Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 Infonnation on iDimension 6.1.1 Background and history We were incorporated in Malaysia on 20 December 2010 under the Act as a public limited company under the name iDimension Consolidated Bhd for the purpose of implementing the listing exercise as set out in Section 10 of this Prospectus. 6.1.2 Principal activity and products/services We are principally an investment holding company.
6.1.3 Share capital and changes In share capital As at LPD, our authorised and issued and paid-up share capital are set out as follows: Number of  Par value  Amount  Shares  (RM)  (RM)  Authorised  500,000,000  0.10  50,000,000  Issued and fully paid-up  103,770,000  0.10  10,377,000
Details of the changes in our issued and paid-up share capital since incorporation until the date of this Prospectus are set out as follows: Date  Number ofshares  Par value rRMI  Consideration  Total (RMl  20 December 2010 21 February 2011 25 February 2011  20 101,636,730 2,133,250  0.10 0.10 0.10  Subscriber’s shares Full purchase consideration for the AcqUisition of iMSC Fun purchase consideration for the Acquisition of iMSC Singapore  2 10,163,675 10,377,000
As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in iDimension. 6.1.4 Subsidiaries As at LPD, the corporate structure of our Group is set out as follows: iDimension iMSC iSystems OS Solutions iMSC Singapore 100% 100% 100% 100% 6. INFORMATiON ON OUR GROUP (Cont’d) iDimension’s principal activity is that of investment holding while the principal activity of its subsidiaries are set out as follows: Date and Effective Name of country of Issued and paid-interest company incorporation up share capital (%) Principal activity Direct iMSC 14 March 2005 RM85,002 100.00 Development and Malaysia provision of software solutions and maintenance services iSystems 10 April 2001 RM85,002 100.00 Provision and Malaysia marketing of software solutions and maintenance services OS 2 July 2004 RM100,000 100.00 Development and Solutions Malaysia provision of software solutions and maintenance services iMSC 12 January 2009 SGD100 100.00 Sales and marketing Singapore Singapore of software solutions As at LPD, we do not have any associates. 6.2 Information on iMSC 6.2.1 Background and history iMSC was incorporated in Malaysia on 14 March 2005 under the Act as a private limited oompany under the name Mighty Ingenious Sdn Bhd, and commenced its operations in the same year. On 30 November 2007, the company changed its name to iDimension MSC Sdn Bhd. iDimension acquired iMSC on 21 February 2011.
6.2.2 Principal activity and products/services iMSC is mainly responsible for the development and provision of software solutions and maintenance services within our Group.
6.2.3 Substantial shareholder As at LPD, iMSC is our Wholly-owned subsidiary.
6.2.4 Share capital and changes in share capital As at LPD, iMSC’s authorised and issued and paid-up share capital are set out as follows: Par value  Amount  Number of shares  (RM)  (RM)  Authorised  100,000  1.00  100,000  Issued and fully paid-Up  85,002  1.00  85,002
6. INFORMATION ON OUR GROUP (Cont’d) There has been no change in iMSC’s issued and paid-up share capital over the last three (3) years up to the date of this Prospectus. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in iMSC. 6.2.5 Subsidiary and associate As at LPD, iMSC does not have any subsidiary or associate.

 

6.3 Information on iSystems 6.3.1 Background and history iSystems was incorporated in Malaysia on 10 April 2001 under the Act as a private limited company, and commenced operations in the same year. It was acquired by iMSC on 18 February 2008. iDimension acquired iSystems on 22 February 2011.
6.3.2 Principal activity and products/services iSystems is mainly responsible for the sales and marketing of software solutions within our Group. It generally deals with the customers of our Group. iSystems typically services our customer entirely if the customer only wishes to purchase software and/or requires straight forward maintenance jobs. However, if the customer requires further services such as customised solutions and/or heavy maintenance work, iSystems would pass on the project to either iMSC or OS Solutions for execution. 6.3.3 Substantial shareholder As at LPD, iSystems is our wholly-owned subsidiary.

6.3.4 Share capital and changes in share capital As at LPD, iSystems’ authorised and issued and paid-up share capital are set out as follows: Par value  Amount  Number of shares  (RM)  (RM)  Authorised  100,000  1.00  100,000  Issued and fully paid-up  85,002  1.00  85,002
There has been no change in iSystems’ issued and paid-up share capital over the last three (3) years up to the date of this Prospectus. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in iSystems. 6.3.5 Subsidiary and associate As at LPD, iSystems does not have any subsidiary or associate. 6. INFORMATION ON OUR GROUP (Cont’d)

 

6.4 . Information on OS Solutions 6.4.1 Background and history as Solutions was incorporated in Malaysia on 2 July 2004 under the Act as a private limited company and commenced operations in the same year. It was acquired by iMSC on 9 April 2008. iDimension acquired as Solutions on 22 February 2011.
6.4.2 Principal activity and products/services as Solutions is mainly responsible for the development and provision of software solutions and maintenance services within our Group. 6.4.3 Substantial shareholder As at LPD, as Solutions is our wholly-owned sUbsidiary.

6.4.4 Share capital and changes in share capital As at LPD, as Solutions’ authorised and issued and paid-up share capital are set out as follows: Par value  Amount  Number of shares  (RM)  (RM)  Authorised  100,000  1.00  100,000  Issued and fully paid-up  100,000  1.00  100,000
There has been no change in as Solutions’ issued and paid-up share capital over the last three (3) years up to the date of this Prospectus. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in as Solutions. 6.4.5 Subsidiary and associate As at LPD, as Solutions does not have any SUbsidiary or associate.

 

6.5 Information on IMSC Singapore 6.5.1 Background and history iMSC Singapore was incorporated in Singapore on 12 January 2009 under the Companies Act of Singapore as a private limited company. It commenced operations in the same year. Dimension acquired iMSC Singapore on 25 February 2011.
6.5.2 Principal activity and products/services iMSC Singapore is our Group’s marketing arm in Singapore. iMSC Singapore is only represented by a virtual office however, and purchase orders received are executed by either iMSC or as Solutions. 6.5.3 Substantial shareholder As at LPD, iMSC Singapore is our wholly-owned subsidiary.
6. INFORMATION ON OUR GROUP (Cant’d) 6.5.4 Share capital and changes in share capital As at LPD, iMSC Singapore’s issued and paid-up share capital is set out as follows:
Amount  Number of shares  (SGD)  Issued and fully paid-up  100  100
The ordinary shares of iMSC Singapore have no par value and no authorised share capital. There has been no change in iMSC Singapore’s issued and paid-up share capital since incorporation up to the date of this Prospectus. 6.5.5 Subsidiary and associate As at LPD, iMSC Singapore does not have any subsidiary or associate THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK 7. OUR BUSINESS

