3. RISK FACTORS 3. RISK FACTORS You should carefully consider the following risk factors (which are not exhaustive) in addition to the other informalion contained elsewhere in this Prospectus belore applying for the lPO Shares: 3.1 RISKS RELATING TO OUR OPERATING INDUSTRY Our Group is a provider of offshore platform services to the upstream sector of the Oil and Gas Industry, which focuses on exploration and production of Oil and Gas. The level of oil exploration, development and production activities in the Oil and Gas Industry has a direct impact on our Group’s operations. The lactors which may affect the level of oil exploration. development and production activities include, inter alia:3.1.1 Fluctuations In The Market Price Of Hydrocarbons Hydrocarbons, including crude petroleum and natural gas, are internationally traded commodities whose price fluctuate with the constant interaction between supply and demand for hydrocarbons. Factors such as geopolitical factors and unforeseen supply disruptions may also inlluence the market price of hydrocarbons. Activities in the Oil and Gas Jndustry are, to some degree, affected by fluctuations in the market price of hydrocarbons, for instance:••• Activities tend to increase during periods of sustained high hydrocarbon prices. This is due to elevated production activities, as well as increased activities in exploration and development; .:. AClivities tend to decline during periods of sustained low hydrocarbon prices. This is due to lower production activities, as well as temporarily reducing or shutting down production from reserves that are no longer commercially viable. However. exploration activities will still continue. There is a risk that sustained lower price of hydrocarbons will negatively affect activities In the Oil and Gas Industry, leading 10 a lower demand for supporting products and services. including offshore topside maintenance services. The maintenance of offshore structures and platforms is affected to a lesser degree due to the nature 01 the industry. There will always be a requirement lor maintenance services to ensure thai the integrity of the existing and aging offshore structures and platfonns are not compromised. Organisation of the PetrOleum Exporting Counlries (“OPEC”), a grouping that includes many of the world’s largest petroleum producing nations, has some influence on the price 01 hydrocarbons through their control of a sizable proportion of the world’s production capacity and reserves. Although the influence of OPEC over the market price of hydrocarbons is not absolute, OPEC has a vested interest in ensuring that hydrocarbon prices do not collapse, and as SUCh. are likely to actively attempt to sustain hydrocarbon prices at an “acceptable-level. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting $dn Bhd) Nevertheless there is no assurance that our Group’s business performance will not be affected by fluctuations in the price of hydrocarbons. 3. RISK FACTORS (Cont’d) 3.1.2 Activity in the Malaysian Oil and Gas Industry Pursuant to the PDA, PETRONAS is vested with exclusive ownership to Malaysian 011 and Gas reserves. The PDA provides for all exploration and exploila1ion of petroleum by PETRONAS in Malaysia. and accordingly, any initiative 10 undertake the exploration and extraction of crude oil and gas in Malaysia can only be carried out via a PSC with PETRONAS. Consequenlly. any new terms that may have an adverse impact 10 the regular terms 01 a PSC such as reduction of profit sharing of the contractors under the PSG may lower the level of oil exploration. development and production activities as the contractors will be less motivated to carry oul crude oil exploration and extraction activities in Malaysia as well as preclude investors from future ventures. This reduction in the level 01 oil exploration and extraction wilt lower the demand for products and services provided by Oil and Gas support companies such as our Group. In Ihe event PETRONAS does not react to change the terms of the PSC to reflect the current market. global conditions or economic situations that affect the Oil and Gas Industry, many PSCs may be discouraged 10 enler the Malaysian Oil and Gas market, resulting in a downturn of market activity and consequently affect the performance at our Group. However. in the even! PETRONAS reacts timely to the current market conditions. the resultant outtook wilt be favourable for our Group. The Oit and Gas Industry is one of the major contribu1ors 10 the Malaysian economy, both as a source of energy and a major foreign exchange earner, and as such, it is expected that there wilt be continued growth in the industry in terms of steady stream of contracts and in lurn, revenue and growth in the long term lor our Group. 3.1.3 Depletion Of Hydrocarbon Resources All hydrocarbon deposits are non-renewable. whereby it is not possible to regenerate these hydrocarbons within a reasonable timelrame once they have been extracted. As such, hydrocarbon resources in alt hydrocarbon producing regions. including Malaysia, wit! eventuatly be depleted. It is likely that demand for suppor1ing products and services in Malaysia, including oUshore topside maintenance services will be adversely aHeeted after Oil and Gas Industry exploration and production activities ceases in Malaysia. As al 1 January 2007, Hydrocarbon Reserves in Malaysia are as follows:.:. Reserves of crude oil (induding condensates) amounted to 5.4 billion BOE; .:. Reserves of natural gas amounled 10 14.8 billion BOE. At the present rate of production, Hydrocarbon Reserves in Malaysia are expected to sustain production as follows: -:. Production of crude oil (including Condensates) for 21 years; and .:. Procluction of natural gas for 34 years. