 to 54 years is likely to be a key factor in contributing to vehicle purchase decisions, including new and used vehicles sales, over the said period. This is in turn likely to lead to a demand for the aerosol paints market over The following chart illustrates the population breakdown by age brackets for selected countries in Population by Age Bracket (in Millions), Selected Countries in Southeast Asia, % 80% 6% 7% 10% 6% 7% 8% 8% 11% 8% 9% Million 60% 40% 20% 0% 41% 42% 47% 45% 43% 17% 17% 17% 17% 15% 28% 26% 17% 24% 24% Malaysia Indonesia Thailand Vietnam Overall 0-14 years years years years 65 years and over Source: CIA; Compiled by Frost & Sullivan GROWTH IN PER CAPITA DISPOSABLE INCOME In addition to growing GDP per capita, the Southeast Asian countries have also been witnessing significant growth in per capita disposable incomes over the years. Growth in per capita disposable income is a reliable indicator of excess money a consumer has for spending on discretionary purchases. Historically, Vietnam had the highest growth in per capita disposable income. Indonesia, another economically robust country in the region, had a relatively lower historical per capita disposable income growth. However, it is expected to register the highest rate of growth (CAGR of 9.4% over 2015A-2020F) in the Forecast Period with Malaysia at a close second registering a growth of around 8.5% while Thailand and Vietnam had lower growth rates of around 4-5% over the same period. The chart below depicts the historical and growth rates for the Forecast Period of per capita disposable income of the select Southeast Asian countries. Per Capita Disposable Income Growth in Selected SEA Countries, 2010A 2020F 15.0% 2010A-2015A CAGR 2015A-2020F CAGR Per Capita Disposable Income Growth (%) 10.0% 5.0% 0.0% 9.4% 10.0% 8.5% 4.6% 4.9% 2.1% 3.7% 2.4% Indonesia Malaysia Thailand Vietnam "Higher than historical growth rates in disposable income per capital is a majority of the selected Southeast Asian countries is expected to drive discretionary purchases in the Forecast Period." Source: Economist Intelligence Unit (EIU) and United Nations: Department of Economic and Social Affairs, Population Division. Compiled by Frost & Sullivan Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 10 I-10

413 APPENDIX I INDUSTRY REPORT Rising per capita disposable income which is a leading indicator of economic progress is expected to result in increased discretionary spending. With a majority of the Southeast Asian countries projected to have a higher than historical growth in per capita disposable income, Frost & Sullivan believes that this is likely to serve as an impetus towards erstwhile deferred automobile purchases which in turn is expected to result in an increase in the demand for aerosol spray paints over the Forecast Period. URBANIZATION Following chart depicts the overall urbanization trend in the Southeast Asia during F. The % Share in Total Population Living in Urban Areas, Southeast Asia, F Share in Total Population Living in Urban Areas, (%) 100% 75% 50% 25% 0% CAGR ( ) ~ 3.2% F 37.8% 46.4% 50.1% 54.7% Overall (4 countries combined) "Frost & Sullivan observed that urbanization has a positive correlation with automotive purchases and expects an increase in urbanization in the selected geographies from ~ 50% in 2015 to ~ 55% by 2020F" Source: United Nations, Compiled by Frost & Sullivan Urbanization is an overarching trend across all selected Southeast Asian countries. Urbanization is leading to growth in investments across industries, including infrastructure development. This is translating into creation and expansion of cities, mega cities and mega regions (e.g. Johor in Malaysia) in all these countries. Projected increase in urbanization is likely to result in higher need of transportation, thereby, generating greater automotive sales, including two-wheelers. This increase in number of two wheelers in operation is likely to translate into greater repainting requirement for them. The following chart depicts the urbanization trend in the 4 target countries, during F. The % of Population Living in Urban Areas, Select Countries in Southeast Asia, F Population Living in Urban Areas (%) 100% 80% 60% 40% 20% 0% 62% 78% 58% 56% 42% 31% 24% Malaysia Indonesia Thailand Vietnam 37% F Source: United Nations, Compiled by Frost & Sullivan Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 11 I-11

414 APPENDIX I INDUSTRY REPORT CONCLUSION Southeast Asia boasts of a share of a little over 6% of the world s total population. The region, as observed earlier is also home to a significant pool of young population which is expected to serve as key consumers of convenience and lifestyle products. Future growth in GDP combined with rising disposable income per capita are likely to serve as corner stones for discretionary purchases. A combination of rising young population, increasing disposable income (reflected by growth in GDP per capita), and promising urbanization trend are expected to lead to increased consumer spending on goods including vehicle purchases, in selected Southeast Asian countries. A combination of the aforementioned macro-economic indicators is expected to lead to increased consumer spending on goods including vehicle purchases, in selected Southeast Asian countries. This increase in vehicle purchase is expected to bring along with it a demand for aerosol spray cans in the aftermarket in the Forecast Period. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 12 I-12

