Business Overview

 

6. BUSINESS OVERVIEW Our Group also secures orders from our channel partners who play the role as a sales representative by assisting to secure sales for the Group. We employ the channel partners model in view that they are able to manage the business relationships with their respective customers and we will work together with these partners to reach out to their customers, especially in Europe whereby the end customers would normally deal with international renowned companies such as Synergie CAD Group. There is no agreement or contract with these channel partners. Our channel partners consist of companies only and are not confined to Europe. The number of channel partners engaged by the Group for the financial years under review are as follows: ­FYE 2014  FYE 2015  FYE 2016  Synergie CAD Group#  8  8  8  Others  5^  5^  5^  Total  13  13  13
Notes:­# The Synergie CAD Group comprises Synergie CAD, Synergie CAD (UK) Ltd., Synergie CAD Germany GMBH, Synergie CAD Instruments S.R.L., Synergie CAD Probe, Synergie CAD Probe (Singapore) Pte. Ltd., Synergie CAD USA, Inc. and Synergie CAD, Inc. ^ U4 Global Solutions Ltd in UK, QL Tech Malaysia Sdn. Bhd. in Malaysia, Ara Technologies, Inc in Korea, Systems and Technology International in France and BeCe Pte. Ltd. in Singapore. The Group will frequently communicate with its channel partners via emails, telephone calls and site visits in order to monitor its business transactions with its channel partners. There are no differences in the financial arrangement between FoundPac and its channel partners vis-à­vis other customers. Sales are invoiced to the channel partners with credit terms ranging from thirty (30) to ninety (90) days. Revenue is recognised upon the delivery of the products to the channel partners. FoundPac is not dependant on sales from any channel partners. None of our channel partners contributed more than 10.00% of our Group’s total revenue for the FYE 2014 to FYE 2016. There is no after sales service required for our products. Defective products are either returned to us to be rectified or replaced. Our customers also purchase stiffener and test socket accessories from us as replacement parts due to normal wear and tear. In the past three (3) financial years, there was only one (1) sales return due to an error on the drawing specifications with a customer (which was a channel partner) for approximately RM198,000 in FYE 2015. The Group has issued a credit note to the customer for the aforesaid amount and it has been set-off against its revenue. The risk exposure to sales return is minimal as the Group has stringent quality control in-place and the Group will obtain confirmation from its customers on the product specifications before commencement of any production. According to the IMR report, the precision engineering part industry size in Malaysia grew, in terms of the revenues of major industry players which are involved in the design, development and manufacturing of precision engineering parts, from RM35.76 million in 2011 to RM132.51 million in 2015, at a CAGR of 38.74%. Due to the global nature of the semiconductor industry, precision engineering part industry players serve their customers worldwide. The global prospects of precision engineering part industry players in Malaysia can be illustrated through the growth in the global semiconductor industry, as data on global precision engineering part industry players is not publicly available.
6. BUSINESS OVERVIEW Overall, the global market for electronic products is estimated to have grown from USD1.79 trillion (RM6.31 trillion1) in 2009 to USD2.60 trillion (RM10.16 trillion2) in 2015, registering a CAGR of 6.42% during this period while the global semiconductor industry registered a CAGR of 7.73% between the period 1990 and 2015, indicating the sustainability of the industry’s growth in the long term. Semiconductor sales grew from USD50.03 billion (RM135.26 billion3) in 1990 to USD321.80 billion (RM1.26 trillion4) in 2015. Meanwhile, the semiconductor industry in Malaysia also witnessed positive growth over the last six (6) years, where production of ICs grew from 23.28 billion units in 2009 to 24.25 billion units in 2015, registering a CAGR of 0.69% between 2009 and 2015. During the same period, Malaysia’s production of other semiconductor components also increased, from 44.16 billion units in 2009 to 47.32 billion units in 2015, growing at a CAGR of 1.16%. (Source: IMR Report). [The rest of this page is intentionally left blank] 1Exchange rate from USD to RM in 2009 was converted based on average annual exchange rates in 2009 extracted from published information from Bank Negara Malaysia at USD1 = RM3.5236.2 Exchange rate from USD to RM in 2015 was converted based on average annual exchange rates in 2014 extracted from published information from Bank Negara Malaysia at USD1 = RM3.9073.3 Exchange rate from USD to RM in 1990 was converted based on average annual exchange rates in 1990 extracted from published information from OANDA Corporation at USD1 = RM2.7035.4 Exchange rate from USD to RM in 2015 was converted based on average annual exchange rates in 2015 extracted from published information from Bank Negara Malaysia at USD1 = RM3.9073.