7.1 Our History We are primarily a manufacturing software solutions provider. We develop some of the software solutions in-house, while others are customised solutions that combine our in-house developed modules with third party software, We are also a value-added reseller of third party software solutions, providing value-added services which include consulting services, systems design, systems configuration, hardware, software and network installation, and commissioning, Our current software solutions are for the manufacturing sector, where we have a strong focus on the semiconductor industry. Nevertheless, our manufacturing software solutions are flexible and can be customised for use in most manufacturing environments and operations. Presently, our software solutions have also been extended to customers involved in, amongst others, the manufacturing of handgloves, adhesives and electronic die cast components. Moving forward, we intend to develop software solutions that are targeted at process manufacturing and discrete manufacturing industries, and the plantation industry, Since the incorporation of iSystems, we have made significant headways in exporting our software solutions. For the three (3) financial years up to the FYE 31 December 2010, exports ranged between 41.24% and 49.83% of our total revenue, Our ability to export our services is testament to the quality of our service and software solutions. Most importantly, it opens up a significantly larger global market to sustain our business growth. The iDimension Group was started by our co-founders, Daniel Boo and Pang Lee Fung, with the incorporation of iSystems in 2001, Our initial business was primarily that of a value-added reseller of manufacturing software solutions targeted at high-technology consumer electronic goods and semiconductor manufacturers, In 2002, we were appointed as a Master Distributor of WinSPC products, a type of Windows-based SPC software, by DataNet Quality Systems for the Asia Pacific region. This is of significance to our Group as all enquiries and purchases of WinSPC products within the Asia Pacific region (excluding India and Australia) have to be done through us. Presently, other than Japan Whereby we have appointed a reseller, we are the sole distributorofWinSPCproductsintheAsia Pacificregion (excluding Indiaand Australia). Mighty Ingenious Sdn Bhd, now known as iMSC, was incorporated in 2005 and was granted MSC status in the same year, iMSC is currently involved in developing software products and solutions, namely iDynamics, iMES, iPASS, CAPS Assembly, iSPC, iRMS and iVMS. We launched our APS solutions in 2005, marketed under the product name iPASS, and are optimised for semiconductor manufacturers. We won our first major project with a front-end semiconductor manufacturer in 2005, when we were awarded an EA project by Silterra Malaysia Sdn Bhd. Silterra Malaysia Sdn Bhd is one of two front-end semiconductor manufacturers operating in Malaysia. In 2006, we were awarded our first Computer Integrated Manufacturing (CIM) project, which integrates ERP, MES and APS, by Unisem Chengdu Co., Ltd, a subsidiary of Unisem (M) Berhad. Unisem (M) Berhad is a global provider of semiconductor assembly and test services, We launched our in-house developed MES solutions in 2006, Our MES solutions are targeted at all sectors of manufactUring, and are designed to improve manufacturing efficiency by allowing users to collect data, monitor work-in-progress in real-time, execute work orders, and track machinery usage and status. In 2007, iSystems was recognised as a Microsoft Certified Partner for Malaysia. We joined the Microsoft President’s Club in 2008, which recognises partners with the highest overall performance, in addition to driving license revenue, new customer additions, support renewal and year-on-year growth. 7. OUR BUSINESS (Cont’d) iMSC acquired OS Solutions in 2008. OS Solutions was granted MSC status earlier in 2006 and is currently Involved in developing software products and solutions, mainly focusing on our proprietary MES solution, OSTrack. In 2008, iSystems was recognised as a partner by Siemens Product Lifecycle Management Software (SG) Pte Ltd for Singapore. Malaysia, Indonesia, the Philippines and Vietnam. In the same year, iSystems was also recognised as Miracom Inc’s Best Partner in South East Asia. iMSC Singapore was incorporated in 2009, and is our marketing arm for Singapore. Our Managing Director, Daniel Boo, was one of the winners of the Asia Pacific Entrepreneurship Awards (APEA) Most Promising Entrepreneur Award 2009 for his outstanding and exemplary achievements in entrepreneurship. SME Magazine included iMSC on its SME100 Award 2009 list of fast moving companies. iMSC was also recognised as a leading technology company in the Deloitte Technology Fast500 Asia Pacific 2009 programme. In 2010, MDeC granted iMSC a R&D grant of RM681,559. The R&D grant was in relation to our CAPS Assembly development project. To date, iMSC has received 75% of the grant, i.e. RM511,069. The remaining 25% will be received upon satisfactory verification by MDeC of at least three (3) intellectual property rights being created under the development of CAPS Assembly and applied to be registered for by iMSC. The creation of the intellectual property rights is presently in progress. In 2010, iMSC had attained the following: (a) announced as the winner of the “Top 10 Outstanding SMEs” category at the Golden Bull Award 2010;
(b) ranked third on the Enterprise 50 list in 2010, representing Malaysia’s top 50 most enterprising privately-held companies for 2010; and
(c) ranked 95 on the Deloitte Technology Fast500 Asia Pacific 2010 Ranking.

Since the incorporation of iSystems in 2001, we have successfully built up our expertise and capabilities with a primary focus on manufacturing software solutions. From our beginnings as value-added resellers of third party manufacturing software soiutions, we have since progressed to become developers of our own proprietary manufacturing software solutions. We serve customers in both Malaysia and overseas countries such as Indonesia, Singapore, China, the United States of America, the Philippines, Japan and Thailand. 7.2 Our Key Achievementsl Milestonesl Awards The following are some of the key milestones of our Group: Year  Milestones  2001  Our Group was formed with the incorporation of iSystems. iSystems was appointed as a Master Distributor of WinSPC products in the Asia Pacific region. Mighty Ingenious Sdn Bhd, which is now known as iMSC, was incorporated.  2002  2005  2005  iMSC was granted MSC status. We were awarded our first major project with a front-end semiconductor manufacturer, Silterra Malaysia Sdn Bhd for an EA project.  2005
7. OUR BUSINESS (Cont’d) Year  Milestones  2005  We launched our APS solutions, under the product name iPASS, which are targeted at semiconductor manufacturers. as Solutions was granted MSC status. We launched our MES solutions. We were awarded the CIM project for Unisem Chengdu Co., Ltd, a subsidiary of Unisem (M) Berhad. iSystems was recognised as a Microsoft Certified Partner for Malaysia. iMSC acquired as Solutions iSystems was recognised as a partner by Siemens Product Lifecycle Management Software (SG) Pte Ltd for Singapore, Malaysia, Indonesia, the Philippines and Vietnam. iSystems was recognised as Miracom Inc’s Best Partner in South East Asia. iSystems joined Microsoft’s President’s Club iMSC Singapore was incorporated. Our Managing Director, Daniel Boo, was one of the winners of the Asia Pacific Entrepreneurship Awards (APEA) Most Promising Entrepreneur Award 2009. iMSC was listed in SME & Entrepreneurship Magazine’s SME100 Award 2009 list of fast moving companies. iMSC was listed on the Deloitte Fast 500 (Asia Pacific) list. MDeC awarded iMSC with an R&D grant of RM681,559 in relation to our CAPS Assembly development project. iMSC was announced as the winner of the “Top 10 Oustanding SMEs” category of the Golden Bull Award 2010. iMSC was ranked third on the Enterprise 50 list in 2010, representing Malaysia’s top 50 most enterprising privately-held companies for 2010. iMSC was ranked 95 on the Deloitle Technology Fast500 Asia Pacific 2010 Ranking.  2006  2006  2006  2007  2008  2008  2008  2008  2009  2009  2009  2009  2010  2010  2010  2010
THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK Semiconductor Industry  Electro nics Industry  Other Manufacturing Industries  Service Industries
7. OUR BUSINESS (Cont’d) 7.3 Our Business Model Our Group’s business model is depicted in the diagram below:
Business Focus {
Proprietary andCore Revenue Third Party SoftwareCustomisedStream Software Solutions Maintenance{ Software Solutions {
Target Markets
In-house Software Total Integrated Solutions Proprietary Software Solutions Provider DevelopmentCompetitive Advantages and Key Strengths
Specialised in Semiconductor IndUStry  Recurrent Revenue  Export Revenue Base  Potential Global Market Place

7.3.1 Our business focus Our current business focus is on the provision of a range of manufacturing software solutions.
7.3.2 Our core revenue stream Our core revenue stream is derived from the provision of proprietary, customised and third party software solutions, as well as maintenance of software systems. Our proprietary software solutions are fully developed in-house, while customised software solutions incorporate our in-house developed modules combined with third party developed software. We also distribute third party software solutions where we are responsible for marketing as well as implementing the software system. As part of providing end-to-end solutions, we also undertake software maintenance, where we provide technical support for the software system that we provide and implement.
7.3.3 Our target markets Our current target customers are manufacturers in general. Nevertheless, we have developed specialised skills and software solutions that have enabled us to focus on the semiconductor industry. 45 7. OUR BUSINESS (Cont’d) Our software solutions and skills can also be used for most types of manufacturing businesses. Moving forward, we intend to expand our target markets to include process manufacturing and discrete manufacturing industries, and the plantation industry.
7.3.4 Our competitive advantages and key strengths Our competitive advantages and key strengths are important in sustaining our business as well as providing us with future business growth. (a) Proprietary and customised software solutions We currently have proprietary and customised software solutions incorporating ERP, MES, APS, and EA Our proprietary and customised software solutions include both complete software solutions and add-on modules for third party software solutions. These proprietary and customised solutions were developed in-house and the copyrights to the source codes belong to us. This is a competitive advantage over resellers of third party software where we are able to derive the following benefits: • we are able to resell our proprietary and customised software solutions without constraints;
• we are able to appoint resellers to expand our global coverage;
• we are able to customise our software solutions to better fit our customers’ requirements as we have the source codes; and
• we are able to enhance our software to keep abreast of changing needs of customers and the operating environment, as well as technologies.