415 APPENDIX I INDUSTRY REPORT 3 AEROSOL SPRAY PAINT MARKET 12 DYNAMICS MARKET OVERVIEW AND MARKET SIZING OF OVERALL PAINTS & COATINGS INDUSTRY IN SEA As observed earlier, for the purpose of this study the paints and coatings market has been segmented into aerosol spray paint, automotive OEM coatings, automotive refinish coatings, can coatings, coil coatings, decorative coatings, marine coatings, powder coatings, pre-decorative coatings etc. The total Southeast Asian paints and coatings market was valued at US$ 5.8 billion in 2015, with large consumer bases in countries such as Indonesia and Thailand. This market is projected to grow at a CAGR of Going forward the SEA paints and approximately 7.3% ( ) and reach approximately US$ coatings industry is expected to 8.6 billion by Most dominating segments in terms of grow at a CAGR of approximmately consumption of paints and coatings are decorative coatings 8% over (more than 50% market share), wood furniture coatings and protective coatings. Key drivers governing the growth in paints and coatings market in South East Asia are: Growth in construction industry: The coatings market in Southeast Asia is expected to fare well due to a growth in the construction industry a result of the development of residential and commercial buildings as well as infrastructure. The optimistic economic conditions anticipated in most Southeast Asian countries, especially Indonesia and Thailand, is expected to cause these segments to witness buoyant growth, thereby influencing the coatings market Rise in number of automobiles: Rise in the number of automobiles has a direct positive relation to the automotive OEM coatings market. According to Frost & Sullivan estimates, automotive coatings market was valued at US$ 377 million in 2015 for the selected South East Asian countries. Thailand accounted for the largest automotive OEM coatings market share of 51.2% in 2014 due to its continued strength as an exporting hub for automotive industries. Almost 50% of the production output is exported. Thailand is poised for strong growth in automotive production, domestic demand, as well as export High growth of industrial sectors, such as the energy and power, mining, oil & gas, chemicals, off-shore project developments, building and infrastructure construction, and manufacturing promote the usage of protective coatings. Indonesia accounted for the largest protective coatings market share of approximately 26-27% in 2015, followed by Malaysia having approximately 21% - 22% market share 12 Aerosol spray paint market for two-wheelers in aftermarket Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 13 I-13

416 APPENDIX I INDUSTRY REPORT The figure below shows the total paint & coating market size in the selected countries from F. Total Paints & Coatings Market: Market Size (US$ million), Selected Countries in Southeast Asia, F In US$ Million 10,000 8,000 6,000 4,000 2, ,460 CAGR ( ) ~ 8.6% 2,828 CAGR ( ) ~ 5.1% 780 1,164 CAGR ( ) ~ 5.1% F 1,630 CAGR ( ) ~ 9.7% 2,423 2,220 1,060 CAGR ( ) ~ 7.3% 8,636 4,930 Indonesia Malaysia Thailand Vietnam Overall Source: Frost & Sullivan VALUE CHAIN FOR AEROSOL SPRAY PAINT INDUSTRY IN SELECTED SOUTHEAST ASIAN COUNTRIES The following figure depicts the generally prevailing value chain structure for aerosol spray paint industry, in the 4 countries, identified stakeholders and their roles. e.g. various types of aftermarket workshops, their characteristics, which ones do repainting jobs and those that use/likely to use aerosol spray paints. These are inputs that have been used to estimate and validate market size. Value Chain, Aerosol Spray Paint Industry in Selected Southeast Asian Countries Across the region, two wheeler owners typically prefer visiting shed shops for major repainting jobs. For decorative paint jobs and minor touch-ups, preferred options of customers include both shed shops and DIY (Do-ityourself) Source: Frost & Sullivan analysis Note: * observed only in Malaysia Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 14 I-14