6. BUSINESS OVERVIEW (cont’d) The diagram below illustrates our sales channels:-
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6. BUSINESS OVERVIEW (cont’d) Our products are primarily manufactured using aluminium, stainless steel and engineering plastics. Our core business activities can be segmented as follows:­(a) Design, development, manufacturing, marketing and sale of stiffeners and accessories for stiffeners A stiffener acts as a docking mechanism, and it ensures that PCBs, on which the ICs are affixed, remain rigid and firm in its position during testing of the ICs. The ICs are tested using ATE which our Group does not manufacture or supply. Our stiffeners are an essential component of the IC testing process, as most PCBs are mounted onto stiffeners when IC testing is underway. The stiffeners that we manufacture are developed and designed to our specifications and can be customised based on specific requirements. (b) Design, development, manufacturing, marketing and sale of test sockets, hand lids and accessories for test sockets Test sockets are placed on PCBs and are configured to receive and protect the leads/balls of an IC, while hand lids are used during the setup of manual test to secure a DUT in place. Our test sockets and hand lids are important in the IC testing process, as they secure and protect the DUT while testing is underway. The test sockets, hand lids and accessories of test sockets that we manufacture are developed and designed to our specifications and can be customised based on specific requirements. [The rest of this page is intentionally left blank] 52
6. BUSINESS OVERVIEW (cont’d) 6.2  KEY ACHIEVEMENTS, AWARDS AND RECOGNITION  Since the commencement of our business, weachievements, awards, accreditation and recognition.   have  achieved  the  following  key  6.2.1  List of Key Historical Milestones, Awards, Accreditation and Recognition
Year  Key Milestones, Awards, Accreditation and Recognition  December 2004  . Incorporation of FPSB  May 2005  . FPSB commenced business in the trading of precision engineering parts such as stiffeners, test sockets, hand lids and conversion kits  February 2006  . FPSB moved operations to Lengkok Kampung Jawa 2 . FPSB expanded business to manufacturing of stiffeners, test sockets and hand lids  August 2007  . FPSB received the ISO 9001:2000 certifications from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing”  March 2010  . FPSB moved operations to Bayan Lepas Non-Free Industrial Zone Phase IV  August 2010  . FPSB received the ISO 9001:2008 certification from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing” and the “Provision of Dimensional Measurement Service”  April 2011  . Incorporation of FoundPac Tech  September 2011  . FoundPac Tech commenced business to undertake the design, development, manufacturing, marketing and sale of precision engineering parts . FPSB became an investment holding company holding the Group’s factory premises  November 2011  . FoundPac Tech received the ISO 9001:2008 certification from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing” and “Provision of Dimensional Measurement Service”  August 2013  . FoundPac Tech renewed the ISO 9001:2008 certification from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing” and “Provision of Dimensional Measurement Service”  October 2016  . FoundPac has received the ISO 9001:2015 certification from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing” and “Provision of Dimensional Measurement Service”. The certifications are valid until August 2019
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6. BUSINESS OVERVIEW (cont’d) 6.3 OVERVIEW OF OUR GROUP’S PRODUCTS, SERVICES AND OPERATIONS Our range of stiffeners and accessories for stiffeners are shown as follows:­Product range  Description  Final test stiffener  Final test stiffeners dock PCBs in place to ensure that the PCBs are in alignment with the test handlers and/or tester during the testing of IC packages. Final test stiffeners are designed to precise specifications to ensure the PCBs remain in a level position under all load conditions. We manufacture a standard range of final test stiffeners, as well as customised final test stiffeners. Our final test stiffeners are usually fabricated from aluminium.  Probe card stiffener  Probe card stiffeners dock PCBs in place to ensure that the PCBs are in alignment with the tester during the testing of wafers (i.e. a thin slice of semiconductor material). Probe card stiffeners are designed to precise specifications to ensure the PCBs remain in a level position under all load conditions. Our probe card stiffeners are usually fabricated from stainless steel and hardened steel.  Accessories for stiffeners  Accessories for stiffeners are mounted to stiffeners to enhance the setup of the DUT. This specific setup is to enable certain test capabilities which are not enabled in the normal setup. The main function of the accessories for stiffeners is to hold the RF connector/cable which connects to the tester for RF testing. There are a standard range of accessories for stiffeners, as well as customised accessories.
Our stiffeners and accessories for stiffeners are sold under third party brands or without any brand. This is due to the following reasons:­. Our direct end-user customers brand our products with their own proprietary brands. . Our channel partners either brand our products with their own proprietary brands or sell to their customers who may brand our products subsequently. Among the third party brands that may be used on our stiffeners and accessories for stiffeners are Advantest and Teradyne. There are no restrictions faced by the Group for selling its stiffeners and accessories for stiffeners under third party brands. The choice of brands for our stiffeners and accessories for stiffeners to be used is determined by the customer and there is no difference in pricing and margins between the different choice of brands.
6. BUSINESS OVERVIEW (cont’d) Our range of test sockets, hand lids and accessories for test sockets are made from engineering plastics and are shown as follows:­Product  Product range  Description  IC test sockets  High pin count sockets  High pin count sockets are used for the testing of IC packages with more than 1,000 pin counts.  Fine pitch sockets  Fine pitch sockets are used for the testing of IC packages with fine pitching size of equal or less than 400 micron.  High power/ High  High power sockets are used for the  frequency sockets  testing of IC packages requiring higher current carrying capacity of two (2) Ampere per pin. High frequency sockets are used for the testing of IC packages requiring higher frequency allowance at more than 6GHz @ -1dB.  Tri-temp test sockets  Tri-temp test sockets are used for the testing of IC packages requiring wider range of testing temperatures (-55 °C to 155 °C).  Module test sockets   Module test sockets are used for the testing of modular components.  Hand lids  Clamp shell hand lids  Clamp shell hand lids are typically used to securely mount IC packages, with pin count ranging between 100 and 1,000 pin count, in place. Clamp shell hand lids holds a DUT.  Snap-on hand lids  Snap-on hand lids are typically used to securely mount IC packages with 100 pin count and below. Snap-on hand lids are pre-set to the required force to automatically hold the DUT in place, thus reducing set-up time.  High power hand lids with heat sink  High power with heat sink hand lids are equipped with heat sinks to assist in dissipating heat of the DUT during the testing of the IC package.
6. BUSINESS OVERVIEW (cont’d) Product  Product range  Description  Toggle clamp hand lids  Toggle clamp hand lids are used to secure IC packages with more than 1,000 pin count, which require weight to assist in securing the DUT in place.  Accessories for test sockets   Accessories for test sockets are typically used for periodic maintenance of test sockets or as replacement parts for wear and tear. A key example of accessories for test sockets is probe pins. The main function of probe pins is to provide connection paths between the PCB and DUT. The tip of the probe pins will wear off after a certain number of contact cycles causing the performance of the probe pins to degrade after which they need to be replaced.