(b) In-house software development Our proprietary and customised software solutions are all developed in-house. This capability provides us with the advantage of being able to develop new applications, functions and solutions to meet market needs. We also have the ability to undertake modifications, customisation and updates expediently and cost effectively as and when they are necessary using our in-house software development capabilities. Our in-house software development capabilities mean all our software source codes are our intellectual property, which we may use to expand our business into other countries without any restrictions on the use of intellectual property rights. (c) Total integrated solutions provider We are engaged in providing total integrated manufacturing software solutions. We can design and implement a complete integrated manufacturing software solution package for our customers using our proprietary and customised solutions, as well as third party solutions. We can couple our proprietary software solutions with our in-house software development capability to modify and customise our existing solutions to meet our customer’s requirements. This capability is a key strength as it enables us to position ourselves as a one­stop supplier of software solutions for the manufacturing sector. We can position ourselves as the main solutions provider when we compete for software solutions projects, and exercise a high degree of control over our projects. 46 7. OUR BUSINESS (Cant’d) (d) Specialisation in the semiconductor industry We have developed and customised many of our manufacturing solutions specifically for the semiconductor industry. In addition, we have served customers in the semiconductor industry since the formation of our Group, providing us with a strong knowledge and skills base pertinent to the semiconductor industry. For the FYE 31 December 2010 and the 4-month FPE 30 April 2011, revenue derived from servicing customers in the semiconductor industry amounted to approximately 57.06% and 56.90% respectively of our total revenue. Our track record, knowledge and skills base, as well as specialised manufacturing solutions for the semiconductor industry provide us with a competitive advantage over general manufacturing solutions providers. This specialisation will provide us with an added advantage in selling our manufacturing solutions to overseas operators within the semiconductor industry. (e) Recurrent revenue As we market and implement software systems, invariably we are also retained to provide systems maintenance for our customers. Maintenance commonly inciudes fixing problems associated with the software systems, providing ad-hoc reports, simple enhancements, installing software upgrades, and providing user training. Maintenance is a key strength of our business model as it represents recurrent revenue for us. In addition, maintenance is commonly based on yearly contracts. For the FYE 31 December 2010 and 4-month FPE 30 April 2011, revenue from our software maintenance services accounted for approximately 14.91% and 14.64% respectively of our total revenue. (f) Export revenue base We have developed an export customer base. For the past three (3) financial years up to the FYE 31 December 2010, export revenue ranged between 41.24% and 49.83% of our total revenue. For the 4-month FPE 30 April 2011, export revenue represented approximately 14.46% of our total revenue. Our export base provides us with a key strength as it indicates to potential customers that we have the skills and the software solutions that meet the requirements of overseas customers. This is a strong testament to our capabilities and the quality of our software solutions, which will help us gain new customers locally as well as overseas. Our export customer base also provides us with a larger potential market (g) Potential market place overseas As we own the intellectual properties of our software solutions, we are able to export our software overseas with minor modification. Our ability to export our software solutions enlarges our potential markets significantly compared to being restricted only to Malaysia To-date, we have managed to export our software solutions to overseas markets such as China, Indonesia, Japan, the Philippines, Singapore, Taiwan, Thailand, the United Kingdom and the United States of America 47 7. OUR BUSINESS (Cont’d) In addition to growth opportunities of the overseas market place, it also helps diversify our reliance on anyone market. In the event of an economic downtum in one economy, we have other economies to help sustain and grow our business. Being able to address the overseas market place without undue constraints is a competitive advantage compared to other third party resellers who are commonly restricted to reselling software solutions within Malaysia only or confined to a small number of countries.

