Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 HISTORY AND BACKGROUND Our Company was incorporated in Malaysia under the Act on 14 May 2012 as a public limited company to facilitate the Listing of our Group on the Main Market. We are principally an investment holding company while our subsidiaries are principally involved in the design, development, fabrication and sale of our products for the palm oil milling machineries sector in the palm oil industry. Our Group’s corporate structure is depicted as below: Dolphin I
100% Dolphin Engineering  100% Dolphin Applications  1 100% Dolphin Systems  1 75% Dolphin Components  [100% Dolphin Robotic  90% PT Dolphin  1 30% PT Emas Hijau
Our history began with the incorporation of Dolphin Engineering on 14 October 1992 by our Promoters. We started out by providing customised automation systems and its related services to assembly plants of various industries, including the automotive and consumer electronics industries. For the automotive industry, we provided the automated systems for the manufacturing of car safety belts and visors. As for the consumer electronics industry, our Group manufactured the automated systems for the deburring of components used in washing machine assembly lines. In 1995, our Promoters decided to shift the focus of Dolphin Engineering to the palm oil milling machineries sector in the palm oil industry to carve a niche product offering for our Group due to the growing demand for process integration and automation solutions and services as POMs seek to enhance productivity, safety and efficiency. In 1997, we were awarded with the Main Contractor Certification by the Ministry of Finance and Construction Industry Development Board under the category of the construction of buildings, civil construction and mechanical and engineering works, which allows our Group to participate in tenders or directly negotiate with our customers for the provision of our palm oil milling systems as the abovementioned certifications were amongst the pre-requisites required of a tender participant or systems provider by some of our customers. Between 1995 and 2002, our Group had individually developed modular milling systems, such as the Loading Ramp Door System (introduced in 1997), the Dolphin Intelligent Screw Press System (introduced in 1998), Back Pressure Receiver Stabiliser System (introduced in 1998), Cage Feeding Door System (introduced in 2002), Cage Tipper System (introduced in 2002), Transfer Carriage System (introduced in 2002), Cage Indexer System (introduced in 2002), Cantilever Drawbridge with Articulated Indexer System (introduced in 2002) and Steriliser Door Control System (introduced in 2002), all of which we continue to offer today.
6. INFORMATION ON OUR GROUP (Cont’cf) In 2002, we secured our first tender contract to supply our Cage Indexer System, which automates the FFB sorting process and transfers FFB to the sterilisation station, at the 45 MT/H POM owned by Ladang Tai Tak (Kota Tinggi) Sdn Bhd, an oil palm plantation company and palm oil miller based in Kota Tinggi, Johor. The Cage Indexer System provides cost savings, while also reducing possible health and safety hazards as compared to conventional systems that were considered to be more laborious, dangerous and in-efficient. In 2004, our Group further demonstrated our technical ability and competence by securing our first overseas project, namely the supply and installation of our Cage Indexer System at the 60 MT/H POM owned by Yuzana Co. Ltd. located in Kawlhaung, Myanmar. In 2006, our Group’s QMS with regards to the systematic process flows and scalability of our products was accredited with the ISO 9001 :2000 certification by TUV Nord Group, one of the world’s largest inspections, certification and testing organisation. This certification accredits our Group for our ability “to design, supply, implement and maintain SCADA software systems, hydraulic and automation systems specifically to the palm oil industry”. In 2007, we witnessed the expansion of our Group when both Dolphin Applications and Dolphin Systems were established as part of our Group’s initiative to re-organise our operations. Hence, the operations of our Group were streamlined such that Dolphin Applications was established to focus on electro-automation systems for the palm oil milling machineries sector while Dolphin Engineering focused on pneumatic and hydraulic systems. Further thereto, Dolphin Systems was established to focus on system hardware and software application solutions used in the palm oil milling machineries sector. In 2008, Dolphin Systems was awarded the MSC Malaysia Status by MDeC for two key areas namely, the research, development and commercialisation of software solutions and provision of implementation, technical services and maintenance related to the software solutions. Dolphin Applications, on the other hand, was awarded the Pioneer Status Certification by MIDA for two key areas, namely, the integrated process control systems for POMs and process equipment and integrated process control systems. In 2009, our Group’s QMS were reassessed and accredited with the updated ISO 9001 :2008 certification by TUV Nord Group. The updated ISO 9001 :2008 certification was a testament of our Group’s emphasis on meeting international standards. Our Group has proven to consistently provide products and services that meet applicable regulatory requirements and international standards. In 2010, our Group expanded our reach to Latin America where we penetrated into Colombia with the provision of our Cage Indexer System to the 45 MT/H POM owned by Extractora La Gloria SAS. located in Magdalena, Colombia. During 2010 as well, our Group widened our range of services to include provIsion of M&E solutions. Our decision to widen our range of services proved fruitful when we were awarded our first mechanical works contract, which was also our first contract in Indonesia, by PT Prima Mitrajaya Mandiri, a subsidiary of the MP Evans Group based in the United Kingdom, for its 60 MT/H POM in Kalimantan, Indonesia in October 2010. I Company No.: 1001521-X I
6. INFORMATION ON OUR GROUP (Cont’d) In 2011, our Group established PT Dolphin, our Group’s first overseas subsidiary. Resulting thereto, PT Dolphin’s office in Jakarta, Indonesia provided our Group with a presence in the Indonesian palm oil industry. This is in line with our Group’s plans to penetrate into the Indonesia market, the fastest growing market for paM automation. Indonesia’s oil palm plantation land bank, which is estimated at 9.2 million hectares of oil palm planted area as at 2013, is the largest in the world and is home to the highest numbers of POMs in the world estimated at 608 POMs as at 2010. Therefore, the establishment of our Indonesian sUbsidiary was a strategic decision to have a presence in the Indonesian market to cater to local needs. In 2012, we secured our first project for the provision of turnkey solutions for the upgrade of a 40 MT/H paM to 60 MT/H located in Bau, Sarawak owned by Bau Palm Oil Mill Sdn Bhd, a company owned by SALCRA. In 2013, together with UPM, we launched Roba-REST, an automated sterilisation system that surpasses the performance of conventional sterilisation systems. We are currently in the midst of preparing for the commercialisation of Robo-REST. Please refer to Section 6.15.3 of this Prospectus for further information on the Robo-REST. Our Group’s founders, Low Teck Yin and Hoh Yeong Cherng, have played a pivotal role in driving the growth of our Group. From the humble beginnings of providing customised automation systems and its related services to assembly plants of various industries including the automotive and consumer electronics industry, our Group has today established ourselves as a provider of products, services, and solutions for the palm oil milling machineries sector in the palm oil industry. We have established offices in Malaysia and Indonesia. We have also business presence in the other South East Asian countries as well as expanded our reach to the Latin America. Overall, since our inception, our Group has exported our products to palm oil millers based in 6 different countries around the world, namely Indonesia, Thailand, Myanmar, Papua New Guinea, India and Colombia. Since then and up to the LPD, we have provided our milling systems and solutions to 196 POMs, which are located mainly in Malaysia and Indonesia. Please refer to Section 6.7 of th is Prospectus for further information on our principal markets during the Period under Review. 6.2 KEY ACHIEVEMENTS AND MILESTONES Our key achievements and milestones since inception are summarised as follows:
1992 1995 1997 2002 2004 2006 Dolphin Engineering was founded by our Promoters Dolphin Engineering shifted its focus to the palm oil milling sector as a niche, tapping on the growing demand for process integration and automation solutions and services Awarded Main Contractor Certification by the Ministry of Finance and the Construction Industry Development Board under the category of the construction of buildings, civil construction and mechanical and engineering works, which enabled us to tender directly for projects as well as to provide us with the opportunity to take on higher-value projects Secured first fully automated paM contract to supply and install our product at the 45 MT/H paM owned by Ladang Tai Tak (Kota Tinggi) Sdn Bhd located in Kota Tinggi, Johor Secured first overseas paM contract to supply and install our product at a 60 MT/H paM owned by Yuzana Co. Ltd. located in Kawthaung, Myanmar Awarded the ISO 9001 :2000 certification by the TUV Nord Group I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
2007 2008 2008 2009 2010 2010 2011 2012 2013 Dolphin Applications and Dolphin Systems were established to cater to the needs of our customers for more efficient response regarding specific areas of their requirements Dolphin Systems was awarded the MSC Malaysia Status by MDeC Dolphin Applications was awarded the Pioneer Status Certification by MIDA Our Group’s quality management systems was reassessed and accredited with the updated ISO 9001 :2008 certification from TUV Nord Group Penetrated the Latin American market, namely Colombia by securing orders for our products Expanded our range of services to include provision of M&E solutions. Managed to secure our first mechanical works contract from a subsidiary of the MP Evans Group for their Indonesian mill Established PT Dolphin, our first overseas subsidiary in Jakarta, Indonesia, to facilitate the penetration and service of the Indonesian palm oil milling machineries sector Awarded first project for the provision of turnkey solutions for the upgrade of a 40 MT/H POM located in Bau, Sarawak owned by Bau Palm Oil Mill Sdn Bhd, a company owned by SALCRA, to a 60 MT/H POM ~ Launched “Robo-REST” ‘——–‘—–~—-­6.3 INFORMATION ON THE LISTING SCHEME In conjunction with and as an integral part of the listing of and quotation for the entire enlarged issued and paid-up share capital of our Company on the Main Market, the listing scheme involves the following: (i) Acquisitions;
(ii) Public Issue; and

(iii) Listing. The above are inter-conditional and are viewed as one exercise undertaken to facilitate the Listing of our Company.
6.3.1 Acquisitions In preparation of our Listing, we have undertaken the Acquisitions wherein our Company had entered into 4 separate conditional sale and purchase agreements to acquire the respective equity interest in Dolphin Applications, Dolphin Engineering, Dolphin Systems and Dolphin Components respectively. The Acquisitions have been of related companies to create a holding company structure with subsidiaries focused on specific elements of serving the palm oil milling machineries sector in the palm oil industry and its customers. The new Shares issued pursuant to the Acquisitions shall rank pari passu in all respects with our existing issued and paid-up Shares including the voting rights and will be entitled to all rights and dividends and other distributions, the entitlement date of which are SUbsequent thereof.

 

6. INFORMATION ON OUR GROUP (Cont’d) (i) Acquisition of Dolphin Applications On 30 May 2014, Dolphin entered into a conditional sale and purchase agreement with the vendors of Dolphin Applications, being Low Teck Yin, Hoh Yeong Cherng, Lim Kwee Gee, Loh Peng Chai, Lee Ah Chuan, Chong Han Fung, Albert Chan Kin Soong and Pah Wee Kiat, to acquire the entire issued and paid-up share capital of Dolphin Applications of RM2,666,666 comprising 2,666,666 ordinary shares of RM1.00 each for a purchase consideration of RM28,1 00,000, which was wholly satisfied by the issuance of 140,500,000 new Shares at an issue price of RM0.20 per Share. As at 30 May 2014, the shareholders of Dolphin Applications and their respective shareholdings are as follows: <———-Direct———-> <———-1ndirect———-> Name of shareholder No. of shares % No. of shares % Low Teck Yin 1,000,000 37.50 Hoh Yeong Cherng 1,000,000 3750 Lim Kwee Gee 128,889 483 Loh Peng Chai 128,889 4.83 Chong Han Fung 128,889 4.83 Albert Chan Kin Soong 128,889 4.83 Lee Ah Chuan 76,190 2.87 Pah Wee Kiat 74,920 2.81
The purchase consideration of Dolphin Applications of RM28, 100,000 was arrived at on a willing-buyer willing-seller basis, after taking into consideration the NA position of Dolphin Applications as at 31 December 2013 of RM26, 787, 114. The acquisition was completed on 31 March 2015 and Dolphin Applications became a wholly-owned sUbsidiary of our Company. (ii) Acquisition of Dolphin Engineering On 30 May 2014, Dolphin entered into a conditional sale and purchase agreement with the vendors of Dolphin Engineering, being Low Teck Yin, Hoh Yeong Cherng, Lim Kwee Gee, Loh Peng Chai, Lee Ah Chuan, Chong Han Fung, Albert Chan Kin Soong and Pah Wee Kia!, to acquire the entire issued and paid-up share capital of Dolphin Engineering of RM2,000,000 comprising 2,000,000 ordinary shares of RM1.00 each for a purchase consideration of RM5,1 00,000, which was wholly satisfied by the issuance of 25,500,000 new Shares at an issue price of RMO.20 per Share. As at 30 May 2014, the shareholders of Dolphin Engineering and their respective shareholdings are as follows: <———-Direct———-> <———-1ndirect———-> Name of shareholder No. of shares % No. of shares % Hoh Yeong Cherng  833,334  4167  Low Teck Yin  833,333  41.67  Lirn Kwee Gee  64,444  3.22  Loh Peng Chai  64,444  3.22  Chong Han Fung  64,444  3.22  Albert Chan Kin Soong  64,444  3.22  Lee Ah Chuan  38,095  1.91  Pah Wee Kiat  37,462  1.87
The purchase consideration of Dolphin Engineering of RM5,1 00,000 was arrived at on a willing-buyer willing-seller basis, after taking into consideration the NA position of Dolphin Engineering as at31 December 2013 of RM7,651,989. The acquisition was completed on 31 March 2015 and Dolphin Engineering became a wholly-owned subsidiary of our Company. 110
6. INFORMATION ON OUR GROUP (Cont’d) (iii) Acquisition of Dolphin Systems On 30 May 2014, Dolphin entered into a conditional sale and purchase agreement with the vendors of Dolphin Systems, being Hoh Yeong Cherng and Low Teck Yin, to acquire the entire issued and paid-up share capital of Dolphin Systems of RM500,000 comprising 500,000 ordinary shares of RM1.00 each for a cash consideration of RM65,000. As at 30 May 2014, the shareholders of Dolphin Systems and their respective shareholdings are as follows: <———-Direct———-> <———-1ndirect———-> Name of shareholder No. of shares % No. of shares % Hoh Yeong Cherng 350,000 70.00 Low Teck Yin 150,000 30.00 The purchase consideration of Dolphin Systems of RM65,000 was arrived at on a willing­buyer willing-seller basis, after taking into consideration the NA position of Dolphin Systems as at 31 December 2013 of RM64,793. The acquisition was completed on 31 March 2015 and Dolphin Systems became a wholly-owned subsidiary of our Company. (iv) Acquisition of Dolphin Components On 30 May 2014, Dolphin entered into a conditional sale and purchase agreement with the vendors of Dolphin Components, being Low Teck Yin and Hoh Yeong Cherng, to acquire 75% or 75,000 ordinary shares of RM1.00 each of the issued and paid-up share capital of Dolphin Components consisting of RM100,000 comprising 100,000 ordinary shares of RM1.00 each for a cash consideration of RM65,000. As at 30 May 2014, the shareholders of Dolphin Components and their respective shareholdings are as follows: <———-Direct———-> <———-1ndirect———-> Name of shareholder No. of shares % No. of shares % Low Teck Yin 37,500 3750 Hoh Yeong Cherng 37,500 37.50 Brian Lim Eu Kheng 25,000 25.00 The purchase consideration of Dolphin Components of RM65,000 was arrived at on a willing-buyer willing-seller basis, after taking into consideration the net liability position of Dolphin Components as at 31 December 2013 of RM11, 157, the subsequent cash injection of RM99,900 by the shareholders of Dolphin Components on 2 April 2014 and the future earnings contribution to the Group by Dolphin Components from its intended business activity. The acquisition was completed on 31 March 2015 and Dolphin Components became a 75% owned subsidiary of our Company. 6.3.2 Public Issue To facilitate the listing of and quotation for our Company’s entire enlarged issued and paid-up share capital on the Main Market and to comply with the Listing Requirements with regard to the shareholding spread, our Company shall undertake the Public Issue of 46,000,000 IPO Shares at the IPO Price in the following manner: (i) Malaysian Public 15,000,000 IPO Shares representing 6.76% of our enlarged issued and paid-up share capital will be made available for application by the Malaysian Public investors through a balloting process, of which at least 50% shall be set aside for Bumiputera investors including individuals, companies, societies, co-operatives and institutions. 6. INFORMATION ON OUR GROUP (Cont’d) (ii) Eligible Persons 8,250,000 IPO Shares, representing approximately 3.72% of our enlarged issued and paid­up share capital will be made available for application by the Eligible Persons. (iii) Selected eligible investors by way of private placement 22,750,000 IPO Shares, representing 10.25% of our enlarged issued and paid-up share capital will be made available for application by way of private placement of which 2,500,000 IPO Shares, representing 1.13% of our enlarged issued and paid-up share capital, will be made available to selected eligible investors and 20,250,000 IPO Shares, representing 9.12% of our enlarged issued and paid-up share capital, will be made available to Bumiputera investors approved by the MIlL Upon completion of the Public Issue, our Company’s issued and paid-up share capital will be further increased from RM35,200,002 to RM44,400,002.
6.3.3 Listing on Bursa Securities Our Company will seek for the admission and listing of and quotation for our entire enlarged issued and paid-up share capital of RM44,400,002 comprising 222,000,010 Shares on the Main Market. 6A SHARE CAPITAL As at the LPD, the authorised share capital of our Company was RM100,000,000 comprising 500,000,000 ordinary shares of RMO.20 each. The eXisting issued and paid-up share capital of our Company is RM35,200,002 comprising 176,000,010 Shares. The changes in the issued and paid-Up share capital of our Company since incorporation are as follows:
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Dolphin. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. 6. INFORMATION ON OUR GROUP (Cont’d)