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] -21 3. RISK FACTORS (Conl’d) The relatively long period of time before current reserves of crude oil (including condensates) in Malaysia are expected to be completely depleted enables Oil and Gas Industry organisations, including local providers of offshore topside maintenance services, to diversify into other industries andlor venture into overseas markets. The National Deplelion Policy inlroduced in 1980 to safeguard the exploitation of the natural oil reserves by postponing development and conlrol the production of major oil fields (with reserves of 400 million Barrels or more) will also ensure that extraction is carefully managed and sustained over the long term. Current reserve estimates tend to be conservative and may underestimate the actual amount of hydrocarbons that is ultimately extracted, as they do not take into account the following:…. the existence of currently undiscovered Hydrocarbon Reserves; .:. technological advances that increases the amount of hydrocarbons that may be commercially extracted from existing reserves; .:. technological advances that enable production from previously inaccessible regions. As such, activities in the Oil and Gas Industry in Malaysia may very well continue beyond the currently estimated dale of complete Hydrocarbon Reserve depletion. (Source: Independent Assessment of the Offshore Supporling Services for the Oil and Gas fndustry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn 8hd) Nevertheless lhere is no assurance that our Group’s business periormance will not be affected by the decline in Malaysia’s Oil and Gas reserveS.
3.1.4 Regulatory Compliance! Dependence on Licenses! Permits All service providers wishing to participate in the Oil and Gas Industry in Malaysia are required to obtain the necessary licenses. or registrations with PETRONAS and other relevant authorities. All of these licenses and registrations are only valid for a stipulated timeframe, which is renewable subject to compliance with the relevant conditions. The requirements set out by PETRONAS and the au1horities may be subject to changes, which could then affect certain operations of our Group. Failure by our Group to renew, maintain or oblain the required licenses and registrations may have an adverse effect on our Group. PETRONAS is the main licensor governing our operations in the Malaysian Oil and Gas Industry. The licences issued by PETRONAS enable us to provide certain maintenance and marine vessel services and are subject to shareholding slructure and various employment and operaling conditions. Our registrations with the MOF and CIOB also enable us to tender for contracts from the Government. These licences and registrations are valid for certain periods of time with the renewal based on our compliance with those requirements imposed by the relevant authorities. Fundamental changes to PETRONAS’ policy with regards to 1he regulation of the Oil and Gas Industry may occur in future. These changes either by restricting or liberalising the regulalions governing the Oil and Gas Industry may have an adverse or favourable impact on how we operate. If restrictive, there can be no assurance that our business will not be materIally affected by these changes. 3. RISK FACTORS (Cont’d) Although we have not experienced any problems in the past and do not !cresee any potential problems in renewing our existing licences when they become due. we cannot provide any assurance that our licences will be renewed Of if renewed, such renewal would be effected within the anticipated limeframe or wilhoul any new terms and conditions imposed, which may materially affect our operations. Please see Section 4.2.4 lor a list of our licences and registrations.
3.1.5 Political, Economic and Regulatory Considerations Changes and developments in political. economic and regulatory conditions in Malaysia and the countries in which our Group may operate in future could materially andlor adversely affect the profitability and business prospects of our Group and industry in which we operate. These uncertainties include, but are not limited to, the changes in political leadership, changes in investment policies and taxation, expropriation, nationalisation, changes in interest rales, changes in regulatory structure, risks of war and global economic downturn. Our Group’s revenue and our ability to achieve and sustain profitability depend on the overall demand for the services that we offer. Any economic slowdown in the world, region or national economy may cause our customers to defer or reduce purchases of our services. Uncertainty in the global economic environment may cause some businesses to curtail or eliminate spending and as such may have an impact on our Group where certain customers may curtail their procurement of products and services. Although we practice efficient operating procedures and prudent financial management, there can be no assurance thai adverse political and economic developments, which are beyond our control, will not materially affect our per10rmance or the industry as a whole.