417 APPENDIX I INDUSTRY REPORT The key stakeholders in aerosol spray paint industry in South East Asia are as follows: Manufacturers are the producers of aerosol spray paint. Manufacturers mostly sell their product directly to the distributor or in some cases to the hardware stores. Also, some manufacturers engage directly with the dealers/retailers and e-commerce companies. The key manufacturers/brands are as follows: o Malaysia: Samurai 13 (Orientus Industry 14 ), DPI, Aeromix, Nippon o Indonesia: Pylox, RJ London, Aerox o Thailand: Pylac, Beelox, Kobe, Bosny, Leyland, and Red Fox manufactured by companies such as TOA Paint, Nippon Paint, RJ London, and Nagoya Paint o Vietnam: ATM, TOA Paint Vietnam Co Distributors sell their products to wholesalers which in turn sell to retailer, hardware stores in different provinces Dealers typically comprise of the paint stores that usually buy from the distributors and wholesalers. Some dealers engage directly with manufacturers as well. E-commerce channel is popular in Malaysia and is also available in Indonesia where aerosol spray paint is available through Lazada and Ace hardware etc. End customers of aerosol spray paints comprise of o Body shops, shed shops that buy aerosol spray paint from dealers and receive a service fee from two-wheeler owners for painting their vehicles. Body shops and shed shops use aerosol spray paints for both partial and full repainting of two-wheelers. Aerosol spray paint is also used by body shops for finishing, as it adds shine and gloss o DIY two-wheeler owners, who typically purchase aerosol spray paint from dealer shops, e- commerce website and paint the vehicle on their own The decision making process varies across different countries. For instance, in Malaysia, the end consumers are more aware and use social media to decide the brand to purchase. On the contrary, in Vietnam, decision making is primarily influenced and driven by workshops, largely due to lack of awareness among customers. Southeast Asia s two wheeler aftermarket is segmented into three major types of workshops, OEM affiliated: These workshops are typically large in size and are affiliated with an OEM. These workshops do not undertake paint jobs for the two wheelers Insurance affiliated: These workshops are affiliated to an insurance company, and may or may not be associated to an OEM. The customers typically visit these workshops, when they can claim the expenses through insurance Shed shops: These workshops are usually smaller than two workshops discussed above. These are neither affiliated to an OEM nor registered with any automotive or insurance body. Hence the customers visiting these workshops have to incur out of pocket expenses. Therefore, most of the repainting jobs carried out for the decorative purposes are undertaken at the shed shops 13 PT Samurai Paint, Samurai, Samurai Paint have been used interchangeably 14 Orientus Industry, Orientus Industry Sdn. Bhd have been used interchangeably Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 15 I-15

418 APPENDIX I INDUSTRY REPORT Overall the value chain is consistent and follows a similar flow across selected geographies. However, at a country level the key differences are as under: Availability of aerosol spray paint on the popular of e-commerce portals in Malaysia. Whereas in Indonesia, the hardware stores operates their own online portals, such as AceHardware sells aerosol spray paint on its online portal as well as through traditional brick and mortar stores. Thailand has a concept of fancy bike accessories stores which are a popular among the consumers which tend to get their two wheelers repainted to enhance the aesthetic of the vehicle Across the region, two wheeler owners typically prefer visiting shed shops for major repainting jobs. For decorative paint jobs and minor touch-ups, On an average, a two wheeler gets preferred options of customers include both shed shops repainted every 2 to 3 years in the and DIY (Do-it-yourself). selected southeast Asian countries for maintenance and decorative purposes. KEY DRIVERS FOR AEROSOL SPRAY PAINT MARKET One of the key drivers is rising two wheeler population in the region. Cumulative two-wheeler population in Southeast Asia is expected to grow from approximately 177 million in 2015 to approximately 239 million by 2020, at a CAGR of slightly over 6%. The figure below shows the collective trend of two wheeler population growth during the period 2010 to 2020F, for the four countries. The chart below illustrates the total two wheeler populations in selected Southeast Asian countries. Total two wheeler population (Number of Units in Millions), Selected Countries in Southeast Asia, F Malaysia Indonesia Thailand Vietnam 200 Million Source: Published two-wheeler statistics from respective countries Note: Data labels at top (2010, 2015, 2020) indicate aggregate of two-wheeler population in all 4 countries. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 16 I-16

419 APPENDIX I INDUSTRY REPORT Key factors driving expansion of two-wheeler population are Inadequate public transport Lack of public transport induces majority of the population towards purchasing two-wheelers as the latter are seen as the most convenient mode of transport in the congested traffic situation on most of the roads in these countries. For instance, in Bangkok, people tend to use two-wheelers for various purposes ranging from local commute to business-related transportation. Such reliance on twowheelers for transport across the selected SEA countries are likely to result in an increased purchase of two- wheelers- both new and used in turn translating to a potential increase in demand for repainting of these used two-wheelers. Affordability Growing yet relatively lower GDP per capita (e.g. Vietnam approximately 2,088 US$ in 2015) is also a key driver for two-wheeler purchases in the target geographies. Malaysia s two wheeler population is expected to reach 14.4 million by 2020, growing at a CAGR of approximately 3.6% during 2015 to In Malaysia, the existing vehicle population offers a large pool of customers with repainting requirements. Indonesia s two wheeler population is expected to reach 140 million by 2020, growing at a CAGR of approximately 7.2%, during In Indonesia, two-wheelers constitute the predominant mode of transportation, accounting for approximately 80% of the total mode of land transportation, since Thailand s existing two-wheeler population is projected to reach around 23.3 million in 2020 from almost 20.3 million in The Thai government had further lowered the import duties by another 5% last year (2015). This move is expected to encourage more companies to setup assembly plants in Thailand with a potential to reduce the total landed cost to the end consumer. Apart from being used for personal transportation needs, two-wheelers are also used as taxis in Thailand with companies such as BananaBike and GoBike, operating in the market. Vietnam s two wheeler population is expected to reach 61 million by 2020, reflecting a projected CAGR of approximately 6% during 2015 to Moderation in two-wheeler population growth (from CAGR approximately 8.8% during ) can be attributed to below factors Relative market saturation with 1 in 2 persons owning a two-wheeler Gradual shift towards four-wheeler purchases due to improving income levels Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 17 I-17