6.5 INFORMATION ON OUR SUBSIDIARIES AND ASSOCIATE COMPANY Dolphin has 6 sUbsidiaries, each relating to a particular aspect of servicing the palm oil milling machineries sector in the palm oil industry and its customers, and an associate company. The details on each of our subsidiaries and our associate company as at the LPD are set out below: 6.5.1 Dolphin Applications Dolphin Applications was incorporated in Malaysia as a private limited company under the Act on 10 October 2007 under its present name. Dolphin Applications is principally involved in the sale, design, engineering, development and integration of electro-automation and related systems and products which are sold under the “Dolphin” brand for the palm oil milling machineries sector and commenced its business on 10 October 2007. The present authorised share capital of Dolphin Applications is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2,666,666 comprising 2,666,666 ordinary shares of RM1.00 each. Details of the changes in the issued and fully paid-up share capital of Dolphin Applications for the past 4 years preceding the LPD are as follows:
As at 01.01.2011 10.05.2011 13.04.2012  1,250,000 666,666  1.00 1.00  Bonus issue Cash  750,000 2,000,000 2,666,666
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Dolphin Applications. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Dolphin Applications has two subsidiaries, namely PT Dolphin and Dolphin Robotic and an associate company, PT Emas Hijau.
6.5.2 Dolphin Engineering Dolphin Engineering was incorporated in Malaysia as a private limited company under the Act on 14 October 1992 under its present name. Dolphin Engineering is principally involved in the sale, design, engineering, development and integration of pneumatic, hydraulic and related systems and products which are sold under the “Dolphin” brand for the palm oil milling machineries sector and commenced its business on 14 October 1992. . The present authorised share capital of Dolphin Engineering is RM5,OOO,000 comprising 5,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2,OOo,000 comprising 2,000,000 ordinary shares of RM1.00 each. 6. INFORMATION ON OUR GROUP (Cont’d) Details of the changes in the issued and fully paid-up share capital of Dolphin Engineering for the past 4 years preceding the LPD are as follows:
As at 01.01.2011 13.04.2012 25.10.2012  333,333 666,667  1.00 1.00  Cash Cash  1,000,000 1,333,333 2,000,000
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Dolphin Engineering. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Dolphin Engineering does not have any sUbsidiary and associated companies.
6.5.3 Dolphin Systems Dolphin Systems was incorporated in Malaysia as a private limited company under the Act on 10 October 2007 under its present name. Dolphin Systems is principally involved in the sale, design, programming and development of system hardware and software application solutions which are sold under the “Dolphin” brand for the palm oil milling machineries sector and commenced its business on 10 October 2007. The present authorised share capital of Dolphin Systems is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. The issued and paid-Up share capital is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. Details of the changes in the issued and fully paid-up share capital of Dolphin Systems for the past 4 years preceding the LPD are as follows: As at 01.01.2011 100,000 I 08.06.2012 400,000 1.00 Cash 500,000

As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Dolphin Systems. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Dolphin Systems does not have any subsidiary and associated companies.
6.5.4 Dolphin Components Dolphin Components was incorporated in Malaysia as a private limited company under the Act on 15 September 2009 under the name Dolphin Universe Sdn Bhd. Dolphin Universe Sdn Bhd SUbsequently changed its name to Dolphin Components on 2 January 2014. Dolphin Components is principally involved in the sale and trading of components and consumable parts for the palm oil milling machineries sector and commenced its business on 2 January 2014. I Company No.: 1001521-X I

6. INFORMATION ON OUR GROUP (Cont’d) The present authorised share capital of Dolphin Components is RM1 00,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. Details of the changes in the issued and fUlly paid-up share capital of Dolphin Components for the past 4 years preceding the LPD are as follows:
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Dolphin Components. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Dolphin Components does not have any subsidiary and associated companies. 6.5.5 PT Dolphin PT Dolphin was established by the Deed of Establishment No. 43 dated 16 May 2011, which deed has been approved by the Ministry of Law and Human Rights by virtue of Decree No. AHU­30188.AH.01.01.Tahun 2011, and was registered in the Company Registry No. AHU­0048645.AH.01.09.Tahun 2011 dated 16 June 2011, in Indonesia as an Indonesian limited company domiciled in Jakarta under the Law of the Republic of Indonesia No. 25 of Year 2007 concerning investment under its present name. PT Dolphin is principally involved in the sales, marketing and installation of the Group’s customised electro-automation, pneumatic and hydraulic systems in Indonesia and commenced its business on 16 June 2011. The present authorised share capital of PT Dolphin is USD1,750,000 comprising 1,750,000 ordinary shares of USD1.00 each. The issued and paid-Up share capital is USD1,750,000 comprising 1,750,000 ordinary shares of USD1.00 each. Details of the changes in the issued and fully paid-up share capital of PT Dolphin since its incorporation until the LPD are as follows:
As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in PT Dolphin. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, PT Dolphin does not have any subsidiary and associated companies. 6. INFORMATION ON OUR GROUP (Cont’d)
6.5.6 Dolphin Robotic Dolphin Robotic was incorporated in Malaysia as a private limited company under the Act on 5 May 2014 under its present name. Dolphin Robotic is principally involved in the design, engineering and development of palm FFB sterilisation and related system, components and parts. Dolphin Robotic commenced its business on 5 May 2014. The present authorised share capital of Dolphin Robotic is RM400,000 comprising 400,000 ordinary shares of RM 1.00 each. The issued and paid-up share capital is RM2 comprising 2 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of Dolphin Robotic since its incorporation untii the LPD. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Doiphin Robotic. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, Dolphin Robotic does not have any subsidiary and associated companies.
6.5.7 PT Emas Hijau PT Emas Hijau was established by the Deed of Establishment No. 37 dated 20 November 2014, which deed has been approved by the Ministry of Law and Human Rights by virtue of Decree No. AHU-0002071.AH.01.01.Tahun 2015, and was registered in the Company Registry No. AHU­0005196.AH.01.11.Tahun 2015 dated 19 January 2015, in Indonesia as an Indonesian limited company domiciled in Jakarta under the Law of the Republic of Indonesia No. 25 of Year 2007 concerning investment under its present name. PT Emas Hijau is currentiy dormant and is intended to be principally involved in the bUilding, operating and managing of POMs to be located in Indonesia. The present authorised share capital of PT Emas Hijau is IDR10,000,000,000 comprising 10,000,000 ordinary shares of IDR1,OOO each. The issued and paid-up share capital is IDR2,500,000,000 comprising 2,500,000 ordinary shares of IDR1 ,000 each. As at the LPD. there are no outstanding warrants, options, convertible securities or uncalled capital in PT Emas Hijau. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. As at the LPD, PT Emas Hijau does not have any subsidiary and associated companies.
6.6 BUSINESS OVERVIEW Our Group, through our subsidiaries, are principally involved in the design, development, fabrication and sale of our products together with the corresponding hardware and software solutions for the palm oil milling machineries sector in the palm oil industry. We provide products and related services for palm oil milling automation and control as well as M&E and/or full turnkey solutions in the construction of palm oil mills. Our products for automation and control can be purchased individually, or combined to form an integrated system, for use in the palm oil milling process. Our Group’s core competency and competitive edge is in having the technology and know-how to provide POMs with products to form wholly integrated automation and control systems that offer improved efficiency, productivity and safety. 6. INFORMATION ON OUR GROUP (Cont’d) The major processes involved in palm oil milling can be lIIustrated as follows:
Please refer to Section 5 of this Prospectus for further information on the palm oil milling process. A typical POM layout can be divided into 2 main sections, namely the marshalling yard and extraction plant where the palm oil milling processes are carried out, as shown in the diagram below:
Our products for automation and control focus primarily on 2 key areas, namely: (i) material handling in the marshalling yard; and
(ii) process automation and control of the sterilisation, digestion and pressing and clarification processes.

6. INFORMATION ON OUR GROUP (Cant’et) Material handling is an important field in the palm oil milling process as it is used throughout the entire process from the FFB reception at the FFB ramp area to the final product storage yard. Conventionally, material handling activities are labour-intensive, hazardous and prone to accidents. With oil palm plantations generating large volumes of fruits, the processing of large quantities of fruits requires a greater degree of mechanisation and automated material handling. The adoption of Dolphin’s products for automation in material handling activities enable simple and guided operational sequence that significantly reduces the dependence on labour-intensive operation. Coupled with a remote operation option, our products enable the process to be operated and monitored from a safe distance, which enhances safety and reduces the risks of errors and accidents. Process automation and control is a statistics and engineering discipline for maintaining the output of a specific process within a desired range. In the absence of process automation and control, plant operators have to manually monitor performance results and the quality of outputs to determine the best settings on which to run a production process. Dolphin’s products for process automation and control simplify this with the help of sensors and instruments installed strategically at key prod uction processes that collect various real-time data. The stored information is then analysed and automatically adjusted via the software instaHed.

6.6.1 Our Products, Solutions and Services We design, develop, integrate and support technological products, services and solutions based on the needs and technical requirements of our customers in the palm oil industry. Our product development focuses on key themes that improve palm oil yield, improve mill safety and overall customer economics. Currently, the palm oil milling machineries sector is generally less automated with little sophisticated process controls than in many other global process industries. This continues to create innovation opportunities for us. The 5 key principals which our Group focuses on when designing and developing our products are as follows: (i) automate key functions for enhanced safety and efficiency;
(ii) reduce unplanned maintenance and operation down-time;

(iii) optimise palm oil recovery and reduce wastage; (iv) real-time online monitoring and troubleshooting to identify and rectify process issues quickly; and
(v) inception and adoption of evolving technology.

The offerings of our Group are as follows:

6. INFORMATION ON OUR GROUP (Cont’d) The revenue generated from our Group’s turnkey solutions and M&E solutions are recorded by our Group under Ihe provision of solutions revenue segment while the products offered by our Group can be categorised under the revenue segments of sale of milling systems or sale of milling software. The remaining services offered by our Group as depicted in the above diagram is categorised under the revenue segment of supply of parts and maintenance services. Please refer to Section 10.2 of this Prospectus for further information our revenue recognition. Our individual products and where it functions within the palm oil milling process are as follows: ~~~.~~~.~ _~_.~~.~ •.~~ __~_”~_.~_~.~.WWW_”MM_.~~ ” _~~”.._”_•••.••~”~””~~_’w•• __~~_e.”.~q. .>~J’alm oilJ!!!lllnll P.!2!:!!.~~L~~U””M,”~’~_~~”_”__~~=__~~~ Marshallmg yard Extraction plant ~ ~”~~~…..,,….,~~ “-‘” Notes: May be integrated to form our Automated Cage Handling System; A May be integrated to form our Automated Production Throughput Synchronisation Control System; and # May be combined to form our Intelligent Process Automation & Data Acquisition System (iPADAS). All our individual systems in the diagram above can be sold separately/individually or combined to form our integrated systems. Further details of our products are set out in the ensuing sections. 6. INFORMATION ON OUR GROUP (Cont’d) 6.6.1.1 Our Products (i) Automated Cage Handling System Our Automated Cage Handling System is an integrated material handling system that is designed and developed to manage the manoeuvring of cages in the marshalling yard of the POM with greater safety, productivity and efficiency. The marshalling yard is where the FFB is transferred from the loading dock and fed into the cages as a mode of mobilisation via a series of conveyors and feeding door systems before being put through the sterilisation process. At the end of the marshalling yard, SFB are discharged from the cages at the tipping station. The individual products that work within the Dolphin’s Automated Cage Handling System located in the marshalling yard are depicted and described as follows:
(a) Loading Ramp Door System
Our Loading Ramp Door System is a hydraulic dual pump system which allows for the concurrent operation of multiple doors installed in the FFB reception station to regulate the loading of FFB from the reception station onto the FFB conveyor. Its function is to ensure that FFB are evenly loaded onto the FFB conveyor. 6. INFORMATION ON OUR GROUP (Cont’d) (b) Twin Drive FFB Conveyor System
Our Twin Drive FFB Conveyor System is installed to operate a conveyor belt used for the transfer of FFB from the FFB reception station to the cages. It is driven by 2 heavy duty hydraulic hybrid motors, coupled to the left and right side of a conveyor drive shaft. It provides equal and balanced force distribution at each side of the conveyor chain, effectively prolonging its life span. This system regulates the transfer of FFB to the Cage Feeder Chute System. (c) Cage Feeder Chute System
Our Cage Feeder Chute System is used for the feeding of FFB into the cages via hydraulically controlled sliding chute doors at the discharge opening of the chute. This system regulates the quantity and even distribution of FFB loaded into the cages. (d) Transfer Carriage System Our Transfer Carriage System is used to automatically transfer the FFB loaded cages from the loading line to the sterilisation line by shifting the cages back and forth along the transfer carriage pit. Upon reaching the sterilisation line, this system will initiate a self­locking mechanism which automatically aligns the cage with the sterilisation track. Our Transfer Carriage Systems comes with a dual speed movement system which allows the cages to be moved at a higher speed between lines which automatically slows down to ensure precise final track positioning and stopping. This system reduces the maintenance required on the cages as it eliminates the knocking of cages between each other, which are commonly found in conventional manual systems. (e) Cage Indexer System

Our Cage Indexer System is a system which mobilises cages along the loading line and sterilisation line. This system has an automatic self-latching and unlatching mechanism with integrated sensors for the precision positioning of cages Our Cage Indexer System, which enhances safety, replaces the conventional winch and bollard system, thus eliminating the need for manual handling. 6. INFORMATION ON OUR GROUP (Cont’d) (f) Steriliser Door Control System and Integrated Cantilever Drawbridge with Articulated Indexer System Our Steriliser Door Control System is designed to replace the manual operation of the steriliser door while our Integrated Cantilever Drawbridge with Articulated Indexer System allows the loaded FFB cages to be mobilised into the steriliser. This process is smoothen by the Articulated Indexer System which acts as the mechanism which precisely loads and unloads the cages from the steriliser.
Upon arrival of the cages at the entry point of the steriliser, our Steriliser Door Control System automatically opens the steriliser door. The Integrated Cantilever Drawbridge with Articulated Indexer System then pushes the loaded FFB cages into the steriliser. The Steriliser Door Control System then automatically closes and locks the steriliser door. When the sterilisation process is completed, the Steriliser Door Control System then automatically unlocks and opens the steriliser door at the exit point to allow the loaded SFB cages in the steriliser to be automatically transferred to the tipping station via the Transfer Carriage System. This system eliminates the need for manual operators to be in close proximity to the steriliser and thus enhances safety. (g) Sterilisation Process Automation System (STERPAS)
Our STERPAS is a control and monitoring system that ensures the consistent sterilisation of FFB via an automated pressure and time application. The system provides ease of configuration, accurate data acquisition and display, alarm monitoring and end-of-cycle reporting that ensures optimal sterilisation of FFB of various grades.
(h) Back Pressure Receiver Stabiliser System