3.1.6 Competitive Industry Our Group’s work contracts are awarded based on open lender which are restricted to PETAONAS licensees. Generally, track record, reputation, experience, prompt delivery/completion, sufficient technical capacity, personnel and pricing are major factors in most tender awards. We face competition from other local service providers in the Malaysian Oil and Gas Industry. Although there is competition between the local licensed service providers, threat from new entrants is mitigated to a certain extent by the barriers of entry for the provision of supporting products and services for the Oil and Gas Industry in Malaysia. Some key barriers to entry include technical expertise, knowledge required to facilitate works and services, ability to demonstrate a good safety record, ability to meet customers’ specifications and the ability to obtain licences and registrations with PETRONAS and various government bodies such as the CIOB and the MOF. Although we cannot guarantee that we will be able to continue to compete successfully or that the Jevel of competition and pressure on pricing will not affect our margins, we have several competitive advantages over our competitors as set out in Section 4.2.2. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 3. RISK FACTORS (Conl’d) 3.2 RISKS RELATING TO OUR OPERATIONS AND BUSINESS 3.2.1 Business Risks Our Group is subject to business risks common 10 the Oil and Gas Industry at large. This may include amongst others. changes in government policies, shortages in skilled workforce. fluctuations in demand for our products and services, market acceptance of new products and services, changes in general economic conditions, competitive conditions in the industry, business and credit conditions and other business risks common to going concerns. Our senior management has on average in excess of twenly (20) years of relevant experience in the industry and our other management and technical personnel have on average in excess of ten (10) years of relevant eKperience as well. However, no assurance can be given that any changes in lhese factors would not have any material adverse impact on our Group’s business and profitability. 3.2.2 Operational, Health and Safety Risks Our business activities are subject to operational risks inherent in the Oil and Gas Industry such as accidents, fire breakouts and explosions which may occur on the offshore platforms. These risks could result in substantial losses due to injury and loss of life, severe damage to property, equipment and environment as well as the suspension of operations and termination of contract and potenliallegal proceedings. In this regard, we have purchased insurance covering our equipment, general third parties’ liabilities (such as injury. loss or property damage) and other liabilities relating to marine and environment which we deem arc adequate 10 protect us against liability for such events. To minimise the above operational risks, we implement the following risk management practices: (a) We emphasise on health and safety throughout all levels of our operations as well as compliance with customers’ various manuals such as HSE specifications to ensure worksites are in full operating efficiency and the working conditions and environment are safe. Refer to section 4.2.10 lor our HSE management;
(b) We undertake continuous health and safety training for our employees;
(c) We have developed and implemented an emergency response plan in order to cater for any accidents at any of our offices or operational facilities whereby these places are equipped with basic regulatory lire fighting equipment. We have in place additional equipment and spare parts to cope with unexpected emergencies in addition to holding regular meetings and discussions to identify and mitigate any potential business operation risks;
(d) Our marine vessel meets all the safety requirements set out in various licences issued by the relevant authorities such as the Domestic Shipping Licensing Board and the American Bureau of Shipping, Kuala lumpur. We also conduct various in-house training and briefing on safety requirements on a conlinuous basis; and
3. RISK FACTORS (Cont’d) (e) We place significant emphasis on quality and adherence to stringent quality standards. DESB, our wholly·owned subsidiary was certified with MS ISO 90001:2000 Quality Management System from SIAIM QAS International Sdo Bhd in 1999. Further. our good safely track record is reffected by various certificates awarded 10 us by PETRONAS Carigali. Please see Section 4.2.10 for further delails. Our Directors believe thai these risks are mitigated through the periodic audits of our HSE procedures and practices. drills, continuous health and safety meetings and reviews, training and other measures. Since 2004, our Group has recorded approximately 8 million man·hours with zero loss lime injury for our offshore operations. In 2007, we were awarded ~PETRONAS Carigall HSE Awards 2006/2007. These achievements are a reffection of our commitment to good safety practices. However there is no assurance that incidents and damages wJll not occur. Our Directors will use their best endeavours to ensure Ihat an adequate level of insurance coverage against such risks is maintained. Notwithstanding the above, no assurance can be given that any Insurance coverage arranged will be adequate and available to cover all and any claims arising therefrom. 3.2.3 Dependent On Major Customers For the FYE 30 September 2007, PETRONAS Carigali and Sarawak Shell contributed 78.5% and 16.1% to the total turnover of our Group, respectively. Any termination (with or without cause) of existing contracts with lhese major customers may significantly affect our operations, performance and profitability. The following faclors serve to mitigate our Group’s dependency on these major customers:PETRONAS Carlgali .:. PETRONAS Carigali has been a customer 01 our Group for approximately seventeen (17) years indicating a long-term and stable business relationship. This would provide the basis fOf a continuing business relationship. •:. Our Group has been a provider of a wide range of offshore platform services to PETAONAS Carigali over the past seventeen (17) years, inc’uding:~
o Provision of offshore maintenance services for 309 offshore platforms/structures, four (4) S8M systems, and one (1) FPSO facility;
o Charter of marine vessels;
o Minor fabrication; and
o Offshore hook-up and commissioning services.