420 APPENDIX I INDUSTRY REPORT The figure below shows the trend of two wheeler population (existing and new registrations) growth during the period 2010 to 2020F, for the 4 countries combined. Total two wheeler population (Number of Units in Millions), Split between Existing and New Vehicles in Selected Countries in Southeast Asia, F Million CAGR: 9.5% (Existing two CAGR: 6.2% (Existing two wheelers) wheelers) CAGR: -2.2% (New registrations) CAGR: 5.7% (New registrations) F 2017F 2018F 2019F 2020F Source: Published two-wheeler statistics from respective countries; Compiled by Frost & Sullivan Note: New Registrations refers to new sales of two-wheelers The total number of two wheelers on road is associated with the number of repainting jobs. On an average, a two wheeler gets repainted every 2 to 3 years in selected geographies for maintenance and decorative purposes. Therefore, expansion of two-wheeler population (existing and new) bodes well for consumption of aerosol spray paint for two-wheelers in the aftermarket. The other drivers for this market include Rising disposable income level 15 and growing expenditure on vehicle purchase Rise in income levels is expected to boost the use of aerosol spray paint for decorative purposes. In 2014, Vietnam was found to have the fastest growing middle class in Southeast Asia in a survey. By 2020, the country is expected to have 30 million middle class and rich consumers. The country s per capita income is expected to increase to US$3,000 by 2020 from US$1,960 in In Indonesia, consumer sector is projected to be worth approximately S$1.38 trillion by 2030, as Indonesia s consuming class triples to 135 million to become the world s third largest middle class after China and India. In the Philippines, household spending is expected to increase annually by 10.5%, from $210.5 billion in 2014 to $322.6 billion in 2018 due to the growing middle class population with increasing disposable income. This rise in disposable income levels in these selected geographies is expected to translate into greater consumer spending on purchase of two-wheelers as well as on aesthetic enhancement of their two-wheelers. A combination of these factors is projected to trickle down to greater consumption of aerosol spray paint for decorative repainting purposes in these countries. The following charts reflect the projected trend of per capita purchase of new two-wheelers in Malaysia and Indonesia. 15 International Enterprise Singapore; World Bank, 2014; Frost & Sullivan Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 18 I-18

421 APPENDIX I INDUSTRY REPORT Per Capita New Two-Wheeler Purchases (in 000s), Malaysia and Indonesia, F Thousands F 2017F 2018F 2019F 2020F Per capita motorcycle purchase Malaysia Per capita motorcycle purchase Indonesia Source: World Bank, UNESCO, Ministry of Transport, Malaysia, Indonesian Motorcycle Industry Association (AISI), Frost & Sullivan Additionally, owners of large motorcycle (400cc and above) tend to take extra care of their vehicle and frequently repaint their two-wheelers. This segment is also important as it is not significantly affected by economic downturns. For instance, the large bike market in Thailand grew at 20% in 2015 and is likely to continue on a growth trajectory in the Forecast Period. This is expected to contribute significantly to the growth of aerosol spray paint for decorative purposes over A high per capita purchase induced by growing disposable income, coupled with rapid urbanization in these countries bodes well for the expansion of two-wheeler market, and in turn, for the growth of aerosol spray paint market. Favourable demographics Of the total population in the selected geographies, approximately 43% lies in the age bracket of years and approximately 17% lies in the age bracket of This young population is likely to constitute majority of the customers of two-wheelers and also exhibit higher tendency of customizing and repainting their two-wheelers aimed at aesthetic enhancement. Growing young population in the 4 countries is expected to bolster demand for two-wheelers and lead to greater consumption of aerosol spray paints over Forecast Period For example, Indonesia has a relatively young demographic where over one-third of its population was in the age group of 20 to 35 in Aerosol spray paint appeals to this demographic by offering a wide variety of vibrant, fluorescent colors A combination of young demographics, improved economic climate (despite the recent economic downturn, the government of Indonesia has projected that real GDP (at 2010 constant price) growth will increase to 6% in 2020), increased two-wheeler sales, and ready availability of aerosol spray paint products across dealers and hardware stores is likely to result in an increase in the use of aerosol spray paint for decorating vehicles in the Forecast Period. Relatively higher accident rate Relatively higher two-wheeler accident rate in the four countries cascades to greater number of repair and repainting cases. For instance, in Malaysia, motorcycles account for approximately 50% 16 of road accidents. Greater repainting requirement along with small touchup jobs catalyze the expansion of aerosol spray paints market. Substantial decorative and refurbishing According to Frost & Sullivan estimates, as of 2015, around 20% - 22% of the motorcycles get partially repainted because of decorative reasons or for small touch ups required in cases of minor accidents (which are not reported). These minor repaint jobs are either carried out by the consumer themselves (DIY) or are carried out at the local shed shops. The minor repainting jobs generate significant demand for aerosol spray paints, as using an aerosol spray can for small repainting jobs is economically more viable than using other technologies such as spray gun etc Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 19 I-19