 

Our Back Pressure Receiver Stabiliser System is designed to automatically provide sufficient and consistent flow of steam for the sterilisation process. It automatically regulates the desired set-point pressure to ensure the complete sterilisation of FFB. 6. INFORMATION ON OUR GROUP (Cont’e/) (i) Cage Tipper System with Tipper-Hopper Control System
Our Cage Tipper System is used for the tipping of the SFB loaded cages into a hopper below prior to the transfer of SFB to the threshing station via a conveyor. The Tipper-Hopper Control System monitors and regUlates the amount of SFB fed onto the said conveyor system. Our Cage Tipper System with Tipper-Hopper Control System replaces the use of conventional overhead crane to tip cages for the unloading of SFB.
(ii) Automated Production Throughput Synchronisation Control System Our Automated Production Throughput Synchronisation Control System manages the handling of SFB through the thresher, digester and screw press stations. The ultimate objective of the system is to create a consistent and synchronised SFB feed from one station to another, in line with the desired production throughput. The operational parameters of the thresher, digester and screw press stations are being constantly monitored by the system and regulated if any changes arise during operations. Steady and even SFB supply to the thresher ensures thorough stripping thus reducing the amount of un-stripped bunches. Regulated feed to the digester station based on the required volume ensure consistent digester level for proper and thorough digestion which will then optimise the screw press function. The individual products that work within the Automated Production Throughput Synchronisation Control System located in the extraction plant are depicted and described as follows:
[COmpany No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) (a) Twin Drive SFB Inclined Conveyor System Our Twin Drive SFB Inclined Conveyor System is installed to operate a conveyor belt used for the transfer of SFB from the tipper-hopper to the threshing station and subsequently to the digestion station. It is driven by 2 heavy duty hydraulic hybrid motors, coupled to the left and right side of a conveyor drive shaft. It provides equal and balanced force distribution at each side of the conveyor chain, effectively prolonging its life span. This system operates similarly to that of our Twin Drive FFB Conveyor System. (b) Digester Level Control System

Our Digester Level Control System automatically regulates the feed rate of fruitlets into the digester chamber, maintains fruitlet capacity in the digester at the pre-set mass and ensures even distribution of fruitlets in all digesters to optimise fruit digestion within the allocated time. Upon completion of the digestion process, the chute door at the bottom of the digester will open and discharge the digested mass to the screw press for oil extraction. Our Digester Level Control System allows our customers to ensure a consistent and monitored feeding process of fruitlets into the digesters. This enhances their productivity process as ensuring optimal fruitlet digestion plays an important role in increasing OER. (c) Dolphin Intelligent Screw Press Control System (DISS)
Our DISS is an automated screw press system to extract oil from the digested fruitlets. Installed at the base of the digester, the DISS maximises oil extraction due to a more effective pressing via its pressure control capability. (iii) iPADAS We have developed a suite of 6 individual software applications for POMs, which can be sold either individually or as an integrated software system known as the Intelligent Process Automation & Data Acquisition System (jPADAS) to our customers. iPADAS provides POMs with a comprehensive process monitoring and resource planning solution. This enables POMs to centrally capture, monitor and provide real time data to support critical decision making relating to mill operation, production planning and quality control. [t also enables centralised supervision of process attributes, alerts, event logs and has the ability to undertake continuous data warehousing which provides historical trending reports for the periodic data evaluation of important aspects of the palm oil milling process. 6. INFORMATION ON OUR GROUP (Cont’d) The individual software applications within iPADAS, are illustrated as follows:
iWEIGH  iWEIGH is an automated truck scale weighing application for POMs that integrates multiple truck scales with a single workstation. iWEIGH’s automated interfacing with a broad range of weighing indicator models provides simple and easy weight acquisition while its access control feature with data validation provides weight information.  iGRADE  iGRADE is a mobile FFB grading application (essentially a portable wireless thin-client application). Its user-friendly interface allows for easy entry of direct sampling data and is capable of generating reports on FFB quality classification that is fully compliant with MPOB’s quality control standard for FFB grading procedures.  iLAB  iLAB is a software application for recording and reporting of test procedures used in every level of production quality control. It automatically performs arithmetic calculations based on direct test data entry to produce test result reports that are fully compliant with MPOB quality control standards.
——–L-­~ 6. INFORMATION ON OUR GROUP (Cont’d)
iSMS is a client-server application which harnesses the short message service (SMS) to disseminate critical business information such as stock level, production throughput, extraction rate and daily sales figures. The application supports all industrial leading databases at the backend in a single package. It also supports Global System for Mobile communications (GSM) modem for sending and receiving messages. iSMS CEMS refers to a packaged system of gas analysers, gas sampling system, temperature, flow and opacity monitors that are integrated with a data acquisition system, that is involved in the measurement of gases, particulates and smoke (opacity) emitted from stationery source of air pollutants and to provide a continuous record of air pollution control equipment performance and to determine compliance with emission of operation limits. CEMS iPRODUCTION integrates data from all input devices to provide details for monitoring mass balance and production control. It provides a wide range of processing data and historical trend analysis that are necessary for critical decision making. iPRODUCTION (iv) Other products In addition, our Group also offers other individual products used within the palm oil milling process, described as follows: (a) Water Dilution Control System

Our Water Dilution Control System automatically regulates the precise amount of water that is infused to stabilise the crude oil mixture before the clarification process. This is to ensure that sufficient water is mixed with crude oil mixture to achieve the optimal separation of impurities from the crude oil.
(a) Depericarper Control System

 

Our Depericarper Control System is a system which monitors and regulates the proportion of the velocity of airflow to the volume of material in the separation column in order to achieve effective separation of the nut and fibre. I Company No.: 1001521-X] 6. INFORMATION ON OUR GROUP (Cont’d) (c) Silo and Hopper Weighing System
This system facilitates compression weighing and has an integrated human machine interface that allows interactive monitoring of storage inventory and alarm configuration. Used for the real-time reporting of the weight of contents fed into the digesters and storage silos. (d) Tank Level Sensor
Our Tank Level Sensor is designed for level measurement of liquid stored in a storage tank. 6.6.1.2 Our Solutions In addition to the products mentioned above, our Group is also able to provide turnkey and M&E solutions at the request of our customers. (i) Turnkey solutions
In a turnkey solutions project, we manage the entIre construction or upgrading and/or extension of a POM, from its design to its development and commissioning. The provision of turnkey solutions would include responsibilities such as obtaining the necessary bUifding plan approvals from the local authorities, land clearing, civil engineering works and the construction of the POM or any extension thereof, all of which would be sub-contracted to other professionals and completed under the supervision of our Group’s project management team. For clarity, a turnkey solutions project would also include the job scope of an M&E solutions project.
(ii) M&E solutions

In an M&E solutions project, we manage the installation of all mechanical and electrical works via the installation of external equipment, components and/or parts in an already constructed POM. For the majority of our M&E solutions projects, our customers may specify the equipment, components and/or parts of their choice. Our engineers would then work closely with these customer-specified suppliers in order to ensure the seamless integration of the said equipment, components and/or parts with our products. NotwIthstanding the above, we will only undertake an M&E solutions project or turnkey solutions project in conjunction with the purchase and installation of our products, subject to a viability and feasibility evaluation of the project. 6. INFORMATION ON OUR GROUP (Cont’d)
6.6.1.3 Our Services As part of our after sales service, we also provide the option to our customers for the running of periodic mill diagnostics to determine that our products installed in the POMs are running at a satisfactory level. We also provide maintenance and repair services for our customers on an ad­hoc or contractual basis. 6.7 PRINCIPAL MARKETS While we have sold our products to palm oil millers based in 7 countries around the world, our principal markets are still the palm oil milling machineries sector of Malaysia and Indonesia. Indonesia is currently our largest overseas market and is expected to remain our largest export market moving forward due to Indonesia being the world’s largest and fastest growing palm oil producer. From FYE 2011 to FYE 2014, our revenue by geographical markets is as follows:
DomesticP1 Overseas Indonesia Thailand India Myanmar Papua New Guinea Colombial11 Australia(21 Singapore(2) I Total overseas Total revenue 9,521 32,760 908 29 1,104 702 963 3  20.70 71.23 1.98 0.06 2.40 1 53 2.09 0.01  10,877 48,679 2,158 148 1,383 783 84 63  16.95 75.85 3.36 0.23 2.16 1.22 0.13 0.10  55,745 30,103 674 41 522 661 501 2  63.17 34.11 0.76 0.05 0.59 0.75 0.57 *  80,168 23,014 7 6 51 1,335 4  76.65 22.00 0.01 0.01 0.05 1.28 *  36,469  79.30  53,298  83.05  32,540  36.83  24,417  23.35
45,990  100.00  64,175  100.00  88,249  100.00  104,585  100.00

Notes: * (1) (2)  Negligible. Includes sales ofpalm oil milling machineries and parts to palm oil milling machinery traders, which we are unable to ascertain the final geographical market in which our said products sold are utilised. Consist solely of sales ofpalm oil milling machineries and parts to palm oil milling machinery traders of which we are unable to ascertain the final geographical market in which our said products sold are utilised.  As  the  revenue  generated  by  our  Group  is  pre-dominantly  project-based  in  nature,  the
fluctuations of revenue generated in the respective abovementioned geographical markets over the Period under Review are mainly due to the revenue recognised from projects based on the percentage-of-completion method undertaken in the respective geographical locations. Please refer Section 10.2(i) for further analysis on the revenue by geographic market for FYE 2011 to FYE 2014. 6. INFORMATION ON OUR GROUP (Cont’e/) 6.8 TYPES, SOURCES AND AVAILABILITY OF RESOURCES We purchase a variety of materials, components and parts for the fabrication of our products. Such materials and parts include metal, steel, equipment and parts, hydraulic parts, cables, electrical switchboards and other electrical components. Our costs of materials and parts constitute approximately 13.28%, 34.42%, 15.75% and 10.13% of our cost of sales for the FYE 2011, FYE 2012, FYE 2013 and FYE 2014 respectively. The cost of these materials and parts are highly variable and depends on market prices. Our policy is not to purchase materials, components and parts prior to receiving a binding customer forecast, contract or order. Aside from purchasing from our suppliers, we also procure such materials, components and parts through our sub-contractors which provide the materials, components and parts as part of their labour and fabrication services. In such cases, we are unable to quantify the cost of such materials, components and parts as it is generally included as part of the entire cost package offered by the sub-contractors. The spike in the percentage of the cost of materials and parts as compared to our overall cost of sales during the FYE 2012 was due to the increase in materials and parts consumed as a result of the decrease in sub-contractors engaged. Materials, components and parts are sourced locally and/or imported depending on the locations of our projects. We import certain desired grades of materials, components and parts which are not available in the local market to meet certain project specifications. We seek to reduce our exposure to increases in materials prices by utilising a pricing methodology that factors in the cost of materials, components and parts we are required to purchase to fabricate our products. The pricing methodologies used by our Group are as follows: (i) “Back-to-back”
For certain of our customers, we order materials “back-to back” with the customer’s order and incorporate the materials, components and parts’ purchase price into the final product price. This reduces our exposure to any potential increases in the prices of materials and parts as upon obtaining the order, we will proceed to order the materials and parts required.
(ii) Customer specified suppliers

For certain of our customers, we use materials that are sourced from suppliers directed by our customers at prices that have been pre-negotiated by the customer and that are passed through to the customer in the final product price. (iii) Project budgeting In respect of our project customers, we have traditionally been able to factor in the cost of our materials, components and parts into our project bidding as the quantity and specification of the materials, components and parts required are usually determined upfront after the structural, electro-automation, pneumatic and hydraulic products design is finalised. We mitigate the risk of the availability of materials, components and parts by having a diversified pool of established suppliers. In addition to the aforementioned, we also mitigate the risk of availability by making deposits as advance payments to “Jock-in” the quantity of materials, components and parts as well as to fix our cost of purchases where and when necessary. [COffiPany No.: 1001521-XJ 6. INFORMATION ON OUR GROUP (Cont’d) 6.9 MAJOR CUSTOMERS Our Group’s major customers who accounted for 10% or more of our Group’s total revenue for the Period under Review are as follows:
Bau Palm Oil Mill Sdn Bhd (a company owned by SALCRA) I Malaysia  Operation of a palm oil mill  Civil, structural, mechanical and electrical works for the extension and upgrading of a POM including the supply of Dolphin’s Automated Cage Handling System  2  – 26,121  29.60  158  0.15  PT Kutai Balian Nauli I Indonesia  Cultivation and processing of palm oj)  Civil, structural, mechanical and electrical works for the construction of a POM and the  2  – 15,440  17.50  13,001  12.43  supply of Dolphin’s Automated Cage Handling System  Syabas Vista Sdn Bhd /  Palm oil milling  The supply of Dolphin’s  2  – 14,300  16.20  Malaysia  machineries trader  Automated Cage Handling  System  PT Dharma Satya Nusantara / Indonesia  Palm oil and wood processing  Mechanical and electrical works and the supply of Dolphin’s Automated Cage Handling System and STERPAS as well as the  4  6,178  13.43  31,559  49.18  5,908  6.69  98  0.94  construction of a bulking station  PT Prima Mitrajaya Mandiri / Indonesia  Production of crude palm oil and palm kernels  Mechanical works  5  13,675  29.73  69  0.11  224  0.25  16  0.02
~mpany No.: 1001SiiiJ 6. INFORMATION ON OUR GROUP (Cont’d)
Vila Sutera Sdn Bhd I  Manufacturing of crude  Civil, structural, mechanical  2  117  0 13  20,944 20.03  Malaysia  palm oil, palm kernel  and electrical works for the  extension and upgrading of a  POM including the supply of  Dolphin’s Automated Cage  Handling System and  Automated Production  Throughput Synchronisation  Control System  SALCRA I Malaysia  Developing and managing  Civil, structural, mechanical  5  48,239 46.12  Native Customary Rights  and electrical works for the  Land, Native Land and  construction of a POM and the  Mixed Zone land for oil  supPly of Dolphin’s Automated  palm and tea estates  Cage Handling System and  based on “in-situ”  Automated Production  concept, processing FFB  Throughput Synchronisation  to produce CPO and palm  Control System  kernel and processing tea  leaves to made tea,  marketing of oil palm  products and made tea  with agriculture product.
During the Period under Review, our Group has served 116 customers who may own mUltiple POMs. Of these 116 customers, 69 customers are based in Malaysia, 34 customers are based in Indonesia, While the remaining 13 customers are based across Thailand, India, Myanmar, Papua New Guinea, Colombia, Australia and Singapore. 6. INFORMATION ON OUR GROUP (Cont’d) Of the 116 customers served by our Group during the Period under Review, 103 customers are recurring customers. The revenue contributed by these recurring customers during the Period under Review is as follows:
Notes: (1) Percentage of revenue of the respective financial years dUring the Period under Review.
(2) The decrease in tile revenue generated from recurring customers during tile FYE 2013 was because we were abfe to secure projects from new customers, namely PT Kuta! Balian Nauli and Syabas Vista Sdn Blld.