•:. In addition. our Group has successfully secured a letter of award from PETAONAS Carigali on 5 November 2007 for the “Provision for Hook-up and Commissioning of PETRONAS Carigali Scln Bhd faci!ities~ which expires in 2010. This further strengthens the continuing relationship between PETAONAS Cangali and our Group.
•;. PETRONAS Carigali is a SUbsidiary of PETAONAS, which is entrusted with developing and adding value to aU the Oil and Gas resources in Malaysia. As such, PETAONAS and its subsidiaries are principal operators in the Malaysian Oil and Gas Industry, and will inevitably be a major source of revenue for our Group or any olher provider 01 offshore platform services in Malaysia. 3. RISK FACTORS (Conl’d) .;. As PETRONAS Carigali is a major PSC operator in Malaysia, dependency is a common feature among other larger operators in the Oil and Gas Industry in Malaysia. especially those servicing the upstream Oil and Gas seclor. Sarawak Shell .:. Sarawak Shell has been a customer of our Group for twenty-seven (27) years, indicating an established business relationship. This would also provide the basis for continuing business and gro’oVth. 0} Sarawak Shell is a PSG operator. and is one 01 the main participants in the Malaysian Oil and Gas Industry. It is inevitable that Sarawak Shell would constitute a major source of revenue for service providers like our Group. Nevertheless there is no assurance that our Group’s dependency on major customers will not affect our future business perlormance. The local Oil and Gas Industry is still very active with new and existing PSC operators increasing activity Ihrough deepwaler exploration and development aClivilies, marginal field developmenls and enhanced recovery. Thus it is expecled Ihat Ihe local Oil and Gas InduSlry will continue 10 be active and grow in the near future. Further as mentioned in Section 4.7, our Group is looking at expanding our current operations overseas, where opportunities in Oil and Gas Industry exist, 10 mitigate against any over dependence on the domestic market by spreading our revenue base over a greater geographical area. 3.2.4 Future Business Performance Depends On The Award Of New Contracts Our revenues are largely derived from medium-term to long-term contracts. It is generally very difficult to predict whether and when we will be awarded such contracts as they frequently involve a lengthy and complex bidding and selection process. The bidding costs associated with tendering for new contracts may not necessarily result in the award of a new conlract. We participate in a number of tenders each year. Failure 10 win such tenders could affed our fulure financial performance. Nonetheless, we believe that our eslablished track record which is associated with quality, reliability. technical expertise and service excellence. good HSE record as well as our long-standing relationship with our major customers would provide us with a key advantage when submitting our tenders for new contracts. 3,2.5 Dependent On Our Key Personnel And Skilled Workforce Our continued success depends. to a significant extent. upon the abilities, continued efforts and teamwork of our Directors and senior personnel as well as our ability to attract and retain experienced engineers, project managers and other technical and management personnel. If we lose a significant number of directors or members of our senior management and/or are unable to replace these key personnel, this may impact our Group’s future prospects. In this regard. our Directors presently have in place. human resource strategies which include providing competitive and performance·based remuneration. adopting succession planning for k.ey positions and providing employees with a variety of ongoing training programmes to upgrade their knowledge and capabilities. However, we cannot provide any assurance that the above measures will be successful in attracting and retaining key personnel or ensuring a smooth transition should changes occur. 3. RiSK FACTORS (Cont’d)
3.2.6 Delay In The Completion Of Work Orders Our contracts comprise numerous work orders. The timely completion of these work orders is dependent on many external factors which may be beyond our control such as work stoppage due \0 poor working weather conditions, unexpected breakdown in our own or chartered marine vessels and other operational hazards. In particular, our outdoor blasting and painting acti….ities are affected by adverse weather conditions as blasting and painting cannol be carried out in the open under rainy weather. This could lead 10 an increase in our operating costs due to the standby cost of equipment and labour overtime to make up for lost time. Any such delays could have an adverse impact on our ability to conduct our activities and complete our contractual obligations. In mitigation, our management has in place, effective cost and operational monitoring procedures to ensure that our work orders are completed on time and on a profitable basis. Based on our long historical track record. we have operated under many different types of external conditions and have been able to successfully minimise and mitigate the adverse impact of such conditions on our business performance. However, there is no assurance that external factors such as adverse weather conditions or unexpected breakdown in marine vessels would not adversely impact the performance of our business in the future.