Our test sockets, hand lids, and accessories for test sockets, are sold under our own brand, “FoundPac”, as well as under third party brands. There is no difference between the products sold under our own brand and those sold under third party brands. Among the third party brands involved are Broadcom and Synergie CAD. The choice of brand to be sold to customers depends on our customers’ request and there is no difference in pricing and margins between the different choice of brands. In addition, there are no restrictions faced by the Group for selling its test sockets and hand lids, and accessories for test sockets under third party brands. Notwithstanding our stiffeners, accessories for stiffeners, test sockets, hand lids and accessories for test sockets may be generic, the Group’s emphasis on product quality and precise measurement coupled with customer service enable us to provide solutions and meet our customers’ needs and requirements. 6.4 OUR COMPETITIVE ADVANTAGES AND KEY STRENGTHS Our competitive strengths are important in sustaining our business as well as providing us with future business growth. (a) Our customers are primarily large multinational semiconductor manufacturers, OSATs and PCB design houses We serve customers in the global semiconductor industry. Our customers comprise multinational semiconductor manufacturers, OSATs and PCB design houses, which include, amongst others, Broadcom Corporation, Qualcomm Technologies, Inc and Synergie CAD Group (comprising Synergie CAD, Synergie CAD (UK) Ltd., Synergie CAD Germany GMBH, Synergie CAD Instruments S.R.L., Synergie CAD Probe, Synergie CAD Probe (Singapore) Pte. Ltd., Synergie CAD USA, Inc. and Synergie CAD, Inc.). Our export business accounted for 94.46%, 95.48% and 97.09% of our revenue in the last three (3) FYEs.
6. BUSINESS OVERVIEW (cont’d) Our success in securing and retaining these globally renowned companies is testament of our product quality, customer service and proven industry track record. Since securing these customers, we have managed to retain many of them over the years. For example, Broadcom Corporation is a major global fabless semiconductor manufacturer and has been our customer for over ten (10) years, since the commencement of our Group’s operations in 2005. Our track record and successful relationship with Broadcom Corporation has also led to our Group securing other major multinational customers. Qualcomm Technologies, Inc and Synergie CAD (UK) Ltd have been our customers for four (4) and nine (9) years respectively. As a supplier to these multinational companies, we have had to comply with their product and quality control requirements, which is evidence of our standing as a global industry player with proven credentials. Our successful track record and credentials will lay the foundations for our Group’s on-going and future business expansion. (b) We have demonstrated our ability to comply with the design and manufacturing requirements set by our multinational customers Our multinational customers have stringent design and manufacturing requirements. Our design and manufacturing process complies with international compliance standards. We were first awarded the ISO 9001:2000 certification in 2007 from SGS United Kingdom Ltd and its local office SGS (Malaysia) Sdn. Bhd. for “Design and Fabrication of Precision Engineering Manufacturing”. We subsequently received the ISO 9001:2008 certification for “Design and Fabrication of Precision Engineering Manufacturing” and “Provision for Dimensional Measurement Service” from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. in 2010. FoundPac Tech received the ISO 9001:2008 certification for “Design and Fabrication of Precision Engineering Manufacturing” and “Provision for Dimensional Measurement Service” from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. in 2011, which were subsequently renewed and valid until August 2016. Subsequently in October 2016, FoundPac has received the ISO 9001:2015 certification from SGS United Kingdom Ltd and SGS (Malaysia) Sdn. Bhd. for the “Design and Fabrication of Precision Engineering Manufacturing” and “Provision of Dimensional Measurement Service”. The certifications are valid until August 2019. This ISO certification serves as a testimony that we are able to comply with strict design and manufacturing requirements of our multinational customers. As such, our ability to comply with these requirements in accordance to international standards has enabled us to be effective and successful in both securing and retaining our multinational customers. (c) We are well-positioned to capitalise on growth in the global electronics and semiconductor industry According to the IMR report by Smith Zander, the global market for electronic products is estimated to have grown from USD1.79 trillion (RM6.31 trillion) in 2009 to an estimated USD2.60 trillion (RM10.16 trillion) in 2015, registering a CAGR of 6.42%. The global semiconductor industry registered a CAGR of 7.73% between the period 1990 and 2015, indicating the sustainability of the industry’s growth in the long term. The future growth in the global electronics and semiconductor industry is expected to be driven by mobile communications, which has radically transformed the global electronics and communications industry, including changing the lives of billions of consumers worldwide. According to the IMR report by Smith Zander, in 2013, the penetration of mobile phones reached 73.00% of the global population, while smartphones had a 22.00% penetration rate. While mobile cellular subscriptions illustrated a healthy growth of 214.30% in a span of nine (9) years between 2007 and 2015, active mobile broadband (which enables the use of smartphones and tablets) grew almost six (6) times faster with
6. BUSINESS OVERVIEW (cont’d) a growth of 1,194.00% during the same time period, from 268.00 million subscriptions in 2007 to an estimated 3.20 billion subscriptions in 2015 and thus, much of the growth of the electronics and semiconductor industry is expected to be driven by the rapidly increasing uptake of smartphones and tablets. Our prospects will remain in tandem with growth in the global electronics and semiconductor industry, which has demonstrated sustainability over the last twenty-five (25) years. As an industry player supporting the global electronics and semiconductor industry, our Group is well-positioned to capitalise and leverage on further growth in the industry, including capturing future growth opportunities the industry may offer and enabling our Group to continue on our long term growth and expansion. (d) Our Group has a well-established network of channel partners in Europe In markets such as France, UK, Italy, Belgium, and Germany in Europe, our products are also distributed through channel partners to leverage on their market reach and business relationships with their customers, who are end-users of our products. We have close partnerships with various channel partners in Europe such as Synergie CAD Group of companies in Europe, U4Global Solutions Ltd and Systems & Technology International as well as the US such as Synergie CAD USA, Inc. While the sales and marketing is carried out through our channel partners, we maintain close contact with their customers, i.e. the end-users of our products, as we provide after-sales service and technical assistance directly. By working directly with the end-users, we are able to provide more effective customer service as well as a shorter response times. By leveraging on the customer networks of our channel partners, we are better-positioned to extend our end-user customer reach in Europe, in addition to serving end-user customers in geographical regions in which we do not have physical presence. Through these strategic channel partnerships, we also incur minimal sales and distribution cost. (e) We have an experienced management team with strong technical expertise We have been operating our business for more than ten (10) years, and we are led by an experienced and technically strong senior management team. Our Executive Director and CEO, Lee Chun Wah, is a qualified engineer with over twenty (20) years of experience in the electronics and semiconductor industry, and holds a Master’s degree in Mechatronics. Our Executive Director and COO, Tan Sin Khoon, is an electrical engineer and has over twenty-three (23) years of experience in the electronics and semiconductor business. Further to their roles in providing strategic direction and operations management, both our CEO and COO play key roles in product development for our Group. Our CEO and COO are supported by our key management team, who collectively, have exposure across a broad spectrum of business activities, including engineering, operations, sales and marketing and finance. Our CFO, Ong Choon Heng, joined us in 2015, and brings with him sixteen (16) years of experience in finance, accounting and business management. Our Vice President of Sales and Marketing, Low Cher Shyong, has been with our Group since 2012, and has over eighteen (18) years of experience in the electronics and semiconductor industry. Our Operations Manager, Fathil bin Mohamed, has spent five (5) years with our Group, managing various aspects of our operations including production and quality management, and has thirty-four (34) years of experience in the manufacturing industry. Our Engineering Manager, Lam Yoong Leng, joined our Group in 2006 and has twenty (20) years of experience in the electronics industry. Our Senior Finance and Admin Manager, Tan Yong Yong, has seventeen (17) years of experience in finance and accounting.