7.4 Our Principal Activities Our revenue segmentation by business activities, and products and services for the FYE 31 December 2010 and 4-month FPE 30 April 2011 were as follows: FYE 31 December 2010  FPE 30 April 2011  (RM’OOO)  (%)  (RM’OOO)  (%)  Software solutions -Proprietary and customised -Third party Software maintenance -Proprietary and customised -Third party Other IT products and services  12,709 10,400 2,309 2,229 1,080 1,149 12  85,01 69,57 15.44 14,91 7,22 7,69 0,08  4,710 4,503 207 813 550 263 31  84.80 81,07 3,73 14.64 9,90 4,74 0.56  Total  14,950  100.00  5,554  100,00
For the FYE 31 December 2010, our most important business activity was the provision of software solutions, which earned revenue of approximately RM12,71 million, accounting for 85,01% of our total revenue, Our revenue from proprietary and customised software solutions totalled approximately RM10AO million and accounted for 69,57% of our total revenue, while revenue from third party software solutions totalled approximately RM2.31 million and accounted for 15,44% of our total revenue. Our Group’s revenue from the provision of software maintenance services totalled approximately RM2.23 million for the FYE 31 December 2010, representing 14.91 % of our total revenue. Revenue from providing software maintenance for proprietary and customised software solutions totalled approximately RM1.08 million representing 7.22% of our total revenue, while revenue from providing software maintenance for third party software solutions totalled approximately RM1.15 million representing 7.69% of our total revenue. We also provided other IT products and services such as training and IT hardware to our customers. Our Group’s revenue from the provision of other IT products and services totalled approximately RMO.01 million for the FYE 31 December 2010, representing 0.08% of our total revenue. For the 4-month FPE 30 April 2011, the prOVIsion of software solutions remained our most important business activity, earning revenue of approximately RM4.71 million, accounting for 84,80% of our total revenue. Our revenue from proprietary and customised software solutions totalled approximately RM4.50 million and accounted for 81.07% of our total revenue, while revenue from third party software solutions totalled approximately RMO.21 million and accounted for 3,73% of our total revenue. 48 7. OUR BUSINESS (Cont’d) For the 4-month FPE 30 April 2011, our Group’s revenue from the provIsion of software maintenance services totalled approximately RMO.81 million, accounting for 14.64% of our total revenue. Revenue from providing software maintenance for proprietary and customised software solutions totalled approximately RMO.55 million, accounting for g.90% of our total revenue. Our Group’s revenue from providing software maintenance for third party software solutions totalled approximately RMO.26 million, representing 4.74% of our total revenue. Our Group’s revenue from the provision of other IT products and services totalled approximately RMO.03 million for the 4-month FPE 30 April 2011 , accounting for 0.56% of our total revenue. 7.4.1 Business activities overview Our business activities are as follows:
other IT ProductsThirdParly Softwere end Services Software Solutions Maintenance Enterprise Resource Planning  Manufacturing Ex ecution System  Advanced Planning .nd Scheduling  Equipment Automation
Our business is focused on the provision of a range of manufacturing software solutions. Although our software solution may be customised for use in most manufacturing operations, our focus is currently on the semiccnductor industry. Most of the manufacturing software solutions that we provide are proprietary or customised solutions, while a small proportion are third party solutions. We support our customers by providing after-sales software maintenance services. We can design and implement a complete integrated manufacturing software solution package for our customers using our proprietary and customised solutions, as well as third party solutions. We also supply our customers with other IT products and services that are related to our manufacturing software solutions. 7. OUR BUSINESS (Cont’d)
7.4.2 Overview of our integrated manufacturing software solutions Our integrated manufacturing software solutions package includes a wide range of manufacturing software solutions and functions. We develop complete manufacturing software solution packages that are bUilt out of our proprietary and customised manufacturing software solution modules, as well as third party modules. Our integrated manufacturing software solution package is illustrated in the folloWing diagram:
In general, our manufacturing software solution packages are designed to achieve one or more of the following objectives: (a)  Increase customer improvement;  satisfaction  through  product  and/or  process  quality  (b)  Increase the operational efficiency of equipment and other prod uction resources;  (c)  Eliminate or minimise human-related process errors; and  (d)  Support total supply chain management.
Our integrated manUfacturing software solution package creates a complete platform to automate the data flow from a manufacturer’s factory floor to its management, and enables critical business decisions to flow down immediately from the management to the factory floor. At the EA system layer, manufacturing process parameters are controlled, monitored and acquired. The EA system layer is focused on the operational or workstation level to ensure that the correct manufacturing process parameters and recipes are being used, and that critical process parameters are within the process specifications. 50 7. OUR BUSINESS (Cont’d) The specified data that is acquired by the EA system layer is constantly exchanged with the MES layer, which is focused on tracking the entire manufacturing process to ensure the correct routing, equipment, raw materials and other inputs are being used or loaded into the production line. WOO<. order, output, defects and other critical information from the MES layer are constantiy fed back to the ERP system to update the total inventory of the finished goods store, as well as to track the usage of key raw materials. Based on this information, the ERP will trigger the necessary finance and billing functions to bill the manufacturer’s customers, and order raw materials from suppliers. The APS system receives forecasts and confirmed orders from the ERP layer and factory floor information from the MES layer to generate production schedules that optimise the factory floor’s resource utilisation for optimal efficiency, or to fulfil targeted objectives.
7.4.3 Proprietary and customised solutions We have developed a range of proprietary and customised manufacturing software solutions that we supply to our customers. Our first customised manufacturing software solution was an APS solution, which we marketed under the name, iPASS. We completed our development of iPASS in 2005 and launched it with Unisem (M) Berhad being our first customer. As our experience in designing and implementing manufacturing software solutions and in-house software development capability grew, we began to internally develop our own proprietary manufacturing software solutions from scratch. We typically customise and configure our proprietary manUfacturing software solutions to meet each customer’s individual specifications and reqUirements. We started to develop our first proprietary manufacturing software solution in 2004. This was a MES solution, which we eventually marketed under the name, OSTrack. OSTrack was commercialised in 2006 and our first customer for this product was Denso (Malaysia) Sdn Bhd. We currently offer our customers the following types of proprietary and customised manufacturing software solutions: Product names  Descrlptlon  Enterprise Resource Planning (ERP)  iDynamics  Our customised ERP module  Manufacturing Execution System (MES)  OSTrack  Our proprietary MES solution  iMES  Our customised MES module  Advanced Planning and Scheduling (APS)  iPASS  Our customised APS solution  CAPS Assembly  Our proprietary APS solution  Equipment Automation (EA)  iSPC  Our proprietary Statistical Process Control solution
7. OUR BUSINESS (Cont’d) Product names  Description  iRMS  Our proprietary Recipe Management System solution  iVMS  Our proprietary Visual Management System solution
Proprietary and customised manufacturing software solutions now comprise the bulk of software solutions that we deploy for our customers. We have a team of in-house consultants to design and implement our proprietary and customised manufacturing software solutions for our customers.
7.4.4 Enterprise Resource Planning solutions In general, an ERP solution is an IT-based platform that is designed to electronically capture, store, manage and process information. ERP solutions are an important tool for manufacturers and other complex organisations whose daily operations are driven by large amounts of information. Traditional information capturing, storage and processing methods that are based on hardcopy documents can no longer keep up with modern organisational and manufacturing requirements. The ERP solutions that we develop are IT-based systems that are used to manage the internai and external resources of an organisation. Our ERP solutions are designed to operate in real-time, and integrate and consolidate all of the business functions of the organisation into a uniform, organisation-wide environment. Our ERP solutions are built on a centralised database and utilise a common computing platform environment. They are designed to allow different divisions of an organisation to share information and communicate with each other. ERP soiutions are also used to manage the organisation’s connections with external parties such as suppliers and customers. We have an ERP platform that we customise and configure for individ ual clients to meet their specific particular requirements and specifications. We have developed iDynamics, which is an ERP module built on top of the Microsoft Dynamics® AX ERP suite. iDynamics has been specifically developed to suit the needs of companies engaged as sub-contractors for integrated circuit packaging, which is a process that involves the assembly and testing of integrated circuits. iDynamics provides customised solutions specifically used to manage and handle real-time integration of the MES shop floor activities to update the relevant sales orders for the subsequent outbound processes at the ERP system level. The integrated nature of the system promotes accuracy and precise invoicing against received customer purchase orders, while catering for complex billing scenarios. Our ERP solutions can generate the information that is used by our MES to prepare manufacturing schedules. Most of the ERP solutions that we currently provide are bundled and integrated with our MES solutions. We plan to diversify our ERP solutions into other sectors, such as the process manufacturing industries, discrete manufacturing industries, and the plantation industry. 7. OUR BUSINESS (Cont’d)
7.4.5 Manufacturing Execution System solutions In general, MES solutions are designed to manage and monitor work-in progress on the factory floor. Plant managers and production personnel use MES to support collaborative manufacturing strategies that are designed to integrate disparate data streams from a company’s supply chain, factory floor, and ERP system. Our MES solutions help to improve asset productivity, reduce order-to-ship times, and minimise and reduce costly rework as well as help manufacturers to improve cycle-time, and reduce total time to produce an order. Our MES solutions are designed to prOVide manufacturers with a comprehensive set of flexib[e MES solution features to model their factory floor environment into the tracking engine. This will enable the manufacturer to track and trace every single event that happens on the factory floor. Our MES solutions have forward and backward product traceability function, which provides manufacturer with the ability to handle complicated product genealogy tracking issues. Our MES solutions are designed to be flexib[e and extendable, which enables it to be easily applied across various discrete manufacturing industries, such as the electronics manUfacturing, automotive manufacturing, and precision manufactUring industries. The MES solutions that we have developed are marketed under the OSTrack and iMES prOduct names. OSTrack, which is proprietary to our Group, is aMES toolbox that is designed to provide customers with a comprehensive set of flexib[e MES tools to model their factory floor environment into their [T systems. With OSTrack, customers can further control, track, trace and monitor their factory floor operations from the IT systems. The extendibility and flexibi[ity of OSTrack’s model building features enable the solution to be applied across various manufacturing industries, such as the electronics, automotive, precision die­casting and other discrete manufacturing industries. OSTrack is a web-based solution that is built to be compatible with commonly used software technology, and is designed to be user-friendly and easy to install and maintain. iMES is a specialised module that is developed to solve the complex tracking requirement matrix used in integrated circuit packaging. iMES is a customised modUle that we have developed around Miracom MESplus, a type of MES software provided by Miracom Inc, our partner and major supplier. Our iMES solution provides comprehensive features and tracking control for integrated circuit packaging sub-contractors. With some customisation, iMES can be adapted to meet a customer’s requirement matrix, such as package and device combination coupled with various tracking aspects such as routing control, process setup, critical materials consumption, label printing and residual management The product traceability function of our MES solutions enables our customers and their clients to keep track of a partiCUlar item after it has [eft the factory. Should an item be found to be defective, the customer can identify the batch from which it is made, so that the other items in the same batch can be recalled or inspected. Product traceability is an important feature in semiconductor manufactUring, and is also applicab[e to other manufacturing activities such as food processing and pharmaceutical manufacturing. We provide our customers with secure Intemet-enab[ed MES solutions that ailow authorised users to access, manage and make use of data stored on an organisation’s centralised MES database from any location, provided the user has Internet access. 53
7. OUR BUSINESS (Cont’d) 7.4.6 Advanced Planning and Scheduling solutions In general, APS solutions model a manufacturer’s production using its capacity profile, taking into consideration material availability and capacity availability constraints to perform the desired scheduling tasks. It has the capability to model manufacturing environments while integrating planning and scheduling modules in a single platform to ensure that factory floor resources are working on the correct customer orders at the right time. Our customised APS solutions are marketed under the iPASS product name, We currently market iPASS to semiconductor manufacturers. iPASS enables our customers to build a virtual model of their production floor while taking into account production constraints such as raw material availability and production capacity constraints to perform the desired planning and scheduling tasks. Our iPASS has the capability to model both single-stage and multiple-stage production environments while integrating the planning and scheduling modules in a single platform. This ensures that the factory floor resources are constantly used effectively to cater to the optimum mix of customer orders, iPASS consists of the following four main modules: (a) Capacity and Resource Planning (CRP), a mid-to long-term production resources analytical planning tool that will generate resources usage profiles of manufacturers’ forecast orders;
(b) Lots Issuance Plan (LIP), which helps production control planners in releasing the right mix of products into the production line, on a daily or shift basis after considering the daily expected output, work-in-progress level, bottleneck capacities, critical material status, etc.;
(c) Workcenter Lots Sequencing (WLS), which generates detailed sequencing of lots with the exact start and end times for all workcenters; and
(d) Dynamic Operation Scheduling (DOS), which allows for resequencing of lots at individual workcenters or operations level.