3.2.7 Operating In A Strict Environmental Regime We are subject to increasingly stringent laws and regUlations relating to environmental protection in conducting the majority of our operations, including laws and regulations governing the generation, storage, handling, trealment and disposal of waste materials. We incur and expect to continue to incur, capital and operating costs to comply with environmental laws and regulations. Our business involves working around and with volatile, toxic and hazardous substances and other highly regulated materials. Although we have not contravened any environmental regulations to<!ate, we are subject to potential material liabilities relating to claims alleging personal injury or property damage as a result of exposures to, or releases of, hazardous substances or as a result of accidents or other incidents resulting ‘rom our operations. all of which could have a material adverse effect on OUT financial condition and results of operations. 3.2.8 Environmental Concerns We believe that our existing operations are in compliance with the relellant environmental legislation governing activities within Malaysia such as the stringently monitored Environmental Quality Act, 1974. Nevertheless. there is a possibility thai the Government may change its regulations with regards to environmental matlers in the future which would require our Group to modify our facilities or incur expenses that could have an adverse effect on our Group’s operating results. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 3. RISK FACTORS (Cont’d) 3.2.9 Investment Activities Risk and New Ventures If opponunnies present themselves, we may Irom time to time acquire additional businesses or invest in synergistic new ventures. As such, there is a potential risk that lhese investments may have longer than expected gestation periods or may not be entirely successful. In this evenl, we may take time to recover or be unable to recover our initial investments. We plan to mitigate this risk by exercising due care with effective evaluation and assessment prior to the commencement of such business or ventures in relation to customer demand or market trends. 3.3 RISKS RELATING TO INVESTING IN THE IPO SHARES 3.3.1 No Prior Public Market For Our Shares There is currently no public market for our Shares. There can be no assurance that an active market for our Shares will develop and continue to develop upon or subsequenllo our Listing or. if developed. that such a market will be sustained. The IPO Price of RM1.45 for the lPO Shares has been determined aher laking into consideration a number of factors, including but not limited to. our financial and operating history and condition, our prospects and the prospects of the industry in which we operate, our management and the market prices for shares of companies engaged in business similar to ours. There can be no assurance that the IPO Price will correspond to the price al which our Shares will trade on the Main Board 01 Bursa Securilies upon or subsequent 10 our Listing. 3.3.2 Price Volatility The market price of and demand for our Shares could be affected by various factors and events including the following:(a) the level 01 liquidity of lhe markellor our Shares;
(b) the difference between our actual financial operating results and those expected by investors and financial analysts;
(c) changes in linancial analysIs’ recommendations or projections:
(d) changes in general market conditions and broad market fluctuations; and
(e) general operational and business risks.