6. BUSINESS OVERVIEW (cont’d) Our Group’s revenue by sales channels in the past three (3) FYE 2014 to FYE 2016 are as follows:­Audited  FYE 2014  FYE 2015  FYE 2016  (RM’000)  (%)  (RM’000)  (%)  (RM’000)  (%)  Fabless semiconductor companies  17,052  56.46  18,917  55.04  23,048  52.26  Channel partners  6,567  21.74  8,028  23.36  7,763  17.60  PCB design houses  5,500  18.21  5,588  16.26  10,314  23.38  Semiconductor manufacturers  1,085  3.59  1,837  5.34  2,983  6.76  /OSATs  Total  30,204  100.00  34,370  100.00  44,108  100.00

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6. BUSINESS OVERVIEW (cont’d) (a) Product Design and Engineering Our sales team and engineering team are responsible for the product design. Both teams will discuss and design the product based on customer’s requirements, and at the same time decides on suitable materials to be used for the product. Our engineering team uses SolidWorks, a CAD software tool, for the design of our products. Upon receipt of the drawing, the CNC Programmer will convert the drawing using MasterCam programme so that it is readable by our CNC machine. The product design and engineering process will take approximately three (3) to six (6) days. (b) Preparation of Raw Materials Based on the specifications set out in the drawing, the CNC Programmer will then procure the relevant raw materials. The raw materials will undergo cutting process in accordance to the product dimensions specified in the drawing. The preparation of raw materials will take approximately one (1) to two (2) hours. (c) Setting-up of CNC Machine After the tools have been set in the tool holders by using a tool presetter, and the raw materials have been cut to size, they will be loaded into the CNC machine by a production technician so that the raw materials can undergo more complicated and detailed cutting process. The production technician is responsible for loading the tools into the correct tool magazines and the raw materials onto the table, as well as programming the CNC machine accurately. A milling process will be undertaken to remove unwanted materials from the raw materials. The setting up of CNC machine will take approximately one (1) to two (2) hours. (d) Production Upon the inspection and approval of the QC team on the trial run piece, the production will commence. It takes on average approximately eight (8) hours to complete the production process for stiffeners, and on average approximately thirty-six (36) hours to complete the production process for test sockets and hand lids. In-process QC inspection will be performed on sample pieces to ensure that dimensions are accurate as per the drawing. After production is completed, the stiffeners, test sockets and hand lids will each undergo different processes:­For stiffeners:­(i) Surface Finishing The PCB stiffeners will undergo surface finishing process. This process, which is performed manually, involves polishing to smoothen the overall surface of stiffeners, and deburring to remove unwanted excess material and smoothening sharp edges. The surface finishing process will take approximately half an hour. (ii) Surface Treatment If required by customers, the stiffeners will be sent for surface treatment after the surface finishing process. Surface treatment prevents rust and abrasions and increases durability of the stiffeners. The surface treatment for the stiffeners is outsourced to a third-party service provider. The surface treatment process will take approximately twenty-four (24) hours.
6. BUSINESS OVERVIEW (cont’d) (iii) Quality Inspection Upon surface treatment, stringent quality inspection will be conducted by our QC team on each stiffener. This process includes dimensional measurement and screw hole testing, using inspection machinery such as the CMM, vision inspection and others. This process is conducted to ensure that there are no manufacturing defects or faults. Quality inspection will take approximately one (1) to two (2) hour(s). (iv) Assembly Upon the quality inspection process, the stiffeners will be assembled with other parts (such as screws, metal handles, bushing, plastic discs and dowel pins), in accordance to the drawing. The assembly of stiffeners will take approximately half an hour. For test sockets and hand lids:­(i) Assembly The test sockets and hand lids will be assembled with other parts such as contact pins, screws, bushing and/or plastic parts, to integrate these items to form a functional test socket or hand lid. The assembly of stiffeners will take approximately three (3) to four (4) hours. (ii) Final Testing Upon assembly, the test sockets and hand lids will undergo final testing, to ensure that all the parts are in working order, as per the drawing specification. Final testing will take approximately half an hour. (e)  QA After the stiffeners have been assembled and the test sockets or hand lids has passed the final testing stage, the finished products will undergo a final visual inspection. Quality assurance will typically take approximately ten (10) to twenty-five (25) minutes. (f)   Packaging and Delivery Thereafter, the products will be packed and properly secured in boxes, depending on customers’ requests, awaiting delivery to our local customers or stored in the warehouse awaiting collection from the shipping company for our overseas customers. Packaging will take approximately half an hour. [The rest of this page is intentionally left blank]
6. BUSINESS OVERVIEW (cont’d) 6.7 QUALITY ASSURANCE AND CONTROL PROCEDURE We undergo various stages of quality assurance and control procedures in our manufacturing process i.e. trial run piece QC, in-process QC, post assembly QA as detailed in Section 6.6 of this Prospectus. As a testament to our on-going commitment to quality, we have been awarded the following accreditations:­Date of first issue  Validity period  Certification  Scope  Awarding body  20 August 2007  25 August 2016 – 19 August 2019  ISO 9001:2015  1. Design and Fabrication of Precision Engineering Manufacturing. 2. Provision of Dimensional Measurement Service.  SGS (Malaysia) Sdn. Bhd.  20 August 2007  17 October 2016 – 19 August 2019  ISO 9001:2015  1. Design and Fabrication of Precision Engineering Manufacturing. 2. Provision of Dimensional Measurement Service.  SGS United Kingdom Ltd
[The rest of this page is intentionally left blank] 6. BUSINESS OVERVIEW (cont’d) 6.8  OUR GROUP’S PROPERTY, PLANT AND EQUIPMENT  6.8.1  Own Properties  As at the LPD, the details of the property owned by our Group are as follows:­
Registered/ Beneficial Owner  Title/ Address  Description/ ExistingUse  Tenure of Property/ Date of Expiry of Lease  ApproximateLand/ Built-up Area (Sq Ft)  Date of CF/ Date of Sale and Purchase Agreement (“SPA”)  Group audited NBV as at 30.6.2016 (RM’000)  Encumbrance  FPSB  Title Pajakan Negeri 5869, Lot 12349, Mukim 12, District of South West, Penang Address Plot 35, Hilir Sungai Keluang 2, Bayan Lepas Industrial Estate, Non-Free Industrial Zone, Phase IV, 11900 Bayan Lepas  Industrial land with three (3) buildings erected thereon. Factory complex comprises single storey office building, single storey storage building, single storey with mezzanine floor production building, guard house and car park shed. See Note (2) below.  Leasehold for 60 years with a remaining term of 37 years expiring on 31 October 2053.  66,133 / 46,037  26.1.1998 (CF)/ 18.6.2009 (SPA)  12,369  See Note (1) below.  Penang
Notes:­(1) The Board has confirmed that all the conditions of land use, restriction in interest and express conditions imposed on the title to the above property owned by FPSB have been complied with, save for the condition requiring that 30.00% of the employees at all levels of management of the business the purpose for which the land was alienated shall comprise Bumiputera employees (“Condition”). As an investment holding company, FPSB has no employees (save for the Directors) as at the LPD. The Company had on 29 July 2016 submitted an application to the Pejabat Daerah dan Tanah Barat Daya, Pulau Pinang to amend the Condition by deleting “at all levels of management” from the Condition. The aforesaid application is currently pending the approval of the relevant authority.
(2) The property as set out above is being rented by FoundPac Tech from FPSB for a tenancy period of three (3) years commencing from 1 October 2015 to 30 September 2018 with a monthly rental of RM40,000.00. The aforesaid property is used by FoundPac Tech as its factory premises.