As at the LPD, our Group is presently serving 114 customers of which 54 customers have previously engaged our Group for the provision of various products and solutions and have subsequently awarded our Group with new contracts. Of the recurring customers, 45 recurring customers or 83.33% have engaged our Group for the provision of our products and solutions for their new or other existing POMs while 20 recurring customers or 37.04% have engaged our Group for maintenance of our products previously installed. The frequency of our Group being engaged by our recurring customers is dependent on our recurring customers’ expansion of their POMs and/or replacement schedule of machinery and parts used in their POMs. Given the nature of the contracting business, we do not consider ourselves as dependent on any single customer during the Period under Review as the contribution by major customers are dependent on the contract value of the projects in the respective years. In addition, albeit the project nature of our business operations, our Board is of the opinion that we are able to sustain our profitability as our Group has been able to continuously secure new contracts and are not dependent on any single contract. This is evident from our total order book of secured contracts as at the LPD which stands at RM172.16 million as disclosed in Section 10.7 of this Prospectus. All the major customers, as listed above, are not related to our Group. Our relationships with our customers are mostly project based in nature where contracts are normally awarded after competitive bidding or direct negotiation. We have been repeatedly invited by our past customers to participate in the bidding/submit our proposal for negotiation for the upgrading of their other POMs and/or automation of their new POMs. In addition, we have also been referred to new customers by our existing customers or approached by our existing customers themselves, for the upgrading of their existing POMs milling systems/ automation of their new POMs. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK I Company No,: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) 6.10 MAJOR VENDORS Our main cost of sales are that of the engagement of sub-contractors and labour costs, which accounted for approximately 7754%, 50,92%, 78.62% and 87,27% of our Group’s cost of sales during the FYE 2011, FYE 2012, FYE 2013 and FYE 2014 respectively. Our Group’s major vendors (including sub-contractors) who accounted for 10% or more of our Group’s total purchases during the Period under Review are as follows:
The major vendors, as listed above, are not related to our Group. We believe that we are the major customer of both Kejuruteraan Trisuria Sdn Bhd and Hydra-Line Hydraulics Sdn Bhd. As our Group has a diverse range of vendors, majority of whom are from Malaysia and Indonesia, we do not consider ourselves as dependent on any major vendors who accounted for more than 10% of our Group’s purchases during the Period under Review. As at the LPD, we have a well­diversified vendor base comprising 329 vendors. Our purchases from each vendor is determined after taking into account various criteria such as competitive pricing, quality of products, availability of supply and delivery lead time. ~mpany No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
6.11 FABRICATION FACILITIES AND CAPACITY Our business activity is segmented into contract and/or order based and each contract and/or order would typically require between 2 weeks to 24 months to complete from the design to delivery and commissioning at the project site. The fabrication of a particular product offered by our Group can be divided into external fabrication works, in-house fabrication works and on-site works. The completion duration varies, depending on the scope and specification of a contract and/or order and would also depend on the customer’s site readiness. Further thereto, our annual production capacity depends on the complexity and type of products ordered by the customer. In addition, the utilisation rate of the fabrication and assembly facilities are determined by the timing of implementation and location of the proposed customers’ facilities. Due to the nature of our business which is project based, the estimated annual production capacity and the utilisation rate of our assembly facilities cannot be accurately measured by conventional formulas. Notwithstanding the above, our Board, based on their best estimates, has derived our in-house fabrication capacity during the Period under Review and its corresponding utilisation rates solely based on the working hours of our in-house fabrication capacity, which are illustrated as follow:
Notes: (1) The maximum annual capacity of our in-house fabrication capacity is measure based on 7 technicians who are employed full-time throughout the Pen’od under Review working 8 hours per day, 260 days per year.
(2) The utilisation rate of our fabrication capacity in each financial year was calculated based on the amount of time required to undertake the in-house fabrication portion of our products for contracts and orders during each particular financial year during the Period under Review divided over the maximum annual capacity.

The utilisation rates for our in-house fabrication capacity had increased from 52.55% in the FYE 2011 to 68.90% in the FYE 2012 and subsequently 88.98% in the FYE 2013. This was mainly due to the year-on-year increase in the number of products fabricated by our Group during the Period under Review to meet the increasing demand for our Group’s palm oil milling systems. However, the said utilisation rate for our in-house fabrication capacity had decreased to 47.39% in the FYE 2014. This decrease was mainly resulting from the decrease in orders received from palm oil milling machineries traders. C THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK ~mpany No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’a’) Presently, our main fabrication facilities are located in our headquarters and workshop for the production and assembly of our products, both located in Puchong, Selangor. We are currently faced with space constraint and intend to expand our fabrication facilities via the renovation and expansion of our currently vacant factory bUilding in Shah Alam, Selangor. The said cost for the renovation and expansion of our factory building including the set-up of a new R&D facility is estimated to be RM23.00 million which will be funded via a combination of the proceeds to be raised from the Public Issue amounting to RM 15.00 million coupled with internally generated funds and/or bank borrowings for the remaining RM8.00 million. Please refer to Section 3.7 of this Prospectus for further details on the utilisation of proceeds for our expansion of facilities and set­up of a R&D facility. The actual increase in the production capacity and utilisation rates of our fabrication and assembly facilities is dependent on the number and type of products sold by the Group. 6.12 TECHNOLOGY We use various softwares for our design and detailing processes which complement the skills and expertise of our staff. This enables us to complete our projects effectively and efficiently. As at the LPD, the software used in our processes are as follows:
AutoCAD LT2011 & LT2013 Used for the draught and design of mechanical parts, components, layout plan, schematic diagram and other design purpose. Solidworks Premium plus Simulation Used for 3D modelling of parts and assembly, and for design analysis and optimisation, with main feature of motion study, static and dynamic analysis. Eplan Electrical CAD software for creating and manage electrical schematic diagram, cabinet design, panel layout, and terminal management. Twincat PLC Programming Programming software for Beckhoff PLC. This programming software allows PLC programming using all the languages in the International Electrotechnical Commission’s 61131-3 standard. WinProladder Ladder programming software for specific PLC. Programming software for specific HMI. Software used to write native code and managed code supported by Microsoft Windows, Windows Mobile, Windows CE and .NET framework. PM Designer —–+—=—-~–=——-‘——————___1 Microsoft Visual Studio 2010 Adobe Illustrator CS5 Used to design the user interface of software application. LAMP (software bundle) Consists of: (a) Linux, the server operating system; (b) Apache HTTP Server, the web server; (c) MySQL, the database management system; (d) PHP & Perl, the scripting languages used for dynamic web pages and web development. Wonderware in Touch HMI software tool for creation of standardised, reusable visualisation applications and development across an entire enterprise.
6. INFORMATION ON OUR GROUP (Cont’et) 6.13 CAPITAL EXPENDITURES AND DIVESTITURES Save as disclosed below, our Group has not incurred any other material capital expenditures and divestitures (including interests in other companies) during the Period under Review and up to the LPD:
Leasehold land and factory lots Motor vehicles Office equipment and furniture and fittings Computer Renovation
Total expenditures Net book value of d;sposaIJwrite~off Office equipment and furniture and fittings Computer Renovation Motor vehicles
I Total net book value of disposalJwrite..off There are no material expenditures or Malaysia.
6.14 PROCESS FLOW Our Group’s production process flow involves a series of thorough and controlled procedures to ensure the highest quality products are provided to our customers. Our production process flow can be divided into 2 main categories, namely structural, electro-automation, pneumatic and hydraulic products, and system hardware and software application solutions.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 6. INFORMATION ON OUR GROUP (Cont’d) 6.14.1 Material Handling and Process Automation and Control The diagram below illustrates the production process flow for the production of our structural, electro-automation, pneumatic and hydraulic products:
6. INFORMATION ON OUR GROUP (Cont’d) (i) Technical Design and Project Planning
The process starts with the preparation of an overall structural andlor technical design based on the specifications of a particular project or order as set forth by our customers. The overall structural andlor technical design is prepared and drafted by our engineers and is discussed with the customer to obtain concurrence. Thereafter, project planning commences wherein critical areas such as sourcing of materials, components and parts, fabrication planning, sub-contractor engagements (where relevant and applicable), human resources planning, timing, logistics and budgets are carefully planned prior to execution.
(ii) Procurement of Materials, Components and Parts

Acquisition of materials, components and parts are centralised at our procurement division and are sourced directly from manufacturers andlor authorised agents to ensure authenticity and quality. Notwithstanding the aforementioned, procured products are inspected for quality control purposes and conformity to a particular project or order specification prior to commencement of our fabrication process. (iii) Fabrication and On-Site Works The works undertaken for the production of our Group’s structural, electro-automation, pneumatic and hydraulic products can be captured under 3 segments, which are detailed as follows: (i) In-House Fabrication Works
Our in-house fabrication works represent the core segment of our fabrication and on-site works undertaken. This mainly comprises of the fabrication of our high-end products such as our electro-automation, pneumatics and hydraUlics products.
(ii) External Fabrication Works

Our external fabrication works represent the fabrication works which are performed by our sub-contractors at their premises. The fabrication works which are sub­contracted out include, but are not limited to, fabrication works undertaken for structures and platforms as well as the hardware used to house our products. External fabrication works are done under constant monitoring by our engineers and quality control personnel in order to ensure the necessary standards are achieved. (iii) On-Site Works The on-site works undertaken by our Group include civil and structural works. This will generally be undertaken by external sub-contractors who have the necessary expertise in this field. The exact scope of works will however depend on the nature and specification of each project or order. 6. INFORMATION ON OUR GROUP (Cont’d) (iv) Inspection, Testing and Quality Control
Once the fabrication works are completed, our engineers would perform the pre-shipment inspection, testing and quality controi process to ensure that the items fabricated conform to the necessary standards and are fully functional. Where on-site works are undertaken, our engineers would be performing on-site inspections for quality control and conformity to project or order specifications as well as compliance with the respective land, building and local municipal council requirements.
(v) On-Site Installation
All fabricated products shall upon arrival on-site be assembled and installed. A combination of our installers employed by our Group and appointed local installers sourced within the locality of the project site or from the country of which our products are installed in are contracted during the assembly and installation phase and are supervised by our engineers. Our engineers will also provide an installation report to the customer to ensure that the parts are assembled and installed according to the specifications required by our customers.
(vi) Testing and Commissioning

Upon completion of the installation process as well as the on-site works, our engineers will begin testing of the installed products and commissioning of all works done. This stage is performed together with the customer for familiarisation and for the customer’s acceptance and verification process. Upon completion of this process, the project or order is handed over to the customer. (vii) Handover and Continuous Support and Maintenance Continuous support and maintenance is offered to each customer to ensure that our products are properly operated and maintained. We also provide on-site stand-by technical assistance to our customers for a pre-agreed duration as an after sales service. On-site system familiarisation training is aiso provided where required. In addition, we encourage and promote the principle and practice of “preventive maintenance” as a means to minimise and safeguard our customers’ investments in capital expenditure against any unexpected mechanical and/or system breakdown and downtime. Preventive maintenance for our structural, electro-automation, pneumatic and hydraulic products entails the pre-determination of a specific schedule of maintenance wherein our engineers would conduct inspections in accordance to the schedule of maintenance. The pre-determined schedule of maintenance would also cover the replacement of wear and tear components or parts at specific intervals and/or or based on running capacity of the equipment. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK I 6. INFORMATION ON OUR GROUP (Cont’e/) 6.14.2 System Hardware and Software Application Solutions The diagram below H/ustrates the development and production process flow for the system hardware and software application solutions.
(i) Technical Design and Project Planning Similar to the production of our structural, electro-automation, pneumatic and hydraulic products, the process starts with the preparation of an overall structural and/or technical design based on the specifications of a particular project or order after discussions held with our customers to identify their needs. The overall structural and/or technical design is prepared and drafted by our engineers, which include our system hardware and software applications development engineers, and is presented to the customer for concurrence. Thereafter, project planning commences wherein critical areas such as sourcing of materials, components and parts, fabrication planning, human resources planning, timing, logistics and budgets are carefully planned prior to execution. C:C;;;;;any No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) (ii) Procurement of Materials, Components and Parts Similarly. acquisition of materials, components and parts for control systems are centralised at our procurement division and are sourced directly from manufacturers and/or authorised agents to ensure authenticity and quality. Procured products are inspected for quality control and conformity to a particular project or order specification prior to commencement of our fabrication process. (iii) Fabrication and Development System hardware fabrication and software application solutions development are performed entirely in-house as it is considered as our high-end products. The system hardware fabrication relates to the production of the control systems and console panels, the assembly of electronic and electrical components and parts and integration of components and parts to form complete system hardware. The software application solutions development involves the development of the “brain” that integrates, controls and operates the completed system hardware. Upon the completion of the fabrication and development of the respective system hardware and software application solutions, the software is then installed into the hardware to form a complete operating console unit. (iv) Inspection, Testing and Quality Control
Once the fabrication and development process is completed, our engineers would perform the pre-shipment inspection, testing and quality control process in order to ensure that the console unit is in perfect operating condition.
(v) On-Site Installation

Upon arrival on-site, the console unit will then be installed and integrated with the existing palm oil milling systems. A combination of our own installers employed by OUr Group and appointed local installers sourced within the locality of the project site or from the country of which our products are installed in are contracted during assembly and installation phase and are supervised by our engineers. Our engineers will also provide an installation report to the customer to ensure that the software systems installed are successfully integrated into the palm oil milling systems. (Vi) Testing, Training and Commissioning Upon completion of the installation process, our engineers will begin testing and commissioning. This stage is performed together with the customer for increased familiarisation and for the customer’s acceptance and verification. Upon completion of this process, the console unit is handed over to the customer. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK ~ 6. INFORMATION ON OUR GROUP (Cont’d) (vii) Handover and Continuous Support and Maintenance Similarly, conlinuous support and maintenance is offered to each customer to ensure that our system hardware and software application solutions are properly operated and maintained. We also provide on-site stand-by technical assistance to our customers for a pre-agreed duration as an after sales service. During this process, our engineers will also provide training to the customer’s operators and engineers in respect of operating and simple maintenance of the console unit. In addition, we equally promote the same principle of “preventive maintenance” for our system hardware and software application solutions as a means to minimise and safeguard our customers’ investments in capital expenditure against any unexpected mechanical, electrical and system breakdown or downtime. Preventive maintenance for our system hardware and software application solutions entails pre-determination of a specific schedule of maintenance wherein our engineers would conduct inspections in accordance with the schedule of maintenance. The pre-determined schedule of maintenance would also cover the replacement of wear and tear components or parts at specific intervals and/or based on running capacity of the equipment. 6.15 R&D Our R&D division is focussed on the innovation of technologies for economic and commercial integration into the palm oil milling process. Given our Group’s established presence and experience in the palm oil industry, we have garnered a wealth of knowledge and understanding of the requirements and needs of the palm oil milling machineries sector. This is showcased by our successful commercialisations of our products integrating the electro-automation technologies, the pneumatic and hydraulic technologies as well as system hardware and software application solutions into the palm oil milling process. Our R&D activities essentially cover the following: (i) New Product Research
Before a new product is developed, our R&D division conducts a thorough study to support a particular project. The research phase includes determining product specifications, production costs and a production time line. The research also includes an evaluation of the need for the product before the design begins to ensure it is a functional product that has economic benefits to customers.
(ii) New Product Development

The research paves the way for the development phase. This is the time when the new product is actually developed based on the requirements and ideas created during the research phase. The developed product must meet the product gUidelines and any regulatory specifications. (iii) Existing Product Updates Existing products also fall under the scope of research and development. The division regularly evaluates the products offered to ensure they are still functional. Potential changes or upgrades are considered. 6. INFORMATION ON OUR GROUP (Cont’d) (iv) Quality Checks
The research and development division handles quality checks on products created given that it has an intimate knowledge of the requirements and specifications of a particular project This allows team members to ensure the products meet standards so that we produce quality products.
(v) Innovation

The research and development team aids the Group in staying ahead and to be competitive. The division is able to research and analyse the products other businesses are creating, as well as the new trends within the industry. This research aids the division in developing and updating the products created 6.15.1 R&D strategy and principles Our R&D strategy is to perform R&D activities with a goal of growing existing business fields, and creating future value. The mission of our R&D division is to maintain our competitive edge by: (i) continuously enhancing existing palm oil milling technology and solutions as part of continuous improvement efforts; and
(ii) developing new technology for the palm oil milling process that offer better or new functions and economic value for our customers.