422 APPENDIX I INDUSTRY REPORT Convenience and affordability of aerosol spray paint Aerosol spray paint is relatively easy to use as it is sprayed on to the surface of the two-wheeler directly, compared to the spray gun, which requires the body shop to set up the gun and ensure that it is in working condition. Moreover, body shops also need to ensure that the liquid paint has the correct consistency to avoid a thick coat. With aerosol spray paints, body shops need not worry about wastage from thick coats as the paint is atomized and dispersed evenly on the surface of the two-wheeler. This saves the technicians the hassle of having to create their own mix. As of 2015, the total cost of repainting a two-wheeler in DIY (Do-It-Yourself) route was approximately US$ In comparison, the total cost of getting a two-wheeler repainted at a workshop was approximately US$50 for basic paint shades alone. The low cost of using an aerosol spray paint in DIY mode is expected to drive more end consumers to opt for DIY paint jobs. This expected increase in adoption of DIY mode for repainting jobs is expected to generate greater demand for aerosol spray paint, driven by its attractiveness as a convenient and affordable option. Additionally, aerosol spray cans are available across the region at small and large hardware stores and popular retail chains such as Mr. D.I.Y. in Malaysia. Easy availability is expected to encourage consumers to further try aerosol spray paints in the Forecast Period. Rising awareness among body shop owners The body shop owners are well aware of the various aerosol spray paint products available in the market and also indicate healthy propensity to understand and use new aerosol spray paint products launched in market. Aerosol spray paint manufacturers are increasingly engaging in aggressive product promotions and marketing activities such as road-shows in these countries. This is expected to boost awareness among body shop owners that bodes well for trial and adoption of aerosol spray paint. The body shop owners are also key opinion leaders and are engaged in word-of-mouth advertising which is likely to aid an increased off-take of this product among the target audience in the Forecast Period. Marketing efforts Rising penetration of social media is helping connect two-wheeler owners with each other and with paint manufacturers. Owners share pictures of their two-wheelers along with information on the way they got it painted. This encourages other owners to re-design and repaint their twowheelers. Since aerosol spray paint is easy to use and widely available at hardware stores and even e-commerce platforms (in Malaysia for now), expected surge in use of social media is likely to act as a crucial tool for manufacturers to attract, encourage and induce the adoption of aerosol spray paints during the Forecast Period. Additionally, frequently organized motor shows and bike shows such as Bangkok International Motorbike Festival where a number of world renowned brands showcase their motorcycles and accessories help in educating consumers about two-wheeler maintenance and decoration resulting in an increased awareness of new technologies in the market. This is likely to lead to a demand for 2K technology in the Forecast Period. Growth in Passenger Cars In addition to two-wheeler aftermarket, a growth in passenger cars in the select geographies is expected to bode well for the aerosol spray paint industry. According to Frost & Sullivan estimates, the combined population of passenger cars in Malaysia (approximately 8 million), Thailand (approximately 4.5 million) and Indonesia (approximately 7 million)17 was approximately 20 million in 2015 which grew at a CAGR of 7.6% over This is likely 17 Data for Vietnam is not available. Data for 2020 is not available. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 20 I-20