Save as the above, the Board confirms that the Group is not in breach of any of the relevant land rules and building regulations governing the property owned/occupied by the Group.
6. BUSINESS OVERVIEW (cont’d) 6.8.2 Property rented by our Group Save for the above, as at the LPD, there is no other property rented by the Group.
6.8.3 Material Plant and Equipment A summary of the material equipment used and owned by us as at the LPD is set out below:­Key equipment  Description  No. of units  Original Cost (RM’000)  Group Audited NBV as at FYE 2016 (RM’000)  CNC  Machine incorporated with CNC controls, automatic tool changers, tool magazines and coolant systems, used in a milling/tapping process to remove materials from the workpiece or to make holes in the workpiece  16  3,520  991  Precision surface grinding machine  Machine used to produce precision ground surface  1  763  699  CMM  Machine used in a quality assurance process to accurately measure dimensions of an object  2  446  50  Total  19  4,729  1,740
The abovementioned key equipment has assisted us to ensure the quality of our products. Precision engineering parts require high level of precision in its manufacturing process. As an illustration, the manufacturing of test sockets in particular involves the drilling of 80 micron diameter holes with a hole pitching, i.e. distance between the centre of two (2) holes, 125 micron. The Group intends to purchase an additional nine (9) CNC machines with the proceeds of the Public Issue, which is expected to increase our production capacity for stiffeners by approximately 44.30% or 3,700 units from 8,352 units to 12,052 units; and production capacity for test sockets and hand lids by approximately 69.78% or 642 units from 920 units to 1,562 units. The Group also intends to purchase additional two (2) CMMs and one (1) grinding machine with the proceeds from the Public Issue. This will not increase the production capacity but its functions are complementary to the products produced by the CNC machines. The CMM functions by measuring the dimensions of an object while the grinding machine functions as machinery for light cutting of materials. [The rest of this page is intentionally left blank]

6. BUSINESS OVERVIEW (cont’d) 6.8.4 Material Capital Expenditures And Divestitures The FoundPac Group does not have any material expenditures and divestitures currently in progress. Save as disclosed below, we did not incur any material capital expenditure for the past three (3) FYE 2014 to FYE 2016 and up to the LPD:­Description  Transaction Value (at cost)  FYE 2014 (RM’000)  FYE 2015 (RM’000)  FYE 2016 (RM’000)  1.7.2016 up to the LPD (RM’000)  Investments Plant and machinery Office equipment, furniture and fitting Renovation  165 155 – 2,639 40 277  1,126 28 21  6 7 – Total  320  2,956  1,175  13  Divestments Plant and machinery Office equipment, furniture and fitting  — 8 – 89 1  — Total  – 8  90  –
The capital expenditures incurred by our Group are based on cost incurred and funded via our internally-generated funds. Our capital expenditures during the past three (3) FYE 2014 to FYE 2016 and from 1 July 2016 up to the LPD were incurred on plant and machinery, QA equipment, office equipment, computer hardware and software, furniture and fittings, installation and renovation. [The rest of this page has been intentionally left blank]

 

6. BUSINESS OVERVIEW (cont’d) The new CNC machines proposed to be acquired shall provide additional capacity and specialisation of production by machines. In addition, any additional capacity will provide a buffer for the Company in the event of any contingency and to cater for any future growth in sales. 6.9 TECHNOLOGIES USED We manufacture precision technology products and provide metrology and quality assurance services, using the following technologies/processes: (a) CAD software tool We use SolidWorks, a CAD software tool for three (3)-dimensional product design, engineering, simulation and after-sales analysis. (b) CNC machines CNC machines refer to automated machines used in our manufacturing process. These machines are controlled through programmed commands encoded in a software programme, based on drawings produced from CAD software tool. The use of CNC machines allows for high-speed milling and tapping, which will increase operating efficiencies and process accuracies. Further, these CNC machines will also allow for high-precision profile machining or shaping, enabling us to refine our product finishing through cutting/shaping of complex geometries and patterns without deformation.
6.10 INTERRUPTIONS TO BUSINESS AND OPERATIONS We have not experienced any interruption in business which had a significant effect on operations during the twelve (12) months period prior to the date of this Prospectus.
6.11 SEASONALITY Our business is subject to the cyclicality of the global electronics, semiconductor and PCB industry, which is caused by variations in supply and demand for semiconductors and PCBs and economic cycles. We do not experience any seasonality in our business. [The rest of this page has been intentionally left blank]