We strive for revenue-driving R&D, performing groundbreaking, innovative and technological development and integration into the palm oil milling process.

 

Our Group’s R&D is guided by the principles as described in the diagram above to achieve growth in existing business fields and to create new businesses. As depicted above, innovation is our key driving principle that creates a continuous R&D cycle. 6. INFORMATION ON OUR GROUP (Cont’cf) 6.15.2 R&D facilities and personnel Our R&D division is based in our head office in Malaysia, which is highly advantageous given that our R&D team would have immediate access to resources, new developments and market intelligence from within Malaysia which is the leader in the provision of palm oil milling machineries and equipment. We have invested in the necessary infrastructure, facilities and set-up to support our R&D initiatives and are expected to further invest into this area in order to be competitive. Our development costs for the FYE 2014 were approximately RM8.73 million, which was approximately 8.35% of our revenue. Our Group’s R&D initiatives can be divided into 3 divisions, namely Electrical & Automation, Pneumatic & Hydraulic and Software Development and is overseen by Woo Wai Heng, our R&D Director. He is supported by Teoh Kah Lean, who is currently our Head of Process Automation and Control Division, Afif Hadafi who heads our Electro Pneumatic and Hydraulic Engineering Division and Lim Ah Ber, who heads the Software Division. They are assisted by 3 of our Group’s engineers. Save for Woo Wai Heng who heads our Group’s R&D efforts on a fuli-time basis, the other employees have dual roles in our Group and are invoived in the R&D initiatives on a project basis. 6.15.3 R&D achievements Our Group’s R&D strategies and principles are centred around the improvement of our initial products and developed other product variants that are currently used in our structural, electro­automation, pneumatic and hydraulic products. On 17 October 2013, we had via a licensing agreement entered into between Dolphin Applications and UPM Innovations Sdn Bhd (“UPM Inno”), licensed an intellectual property owned by UPM known as ‘An Improve Sterilization Process to Increase Palm Oil Extraction Rate’ which describes an improved method of sterilisation that achieves optimum hydrolysis of the oil palm fruitlets in order to realise higher palm OER (“UPM Intellectual Property”). The licensing of the UPM Intellectual Property was the result of a collaboration with UPM which spanned approximately 1 year. UPM Inno is a company which was established by UPM to undertake the commercialisation of identified intellectual properties of UPM. Kindly refer to Section 6.23 of the Prospectus for further information on the said licensing agreement. Further thereto, together with UPM, we had on 26 November 2013 introduced a new product known as Robo-REST, an acronym for Robotic-Rapid Equilibrated Sterilisation Technology. The development of Robo-REST represents the culmination of the method described in the UPM Intellectual Property and our engineering expertise to produce an improved sterilisation system. Robo-REST is expected to be commercialised by the first half of 2016. The Robo-REST is an automated sterilisation system that enables a chemical reaction for complete detachment and separation of fruits from stalk and cells from cells and retention of water within the cells. This state, which is defined as “complete hydrolysis”, is a chemical reaction that is not achieved by existing steriliser systems. Robo-REST utilises higher-pressure steam that is able to ensure less evaporation of water from the sterilising bunches and is able to achieve optimum and complete hydrolysis. The expected results of which are improved performance in terms of efficiency in the sterilisation process and increase in palm OER. 6. INFORMATION ON OUR GROUP (Cont’d) 6.16 OUR COMPETITIVE ADVANTAGES We believe our key competitive advantages are: (i) Experienced key management team Our Group’s founders, namely Low Teck Yin and Hoh Yeong Cherng have played a vital role in growing our business. They have an average of 20 years of experience in the palm oil milling machineries sector and more than 26 years of experience and knowledge in the automation, pneumatic and hydraulic engineering sector. More importantly, their leadership, technical know-how and strong business network within the palm oil industry has enabled us to grow to where we are today. They have been directly involved in the business operation of our Group since its inception in 1992. In addition, we have in place a team of key management personnel who possess the necessary qualifications and specific industry experience to implement our comprehensive range of integrated solutions. With the wealth of experience, competencies and knowledge accumulated by our key management over an average of 21 years and coupled with the support of our strong operational team, our Group is able to consistently deliver projects on time with quality to ensure customer satisfaction. Our key management team’s expertise, commitment and knowledge of the business have contributed to our steady growth over the years. In addition, our key management not only has the knowledge and tenacity to be the leading player in the industry, but also a visionary view for a more sustainable development of the palm oil milling machineries sector. (Ii) Proven performance and track record Our Directors believe that in the last 12 years, our Group has established a reputation as a reputable and reliable provider of integrated and modular automation systems and software to the palm oil milling machineries sector. This is achieved through consistent and timely delivery of quality products and services. Our Directors believe that our track record as a reliable provider of integrated and modular automation systems and software is demonstrated by our long-standing business relationships with industry operators. As at the LPD, none of our major customers have prematurely terminated our contractual services with them. In addition, as a testimony to our good track record and the high level of customer satisfaction, and the quality and reliability of our products, our customers have continued to appoint us for their subsequent upgrading/automation of their POMs. Some of our recurring customers who are familiar names in the palm oil industry during the Period under Review include PT Prima Mitrajaya Mandiri (a subsidiary of MP Evans Group PLC), PT Dharma Satya Nusantara (which was listed on the Indonesia Stock Exchange (IDX) on 14 June 2013) and SALCRA. (iii) Provision of competitive and cost effective palm oil milling systems and software We pride ourselves on our ability to provide customised solutions for customers, but more importantly to provide value-added solutions. We design and develop our products based on the needs and technical requirements of our customers. We continuously strive to design our products which are easy to maintain and reliable. I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) All our products are meticulously designed, sourced, fabricated and installed to ensure the final products’ usability, efficiency and productivity. Our Group believes that such achievement has been a result of the technical expertise, design quality and stringent supervision from the production process all the way to the project installation and commissioning at the location site. This is further evidenced by our Group’s accreditation by TUV NORD Group for ISO 9001 :2000 and its subsequent update to ISO 9001 :2008. Through our focus on technology development and innovation, we are able to offer our integrated products which automate palm oil milling functions for enhanced productivity and efficiency, provides a safer working environment, reduces unplanned maintenance and operation down-time as well as ensuring a process driven throughput for optimum productivity and fruit preparation to maximise oil recovery. (iv) Ability to provide total in-house solutions from process automation and controls to software development for the palm oil milling process We believe that our competitive edge lies in our ability to provide a total in-house solutions from process automation and controls to electro, pneumatic and hydraulic engineering to software development. Our Group provides an end-to-end ecosystem for the palm oil milling machineries sector that promotes compatibility and seamless communication among each modules. Behind the process automation and controls and electro, pneumatic and hydraulic modules lies our software system that runs and monitors various parameters associated with a palm oil milling process. Our Group has established an in-house software development team under Dolphin Systems to create a software system that measures, calibrates, collects, analyse and reports the result of each process step. Our Group’s development of software programs has enabled customers to appropriately allocate resources to improve productivity, to reduce operational cost and to enhance the product quality. The central monitoring of key parameters of mill operations provided through real time and/or end cycle reporting enable mills to have better control and lower reaction time should operations fall below optimal operating conditions. (v) Growing presence in key CPO producing markets Indonesia and Malaysia are the world’s largest producers of CPO, supplying up to 90% of the world’s consumption. The palm oil industries in both countries consist of the same industrial value chain from oil palm plantation, milling, refining and other downstream processing; therefore, the same production processes are applied throughout the value chain between Indonesia and Malaysia. With our location in Malaysia, we enjoy close proximity to the palm oil producing corporations which form our customer base. In addition, we have made inroads to the Indonesia, Thailand, Colombia, Papua New Guinea, Myanmar and India markets through our marketing efforts resulting in the sale of our products and solutions. We believe that the contacts arising from our marketing efforts provide us with in-depth knowledge of the local market conditions. This, coupled with our staff’s technical proficiency, allow us to better fulfil the needs of our customers. Over the past 20 years, we have managed to grow our customer base from solely serving the Malaysian market to a player that also caters to the Indonesian market. This is made possible from the increasing demand for our integrated solutions, as well as a testament of our track record in the industry. To date, although our main markets are that of the palm oil milling machineries sector in Malaysia and Indonesia, our experience in various palm oil milling machineries sectors in Thailand, Myanmar, India, Papua New Guinea and Colombia minimises the risk of depending on anyone single market. 146 6. INFORMATION ON OUR GROUP (Cont’d) Notwithstanding the aforementioned, our Group is strategically focused on Indonesia as the next pillar of growth market by establishing our first overseas sUbsidiary, PT Dolphin, in Indonesia in 2011. This is in line with the growth of Indonesia as the world’s largest palm oil producer, with 608 POMs in the country with the capacity to process approximately 300.3 million tonnes of FFB as at 2010. Establishing PT Dolphin in Indonesia provides us with a platform to be closer to our local customers, and at the same time, better serve and cater to their needs and requirements. The export market generated approximately 79.30%, 83.05%, 36.83% and 23.35%, of our Group’s revenue for the FYE 2011, FYE 2012, FYE 2013 and FYE 2014, respectively. (vi) Promoting sustainable growth via continuous R&D efforts The objective of our Group’s R&D is to maintain our competitive advantage by: (a) continuously enhancing existing palm oil milling technology and solutions as part of continuous improvement efforts; and
(b) developing new technology for the palm oil milling process that offer better or new functions and economic value for our customers.

Our Group envisages that the future of the POM industry is not in the increasing of production capacities, but rather in the recovery of more palm oil from existing milling process and reducing the need for more plantations as land resource becomes increasingly scarce. Our Group believes that optimising palm oil recovery is the only sustainable solution and the only way to achieve this is through introducing game­changing innovations via continuous R&D. Our Group has demonstrated its innovative leadership in the palm oil milling machineries sector, by being pioneers in offering automated hydraulics and pneumatics to reduce the use of labour whilst optimising the production process. Our Group is one of the leaders in the development of software programming specifically targeting the continuous operational improvement of the POM for greater efficiency and productivity. As disclosed in Section 6.15.3 of this Prospectus, our Group, together with UPM, recently introduced an automated sterilisation system, “Robo-REST” to the market, which improves performance in terms of efficiency in the sterilisation process and increase in palm OER. 6.17 QUALITY CONTROL We believe that quality control is a key factor that contributed to our growth and success. Hence, quality control is an important management philosophy as we strive to maintain our reputation as a producer of quality products. We have implemented stringent quality control measures at different stages of our business process. These quality control measures seek to ensure that the quality of our products and services meet the expectations of our customers and that our facilities provide a safe working environment for all our staff. Our quality control measures, from the sourcing and procurement of materials to the delivery of our finished goods, adhere closely to the ISO guidelines. After the delivery of our products, our engineers ensure the proper functioning of our products after installation. We provide warranties of 18 months upon delivery or 12 months upon commissioning of our products, whichever comes first, for our products. 6. INFORMATION ON OUR GROUP (Cont’d) Our commitment to quality is evidenced by our subsidiaries’ QMS, namely Dolphin Engineering, Dolphin Applications and Dolphin Systems, being firstly accredited with ISO 9001 :2000 in 2006 and subsequently with the updated ISO 9001 :2008 by TUV NORD Group since 2009 for the design, supply, implementation and maintenance services of our SCADA system, hydraulic & automation system to the palm oil industry. Our ISO accreditation requires for Dolphin Engineering, Dolphin Applications and Dolphin Systems to be subject to annual audits in order to ensure our on-going conformity to the QMS process. We have also put in place a quality control manual (which details the quality process and procedures which is in compliance with ISO 9001 :2008) which we adhere to in our production processes. As an automation systems integration solutions provider, product knowledge and proficiency is vital in ensuring the seamless integration of various system components, both mechanical and electrical. Our staff undergo vigorous training to familiarise themselves with our products and also attend product training courses. Our QC team is chaired by our Head of R&D. They are responsible for quality control and ensuring that our quality control policies and measures are adhered to. We conduct quality checks on all the products fabricated and oversee the implementation of the quality controls at every stage of our production process in line with our QMS. The following quality control procedures have been implemented in our production process in line with our QMS: (i) Establishment of quality control standards We have set in place stringent quality control standards to implement strict measures for quality control in the production of our products. Such standards follow strictly in accordance with the industry standards as well as the standards and guidance set in accordance with the ISO 9001 Quality System. We also take into account customers’ specifications and requirements and quality feedback from our previous customers to supplement our quality control standards. For our system design, we ensure the design of every project is carried out in line with (i) the relevant national laws and regulations; (ii) the relevant technical specifications and industry standards; and (iii) our customers’ specifications and requirements. (ii) Quality control during sourcing and procurement Our vendors are selected through a process of formal audits and qualification by our procurement personnel, quality control personnel, together with a team of engineers, based on stringent selection criteria such as product quality, quality of their raw materials and services, material sources, pricing, timely delivery of products, accreditations, track record, financial condition and market reputation. For certain crucial direct materials used in our production, we may conduct site visits prior to the appointment as one of our selected vendors. The list of selected vendors is subject to further review by our key management on an annual basis. We monitor our vendors’ performance to ensure that they meet our requirements on quality, pricing, delivery and responsiveness. (iii) Quality control during production/fabrication process Before the production/fabrication, incoming direct materials are subject to inspections by our quality control personnel to ensure that they are supplied by approved vendors, and that the quality, grade and quantity of such direct materials conform to our specifications and requirements as well as our quality control standards. Direct materials which fail to comply with these specifications will be rejected and returned to our vendors. 148 6. INFORMATION ON OUR GROUP (Cont’d) We continuously monitor our production process and carry out inspections at systematic intervals throughout the process to ensure consistency in the quality of our products and components. Our quality control personnel and production personnel conduct tests and inspections at the various stages of production to ensure that defective semi-completed products do not proceed to the next stage of the production. Any defective part will be removed from the production line and rectified if possible, thereby minimising defective products from being produced. As to system design, we will maintain close communication and engage constant discussion with our customers so that we can modify our engineering design in accordance with customers’ feedback and requirements and relevant technical specifications and standards approved by the ISO, namely ISO 9001 :2008, and avoid affecting the progress and quality. (iv) Quality control on finished products We conduct overall inspections and testing on finished products before they are painted, packed and stored in the warehouse, ready for despatch to customers. In addition, after our products and components are sent to customers’ paM sites, they undergo a series of inspections and testing to ensure compliance with our quality standards and customers’ design and specifications. Upon the successful testing and commissioning of our system design and components by our customers, the warranty period (which is usually a period of 18 months upon delivery or 12 months upon commissioning of our products, whichever comes first) commences and during this period, we will attend to any complaints regarding defects in the equipment or our products. (v) After sales service and customer support We maintain regular contact with our customers in our efforts to understand their business needs as well as to foster and maintain good business relationships and obtain feedback about our products and services. The follow-ups with our customers also form an integral part of our after-sales service and customer support. This allows us to be better positioned in understanding our customers’ business needs and provide efficient after-sales service. (Vi) Review on our quality management system To create a virtuous circle of our quality management system, we take into account the feedbacks from our employees who are involved in each of the quality control processes, as well as feedbacks on the performance of our products and system design from our customers. Thereafter, we review and improve upon our quality management systems to ensure quality products and services. For the Period under Review and up to the LPD, we had not received any major complaints or rejections from customers of our products and services, namely complaints and rejections due to our products being not functional and/or whereby handover is rejected by our customers. I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) 6.18 HEALTH, SAFETY AND ENVIRONMENTAL MATTERS Our compliance to the health, safety and environmental requirement and regulation are the essentials to ensuring the well-being of our employees, and the continuity of our day-to-day operations. Our Group has established a strong in-house policy on Health. Safety and Environment to provide a favourable working environment for our employees and to fulfi/ our role as a responsible corporate citizen. Our management strongly believes that these matters are also fundamental to the well-being of our Group’s operations and activities. Henceforth, even work iocations comply with legislative requirements. It is our Group’s corporate policy to provide a safe, healthy and friendly work place for all its employees and subcontractors. All employees are required to exercise the requirements of our Group’s safety and health policy. Notwithstanding the aforementioned, our Group has also ensured that appropriate plans are always in place to deal with any emergencies. 6.19 MARKETING AND DISTRIBUTION NETWORK As at the LPD, our sales and marketing division comprises of 7 full time employees led by our Sales and Marketing Director, Lee Kim Teck. They are trained and equipped with the technical knowledge and competencies to effectively market our products and services to our customers. Our Group markets its products directly from our four offices, namely our head office located in Puchong, Selangor, our other offices are located in Cyberjaya, Selangor and Lahad Datu, Sabah and our overseas office in Jakarta, Indonesia. Our Group is able to compete with local and other international players by being a provider of automation, mechanical engineering and software solutions, specifically targeting the palm oil milling machineries sector. Our Group has been able to garner a growing customer base in Malaysia and Indonesia due to our quality and timely delivery of products and comprehensive after-sales services that includes training and maintenance. Our projects are secured via a direct negotiation process or via a tender. We would go through the information gathered on our prospective customer and proposed project to evaluate the requirements of the prospective customer prior to submission of a proposal or tender. A large part of the marketing strategy involves identifying and evaluating an existing customer’s operations in order to be able to proVide substantial evidence on our products’ advantages and benefits. During the Period under Review, our Group has accumulated a customer base of approximately 116 customers. As automation of the palm oil industry is a relatively niche market, our marketing network is based around our existing customers as many of them seek to upgrade other POMs owned by them. New customers are also referred to our Group by our eXisting customers via word-of-mouth recommendations based on our reputation, track record and quality of products. We adopt 4 key principle strategies to effectively market our Group’s product, especially to new customers with no prior knowledge of our Group or our products: • Education When we engage with potential customers and consultants, we educate them to realise that there are new technologies that can revolutionise the POM manufacturing process to create greater efficiency and productivity which would translate into cost savings for the POM. 6. INFORMATION ON OUR GROUP (Cont’d) • Proven Technology
Product demonstration to potential customers and consultants at the POMs of our existing customers to demonstrate to them the level of efficiency, productivity, cleanliness and safety of our Group’s products as compared to conventional palm oil milling systems. Our Group also documents pre-installation and post-installation reports to substantiate our products’ superiority over conventional palm oil milling systems in terms of efficiency, productivity, cleanliness, safety, maintenance required and palm OER.
• Communication
Communication is key and is an essential tool in educating, convincing and negotiating with any prospective customer. Our communication strategy is to ensure that all benefits and advantages of our products and services offered are communicated clearly to our prospective customers and all questions have been addressed.
• Customer’s Testimonials