The CRP and LIP modules are designed for planning purposes, while the WLS and DOS modules are for detailed scheduling. We have recently completed the development of an additional APS solution, to be marketed under the product name, CAPS Assembly. It is a headquarters-level “single installation, multiple sites” solution that is designed to enable the assembly operations of a back-end semiconductor manufacturer to centrally manage its capacity planning process based on relevant information such as forecasts, product attributes, machine and tooling inventory and capability, resource processing rate and utilisation across all of its manufacturing facilities regardless of the facilities’ physical location. It centralises capacity planning and standardises capacity methodologies to generate accurate, reliable and realistic planning resulting in shorter time planning calculation cycle from days to hours, and faster response to customers’ demand change. As part of our future plans, we plan to enhance our suite of APS solutions by developing a more advanced CAPS solution, namely Test CAPS, Test CAPS is similar to CAPS Assembly but it is applied to the testing process of a back-end semiconductor manufacturer, Please refer to Section 7.19.1 (a) of this Prospectus for further information on Test CAPS. 54

7. OUR BUSINESS (Cont’d) 7.4.7 Equipment Automation solutions Our proprietary EA solutions involve integrating the range of manufacturing and inspection equipment that is installed in a particular production line to enable production data to be accurately captured in real-time. This enables manufacturers that implement complex production operations to capture and disseminate information generated on the factory floor to other enterprise applications, and across all nodes of the supply chain. Our EA solutions are flexibly designed to enable quick response to various customer requirements by enabling automation, resource management and quality analysis within the manufacturing environment. We offer the following range of customer-oriented EA solutions: • Statistical Process Controi (SPC);
• Overall Equipment Effectiveness (OEE);
• Recipe Management System (RMS);
• Equipment Integration (EI), to facilitate data collection for analysis purpose, data exchange for decision making and process control, as well as status monitoring for information and preventive purposes;
• Machine Management System (MMS), a web-based machine maintenance system that keeps track of, amongst others, machine running status such as idle and production. it also delivers various kind of notification such as cold stock and low stock e-mail alert notifications;
• Strip Map Server (SMS), which keeps track of strip map information in a database system and facilitates saving, retrieving, updating and viewing in graphical and other reporting format; and
• Quality Control Solution, a set of software helping manufacturers to inspect the incoming parts supplied by vendors. The inspections could include dimensions checking, coiours, outer box labels orientation, etc.

We have developed the following types of EA solutions: • iSPC, a Statistical Process Control (SPC) solution;
• iRMS, a Recipe Management System (RMS) solution; and
• iVMS, a Visual Management System (VMS) solution.

Statistical Process Control solutions In general, a SPC solution is designed to apply statistical methods to monitor and control a manUfacturing operation to ensure that it operates at its full potential to produce products that conform to specifications. Our iSPC solutions are designed to provide: (a) Real-time in-process quality monitoring, control and feedback;
(b) Comprehensive data analysis for process and product improvement; and
(c) Automatically and accurately collect data from manufacturing and inspection equipment.

7. OUR BUSINESS (Cont’d) iSPC can collect and integrate data collected by a variety of measuring devices, automated data collection machines, and laboratory equipment With iSPC, our customers can collect useful data from diverse manufacturing plants located in any number of physical locations. Critical data can be used to generate SPC charts. SPC charts and information on significant events such as control rule violations can be automatically disseminated to all relevant parties. Our isPC solutions are flexible and can be customised for various EA applications, as they are both product and component based. Recipe Management System solutions Our proprietary iRMS solutions are designed to manage the full range of recipes used in different types of equipment found throughout a manufacturing plant iRMS is a cross­platform, open architecture, multi-threaded recipe content management system that is designed to prevent incorrect recipe operation in the back-end and front-end operations of a semiconductor foundry. Incorrectly applied recipe in back-end and front-end equipment can result in costly mistakes in semiconductor production. Our iRMS solutions are designed to operate in a rapidly changing manufacturing environment, where its high availability allows customers to deploy new recipe checking equipment on an ad hoc basis with no downtime. iRMS enables our customers to flexibly handle mUltiple recipe formats, including formatted and unformatted text, encrypted text, and plain text, and convert the recipes into open standard XML (Extensible Markup Language) format for further validation. Our iRMS solutions possess the following features: • Recipe Upload;
• Recipe Download;
• Recipe Content Checking;
• Recipe Versioning;
• Recipe Checksum Checking;
• Recipe Editor;
• Recipe Approval;
• Error and Mismatch Reporting;
• Critical Level Control; and
• Supports formatted and unformatted recipe.

Visual Management System solutions Our proprietary iVMS solutions represent server-based software solutions that compute Overall Equipment Effectiveness (OEE) to help improve the performance of people, processes and equipment iVMS is an Internet-enabled system that allows a manufacturer to incorporate OEE indices into their plant monitoring dashboard. Our iVMS solutions are designed to convert complex production data into simple metrics such as availability, performance and quality. By using iVMS, our customers can gauge the efficiency of the equipment in use. iVMS automatically collects data from the manufacturing plant’s machinery, and reports real-time performance and performance to users. As iVMS is an Internet-enabled solution, users are able to monitor the machinery and access data from any location that has Internet access. 56 7. OUR BUSINESS (Cont’d) Some of the features and benefits that our customers can obtain from iVMS include: (a) Real time production monitoring, controi and feedback;
(b) Calculate equipment OEE by measuring the efficiency, effectiveness and productivity;
(c) Automated aiert triggers distributed by e-maii and Short Message Service (SMS) for monitoring downtime;
(d) Historical data of equipment performance; and
(e) Scheduling the next plant maintenance.

7.4.8 Third party solutions In addition to providing our proprietary and customised solutions, we also currently supply our customers with third party manufacturing software solutions. We have secured distributorships for manufacturing software solutions from a number of software owners: (a) We are the master distributor for WinSPC for the Asia Pacific region;
(b) We are a partner of Miracom Inc for the distribution of MESp[us in the South East Asia region;
(c) We are a partner in Microsoft Certified Partnership for the distribution of Microsoft Dynamics® AX in Malaysia; and
(d) We are a partner of Siemens Product Lifecycle Management Software (SG) Pte Ltd for the distribution of Test Expert and Unicam FX in Singapore, Malaysia, Indonesia, the Phiiippines and Vietnam.

We normally provide value-added services as part of the third party manufacturing software solutions package that we provide to our customers. These value-added services include: (a) Consulting services;
(b) Systems design;
(c) Systems configuration;
(d) Hardware, software and network installation; and
(e) Commissioning.