6. BUSINESS OVERVIEW (cont’d) 6.12 SALES AND MARKETING We understand the importance of building our brand recognition and market standing in order to boost sales revenue. As such, our Group constantly invests in various sales and marketing strategies to raise our corporate profile. The sales and marketing strategies initiated by our Group include the following:­(a) Direct approach As the sales and marketing of our products require in-depth knowledge of our products, the direct approach is the most effective method as it allows us to deliver the required technical information and detailed explanations and descriptions accurately. Our sales and marketing team approach potential customers directly and also via referrals by our existing customers. We provide product simulations prior to purchase and after-sales analysis for troubleshooting purposes. (b) Corporate website Corporate website, http://www.foundpac.com, is another means of introducing and broadcasting our products to potential customers and providing immediate searchable information on our Group. The current widespread use of the Internet as a source of information enables us to cross geographical boundaries and facilitates access from any part of the world, enhancing our potential market reach and exposure.
6.13 MAJOR CUSTOMER AND SUPPLIERS 6.13.1 Major Customer Our Group’s major customer which has contributed more than 10.00% of our total revenue for the past three (3) FYE 2014 to FYE 2016 are as follows:­Major Customer/Country of Operation  Sales Channel  FYE 2014  FYE 2015  FYE 2016  Length of business relationship(years)  (RM’000)  (%)  (RM’000)  (%)  (RM’000)  (%)  Broadcom Corporation/US  Fabless semiconductor companies  13,737  45.48  16,513  48.04  21,040  47.70  11
Broadcom Corporation, a wholly-owned subsidiary of Broadcom Limited which is listed on NASDAQ Stock Market, has been our major customer for the past three (3) FYE 2014 to FYE 2016. We have a strong and established relationship with Broadcom Corporation, as they have been our customer for eleven (11) years, since the commencement of our operations in 2005. As such, we have built a strong, trusted and mutually beneficial relationship with Broadcom Corporation, and this has provided our Group with a strong platform for future growth with Broadcom Corporation. As our stiffeners, test sockets and hand lids are designed to cater to a wide range of multinational semiconductor manufacturers and OSATs, or for fabless semiconductor companies and PCB design houses, there are potential customers and an addressable market for our products that we have yet to explore. In addition, it should also be noted that the electronic and semiconductor industry comprise many PCB design houses, fabless semiconductor companies and channel partners, and as

 

6. BUSINESS OVERVIEW (cont’d) such our Group has a large pool of potential customers. Thus, our Group believes that it is able to secure orders from other customers should we cease to receive orders from Broadcom Corporation. However, the loss of Broadcom Corporation as our major customer may adversely impact our Group’s operating results. The loss of Broadcom Corporation as our major customer, if not replaced, may adversely affect our financial results as this major customer accounted for approximately 45.48%, 48.04% and 47.70% of the total revenue of our Group for the FYE 2014, FYE 2015 and FYE 2016 respectively. In such circumstances, the Group will have to immediately market our products and services to other potential customers in the electronics and semiconductor industries or in other industries. However, there is no assurance that such endeavours will be successful or if we are successful in securing other potential customers, we may not be able to achieve the same profit margins that we achieved over the relevant financial years/period. Nevertheless, the Group has transacted with other PCB design houses, fabless semiconductor companies and channel partners for the past three (3) financial years as part of its efforts to diversify its customer base. To reduce the dependence on Broadcom Corporation, FoundPac is also looking at penetrating into other markets via its overseas expansion such as Milan, Italy and California, US to diversify and broaden its customer base. In addition, the established relationship with Broadcom Corporation has also led the Group in securing other major multinational customers. The Group has also other established customers such as the Advantest group of companies, Qualcomm group of companies and Synergie CAD group of companies. The loss of Broadcom Corporation as our major customer may not result in any other business disruptions such as operational disruptions as we practice flexible management strategies by outsourcing some of our fabrication work to local and international fabricators. Furthermore, all our machineries are purchased in cash and there are no borrowing facilities to be serviced. There were no customer disputes for the financial years under review save for the sales return due to an error on the drawing specifications with a customer for approximately RM198,000 in the FYE 2015. The Group has issued a credit note to the customer for the aforesaid amount and it has been set-off against its revenue. As at LPD, our Group does not have any contracts with our major customers. The total number of customers which has transacted with the FoundPac Group for the financial years under review is as follows:­FYE 2014  FYE 2015  FYE 2016  Total number of customers  80  89  94
The total number of repeat/regular customers which has transacted with the FoundPac Group for the financial years under review is as follows:­FYE 2014  FYE 2015  FYE 2016  Total number of repeat/regular customers*  56  67  74
Note: ­* Repeat/regular customers refer to customers which have transacted with the Group before the aforesaid financial year. The year of relationship with the repeat/regular customers ranges between one (1) to eleven (11) years for the financial years under review.
6. BUSINESS OVERVIEW (cont’d) 6.13.2 Major Suppliers Our Group’s major suppliers which have contributed more than 10.00% of our purchases for the past three (3) FYE 2014 to FYE 2016 are as follows:­Major Suppliers  Country of Operations  Nature of Supplies  FYE 2014  FYE 2015  FYE 2016  Length of business relationship (years)  (RM’000)  (%)  (RM’000)  (%)  (RM’000)  (%)  ADE Technologies Pte. Ltd.  Singapore  Fabrication services  1,098  8.16  1,696  10.30  6,852  38.26  11  Gaffoglio Family Metalcrafters, Inc.  US  Fabrication services  1,745  12.97  1,739  10.56  1,229  6.86  8  Innovative Semicon Technologies Limited  Hong Kong  Fabrication services  1,261  9.37  2,176  13.22  1,093  6.10  9  TKLE Enterprise Sdn. Bhd.  Malaysia  Fabrication services  1,590  11.81  2,325  14.12  – – 4
For the past three (3) FYE 2014 to FYE 2016, our Group’s major suppliers included ADE Technologies Pte. Ltd., Gaffoglio Family Metalcrafters, Inc., Innovative Semicon Technologies Limited and TKLE Enterprise Sdn. Bhd. Contribution of purchases from ADE Technologies Pte. Ltd. to our Group’s total purchases increased significantly as ADE Technologies Pte. Ltd. was able to provide fabricated parts with consistent specification that met our Group’s requirements. ADE Technologies Pte. Ltd., Gaffoglio Family Metalcrafters, Inc., Innovative Semicon Technologies Limited and TKLE Enterprise Sdn. Bhd. are suppliers of fabrication services, which are widely available from local and international suppliers. Hence, we are not dependent on any of our major suppliers as we have alternate source of suppliers. The sourcing from a large pool of suppliers is dependent on the sourcing strategies of each industry player. We understand that it is an industry norm to source on a purchase order basis. The Group adopts ISO certified standard and procedures in selecting a new supplier. In general, the Group will first obtain the company profile to understand the background of the supplier including its major customers, products/services offering, pricing, delivery lead time etc. Subsequently, a quotation will be requested and the Group will undertake the evaluation and selection process based on the information gathered i.e. pricing, delivery lead time and other terms & conditions. If the terms and conditions meet the Group’s requirements, approval will be obtained from the management and a purchase order will be granted to the selected supplier. The Group will then start on a small scale business with the supplier to determine the quality and turnaround time of the products or services provided. In selecting our suppliers for raw materials, the key aspects considered by the Group include the ability of the supplier to provide raw materials that meet the Group’s required specifications, delivery lead-time, price and payment terms and the service provided whereas in selecting our suppliers of fabrication services, the key aspects considered by the Group will include the final surface treatment of the product, the lead-time, price and payment terms and the facility of the fabrication supplier. The Group strive to maintain good relationships with our suppliers to ensure minimal disruptions to our supply chain and operations. There is no financial and non-financial restriction imposed by any suppliers of the Group and there were no disputes with our suppliers for the financial years under review.