Independent testimonials offered by our customers have proven to be reliable and convincing alternative source of information and validation of our products and services. Our reputation for being a reliable provider of milling systems and software for the palm oil milling machineries sector can be further enhanced via word-of-mouth advertising. 6.20 SEASONALITY Our Group’s business portfolio comprises primarily of private sector customers within the domestic and international palm oil milling industry. Our revenue is not affected by any seasonality in the demand of our products and services. However, as stated in Section 5 of this Prospectus, being the Industry Overview prepared by the IMR (please refer to pages 51 to 53 of the Executive Summary of the IMR Report), the palm oil milling machineries sector trends in Malaysia and Indonesia are cyclical according to the replacement and upgrade iifecycles of milling equipment and plants. Nonetheless, our Group’s business is historically and currently not adversely affected by the aforementioned due to the following reasons: (a) While any POM would have its own replacement and upgrade lifecycle of milling equipment. one particular POM would have a different lifecycle from another POM even of the same specification depending on the extent of which the POM owner is maintaining the POM. The durability of the various parts and components of the equipment in a particular POM would also be another factor affecting its Iifecycle;
(b) The POMs in the industry were all not commissioned at the same time period and coupled with the reason in (a) above, the POMs replacement and upgrade lifecycle of the milling equipment differs among each other;
(c) As stated in the “Outlook of the Palm Oil Milling Machineries Sector in Malaysia and Indonesia” in the IMR Report, Malaysia and Indonesia are expanding its oil palm plantation and milling activities, which would further increase the demand for palm oil milling machineries; and
(d) There is a growing trend amongst palm oil millers to improve palm oil milling technology and practices to support sustainable palm oil and to increase productivity and profits which would also increase the demand for palm oil milling machineries.

~ompany No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) 6.21 INTELLECTUAL PROPERTY RIGHTS Save for the patents, trademarks and copyrights as dIsclosed below, we have no other registered patent and trademark:
Dolphin
7 Mechanical, Hydraulical and Pneumatical Machines and Apparatus for Date registered: 7 Engineering 1. October 2004 Treatment and such other process related thereto; Machines and Palm Oil Milling and Processing, Water Purifying Process, Sewage Expiry date: 7 October Apparatus for Hydraulical and Pneumatical Systems, Hydro Inline 2024 Booster System; Control Mechanism, Automatic Machines and Country of recognition: Apparatus, Hydraulic Controls, Pneumatic Control for Machines, Malaysia Apparatus and Parts and Fittings for the aforesaid Goods; All included in Class 07. Trademark No. 04015316 Date registered: 16 Installation, maintenance, upkeep, repair and consultation services in2. Dolphin 37
® November 2012 Expiry date: 16 November 2022 Country of recognition: Malaysia the field of palm oil industry; all included in Class 37. Engineering ~ Trademark No. 2012019342 L ‘———-‘—_—-‘—–_—-‘-_-L—–______ _—-‘ I Company No: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) 3.  Dolphin Engineering  Trademark No. 2012019343  42  Computer software design, installation, maintenance and or updating of computer software; computer systems analysis; hosting web sites, design of web sites and software applications on global computer networks and local and internal business computer networks; R&D; technical project studies; technical research; provision of information, management, consultancy, and advisory services relating to all the aforesaid services; all included in Class 42.  Date registered: 16 November 2012 Expiry date: 16 November 2022 Country of recognition: Malaysia  4.  Dolphin Engineering   16  Printed matters such as letterheads, name cards, pamphlets, catalogues, brochures, leaflets, postcards, printed forms, pictures, posters, periodicals, books, magazines, newsletters, signboards, diaries, paper, cardboards, bill boards advertisement boards of paper or cardboard, bag (envelopes, pouches) of paper or plastics for wrapping and packaging, business publication and information, posters; all included in Class 16.  Date registered: 16 November 2012 Expiry date: 16 November 2022 Country of recognition: Malaysia  Trademark No. 2012019344  5.  Dolphin Engineering  Trademark No. 2012019345  9  Computer Software and Programmes for Managing Computer Systems, Databases and Applications, namely, providing Data Management, IT Process Automation, Application Management, Storage and Performance Optimization and Recovery of Mainframe and Distributed Systems Computers and the Databases and Business Application, Programmes and Systems that operate therein; All included in Class 9.  Date registered: 16 November 2012 Expiry date: 16 November 2022 Country of recognition: Malaysia
I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
IICompany No.: 1001521-X I Company No.: 1001521·X I 6.  INFORMATION ON OUR GROUP (Cont’d)  9.  Dolphin CRTApplications Trademark No. 2012017035*  9  Computer Software and Programmes for Managing Computer Systems, Databases and Applications, namely, providing Data Management, IT Process Automation, Application Management, Storage and Performance Optimization and Recovery of Mainframe and Distributed Systems Computers and the Databases and Business Application, Programmes and Systems that operate therein; All included in Class 9.  Date registered: 8 October 2012 Expiry date: 8 October 2022 Country of recognition: Malaysia  10.  Dolphin CRTApplications Trademark No. 2012017036*  16  Printed matters such as letterheads, name cards, pamphlets, catalogues, brochures, leaflets, postcards, printed forms, pictures, posters, periodicals, books, magazines, newsletters, signboards, diaries, paper, cardboards, bill boards advertisement boards of paper or cardboard, bag (envelopes, pouches) of paper or plastics for wrapping and packaging, business publication and information, posters; all included in Class 16.  Date registered: 8 October 2012 Expiry date: 8 October 2022 Country of recognition: Malaysia  11.  Dolphin Applications  16  Printed materials; user operating manuals; brochures and printed instructions; pamphlets; printed guides; catalogues; installation materials; publications; all in included in Class 16.  Date registered: 23 December 2013 Expiry date: 23 December 2023 Country of recognition: Malaysia  Trademark No. 2013017347
6. INFORMATION ON OUR GROUP (Cont’d) 12.  Dolphin  9  Computer programs for oil palm industry; computer hardware, computer  Date registered: 23  Applications  software, computer programs  for control  systems for operating  and  December 2013  controlling oil palm mills sterilisers positions based  on  data received  Expiry date: 23  from  sensing  devices;  computer  programs  for  control  systems  for  December 2023  operating  and  controlling  steam  input  and  output  in  oil  palm  mills  Country of recognition:  sterilisers  based  on  data  received  from  sensing  devices  or  from  Malaysia  positioned sensing devices; computer programs for contrail systems for  operating and controlling machines in oil palm mills; computer programs  Trademark No. 2013017349  for control system for operating and controlling machines used in oil  palm mills based  on  data received  from  sensing devices; computer  programs  for  steam  management  in  oil  palm  mills  all  being  electronically recorded and processed; software installation in oil palm  mills,  software  installation  in  machines  used  in  oil  palm  mills;  all  included in Class 9.
I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d) 13.  Dolphin Applications  Trademark No. 2013017350  42  Computer services namely computer software installation in machines used in oil palm industry; computer services namely computer software installation in sterilisers in oil palm mills; maintenance, repair, design and development, updating and maintenance of computer software; technical support services namely trouble shooting computer hardware and computer software problems; computer services namely providing information relating to steam management in oil palm industry; computer services namely providing information relating to steam management in sterilisers in oil palm mills; providing services relating to use of computer software and hardware in steam management in oil palm industry; providing services relating to use of computer software and hardware in steam management in sterilisers in oil palm mills; research and development of computer hardware and software in steam management in oil palm industry; research and development of computer services namely computer software installation in machines and steriliser used in oil palm mills, all included in Class 42.  Date registered: 23 December 2013 Expiry date: 23 December 2023 Country of recognition: Malaysia  14.  Dolphin Applications  A Method for Extraction of Palm Oil Patent No. MY-153757-A  Relates to an automated method for extracting palm oil from SFB. It includes various control modules namely a tipper module (110), tipper hopper door module (120), synchronised conveyor module (130), digester level control module (140), screw press module (150) and water dilution module (160) which work cooperatively with one another in an oil milling facility to achieve maximum throughput of fruits and minimum losses of oil.  Date registered: 10 January 2011 Expiry date: 10 January 2031 Country of recognition: Malaysia
I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
Note: We are presently in the midst of deregistering these trademarks as these products are no longer offered by our Group. The necessary applications have been submitted to MylPO and are pending approval. We have registered the above patent under the Patents Act, 1983 and the trademarks under the Trade Marks Act, 1976 with MyIPO. The term of a registered patent is 20 years from the filing date of the registration application. There is a fee payable on an annual basis in respect of the duration of the patent. If the prescribed annual fee is not paid, the patent shall lapse. The registration of a trade mark shall be for a period of 10 years and is renewable upon its expiry for another 10 years. I Company No.: 1001521-X I 6. INFORMAllON ON OUR GROUP (Cont’d) As at the LPD, we have also submitted the following patents for registration under the Patents Act, 1983 and PCT and trademarks for registration with the MylPO and the Directorate General of Intellectual Property Rights of Indonesia:
I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
5.  PT Dolphin  ~  35  Advertising; business management; business administration; office functions.  DGIPR trademark application: 11 November 2013 I J002013057082 I Indonesia  ~  DOLPHIN INDONESIA  6.  PT Dolphin  r~ DOLPHIN  07  Machines and machine tools; motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural tools; incubators for eggs.  DGIPR trademark application: 11 November 2013 I D002013057079 I Indonesia
Notes: A This new application claims priority on the MylPO patent application no. PI2013003006 filed on 15 August 2013 and some of the claims in the MylPO patent application no. PJ2013003006 application were amended and filed in this new application together with the additional new features. This is to overcome the prohibition of Section 26A of the Malaysian Patents Act, 1983, which prohibit the addition of new matters to an earlier filed patent application because such addition would be considered as “amendment which go beyond the disclosure in the initial application”. * The country of recognition for the patents will be determined at a later date after the approval for the said applications have been obtained. I Company No.: 1001521-X I I Company No.: 1001521-X I 6.  INFORMATION ON OUR GROUP (Cont’d)  6.22  DEPENDENCY ON PATENTS, LICENCES, INDUSTRIAL, COMMERCIAL OR PROCESSES  FINANCIAL  CONTRACTS  OR  NEW MANUFACTURING  (i) Dependency on the patent and intellectual property rights  Save for our patent and intellectual property rights disclosed in Section 6.21 of thintellectual rights for our business operations.  is Prospectus , our Group [s n ot de pendent on any patents and  (ii) Dependency on major licences  Save for the major licences disclosed in Section 6.23 of this Prospectus. our Group is not dependent on any other major licences.  (iii) Dependency on industrial, commercial and financial contracts  There are no material agreements or contracts (including informal arrangements been entered into by our Group and which our Group is highly dependent upon.  or understandi ng or understan dings ), as at the LPD, which have  6.23  MAJOR LICENCES AND PERMITS  Save as disclosed below, our Group has not obtained any other approvals and does not hold any regulatory licences or permits.  1.  Dolphin Business Licence No. 2120081200085 MPSJ Engineering • Horizontal signboard / non-illuminate • Operation Office (131 -260 sqm -40′ x 70′ or 2 lot) 1 January 2015to31 December 2015
6. INFORMATION ON OUR GROUP (Cont’d)
2.  Dolphin Engineering  Business Licence No. 2120130800062 • Horizontal signboard! non-illuminate  MPSJ  29 August 2014 to 28 August 2015  •  Operation Office (>260 sqm -3 lots or more)  3.  Dolphin Applications  Business Licence No. 2120080800150 • Engineer factory I electric «501 sqm) • Horizontal signboard! non-illuminate  MPSJ  1 January 2015 to 31 December 2015  4.  Dolphin Systems  Business Licence No. 2120080100156 • Store «501 sqm) • Horizontal signboard I no illuminate  MPSJ  1 January 2015 to 31 December 2015  5.  Dolphin Components  Business Licence No. 2120140500062 • Horizontal signboard I non-illuminate  MPSJ  25 May 2014 to 26 May 2015  – •  Operation Office (130 sqm -20′ x 70’ or 1 lot)
I Company No.: 1001521-X I I Company No.: 1001521-X I 6.  INFORMATION ON OUR GROUP (Cont’d)  Engineering No. K20852414371149200 Finance Dolphin Engineering has registered with the Ministry of Finance in the field of supply and services under the sub heading of the following code numbers:  to 22 April 2016  provided by Dolphin Engineering. Should there be any changes made to the said information, Dolphin Engineering shall notify the Ministry of Finance within’21 days from the date of such changes.  010501, 060302, 100101, 130101, 130201, 130202, 130401, 130402, 140101, 140201, 140301, 140302, 140503,210201,220505,220507.  7.  Dolphin Engineering Certificate of Registration No. 134242A Registration NO.1 970615-WP035308 Grade, category and registered s ecialisation G7 Unlimited 8 804 G7 Unlimited CE CE21 G7 Unlimited ME M15 E11 Construction Development Industry Board  30 December 2013 to 29 December 2016  The certificate shall be renewed at least 60 days before its expiry.  Complied  8.  Dolphin Licence No. A019587 MITI Applications Serial No. A033188 Licence to act as licensed manufacturer from 29 April 2014 at the place of manufacturing at No, 32, Jalan Serendit 2, Bandar Puchong JaYa, 47100 Puchong, Selangor Darul Ehsan for the production of “Palm Oil Processing Plant and Equipment” (“Project I”).  30 April 2014 until revoked under Industrial Co­ordination Act, 1975  (i) (ii) Dolphin Applications shall notify MITI in the event of any sale of shares in Dolphin Applications; and Dolphin Applications shall employ and train Malaysian citizens to ensure that the technology and expertise are transmitted to all levels of employment.  Complied