The volatility in the trading price of our Shares may be caused by factors beyond our control and may be unrelated or disproportionate 10 our financial results. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 3. RISK FACTORS (Cont’d) 3.3.3 Capital Market Risks The performance of the local bourse is very much dependent on externallactors such as the perlormance of the regional and world bourses and Ihe inflow and outflow of foreign funds. Sentiments are also largely driven by internal faclors such as the economic and political conditions of the country as well as the growth potential of the various sectors of the economy. These factors invariably contribute to the volatility of trading volumes witnessed on Bursa Securities, thus adding risks to the market price of the listed securities. Nevertheless, the profitability of our Group is not dependent on the performance of Bursa Securities as the business activities of our Group have no direct correlation with the performance of securities listed on Bursa Securities 3.3.4 Profit Forecast May Vary From Actual Results It should be noted that the profit forecast are based on various assumptions with respect to the levels and timing of revenues, cost and various other matters of an operational or financial nature, which our Directors believe to be reasonable. A forecast. by its very nalure, is subject 10 uncertainties and unexpecled evenls. many of which are outside the conlrol 01 our Group and our Directors. Also, events and circumstances often do not occur as anticipated and therefore actual results may differ from the forecast either positively or negatively. Accordingly. our Directors cannot and do not guarantee the achievement of the forecast. The consolidated profit forecast should be reviewed in conjunction with the description of the business. the historical financial information, risk factors and other materials conlained in this Prospectus. Potenlial inveslors should nole carefully the bases and assumptions of the profit forecast. 3.3.5 Future Dividends Are Dependent on Future Performance Our Company is principally an investment holding company and the core operalions of our Group are carried out through our subsidiaries. Therefore, our Company’s major source of income comprises dividends and other dis1ributions received from our subsidiaries. Our abilily to pay dividends or make other distributions 10 our shareholders is dependent on several factors such as the operating results and the cash flow position of our subsidiaries and potential covenants in our future loan agreements. 3.3.6 Controlled by Our Promoters Upon Listing, our Promolers, as set out in Section 5.1, will collectively hold 74.38% of our enlarged issued and paid·up share capital. As a result. they will stili be able to, in the foreseeable future, effectively conlrolthe business direction and management of our Group as well as influence the outcome of certain matters requiring the vote of our shareholders unless our Promoters are required to abstain from voting by law and/or by the relevant guidelines or regulations. As a slap towards good corporale governance, we have appointed three (3) Independent Directors and an Audit Committee have been set up 10 ensure thai all future transactions involving related parties. if any, are entered into on an arms-length basis. 3. RISK FACTORS (Conl’d) 3.3.7 Failurel Delay In the Listing The occurrence of anyone or more of the following events, which is not exhaustive. may cause a delay in or cancellation of our USling:(a) The identified investors fail to subscribe to the portion of IPO Shares intended to be placed to them although they have furnished their irrevocable undertaking letters to subscribe lor such Shares;
(b) The Sale Underwriter exercising i1s rights pursuant 10 the Underwriting Agreement to discharge Ihemselves from ils obligations thereunder;
(c) We are unable to meel the public spread requirement Le. at least 25% of our enlarged issued and paid·up share capital must be held by a minimum number of 1,000 public shareholders holding not less than 100 Shares at the point of Listing; and/or
(d) We are unable 10 obtain the permission tram Bursa Securities for our admission to the Official List to deal in and for the quotation of our entire enlarged issued and paid-up share capital.
In such an event, subject to restrictions sel out in Section 3.3.8 below, we will retum in full without interest, all monies paid in respect 01 any application accepted. 3.3.8 Delay between Admission and Trading 01 the IPO Shares After the IPO Shares have been allocated to the respective investors’ COS Accounts in Bursa Depository, which would occur at least two (2) clear Market Days prior to the anticipated date for Admission, it may not be possible to recover monies paid in respect of IPO Shares trom us in the evenllhe Admission and the commencement of trading on the Main Board of Bursa Securities do not occur. Delays in the Admission and the commencement of trading in shares on Bursa Securities have occurred in the past. In order for us 10 return monies to investors in respect of the IPO Shares following their allotment and issue, a reduction of our share capital would be required. This would require a special resolution at our shareholders and such resolution would have to be confirmed by the Malaysian High Court. There can be no assurance that monies can be recovered within a short period aflime. or at atl. If Bursa Securities does not admit our Shares lor our Usling, the market for our Shares will be illiquid and it may not be possible to trade our Shares. This may also have a materially adverse effect on the value of our Shares. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY) 3. RISK FACTORS (Conl’d) 3.3.9 Disclosure Regarding Forward-Looking Statements This Prospectus includes forward-looking statements, which are statements other than statements of historical facts, including, without limitations. lhose regarding our financial position, business strategy, ptans and objectives of our management for future operations. Such forward-looking statements involve known and unknown risks. uncertain1ies and other faclors which may cause our actual results, performance or achievements or industry results, to be materially different from any future results, perfonnance or achievements expressed or implied by such forwardlooking statements. Such forwardMlooking statements afe based on numerous assumptions regarding our present and future business strategies and the environment in which our present and future business stralegies and the environment in which we will operate in the future. Such factors include, inter-alia, general economic and business conditions. competition. the impact of new laws and regulations affecling us and the industry, changes in interest rates and changes in foreign exchange rates. In light of these uncertainties, the inclusion of such forwardlooking S1atement in this Prospectus should not be regarded as a representation or warranty by us, or our advisers, that our plans and ob/ectives will be achieved. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]