7.4.9 Software systems maintenance We support our customers by providing after-sales software systems maintenance, which also includes system upgrading services. We provide systems maintenance and upgrading services for both our proprietary and customised solutions, and for third party solutions. 57 7. OUR BUSINESS (Cont’d) Our systems maintenance services are carried out so as to ensure that the manufacturing software solutions perform efficiently with minimum downtime. We also correct any faults that may arise after we have installed our manufacturing software solutions at our customer’s premises. Our customers also engage us to upgrade their manufacturing software solutions. Our systems uP9radin9 services include: (a) Developing new modules to perform new functions;
(b) Improving existing modules to enhance their functionality; and
(c) Upgrading systems or various modules to later versions.

7.4.10 Other IT products and services We currently also supply some other IT products and services to our customers that are related to our manufacturin9 software solutions. We train our customers on how to use and maintain our proprietary and customised solutions, and the third party solutions that we provide. We also sell IT hardware and industrial measuring devices, such as servers and data communication ports, to our customers. 7.5 Our Principal Markets Our revenue segmented by geographic markets is as follows: Country  FYE 31 December 2010  FPE 30 April 2011  (RM’OOO)  (%)  (RM’OOO)  (%)  Malaysia Overseas markets China Indonesia Japan Philippines Singapore Taiwan Thailand United Kingdom United Slates of America  7,736 7,214 1,751 1,744 12 754 2,501 64 76 95 217  51.75 48.25 11.71 11.67 0.08 5.03 16.73 0.43 0.51 0.64 1.45  4,751 803 300 36 –449 -7 -11  85.54 14.46 5.40 0.65 0.00 0.00 8.08 0.00 0.13 0.00 0.20  Total  14,950  100.00  5,554  100.00
During the FYE 31 December 2010, Ma[aysia was our largest market accounting for approximately 51.75% of our revenue, while the remainder were derived from nine overseas countries. Our Group’s largest overseas market for the FYE 31 December 2010 was Singapore, which accounted for approximately 16.73% of our total revenue for the FYE 31 December 2010. China was our second largest overseas market, accounting for approximately 11.71% of our total revenue. Seven other overseas markets accounted for the remaining 19.81% of our total revenue for the FYE 31 December 2010. Malaysia remained our largest market for the 4-month FPE 30 April 2011, accounting for approximately 85.54% of our revenue. 58 7. OUR BUSINESS (Cont’d) For the 4-month FPE 30 April 2011, Singapore was our largest overseas market, accounting for 8.08% our Group’s total revenue. China and Indonesia were our second and third largest overseas markets, accounting for 5.40% and 0.65% of our total revenue respectively. Other overseas markets accounted for the remaining of our total revenue during the 4-month FPE 30 April 2011. 7.6 Seasonality of Our Business We do not experience any seasonality in our business operations.
7.7 Our Technology 7.7.1 Relevant technologies The various types of manufacturing software solutions that we develop are examples of application software.
7.7.2 Application software Application software refers to software that is designed to perform one or more productive tasks for users. Computer programmers have developed many types of application software. Some examples include, among many others, manufacturing software solutions, accounting software, word processors, spreadsheets, engineering software, graphics software, and media players. Application software can be programmed to manipulate information in the form of tex1, numbers, graphics, still images, moving images, sound or some combination of these elements, depending on the task for which it is designed.
7.7.3 Manufacturing software solutions In general, manufacturing software solutions refer to types of application software that are designed to help a manufacturer to collect, store, organise, process and present data so as to manage and improve their manufacturing operations. We have developed the following types of manufacturing software solutions: (a) ERP solutions;
(b) MES solutions;
(c) APS solutions; and
(d) EA solutions.

Enterprise Resource Planning solutions In general, ERP solutions are application software systems that allow manufacturers and other complex organisations to capture, store, and process large amounts of digital information. Traditional paper-based information capturing, storage and processing methods can no longer keep up with modern organisational requirements. 7. OUR BUSINESS (Cont’d) Some of the modules that are commonly built into ERP solutions include: (a) Production planning;
(b) Supply chain management;
(c) Customer Relationship Management (CRM);
(d) Warehouse managemen~ and
(e) Transactional backbone.

Manufacturing Execution System solutions In general, MES solutions are used to manage manufacturing activities in a factory. MES solutions commonly link an organisation’s ERP solutions with their factory floor control systems. Typically, an MES solution can track the progress of a product through the manufacturing process, from the point where an order is released to create that product up to the point where that product is delivered as a finished product. Manufacturers and their clients may also make use of MES solutions to keep track of a particular item after it has left the factory so that should any item be found to be defective, other items in the same batch can be traced and either recalled or inspected. Some of the tasks that can be performed by MES solutions include: • Product and material tracing;
• Capturing in-process production data;
• Tracking work orders;
• Automated recipe management;
• Scheduling and priority management;
• Event or exception management;
• Monitoring the shop floor; and
• Collecting and monitoring KPI.

Advanced Planning and Scheduling solutions In general, APS solutions are used on complex manufacturing environments where the optimum resource allocation problems are unknown, complex and have to be discovered by an iterative trial and error process. APS solutions are used to allocate resources such as raw materials, human resources and production capacity that are available to a manufacturer in an optimal manner. APS solutions can help a manufacturer to manage competing priorities and resource constraints by balancing a range of trade-ofts to achieve a certain goal. Some of the tasks that can be performed by APS solutions include: • planning capacity;
• scheduling daily production activities; and
• scheduling dynamic operations.

7. OUR BUSINESS (Cont’d) Equipment Automation solutions In general, EA solutions are used to enable a range of integrated equipment to capture production line data in real-time. The data can be used to monitor and control the production line. and analysed to improve the production process. The integration of machines and equipment is the basis for a fully automated production process. The objective is to make machine data available plant-wide and to give production control systems, such as MES and ERP systems, controlling access to machines and equipment The data can later be used to monitor and control the production line, and analysed to improve the production process. 7.8 Our Business Process The process flow for software development is depicted in the following diagram: -+ r-+ r–. Project Confirmation

Business Analysis ..
Requirement Gathering
..
ConUnuous Product Management & Support

-+ System Anaiysis ” -+ System Architecture ”
Detailed Design-+ ”
-+ Coding ”
TesUng-+I ”
Rollout-+ ~ ~ ~ —
~ Continuous Product Testing