6. INFORMATION ON OUR GROUP (Cont’d)
Serial No. A033187  under  Applications; and  Industrial Co- Licence to act as  licensed manufacturer  ordination  (ii)  Dolphin Applications  shall  employ  and  train  from  29  April  2014  at  the  place  of  Act, 1975  Malaysian  citizens  to  ensure  that  the  manufacturing  at  No.  17  &  19, Jalan  technology and expertise are transmitted to all  Puteri  5/20,  Bandar  Puteri,  47100  levels of employment.  Puchong, Selangor Darul  Ehsan  ~or  the  production of “Automated Indexer Control  System” (“Project II”).  10.  Dolphin  Government of Malaysia through MDeC  Government of  MSC  (i)  The  MSC  Malaysia  Qualifying  Activities  are  Dolphin Systems  has  yet  Systems  -MSC Malaysia Status & MSC Malaysia  Malaysia  Malaysia  foflows:­ to comply with item (ii) of  Bill of Guarantees: Certificate No. 1962  through MDeC  Status -valid  the  salient  conditions.  from 22 May  (A)  The  Research,  Development  and  Dolphin  Systems  had  on  2008  Commercialization  of  the  following  11  June  2014  submitted  Software Solutions:  an application to MDeC for  •  iPADAS Scada System software for  a variation to the minimum  the oil palm processing industry  office  space  requirement  •  Multi  Level  Workflow  Management  of  1,500 sq  ft  to  600 sq  System Software (eWfMS)  ft(1),  Save  for  the  •  Mill  Management  System  Software  abovementioned, all other  (MMS)  conditions  have  been  complied with.  (B)  Provision  of  Implementation,  Technical  Services and  Maintenance related to the  activities mentioned above.  Any  changes  proposed  to  the  above  MSC  Malaysia Qualifying Activities as detailed in the  Business Plan  must  receive the prior written  consent of MDeC;  –
ICompany No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
(ii) locate the implementation and operation of the MSC Qualifying Activities in the Designated Zone in Cyberjaya with the minimum office space of 1,500 sq ft within six (6) months from the date of the letter dated 22 May 2008 issued by MSC to Dolphin Systems informing Dolphin Systems that our application for MSC Malaysia Status has been approved, and Dolphin Systems shall obtain MDeC’s prior written approval in the event of any changes in the location or address of the company; (iii) ensure that at all times at least 15% of the total number of employees (excluding support staff) of the MSC Malaysia Status Company shall be “knowledge worker” (as defined by MDeC); (iv) inform and obtain the prior approval of MDeC for any proposed change in the name of the MSC Malaysia Status Company;
(v) inform MDeC of any change in the equity structure or shareholding structure of the MSC Malaysia Status Company, or such other changes that may affect the direction or operation of the MSC Malaysia Status Company. MDeC must be informed of any change before steps are taken to effect such change.

[company No.: 1001521iJ 6. INFORMATION ON OUR GROUP (Cont’d)
11.  Dolphin  Pioneer status granted under Section 6  Robotic  of the Promotion of Investments Act 1986  (“PIA”) vide an approval letter from MIDA  dated 8 December 2014  Approval  granted  by  MIDA  to  the  application  made  by  Dolphin  Robotic  under Section 4D of the PiA for pioneer  status for selected industries for income  tax  exemption  of  100%  of  statutory  income for a period of 10 years for the  production of “robotic sterilisation system  and parts thereof for palm oil industry”
MIDA 8 December 2014 to 7 December 2016 The lax exemptions are granted to Dolphin Robotic subject to the following conditions: (i) the products of Dolphin Robotic shall have an added value of at least forty percent (40%) as proposed;
(ii) at least seventy one percent (71%) of the total number of employees of Dolphin Robotic shall be managerial, technical and supervisory level staffs as proposed; and

(iii) the paid-up capital of Dolphin Robotic is required to be increased to achieve the debt to equity ratio of not more than five to one (5: 1). Dolphin Robotic is required to submit an application for the determination of effective date of tax incentive (“Pioneer Certificate Application”) within twenty four (24) months from B December 2014. To be compiled. Dolphin Robotics will comply with the respective conditions prior to the Pioneer Certificate Application by 8 December 2016. 12. PT Dolphin Trade Business Licence No. 510/1/1U/I/PMAIPERDAGANGAN/2013 Permanent license for the company to operate a wholesale trade business 13. PT Dolphin Principle licence amendment No. 1616/1/1P-PS/PMAl2013 Approval for PT Dolphin to amend its capitalisation Indonesia Investment Coordinating Board Indonesia Investment Coordinating Board Valid as long as PT Dolphin still conducts the trading business • PT Dolphin is prohibited to conduct retail Complied activities  • PT Dolphin must conduct the environment management plan  PT Dolphin is obligated to submit the investment report in every 6 (six) months  Complied
[COmpany No.: 1001521-X I Company No.: 1001521-X I 6.  INFORMATION ON OUR GROUP (Cont’d)  14.  PT Dolphin  Statement Letter for Environmental Supervisory and Management No. 56/SPPL!JP/XI/2012 Required licence under Environmental Law  Government of DKI Jakarta Province  Valid as long as PT Dolphin still conducts its activities  ­ Complied  15.  PT Dolphin  Business Domicile Licence and Nuisance Permit No SK0673105/2013 Permit to open business premises  Government of DKI Jakarta Province  2 May 2013 to 2 May 2016  PT Dolphin shall re-register the permit at the latest by 2 May 2016.  Complied  16.  PT Dolphin  Certificate of Domicile No. 231/1.842.0/v/2014 Domicile permit of PT Dolphin  Government of DKI Jakarta Province  21 May2014 to 21 May 2015  PT Dolphin shall re-register the permit at the latest by 21 May 2015.  Complied  17.  PT Dolphin  Letter of Taxpayer Registration No. PEM­01242IWPJ,21/KP.0503/2013 Evidence of a registered entity in the tax office register  Directorate General of Tax  Valid as long as PT Dolphin still conducts its activities  ­ Complied  18.  PT Dolphin  Taxpayer card No 03.098.983.4-043.000 Evidence of taxpayer registration number  Directorate General of Tax  Valid as long as PT Dolphin still conducts its activities  ­ Complied  19.  PT Dolphin  Affirmation Letter of Taxable Entrepreneur No PEM­02571IWPJ.06/KP.0503/2011 Evidence of registration as taxable entrepreneur  Directorate General of Tax  Valid as long as PT Dolphin still conducts its activities  ­ Complied
6. INFORMATION ON OUR GROUP (Cont’cI)
20.  PT Dolphin  Customs Identification 01.042887 For custom access  Number  No  Directorate General of Customs and Excise  Valid as long as PT Dolphin still conducts its activities  .  Complied  21.  PT Dolphin  Importer Identification Number -General Licence to conduct importation  Ministry of Trade  Valid as long as PT Dolphin still conducts import activities  Requirement to conduct registration for every 5 (five) years; PT Dolphin must report to BKPM, any change of information Le. Directors, and address of the company.  Complied  22.  PT Dolphin  Special Importer Identification Number No 1.09.03.07.100801 Licence to import electronic goods (including the components)  Ministry of Trade  4 July 2013 until 3 july 2018  Complied  23.  PT Dolphin  Company Register Certificate 09.01.1.46.40714 Evidence of company registration  No.  Government of DKI Jakarta Province  4 June 2013 until 4 June 2016  Complied  24.  PT Dolphin  Foreign Manpower Work Permit No. KEP.14670/MENfP/IMTAl2014 for Gunandawandu Akalangka Susantha De Zoysa  Ministry of Manpower and Transmigralion  17 August 2014 until 16 August 2015  •  Foreign manpower shall conduct the transfer of knowledge to the Indonesian manpower, and report the result to the Ministry of Manpower and Transmigration;  •  Permit to employ foreign manpower  Foreign manpower shall not transfer his position without permission from the Minister of Manpower and Transmigration;
I Company No: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
Applicant shall report the position of the said manpower to the local manpower agency where the foreign manpower is employed 25.  PT Dolphin  Foreign  Manpower  Work  Permit  No.  Ministry of  27016/MEN/P/lMTAl2014 for Hoh Yeong  Manpower and  Cherng  Transmigration  Permit to employ foreign manpower  26.  PT Dolphin  Foreign Manpower  Utilization  Plan  No.  Ministry of  KEP 00539/PPTK/PTAlKEK-2/2014  for  Manpower and  Quality Control Advisor  Transmigration  Permit  required  to  employ  foreign  manpower in specific positions
7 January 2015 until 31 December 2015 31 May 2015 I Company No.: 1001521-X I Foreign manpower shall conduct the transfer of knowledge to the Indonesian manpower, and report the result to the Ministry of Manpower and Transmigration;  ­ Foreign manpower shall not transfer his position without permission from the Minister of Manpower and Transmigration;  Applicant shall report the position of the said manpower to the local manpower agency where the foreign manpower is employed.  •  PT Dolphin is obligated to appoint Indonesian manpower as companion to the foreign manpower.  ­ •  PT Dclphin is obligated to report the utilization of foreign manpower, training for Indonesian manpower within the framework of transfer of knowledge periodically for every 6 (six) months to the relevant agencies.
6. INFORMATION ON OUR GROUP (Cont’d)
27. PT Dolphin Foreign Manpower Utilization Plan No. Ministry of 31 December • PT Dolphin is obligated to appoint Indonesian ­KEP 00037/PPTKJPTAlKEK-2/2015 for Manpower and 2016 manpower as companion to the foreign President Director, Finance Director and Transmigration manpower. Research & Development Advisor.
• PT Dolphin is obligated to report the utilization Permit required to employ foreign of foreign manpower, training for Indonesian manpower in specific positions manpower within the framework of transfer of knowledge periodically for every 6 (six) months Extension and unification of Foreign to the relevant agencies. Manpower Utilization Plan No. KEP­01251/PPTKlPTAlKEK-2/2013 & 00810/ PPTKlPTAlKEK-2/20 14 28. PT Emas In Principle License for Foreign Indonesia • PT Emas Hijau is required to develop its To be complied. Hijau Investment No. 3245/1/IP/PMAl2014 Investment project within the industrial area dated 14 November 2014 Coordinating Board • PT Emas Hijau is required to obtain the Initial license for investing in Indonesia technical recommendation from the Directorate General of Plantation • PT Emas Hijau to complete the development of its project no longer than three years as of the issuance of the in principle license
• PT Emas Hijau must submit the application for operating business license (ijin usaha) to the Indonesia Investment Coordinating Board once PT Emas Hijau is ready to commence its production
• PT Emas Hijau must conduct the environment management plan
• PT Emas Hijau is obligated to submit the investment report in every 3 (three) months

 

~any No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
30. PT Emas Hijau 31. PT Emas Hijau Notes: Domicile permit of PT Emas Hijau Taxpayer Card No. 71.596.526.5­043.000 Evidence of taxpayer registration number Certificate of Registered No. S·2189KTI WPJ.21/KP.Q503/2014 Evidence of a registered entity in the tax office regi ster (1) Dolphin Systems was awarded a MSC certificate bearing certificate number 1962 effective from 22 May 200B. As there is no expiry to the MSC Malaysia status, Dolphin Systems is still considered a MSC Malaysia status company as the status has not been withdrawn/revoked. However, presently, Dolphin Systems is not in compliance with the minimum office space required of a MSC Malaysia status company. As stated in the approval letter granting Dolphin Systems its MSC Malaysia status, should MDeC be aware of any non-compliance of the conditions of its approval, Dolphin Systems will be given an opportunity to explain and seek for the necessary waivers from MDeC in order to achieve an acceptable compromise or resolution on any such non-compliance. In the event MDeC deems the explanation or waiver application to be unsatisfactory. it may revoke the MSC Malaysia status granted to Dolphin Systems. who will be then given 30 days to appeal. In the event the said appeal is unsuccessful and Dolphin System’s MSC Malaysia status is revoked, Dolphin Systems may be required to repay all tax benefits enjoyed during the period Dolphin Systems was not in compliance of the said requirement, which will amount to approximately RM17,000. After being alerted of the said non-compliance with the minimum office space required during the due diligence process in preparation of this Prospectus, Dolphin Systems had on 11 June 2014 voluntarily informed and submitted the waiver application to the MDeC in respect ofcompliance with its condition imposed. I Company No.: 1001521-X J 6. INFORMATION ON OUR GROUP (Cont’d) In addition, Dolphin Applications had on 17 October 2013, entered into a licensing agreement with UPM Inno (“Licensing Agreement”) for a licence for the production and manufacture of the physical sterilisation device and control system incorporating the UPM Intellectual Property. Further details of the UPM Intellectual Property and the salient terms of the Licensing Agreement are as follows: (i) Details of the UPM Intellectual Property
(ii) Salient terms of the Licensing Agreement

 

Under the terms of the licence, Dolphin Applications may use the intellectual property in its products in Malaysia, Indonesia, Thailand, Colombia, Brazil and such other territories which may be mutually agreed as strategic for the future sales of the Product. The licence agreement will expire on 16 December 2015. Under the terms of the licence, Dolphin Applications has an option to renew the licence agreement for an additional term of 1 year and thereafter the licence agreement shall be automatically renewed for a further term of 3 years. In consideration of UPM Inno granting the licence to Dolphin Applications, Dolphin Applications shall pay to UPM Inno an initial fixed sum of RM200,000.00 as licence fees and a royalty fee of 5% from the gross sale of the final prodUCt. 6.24 INTERRUPTIONS IN OPERATIONS DURING THE PAST 12 MONTHS Our Group has not experienced any disruptions in business which has significantly affected our operations during the 12 months period prior to the date of this Prospectus. 6.25 EXCEPTIONAL FACTORS AFFECTING THE BUSINESS Save for the risk factors highlighted in Section 4 of this Prospectus, we do not foresee any exceptional factors which may affect our business. 172 I Company No.: 10015@ 6. INFORMATION ON OUR GROUP (Cont’d) 6.26  PROPERTY, PLANT AND EQUIPMENT  6.26.1  Properties owned by our Group  Details of the land and bUildings owned by our Group as at the LPD are as follows:

1. Dolphin Engineering 2 units of 3 storey intermediate shop Unit No. 17 and 19, Jalan Puteri 5/20, Bandar office used as our Puteri, 47100 Puchong, Selangor Darul Ehsan Group’s office, workshop for the Master Title identification: production and Title nos. Geran 29182 Lot No. 5468, Geran assembly of our 29184 Lot No. 5470 and Geran 29186 Lot No. products and store 5472 all in Mukim of Petaling, Daerah of Petaling, Negeri Selangor Darul Ehsan(1j Freehold Date of acquisition: 13 April 2007 [company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Cont’d)
2.  Dolphin Engineering  Office unit located  Certificate of Fitness for  Land area:  The said land shall not be  199  on the 81h floor of a  Occupation of Building  Not applicable  transferred, mortgaged or  845, Block A, Leisure Commerce Square, No.  12 storey office  No. MPPJ 0220 dated  charged without the  9, Jalan PJS 8/9, 47300 Petaling Jaya  block rented to  16 September 1999  Gross built-up  consent of the State  IHMS Sdn Bhd  area:  Authority.  Strata title identification:  58.25  Title no. PN 11813/M1-A/8/425, Building no.  “Tanah yang diberi milik  M1-A, Storey no. 8, Parcel no. 425, Lot 54,  ini tidak boleh dipindah  Bandar Sunway, Daerah Petaling, Negeri  milik, dipajak atau  Selangor  digadai melainkan  dengan kebenaran Pihak  Leasehold, 99 years expiring on 17 July 2091  Berkuasa Negen”  Date of acquisition: 20 January 1996  3.  Dolphin Engineering  1 Y2 storey semi- Certificate of Completion  Land area:  Charged to  1,968  detached factory  and Compliance  GM 998 Lot 2656:  Alliance Bank  No. 32, Jalan Serindit 2, Bandar Puchong  (corner unit).  pursuant to Uniform  934  Malaysia  Jaya, 47100 Puchong, Selangor  Building By-Law 1984  GM 987 Lot 2639:  Berhad  The ground floor of  No. LJM 00565 dated 28  267  Individual Title identification:  the property is used  July 2009  Title no. GM 998 Lot 2656 (formerly known as  as workshop for the  Gross built-up  HS(M) 21333 PT 18112) and Title no. GM 987  production and  Certificate of Completion  area:  Lot 2639 (formerly known as HS(M) 21321 PT  assembly of our  and Compliance (Form  805.84  18108), both in Tempat Batu 10, Jalan  products for our  F) pursuant to Selangor  Puchong, Mukim Petaling, Daerah Petaling.  Group while the first  Uniform BUilding By- Negeri Selangor.  floor of the property  Laws 1986 approved on  is currently vacant.  14 October 2008.  Freehold  Date of acquisition: 26 March 2008
I Company No.: 1001521-X I 6. INFORMATION ON OUR GROUP (Conf’d)
4  Dolphin Applications No. 16, Jalan Serindit 2, Bandar Puchong Jaya, 47100 Puchong, Selangor. Master title identification: Title no. HSM 30484 PT 5988 (formerly held under Pajakan Mukim 1162, Lot No. 833), Tempat Kinrara, Mukim Petaling, Daerah Petaling, Negeri Selangor.(1) Leasehold, 99 years expiring on 1 June 2109  1 ‘h storey semi­detached factory (corner unit). Currently vacant and intended to be used as a workshop.  Certificate of Fitness for Occupation No. MPSJ.BGN-01-B 39769 dated 14 August 2009  Land area: 996 Gross built-up area: 374585  The said land shall not be transferred, mortgaged or charged without the consent of the State Authority. “Tanah yang diberi milik ini tidak boleh dipindah milik, dipajak atau digadai me/ainkan dengan kebenaran Pihak Berkuasa Negeri”  Assigned to Hong Leong Bank Berhad  4,373  Date of acquisition. 15 June 2012  5  Dolphin Applications No. 22, Jalan Sepadu 25/123, Taman Perindustrian Axis, Seksyen 25, 40400 Shah Alam, Selangor Title identification.’ Title no. H.S.(D) 104712, PT 102513, Bandar Shah Alam, Daerah Klang, Negeri Selangor  Single storey detached factory cum office buildings, erected on all that piece of industria! land. Currently vacant.  Certificate of Fitness for Occupation of Building No. MBSA: CF 01258 dated 4 July 2008  Land area: 3,640 Gross built-up area: 1,111.2  Charged to United Overseas Bank Malaysia Berhad  7,532  Freehold  Date of acquisition: 4 June 2012
Note:  (1)  These properties are still being held under a master title as the individual titles are yet to be issued.  175
ccompany No.: 1001521-XJ 6. INFORMATION ON OUR GROUP (Cont’d) None of the properties disclosed above are in breach of any land use conditions and/or is in non-compliance with current statutory requirements, land rules or building regulations. 6.26.2 Properties rented by our Group Details of the land and buildings rented by our Group as at the LPD are as follows:
Lu Kwok Chow and Cheah Kim Tsai (as landlords) / Dolphin Engineering (as tenant) Lot 212, Bandar Sri Perdana, Phase 3, Jalan Silam, 91100 Lahad Datu, Sabah  2 storey intermediate terrace shop office used as sales office.  148.64  1 June 2014 to 31 May 2015  22,800  Cyberview Sdn Bhd (as landlord) / Dolphin Systems (as tenant) Unit A-1-09 SME Technoprenuer Centre 2 Cyberjaya (SME 2), 2260 Jalan Usahawan 1, Cyber 6,63000 Cyberjaya, Selangor  Office unillocated on the 1st floor of a 4 storey office block used as Dolphin Systems’ operation office  59.92  28 July 2014 to 27 July 2016  19,350  Djoko Pranoto (as landlord) / PT Dolphin (as tenant) Kiran Boutique Office, Jalan Kirana Avenue 3 Block F-1 No.9, Kelapa Gading Timur Sub-district, Kelapa Gading Disrict, 14240 North Jakarta, Indonesia.  4 storey terrace office building (end lot unit) used as PT Dolphin’s office and store  500.00  1 January 2015 to 31 December 2016  IDR 237,500,000, equivalent to RM66,500 (based on an exchange rate of IDR100:RMO.028 as at the LPD)
As at the date of this Prospectus, our Group is not in breach of any law, rules, bUilding regUlations and/or land use conditions in relation to the use of the properties as mentioned above. Company No.: 10015iiiJ 6. INFORMATION ON OUR GROUP (Cont’et)  6.26.3 Material plant and machinery  As at the LPD, our material plant and machinery are as follows:  Taiwan pinnacle  Shaping of flat and irregular  5  10  *.  milling machine  surfaces  7.5P and 2HP air  To pressurise air for purposes  12  15  *.  compressor units  of cleaning machineries  Oil purifier P600  Mobile hydraulic oil purifier 2  5  10  *.  Flo-check USB  Portable tester for hydraulic 1  7  10  *.  hydraulic system  system diagnostics  analyser  H20 oil fluid condition  Measurement of the level of 2  7  10  *­ monitor  water content and pollutant  within hydraulic oil  Laser CM portable  Measurement of level of  7  10  *.  particle counter  contamination and cleanliness  of hydraulic fluid
Note: As at 31 December 2014, these assets have been fully depreciated.
As at 31 December 2014, all our material plant and machinery have been fUlly depreciated. 6.27 FUTURE PLANS AND STRATEGIES OF OUR GROUP Our objective is to maximise our shareholder value by consolidating our position as a market leader in the POM automation industry in terms of integration of operations, profitability and return on capital. In the shorter term, we intend to focus on increasing the number of our customers. In the medium to longer term, we will look to increase our R&D activities in order to increase our product offerings. 6.27.1 Continuous development as driver for future growth We attribute our past successes in providing integrated and modular automation equipment, control systems and related services to our continuous efforts in innovating palm oil milling processes through the adoption and innovation of automation technologies. Therefore, it is one of our major future plans to continue with our efforts of innovating current and available products in order to improve and enhance the processes in palm oil mills. Examples of our continuous efforts in the past include the development of Robo-REST, which when commercialised, will allow POMs to benefit from shorter sterilisation time and more importantly, reduce OER losses as a result of complete hydrolysis. Detailed information about Robo-REST is available in Section 6.15.3 of this Prospectus. The introduction of Robo-REST is deemed second generation product which has the capability to replace the current marshalling yard, due to the way FFBs are fed to the steriliser, which provides POMs with much welcomed space savings. As part of our dedication to continuous development of innovative products, 12.79% of the proceeds raised from the Listing will be used to fund our R&D centre. 6. INFORMATION ON OUR GROUP (Cont’et) 6.27.2 Introduction of our Dolphin.branded consumable parts The after-sales market remains one of the segments in the palm oil milling industry with a viable potential spin-off business. Over the years, since venturing into the palm oil milling machineries sector up till the LPD, we have provided our products to 196 POMs. This includes POMs which are owned by our recurring customers who have awarded our Group with multiple contracts for the installation of our products at different POMs. Much like most mechanical products, our material handling automation and process control automation products require periodical maintenance and replacement of consumable parts after a pre-determined utilisation. Currently, we are engaged in the supply of parts and provision of maintenance services to our existing customers. This segment of supply of parts and maintenance services have contributed approximately RM5.93 million, RM4.81 million, RM4.32 million and RM4.73 million representing 12.88%, 7.49%, 4.89% and 4.52% of our Group’s proforma consoiidated revenue during the Period under Review. Included in our provision of maintenance services, we are also required to procure and provide replacement consumable parts. However, these consumables are currently sourced from third party suppliers. We have recently established Dolphin Components as part of our efforts to capitalise on this segment as it presents a viable spin-off business owing to the significant customer base we already serve. In addition, our Group is also more than capable of extending our maintenance service offerings to other POMs that are not eXisting customers through the sale of our Dolphin­branded consumable parts. As part of this potential business segments, we have identified several OEMs that we will work with to produce a range of Dolphin-branded consumables which includes (but not limited to) chains, belts, filters and vessels. The pictures below show examples of early sample of Dolphin­branded products:
Dolphin-branded filter Dolphin-branded side plate (for conveyor chain) The commercial production of the Dolphin-branded side plate (for conveyor chain) commenced in March 2015. For this purposes, we have allocated approximately RM300,OOO from our internally generated funds as the initial production costs for the aforementioned OEM product. Presently, we believe that the funds allocated for this production is adequate. These consumables are designed to be compatible with ours as well as other third party machineries that are currently available in the market. This segment presents us with an avenue to generate alternative and recurring income as well as providing us with opportunities to acquire potential new customers. 6. INFORMATION ON OUR GROUP (Cont’d) 6.27.3 Continuous efforts to expand customer base Leveraging on our Group’s strategic location which is headquartered in Malaysia, our Group intends to expand the electro-automation, hydraulic & pneumatic engineering and software development business overseas especially to other South East Asian countries, namely Indonesia and Thailand. These two countries, together with Malaysia, represent the world’s leading producers of palm oil. Malaysia and Indonesia have been our Group’s pillars of growth and will continue to be our major markets. Based on the IMR Report, the total revenue generated in the Malaysian and Indonesian palm oil milling machineries sector in 2014 was RM2.54 billion and IDR15.57 trillion (representing approximately RM4.30 billion based on a conversion rate of RMO.02762/IDR100) respectively. In comparison, our proforma consolidated revenue for the FYE 2014 generated locally and from the Indonesian market was only RM80.17 million and IDR83.31 billion (representing approximately. RM23.01 million based on a conversion rate of RMO.02,762/1DR100) respectively. Therefore, we are of the opinion that there are still untapped opportunities to grow our Group’s business. Our Group has also ventured into other countries within South East Asia and its surrounding regions such as Myanmar and Papua New Guinea, albeit on a smaller scale. Nevertheless, our Group will continue to pursue new opportunities and potential projects in and around South East Asia. Our Group is already exposed to the Latin American market via Colombia, and will continue to expand our presence there and will enter the market whenever opportunity arises in these countries. The penetration to these abovementioned overseas markets will be done through partnerships with local companies via joint ventures to increase local knowledge base and market opportunities. For newer markets, our Group will join trade events and shows to market our Group’s products and services. We intend to cater for the expansion of our customer base via the expansion of our facilities. We have set aside approximately 35.16% of the proceeds to be raised from the Public Issue for this purpose. This would also provide us with the ability to undertake a greater number of projects simultaneously. 6.27.4 Construction and establishment of a POM to show case our products Dolphin Applications had entered into a joint venture agreement with its joint venture partners to establish a new associate company, namely PT Emas Hijau wherein Dolphin Applications has a 30% equity interest. PT Emas Hijau is currently dormant and its intended principal activity is that of the building, operating and managing of POMs to be located in Indonesia. PT Emas Hijau is currently in the midst of identifying a suitable site in Indonesia to undertake the construction of the POM. Upon the acquisition of a suitable site, Dolphin Applications will undertake the turnkey solutions for the construction of the POM while one of the joint venture partners will undertake all electrical works required for the POM. Dolphin Applications will also supply the POM with the entire range of Dolphin-branded products to automate and control the operations of the POM. The management of the POM’s operations upon its successful commissioning will be undertaken by its joint venture partners. The said POM is expected to be operational and fully commissioned by December 2017. Our Group has embarked on this opportunity to establish a POM which will allow us to show case the full range of our products to our potential customers. In addition, we would be able to monitor the various results which our automation systems are able to enhance and use them as part of our sales and marketing efforts in Indonesia. As at the LPD, the costs incurred by our Group as part of this initiative is approximately RM0.22 million, which were from internally generated funds. The expected total cost of investment to be incurred by Dolphin Applications for the joint venture is estimated at approximately USD2.50 million (equivalent to approximately RM9.05 million based on an exchange rate of RM3.6205/USD1.00 as at the LPD), which will be funded via internally generated funds and/or bank borrowings. 6. INFORMATION ON OUR GROUP (Conr’e/) We believe that with the establishment of an actual operating POM which also allows our Group to show case our full range of products, provides us with a unique opportunity of being able to show and demonstrate how our products are operated as well as the benefits and results produced through the installation of our integrated automation and control systems. The joint venture between Dolphin Applications and its joint venture partners are regulated by a joint venture and shareholders agreement entered between the parties dated 16 January 2015 (“Agreement”). As regulated per the Agreement, since the establishment of PT Emas Hijau till the LPD, PT Emas Hijau is a 30%· associate company of Dolphin Applications. Dolphin Applications’ joint venture partners in PT Emas Hijau are namely, Mr Stephanus Hanan, an Indonesian aged 46, whom has been· involved in the development of oil palm plantations, POM construction and the operations of POMs in East Kalimantan since 2007, Mr Oei Yohannes Alexander, an Indonesian aged 46, whom has been involved in thl’ provision of electrical solutions in the· oil palm industry, both in ierms of design, assembly, and installation of electrical panels for POMs and refineries in Indonesia since 1996, Mr Felix Jiady Budiarto, an Indonesian aged 45, whom is involved in the business of the provision of solutions for the design, build and installation of electronic components and Mr Brian Lim Eu Kheng, a Malaysian aged 34, who is an existing investor in the Dolphin Group via his 25% shareholdings and directorship in Dolphin Components. 6.28 PROSPECTS OF OUR GROUP We believe the prospects of our Group are favourable as our business is led by an experienced management team. In view that our Group has been serving in the palm oil milling machineries sector for approximately 20 years, we have evolved from our humble beginnings to be able to provide turnkey solutions, which encompasses the provision of our products coupled with the complete engineering, procurement and construction of a new POM or the upgrading and/or ex1ension of an existing POM. Furthermore, our commitment to quality assurance and consistency over the years has helped us to establish our Group as a reliable provider of palm oil milling systems and software. Further details on our quality control processes are set out in Section 6.17 of this Prospectus. Our Group’s vision is to be the leading player in the palm oil milling machineries sector. Moving forward, our Group’s future plans and strategies will include that of the continuous development of innovative products as a driver for future growth in profitabilit\·, the expansion of our Dolphin­branded consumable parts and maintenance segment, the continuous efforts undertaken for the expansion of our customer base, mainly in the South East Asian region and its surrounding countries and the construction and establishment of a POM to show case our products. According to the IMR Report, the value of the palm oil milling machineries market in Malaysia and Indonesia was estimated to be RM2.54 billion and IDR15.57 trillion (representing approximately RM4.30 billion based on a conversion rate of RMO.02762/IDR100) respectively in 2014 and is expected to grow at a respective compounded annual growth rate of 11.4% and 11.3% between the years 2014 to 2019. Further details on the prospects and outlook of the industry are set out in Section 5 of this Prospectus. As our Group’s business is primarily project-based, our future profitability is dependent on the number of projects and value of the projects secured. As at the LPD, our outstanding order book for our provision of solutions is approximately RM168.67 million (based on total contract value less progress billings) while our outstanding order book for our sale of milling systems and sale of milling software is approximately RM3.49 million (based on total contract value less progress billings). Further details on the state of our order book are set out in Section 10.7 of this Prospectus. As a result of the above, we believe that we will continue to enjoy positive growth and favourable prospects over the next few years. We will continue to leverage on our core competencies, competitive edge and our established track record while pursuing growth opportunities within the palm oil milling machineries sector.

 

 

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