423 APPENDIX I INDUSTRY REPORT to reach an estimated 26 Million 18 cars by 2019 at an expected CAGR of 5.5%. A historical growth in passenger cars is likely to serve as a potential market for aerosol spray paint over the Forecast Period, as cars that are around 2-3 years old are likely to be repainted or refurbished with minor tinkering and partial repainting jobs to increase its aesthetic appeal. Further, similar to a twowheeler, body shops for cars use aerosol spray paint for finishing, as it adds shine and gloss. Frost & Sullivan believes that a growth in passenger car market is a leading indicator for a potential demand for aerosol spray paints in the target geographies over the Forecast Period. KEY CHALLENGES FOR AEROSOL SPRAY PAINT MARKET Below are the key challenges facing the aerosol spray paint market in the target geographies during the Forecast Period: Lack of awareness among two-wheeler owners There is a lack of awareness about the safe use of aerosol spray paint for the DIY jobs including the benefits of prevalent aerosol spray paint technology types (1K, 2K aerosol, spray gun, airgun, etc.). Thus, the two wheeler owners role in the product selection process is relatively insignificant, with body shops acting as the key influencers as well as the final decision makers in a majority of cases. Additionally, absence of adequate knowledge on safety gears such as masks and gloves are considered other key deterrents to extensive usage in residences. In order to convince the consumers who hesitate to use aerosol spray paint, the paint manufacturers need to spread awareness and educate them about necessary precautions to be adopted prior to the usage of aerosol spray paints which is likely to improve awareness leading to softening of the impact posed by this restraint in the Forecast Period. Availability of alternative technology Competing technologies available for painting two-wheelers such as spray gun or airbrush are perceived to yield better results, and are considered to be highly durable. The paints usually used are polyurethane and nitrocellulose based. Also, as aerosol cans promote DIY projects, paint shop experts do not typically recommend the use of aerosol cans for full repainting jobs. This coupled with perceived higher image of alternative technologies as better performing than aerosol spray paint is likely to limit the growth potential of 1K aerosol spray paint in the Forecast Period. However, the use of 2K aerosol paint is expected to be unaffected on account of quality issues as it is considered to be of comparable quality to alternative technologies. Availability of substitute products Stickers are available as an alternative product to aerosol spray paints for decorative purposes and are very popular among two-wheeler owners. These stickers are water and heat resistant. Depending on factors such as size, material etc., price of stickers ranges from about US$ Stickers are primarily used on the small surface area of a two-wheeler for decorative purposes. However, one of the main disadvantages of stickers is that their color fades away very quickly (within a few months in some cases). So, repainting is expected to remain the preferred method for decorative and accidental refurbishing leading to a demand for aerosol spray paints : Malaysia (approximately 9 million); Indonesia (approximately 11 million) and Thailand (approximately 6 million) passenger cars Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 21 I-21

424 APPENDIX I INDUSTRY REPORT Preference for products with high turnover Dealers and hardware stores are more likely to stock products that are popular in the market. Products such as Samurai and Pylox are highly visible and accessible to end consumers. Pylox is widely available at hardware stores and dealers throughout Malaysia. Orientus Industry (Samurai Paint) makes use of social media to educate customers about 2K and its advantages over 1K aerosol spray paint. Similarly in Vietnam, the market is dominated by Guangzhou Botny Chemical Co, which sells its aerosol spray paints under the brand name ATM. It is sold by most hardware stores and is used by body shops. Therefore to gain visibility in these markets, a better quality product (than the prevailing most popular brands) at reasonable price has to be made easily available at the hardware stores. Large hardware stores prefer to keep a fast-moving product making them resort to popular brands resulting in a significant entry barrier to new entrants who have to convince the hardware stores to stock their merchandise. KEY ENTRY BARRIERS Distribution network Established players have engaged distributors, or in some cases are selling to retailers directly since many customers purchase aerosol spray cans by themselves. Ease of availability is an important parameter in product selection. Therefore, an extensive distribution network is crucial in ensuring market penetration and expansion, and is likely to act as a key barrier for new entrants as well as existing market players Loyalty towards existing brands Dealers and consumers are often loyal to brands (such as Pylox in Indonesia) due to its longstanding presence in the Indonesian market. Moreover, existing products in the market such as RJ London, Aerox 800 and 120, Pylox, Ditton, and Samurai have maintained their quality over the years resulting in significant brand equity for themselves. Therefore in the absence of significant differentiation, it is challenging for a new entrant to make a foray into this market and capture a sizeable market share over the Forecast Period. Similarly in Vietnam, the body shop owners and paint experts are comfortable using existing brands such as ATM Spray Paint (a product of Guangzhou Botny Chemical Co.) and are satisfied with the results. With body shop owners being the key decision makers, a new entrant has to either break the value chain by influencing and educating the end consumer or will have to identify the pain points of the hardware stores and shed shops to make a foray into the market in the Forecast Period. The aerosol spray paint market is primarily a DIY market, which makes it very important to maintain good connections with consumers. It is therefore challenging for a new entrant to educate the consumer about a new product and switch from the one they are currently using. This is expected to serve as a significant entry barrier to new entrants in this market. Price sensitive consumers In a region such as Vietnam, body shop owners and end users prefer to purchase aerosol spray paint priced between US$1.3 and US$1.5. It is likely to be challenging for a new entrant to sell aerosol spray paint cans at a higher price serving as a significant entry barrier in the Forecast Period. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 22 I-22