7. OUR BUSINESS (Cont’d) Upon the confinnation of the project from customers, the development team prepares to start the development of the software. A project plan is formulated to define the duraUon for system developmen~ and to carry out a detailed cost-benefil analysis. Software development primarily involves programming as well as integrating all processes, input and output requirements, and system and network security. The initial process begins with the analysis of the customers’ business to produce a model of the business. The business model is analysed and an improved set of system requirements that require development tor the new software package is recommended. These requirements are based on customer input and feedback and also from an assessment of the market’s needs including the software developer’s intemal requirements. Other requirements include information on developing the business process and business data model as well as defining the structure of the business. The next process of requirements gathering is based around developing a use case, which is a description of how end-users will use the software. These inciude a series of tasks that users will accomplish using the software, and the responses of the software to user actions. The system analysis process is the next stage of the software development where a 3­dimensional model of the performance of the system is produced. System analysis involves developing specifications of what the system needs to do to meet the requirements of end users. In this design phase of software development, such specifications are converted to various charts that define the data required and the processes to be carried out on the data so that it can be expressed as ·Instructions in the computer software program. System architecture or system structure is the conceptual structure and functional behaviour of the software in the computer system. This involves developing architectural layers, component structure, SUbsystems and interfaces for each component and producing a systems model, importing software codes and developing pattems for the new software. The detailed design stage is an analysis and re-work of use case implementations into interactions between subsystem interfaces to ensure all functional requirements and specifications have been captured in the software design. The coding process is run in parallel with the testing process at this stage of the software development Once the development of a use case is completed, the software is run and tested under various user inputs and scenarios. The results are documented and any bugs and systems weaknesses are fixed before the software is re-run and re-tested. Once the system is relaUvely error-free, beta testing is implemented to test for system robustness under usage, and to obtain feedback on the user friendliness of the system. Once the software passes the beta tes~ the roll out process is performed at the end of the project The new software product is compiled and installed and a user acceptance test is conducted on all its functions. A user-training program is also developed for the customer and its user staff upon the acceptance of the new software. Continuous and on-going processes such as software testing, project management and project support are active throughout the development of the software. The project management process is an on-going process that ensures the entire project’s plan, risks, milestones and deliverables are being managed appropriately. A project manager will be assigned to oversee the entire prOduct development cycle and to report the progress to the management regularly. 62 7. OUR BUSINESS (Cont’d) The project support process is a range of tasks required to support the software development project. Tasks are assigned to individuals in the project team. Tasks such as process configuration, development tool management and establishment of version controls are performed at the start of each process. 7.9 Quality Management Procedures We implement continuous testing as an integral part of our software development process flow. This is carried out to manage the software development process, and to maintain the consistency of the software that we develop. The SUb-steps that are involved with our testing process are depicted in the following diagram: DevelopDevelop Test Develop Perform Perform.-. f-o f–+I->Strategies Component Tests ComponentTests System Tests System Tests Our test developers will develop the overall test strategy, component tests and system tests. Component and system tests should be performed by a representative from the user under conditions that the user would typically experience. This procedure has the advantage of generating feedback from the software development results to the users in an incremental fashion. 7.10 Our Marketing Activities 7.10.1 Marketing strategies and activities We employ the following marketing strategies to sustain and expand our business: (a) Position our Group as a developer and provider of manUfactUring software solutions aimed at increasing our customers’ operational efficiency;
(b) Continue to improve the qualtly and reliability of our manufacturing software solutions to increase and maintain customer satisfaction;
(c) Ensure that our manufacturing software solutions are implemented in a timely manner with minimal disruption to our customer’s day-to-day operations;
(d) Provide end-to-end solutions by supporting our customers with software maintenance and upgrading services;
(e) Continue to enhance our existing range of customised and proprietary manufactUring software solutions to increase benefits to our customers;
(f) Canry out research and development to develop new manufacturing software solutions and functionalities and address new customer reqUirements to stay ahead of the compettlion; and
(g) Promote our self-branded customised and proprietary manufacturing software solutions to build brand equity to enlarge our customer base.

As at LPD, we have a total of 5 sales and marketing personnel. 7. OUR BUSINESS (Cont’d) 7.10.2 Distribution channel strategy We adopt a direct and indirect distribution channel strategy to market and distribute our solutions, as depicted in the figure below:
Semiconductor Industry  Electronics Industry  Other Manufacturing Industries  Service Industries
Local Resellers Overseas Resellers We rely primarily on the direct distribution channel strategy as our technical staff and sales personnel are best equipped to sell the commercial and technical benefits of our solutions to potentiai customers. In addition, many of our solutions require customisation to meet the unique needs of individual customers, which requires us to interact closely with our customers. We use the indirect distribution channei strategy to market our solutions to customers in Malaysia and in some overseas markets, particularly in countries where we do not have a presence. We engage resellers in overseas countries to identify potential customers and market our solutions in their countries. By using resellers, we can tap their understanding of their markets and contacts to cover potential customers in new countries without having to make significant investments in personnel and other costs. We also have customers in overseas markets where we have not engaged any local reseller. These foreign customers had approached us, possibiy iocating us via the worldwide web or through word-of-mouth. The revenue contribution by our direct and indirect distribution channels is as follows: FYE 31 December 2010  FPE 30 April 2011  (RM’ooO)  (‘!o)  (RM’OOO)  (‘!o)  Direct -semiconductor industry -electronics industry -other manufacturing industries -service industries Indirect -local resellers -overseas resellers  8,531 1,787 1,158 2,484 883 107  57.06 11.95 7.75 16.62 5.90 0.72  3,160 427 629 1.338 — 56.90 7.69 11.32 24.09 0.00 0.00  Total  14,950  100.00  5,554  100.00
7. OUR BUSINESS (Cont’d) 7.11 Approvals, Major Licences and Permits As at LPD, the approvals, major licences and permits obtained by our Group as well as our status of compliance are set out as follows:

Conditions imposed The MSC status company agrees to: (i) complete business registration of the proposed entity as a locally incorporated company under the Act within one (1) month from the date of MDeC’s letter dated 26 October 2005, commence operations of the proposed entity within six (6) months from the date of the letter, and undertake such activities specified in the MSC status company’s business plan (“Business Plan’) as approved by MDeC below (“MSC-Qualifying Activities”) within six (6) months from the date of the letter or by such date(s) as may be specified in the Business Plan (which date(s) may be extended or modified with the written consent of MDeC) and thereafter continue with such business and . activities unless otherwise approved by MDeC. The MSC-Qualifying Activities are as follows: (a) research, development and commercialisation of iMSC iPASS solutions and related components.
(b) provision of training, technical support and maintenance services related to IMSB

iPASS solutions and related components. MDeC’s letter dated 30 October 2008 acknowledges that it has been undertaking the aforesaid activities and in addition to the activities above, it shall additionally perfonn the following activities: • research, development and commercialisation of manufacturing based planning systems include the following software: -iDynamics -iMES -iSPC -iVMS -iRMS
• provision of implementation. maintenance and technical services related to the above products. Any changes proposed to above MSC-Qualifying Activities as detailed in the Business Plan must receive the prior written consent of MDeC; Status of compliance  Complied
65
7. OUR BUSINESS (Cant’d) Issuedlo  Authority  Type of approval/ licence/permit  Conditions imposed (ii) locate the implementation and operation of the MSC-Qualifying Activities in a Designated Cybercity with an office space requirement of 800 square feet within six (6) months from the date of the letter, and will seek MDeC’s prior written approval in the event of any changes in the location or address of iMSC; (iii) ensure that at all times at least 15% of the total number of employees (excluding support staff) of the MSC status company shall be “knowledge workers” (as defined by MDeC). “Knowledge workers” shall be recruited, employed and/or appointed solely for the purpose of undertaking the MSC-Qualifying Activities; The recruitment, employment and/or appointment of foreign “knowledge workers· (if any) shall be the sole responsibility of the MSC status company and MDeC shall not be held responsible for any liability arising from such recruitment, employment and/or appointment; (iv) submit to MDeC a copy of the MSC status company’s Annual Report and Audited Statements in parallel with submission to the Companies Commission of Malaysia; (v) ensure that all information and/or documents fumished by the MSC status company to MDeC or any other authority or agency do not contain any false, untrue or inaccurate statements or omit to state any facts, the omission of which would make any statements made therein in the light of the circumslances under which they are made, misleading; (vi) inform and obtain the prior approval of MDeC for any proposed change in the name of the MSC status company; (vii) inform MDeC of any change in the equity structure or shareholding structure of the MSC status company, or such other changes that may affect the direction or operation of the MSC status company. MDeC must be informed of any change before steps are taken to effect such change; (viii) comply with all such statutory, regulatory and/or licensing requirements as may be applicable; and (ix) as per MDeC’s letter dated 30 October 2008, to continuously comply with the MSC’s environmental gUidelines as determined by MDeC from time to time. The MSC status granted to the MSC status company shall not be transferable or assignable in any way whatsoever without the prior written consent of MDeC.  Status of compliance
66
7. OUR BUSINESS (Cant’d) Issued to  Authority  Type of approval/ licence/permit  iMSC  MITI  Pioneer Status under Section 4A of the Promotion of Investments Act, 1986 from 15 December 2005 to 14 December 2010 (2)  iSystems  Ministry of Finance, Malaysia  For the provision of software product and services to the Malaysian Government from 17 October 2010 to 16 October 2013  OS Solutions  MDeC  Multimedia Super Corridor Status
Conditions imposed Pioneer status issued pursuant to the Promotion of Investments Act, 1986 certifying that Mighty Ingenious Sdn Bhd (now known as iMSC) is a company carTYing out pioneer status activities as follows: (i) Research, development and commercialisation of the Mighty Ingenious iPASS solutions and related components; and
(ii) Provision of training, technical support and maintenance services related to the Mighty Ingenious iPASS solutions and related components.