6. BUSINESS OVERVIEW (cont’d) We expect the suppliers for fabrication services to be reduced as we purchase more machines to increase our capacity as well as expand our fabrication capabilities. Please refer to Section 6.15 of this Prospectus for details on our plans to purchase new machines. As at LPD, our Group does not have any contracts with our major suppliers. 6.14 KEY TYPES, SOURCES AND AVAILABILITY OF SUPPLIES Our raw materials mainly consist of stainless steel, aluminium and engineering plastics used for the manufacturing of stiffeners, test sockets and hand lids. These materials are sourced from local and overseas suppliers. Thus far, we have not experienced any material shortages in sourcing these materials for our operations. In addition, we have not experienced any major fluctuations in prices of our raw materials that have materially affected our financial position. Furthermore, these materials are commodities which are readily available from many overseas as well as local suppliers. We outsource some of our fabrication work to local and international fabricators, in instances where we lack capacity or do not have the machines to carry out the required fabrication. Moving forward, we expect the outsourcing of fabrication work to be reduced as we purchase more machines to increase our capacity as well as expand our fabrication capabilities. Please refer to Section 6.15 of this Prospectus for details on our plans to purchase new machines.
6.15 FUTURE PLANS, STRATEGIES AND PROSPECTS (a) We intend to expand our production capacity through the acquisition of new CNC machines As detailed in Section 6.8.3, for the last three (3) FYE 2014 to FYE 2016, our utilisation rate of production capacity for stiffeners was 63.72%, 78.31% and 76.13%, respectively, while our utilisation rate of production capacity for test sockets and hand lids for the same period was 65.92%, 83.15% and 65.98%, respectively. As at the LPD, we have sixteen (16) CNC machines, which allow for high precision machining of stiffeners, test sockets and hand lids, one (1) unit of precision surface grinding machine as well as two (2) CMMs which allow us to ensure the quality of our products through accurate measurements. We intend to increase our production capacity through the acquisition of nine (9) CNC machines, as well as two (2) CMMs and one (1) grinding machine. We have allocated a total of RM8.00 million for the purchase of property, plant and equipment from the proceeds of our Public Issue which shall be utilised within twenty-four (24) months of our Listing. The additional machines are expected to increase our production capacity which will enable us to expand more aggressively, as we will be able to accept more job orders, ensuring that we will not be constrained by capacity limitations for the foreseeable future, and this will be an impetus to bring our Group to the next phase of growth. Thus, the expansion of our production capacity will facilitate our other growth strategies, namely to strengthen our local and global footprint, as well as to further expand our products to new geographical markets.