425 APPENDIX I INDUSTRY REPORT Preference of 2K over1k Consumers usually consult experts from paint shops before buying a product. Paint shop owners do not typically recommend the use of aerosols, but if asked to choose between 1K and 2K, they recommend the latter (in Malaysia and Indonesia). This makes entry to these markets challenging for manufacturers that only produce 1K. With the entry of 2K type aerosol paint in the Malaysian and Indonesian market, it is likely to be difficult for a manufacturer, who is producing only 1K product to penetrate the market. This is because 2K is perceived to be of superior quality and consequently, the company producing it is likely to enjoy relatively higher brand equity (For instance, the brand Samurai from Orientus Industry is quite popular among the consumers). High intensity of competition The market for aerosol spray paints is highly competitive. There are a large number of brands competing on low price and/or high brand equity. In a highly competitive market such as Malaysia, a manufacturer has to have a uniqueness to sustain in the market. For example, Orientus Industry has a first mover advantage in that it manufactures 2K aerosol spray paints. Therefore, any new entrant has to better the existing companies in either price or brand equity as this segment (Aerosol spray paint) is characterised by little or no product differentiation (within each paint technologies). KEY TECHNOLOGY TRENDS As of 2016, Aerosol spray paint, owing to the ease of use and growing availability, is fast becoming a popular choice for the Do-It-Yourself (DIY) applications as well as partial painting jobs at the workshops. However, as of 2016, spray gun and airbrush remain the most popular paint technologies in the selected geographies and are widely used by workshops in all four countries. A brief overview of these technologies is as follows: Spray gun This is the most common method of painting two-wheelers. A spray gun is used to atomize the liquid paint using compressed air. When the pressurized air is released from the air hole to the water cap, there is a negative pressure that would arise at the end of the fluid. This negative pressure sucks the paint in the cup and this sucked paint is atomized and sprayed onto the twowheeler. There are a few shortcomings in this method. For instance, a clogged nozzle or an air pressure that is not strong enough could cause the paint to splatter causing significant wastage. Airbrush Airbrush is similar, in terms of method, to a spray gun. It uses a spray gun and a compressor, but the size is smaller. The difference in airbrush painting is that it requires three times the amount required for paint and varnish, which makes this method more expensive than a spray gun. Additionally, it takes approximately around 2 weeks longer to complete a project using an airbrush than it does with a spray gun. Aerosol spray paint There are two types of aerosol spray paint, namely, single component (1K) and two components (2K). 1K is the conventional aerosol spray paint in which the paint is sprayed using a propellant/solvent which is filled in the container along with the paint. While 2K has two compartments, one containing resin and the other containing hardener. 2K aerosol spray cans are available in the market in double head type configuration, one head contains a nozzle to spray the Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 23 I-23

426 APPENDIX I INDUSTRY REPORT paint and other head is used to release the hardener in the container. At first, the hardener side head must be pressed to release the hardener into the can and then the shaking of the can is required to mix the two components to achieve the required result. Orientus Industry (Samurai paint) has patented the technology of a single-head 2K spray can in which the hardener is released into the main compartment through a valve and provides a protective coating on to the paint once it s applied on an area. Once the hardener is combined with the paint, it has a lifespan of eight hours, whereas the 1K aerosol spray paint can be stored after required usage. This is seen as a significantly better option compared to the double-head spray can. Figure below shows the difference between 1K and 2K aerosol spray paint. Structure of 1K and 2K type aerosol spray paint Source: SprayMax Advantages of 2K aerosol spray paint over 1K aerosol spray paint: 2K paint has the following advantages despite having short shelf life once opened: o Higher durability than 1K o Smoother finish o Improved resistant to scratches o Spray pattern is similar to that of spray gun. The current nozzle allows the broad dispersion of paint similar to spray gun. Furthermore, it is more economical than 1K as with 1K, the dispersion is fairly narrow. Figure below shows the spray pattern of aerosol spray paint and spray gun. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 24 I-24

427 APPENDIX I INDUSTRY REPORT Spray Pattern of different paint technologies Source: SprayMax The 2K aerosol spray can is a fairly new technology, introduced in Southeast Asia in 2015 by Orientus Industry in Malaysia. Since then, it has started gaining popularity despite the price difference between 1K and 2K (2K is almost twice the price of 1K), as the quality of 2K paint is similar to that of spray gun s. Samurai Paint has patent rights for 2K spray cans in 12 countries in Asia Pacific. Technology improvements in aerosol spray paint Notable technological improvements that are promoting the use of aerosol spray paint cans are: The availability of 2-component paint in a single can (a mix of hardener and resin in the ratio of 1:2) Valve structure, wherein the inner nozzle is divided to allow paint to be twisted inside before it is sprayed, thereby creating a big round spot on the surface The freedom to rotate the nozzle vertically and horizontally to achieve an airbrush-like ease and finish Comparison between various technologies: Parameters Aerosol Spray 1K Aerosol Spray 2K (single head) Aerosol Spray 2K (double head) Spray Gun Airbrush Composition (paint, hardener) Paint (Paint + hardener) in one can (Paint + hardener) in one can Paint + Hardener Paint + Hardener Relative Gloss Least Medium Medium Best Best Relative drying time Relative ease of use Medium Best Best Least Least Easy Easy Medium Difficult Difficult Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 25 I-25

428 APPENDIX I INDUSTRY REPORT Application Spread Specially used for spot repairs Good for metallic parts and DIY applications Good for metallic parts and DIY applications Good for all types of twowheelers Good for all types of two-wheelers Average Price (to end consumer) Approximately $ 1.5 to $2 per can. Around $15-$20 per two-wheeler (DIY) N/A $ 7-9 per can Around $25 per twowheeler (DIY) Around $50 per two-wheeler for basic paint Around $50 per two-wheeler for basic paint Average Volume Required per Bike cans for full repainting 2-4 cans for full repainting 2-4 cans for full repainting - - Parameters Overall Inferences for 2K Aerosol Spray Paint Technology Composition 2K offers easy and ready-to-use system Gloss While spray gun offers the most gloss, 2K is also comparable in terms of gloss Drying Time Ease of Use 2K can dries off quickly compared to the spray gun and the airbrush 2K aerosol cans are the easiest to use Application Spread 2K aerosol cans can be used in a wide array of applications, including metals Average Price Average Volume Required per Bike Using a 2K aerosol can for DIY projects is approximately 50% cheaper than using spray gun or air brush. Number of cans required is least in case of the 2K system Implication: With the advent of new technologies such as 2K in a can and high-performance valves together with the ease of use of aerosol spray paint, the market of aerosol spray cans is projected to grow at a CAGR of 6.2% in the Forecast Period. One of the key industry participants, Samurai Paint, has patented 2K aerosol paint one-head technology, which is even easier to use than the 2K double head. Once launched, it can be expected to be popular among customers and the manufacturers specializing in 2K aerosol spray paints will have the first mover advantage. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 26 I-26

429 APPENDIX I INDUSTRY REPORT MARKET SIZING FOR AEROSOL SPRAY PAINTS MARKET FOR TWO-WHEELERS IN THE AFTERMARKET IN SOUTHEAST ASIA Aerosol spray paint market in two-wheeler aftermarket is projected to expand from approximately 271 million US$ in 2015 to approximately US$ 428 million by 2020, at a CAGR of approximately 10%. This growth can be partially attributed to the growing number of two-wheelers and the increasing awareness about aerosol spray cans. Chart below shows the market size of aerosol spray paint in the selected countries from F, in value terms. Aerosol Spray Paints Market for Two-Wheelers in the Aftermarket: Market Size (in Million US$), Selected Countries in Southeast Asia, F In US$ Million CAGR ( ) ~ 9.9% CAGR ( ) ~ 9.6% F 2017F 2018F 2019F 2020F "Aerosol spray paint market for two-wheelers in aftermarket is expected to witness higher growth during as compared to the total paint & coatings market. Source: Frost & Sullivan The following chart depicts the breakdown of market size trend in value terms for respective countries. Aerosol Spray Paints Market for Two-Wheelers in the Aftermarket: Market Size (in Million US$), Selected Countries in Southeast Asia, F In US$ Million CAGR ( ) ~ 9.8% CAGR ( ) ~ 3.4% CAGR ( ) ~ 6.2% Indonesia Malaysia Thailand Vietnam CAGR ( ) ~ 16.0% Indonesia stands out as most attracctive considering both quantum of market as E 2016F 2017F 2018F 2019F 2020F 75 Source: Frost & Sullivan In terms of overall growth during , aerosol spray paint market (CAGR approximately 9.6%) is projected to expand faster than total paints & coatings market (CAGR approximately 8.4%). Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 27 I-27

430 APPENDIX I INDUSTRY REPORT Share of total aerosol spray paint market (for two-wheelers in aftermarket) in the total paints & coatings market is expected to grow from approximately 4.7% in 2015 to almost approximately 5% by 2020, driven by the increased adoption in two-wheelers aftermarket. Chart below shows the market size of aerosol spray paint in the selected countries from F, in volume terms. This share is higher for Indonesia (approximately 8%) compared to other 3 countries (average market share of approximately 2-3%). This reflects relatively greater adoption and consumption uptake of aerosol spray paint in Indonesian market. Charts below show the penetration of aerosol spray paint in total paints & coatings market in Southeast Asia, for 2015 and 2020, in terms of value. % share of aerosol spray paint market in total paints market, Southeast Asia, 2015 Aerosol Spray paint, 4.7% % share of aerosol spray paint market in total paints market, Southeast Asia, 2020 Aerosol Spray paint, 5.0% Others, 95.3% Others, 95.0% Source: Frost & Sullivan Note: Aerosol spray paint market in above charts refers to aerosol spray paint market for two-wheelers in aftermarket The chart below depicts the market size in volume terms for aerosol spray paint in the selected Southeast Asian countries. Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket: Market Size (in Million Cans), Selected Countries in Southeast Asia, F Million F 2017F 2018F 2019F 2020F Malaysia Indonesia Thailand Vietnam Source: Frost & Sullivan In terms of volume, overall aerosol spray paint market is expected to expand from approximately 118 million cans in 2015 to approximately 159 million cans by 2020, at a CAGR of approximately 6.2%. Frost & Sullivan 2016 Aerosol Spray Paint Market for Two-Wheelers in the Aftermarket 28 I-28