6. BUSINESS OVERVIEW (cont’d) (b) We aim to diversify our customer base to include end-user industries Since the commencement of our business, we have remained focused on the electronics and semiconductor industry. As part of our sector diversification, we intend to manufacture products that cater to other end-user industries (such as the automotive industry) within the next two (2) years from the LPD. Through this expansion of our end-user customer base, we will be able to diversify our revenue stream, reducing the risk of relying on the performance of any one particular industry. In line with our expertise in the design and manufacturing of precision engineering parts produced from aluminium, stainless steel and engineering plastics, we will explore opportunities in other industries where we can leverage on our expertise to undertake the mechanical fabrication of metal automotive components and parts, and as such, we have identified the automotive industry as a potential area for expansion. We believe we are well-positioned to explore such opportunities as we have the relevant experience in precision machining, providing us with the technical capabilities and resources to secure orders from other end-user industries (such as the automotive industry) in which FoundPac’s end customers are operating. Further, our diversification into other end-user industries (such as the automotive industry) will enhance our Group’s profile. (c) We plan to set up a dedicated D&D team to focus on product development Our product D&D activities are presently carried out by our engineering team, which also supports other aspects of our operations including production and manufacturing. With our Group’s on-going expansion, we plan to set up a dedicated D&D team to formalise our D&D activities, a measure which we anticipate will contribute towards the long term growth and sustainability of our Group. The primary objective of our D&D team would be product development. We plan to staff our D&D team initially with six (6) persons, and will expand the team as and when required. Further, we will also need to invest in equipment which will include servers, desktops, laptops and required D&D software. The total cost of setting-up our D&D team, including initial staff cost and cost to acquire the related hardware and software, will be approximately RM3.00 million, which we intend to fund via proceeds from our Public Issue. We expect to commence the setting up of the D&D team within twenty-four (24) months of receipt of our Listing proceeds. The establishment of a dedicated D&D team will enable our Group to remain at the forefront of industry technologies, manufacturing processes and market trends, which will provide a strong foundation for our Group’s future growth and development. [The rest of this page has been intentionally left blank]
6. BUSINESS OVERVIEW (cont’d) (d) We intend to establish sales offices in Milan, Italy and California, US to continue expanding our presence in these major markets We are an export-oriented Group and our major markets are Europe and US. These markets collectively accounted for 88.44%, 90.34% and 89.22% of our total revenue in the last three (3) FYE 2014 to FYE 2016. With many global semiconductor manufacturers, fabless semiconductor companies and PCB design houses based in Europe and US, these regions will continue to remain important markets for our Group. Premised on the above, our Group intends to continue to focus on Europe and US for future customer and market expansion for the Group. As at the LPD, the Group has identified the relevant locations for the set-up of its sales office which are in Milan, Italy and California, US. The set-up of our sales offices in Milan, Italy and California, US will enable us to establish our presence in these markets and be in closer geographical proximity to many potential customers, which will enable our Group to have better access to these customers and allow us to shorten our response times when attending to customer enquiries and when providing technical support. As at the LPD, we have begun making enquiries with regard to the office rental as well as reviewing legal and regulatory requirements related to the establishment of sales offices in these locations. The estimated combined cost for setting up our sales offices in the said locations will be approximately RM4.00 million, which will be funded via proceeds from our Public Issue. This cost is expected to comprise rental cost for the offices (RM1.00 million), staff cost (RM2.00 million), and sales and marketing expenses (RM1.00 million) over a 24-month period. Our presence in these two countries will support our Group’s continued expansion into the world’s major electronics and semiconductor markets, as placing dedicated regional resources will enable our Group to proactively drive our export sales. As our Group’s future growth will be driven by the global electronics and semiconductor industry, the presence of our overseas sales offices will enable our Group to further capitalise on these opportunities. 6.16 COMPETITION Due to the global nature of the industry, precision engineering part industry players in Malaysia also compete with other foreign precision engineering part industry players in the global market, particularly when they are involved in the exports of precision engineering parts to foreign markets. The global prospects of precision engineering part industry players in Malaysia can be illustrated through the growth in the global semiconductor industry, as data on global precision engineering part industry players is not publicly available. The global semiconductor industry is forecast to grow from USD337.70 billion (RM1.32 trillion) in 2016 to reach USD 376.60 billion (RM1.47 trillion) in 2018, registering a CAGR of 5.60% during the period. The precision engineering part industry in Malaysia is a niche and specialist industry within the broader electronics, semiconductor and PCB industry. The precision engineering part industry in Malaysia grew from RM35.76 million in 2011 to RM132.51 million in 2015, at a CAGR of 38.74%. Our Group’s global market share in relation to the equipment segment of the global semiconductor industry in 2015 was 0.02%, based on its revenue of RM34.37 million in the FYE 2015, computed against the global revenue from the equipment segment of the semiconductor industry of USD37.00 billion (RM144.57 billion) in 2015. (Source: IMR Report) Despite the competition, our Board is of the view that our Group will enjoy promising growth in the long term premised on out competitive advantages and key strengths as set out in Section
6.4 of this Prospectus, our Group’s future plans as set out in Section 6.15 of this Prospectus 6. BUSINESS OVERVIEW (cont’d) and the prospects of the global electronics and semiconductor industry as set out in Section 7 of this Prospectus.  6.17  BRAND NAMES, AGREEMENT  TRADE  MARKS,  LICENSE  AGREEMENT  AND  TECHNICAL  As at the LPD, save for the trade marks disclosed in Section 6.17.1 of this Prospectus which we are currently using in our day-to-day business, our Group does not presently hold any brand names, patents, trademarks, licenses, technical assistance agreements, franchises and other intellectual property rights.  6.17.1  Trade Marks Registered  As at the LPD, our Company has the trademark registered as the following:­
No.  Registered Owner  Issuing Authority  Representation of Trade Mark  Issuing Authority/ Trade Mark No.  Date of Certificate/ Effective Date/ Expiry/ Renewal Date  Classification  1.  FoundPac  Registrar of Trade  Logo and  09021185(a)  1.12.2009/  9(b)  Tech  Marks, Malaysia  “FoundPac”  1.12.2019  2.  FoundPac  Registrar of Trade  Logo and  T1000348A(c)  12.01.2010/  9(d)  Tech  Marks Singapore  “FoundPac”  12.01.2020
Notes:­(a) The Malaysian-registered trade mark No. 09021185 was initially registered under FPSB and was assigned by FPSB to FoundPac Tech on 3.12.2015. The transfer in ownership of the trade mark has been duly recorded by the Registrar of Trade Marks, Malaysia.
(b) For test sockets for integrated circuits; apparatus for testing electronic circuits; apparatus for testing printed circuit boards; apparatus for the testing of electrical circuits; circuit testers; circuit testing apparatus; circuit testing instruments; circuits (electric or electronic); electrical apparatus for plating electrical circuits; electrical apparatus for plating printed circuits; electrical circuit boards; electrical circuit testers; electric circuit components; electric circuit control devices; test apparatus for testing electronic circuits; test probe assemblies for integrated circuits; test probes for the automatic testing of bare circuit boards; test probes for the automatic testing of loaded circuit boards; films (laminates) adapted for use in the printed circuit industry; glass fibre conduits for electricity cables; glass wafers for integrated circuits; cases adapted for electric circuits; cases adapted for electronic circuits; all included in Class 9.
(c) The Singapore-registered trade mark No. T1000348A was initially registered under FPSB and was assigned by FPSB to FoundPac Tech on 29.12.2015. The transfer in ownership of the trade mark has been duly recorded by the Registrar of Trade Marks, Singapore.
(d) For measuring apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; test sockets for integrated circuits; apparatus for testing electronic circuits; apparatus for testing printed circuit boards; apparatus for the testing of electrical circuits; circuit testers; circuit testing apparatus; circuit testing instruments; circuits (electric or electronic); electrical apparatus for plating electrical circuits; electrical apparatus for plating printed circuits; electrical circuit boards; electrical circuit testers; electric circuit components; electric circuit control devices; test apparatus for testing electronic circuits; test probe assemblies for integrated circuits; test probes for the automatic testing of bare circuit boards; test probes for the automatic testing of loaded circuit boards; films (laminates) adapted for use in the printed circuit industry; glass fibre conduits for electricity cables; glass wafers for integrated circuits; cases adapted for electric circuits; cases adapted for electronic circuits; in Class 9.

6. BUSINESS OVERVIEW (cont’d) 6.17.2  License Agreement As at the LPD, our Company has not entered into any License Agreement with any parties.  6.18  DEPENDENCY ON CONTRACTS/ARRANGEMENTS/LICENSES/PATENTS As at the LPD, save as disclosed below, our Group is not dependent on any other contracts/ arrangements/licenses/patents:­(a) approvals, major licenses and permits as set out in Section 5.5 of this Prospectus; and (b) registered trademarks as set out in Section 6.17.1 of this Prospectus.  [The rest of this page is intentionally left blank]

 

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