Registration will be suspended! cancelled if iSystems acts as follows: (i) if iSystemsl its directors! any of its management has committed a crime and has been found guilty by a court in Malaysia or abroad, or have a civil liability;
(ii) if iSystems withdraws its tender before the same is considered/ if iSystems rejects an offer made to iSystems;

(iii) if iSystems fails to fulfil its obligation under the contracts signed with the Government; (iv) if iSystems amends the Certificate of Registration of Company for the purpose of cheating or other purposes;
(v) if iSystems permits the Certificate of Registration of Company to be misused by an individual/ other company;
(vi) if iSystems co-operates with other companies in fixing the prices when entering into

Government procurement! sub-contracts without the Government agency involved.  prior  consent from the  The (i)  MSC status company agrees to: complete business registration  of the  proposed entity  as  a  locally incorporated
company under the Act within one (1) month from the date of MDeC’s letter dated 29 June 2006, commence operations of the proposed entity within six (6) months from the date of the letter, and undertake such activities specified in the MSC status company’s business plan (“Business Plan”) as approved by MDeC below (“MSC-Qualifying Activities”) within six (6) months from the date of the letter or by such date(s) as may be specified in the Business Plan (which date(s) may be extended or modified with the written consent of MDeC) and thereafter continue with such business and activities unless otherwise approved by MDeC. The MSC-Qualifying Activities are as follows: (a) the research, development and commercialization of Version 2.0 onwards of the OSTrack MES software solution for manufacturers. 67 Status of compliance  Complied  Complied  Complied
7. OUR BUSINESS (Cont’d) Issued to  Authority  Type of approvall licence/permit  Conditions imposed (b) technical support. maintenance and implementation services related to the solution mentioned above. (ii) any changes proposed to above MSC-Qualifying Activities as detailed in the Business Plan must receive the prior written consent of MDeC; (iii) locate the implementation and operation of the MSC-Qualifying Activities in a Designated Cybercity with an office space requirement of 1,000 square feet within six (6) months from the date of the letter, and will seek MDeC’s prior written approval in the event of any changes in the location or address of as Solutions; (iv) ensure that at all times at least 15% of the total number of employees (excluding support staff) of the MSC status company shall be “knowledge workers” (as defined by MDeC). “Knowledge workers” shall be recruited, employed and/or appointed solely for the purpose of undertaking the MSC-Qualifying Activities; The recruitment, employment and/or appointment of foreign “knowledge workers” (if any) shall be the sole responsibility of the MSC status company and MDeC shall not be held responsible for any liability arising from such recruitment. empioyment and/or appointment; (v) ensure that any products produced pursuant to the MSC-Qualifying Activities are original, and that no part or portion of such Product is an infringement or violation of any intellectual property or any proprietary rights of any third party, or constitutes a misappropriation of know-how belonging to any third party; (vi) submit to MDeC a copy of the MSC status company’s Annual Report and Audited Statements in parallel with submission to the Companies Commission of Malaysia; (vii) ensure that all information and/or documents furnished by the MSC status company to MDeC or any other authority or agency do not contain any false, untrue or inaccurate statements or omit to state any facts, the omission of which would make any statements made therein in the light of the circumstances under which they are made, misleading; (viii) inform and obtain the prior approval of MDeC for any proposed change in the name of the MSC status company; (Ix) inform MDeC of any change in the equity structure or shareholding structure of the MSC status company, or such other changes that may affect the direction or operation of the MSC status company. MDeC must be informed of any change before steps are taken to effect such change; and  Status of compliance
68
7. OUR BUSINESS (Cont’d) Issued to  Authority  Type of approvall licenceJperrnit  Conditions imposed  Status of compliance  (x) comply with all such statutory, regulatory and/or licensing requirements as may be applicable, including but not limited to the Transfer Pricing Guidelines issued by the Inland Revenue Board of Malaysia on 2 July 2003, and such other amendments as may be applicable from lime to time. The MSC status granted to the MSC status company shall not be transferable or assignable in any way whatsoever without the prior written consent of MDeC.  as  MITI  Pioneer Status under  Pioneer status issued pursuant to the Promotion of Investments Act, 1986 certifying that as  Complied  Solutions  Section 4A of the Promotion of Investments Act, 1986 from 29 June 2006 to 28 June 2011 (3)  Solutions is a company carrying out pioneer status activities as follows: (i) The research, development and commercialisation of version 2.0 onwards of the OSTrack MES software solution for manufacturers; and (ii) Technical support, maintenance and implementation services related to the solution mentioned above.
Notes: (1) MDeC had on 26 Ocrobar 2005 issued a letter to iMSC granting the company MSC status and approving the MSC-Qualifying Activities. MDeC had on 30 October 2008 further issued a Jetter to approva additional activities as MSC-QuaJifying Activities.
(2) MDeC had, vide its letter dated 14 September 2011, approved the pionaer status of iMSC for another fIVe (5)-year period and iMSC is presantly pending formal notification of the approval from Min.
(3) An application has been submitted on 27June 2011 by as Solutions for the extension ofits pioneer status.

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7.12 Brand names, Patents, Trademarks, Licences, Technical Assistance Agreements, Franchises and Other Intellectual Property Rights 7.12.1 Trademarks Our Group has the following registered trademark:
Trademark  Validity  Country of  Authority/Regulatory  Trademark  no.  period  registration  gUidelines  Class  Description  iCIMENSICN  T1005724G  6 May 2010 to 6 May 2020  Singapore  Intellectual Property Office of Singapore  42 and g  Creation, development and design of computer programs and software of manufacturing solutions and processes, particularly for use in production, manufacturing and materials management, quality management and plant maintenance, sales and distribution of materials, human resources and project management, general office functions such as word processing, electronic mail and archiving; implementation, installation, analysis, testing, updating and maintenance of computer programs and software; computer software and hardware integration for manufacturing solutions, products and processes; technical consultancy and advice regarding programming, design, development, implementation and installation of computer programs and software; all included in Class 42.  Computer programs and software for use in manufacturing and materials management, management and plant maintenance; all included in Class 9.
70
7. OUR BUSINESS (Cont’d) In addition, our Group has submitted applications for the following trademarks, which are currently pending approval: Trademark  Application no.  Date submitted  Country of registration  Authority/Regulatory guidelines  Class  Description  iCIMENSICN  08004380  7 March 2008  Malaysia  Intellectual Property Corporation of Malaysia  42  Manufacturing IT solutions provider, IT services and consultancy, all included in Class 42.  iCIMENSICN  2010006073  8 April 2010  Malaysia  Intellectual Property Corporation of Maiaysia  g  Computer programs and software for use in manufacturing and materials management and plant maintenance, all included in Class g.
7.12.2 Copyrights We are the owners of the copyrights for several of our proprietary software solutions, namely OSTrack, iSPC, iRMS, iVMS and CAPS Assembly. 7.12.3 Licences Our Group has been granted the following licences: Licensor  Licensee  Date of agreement  Purpose  Miracom Inc (“Miracom”)  iSystems  Licence Agreement dated 25 July 2005  Miracom grants iSystems a non-exclusive, personal, non-transferable and intangible right to sub-license the software system (Miracom FAMate (Object Code») to Silterra Malaysia Sdn Bhd (“Silterra”) for installation and use in Silterra’s premises for Silterra’s own internal business purposes within Malaysia. This sub-licence is granted for perpetual period from the date of the agreement unless terminated earlier.  Miracom  iSystems  Licence Agreement dated 10 August 2005  Miracom grants iSystems a non-eXClusive, personal, non-transferable and intangible right to sub-license the software system ((Miracom MESpius (MES) and Highwayl0l (Enterprise Application Integration)) to Unisem (Chengdu) Co. Ltd (“Unisem Chengdu”) located in Chengdu, Sichuan, China for installation and use in Unisem Chengdu’s premises for Unisem Chengdu’s own internal business purposes within China. This sub-licence is granted for perpetual period from the date of the agreement unless terminated earlier.  Microsoft Regional Sales Corporation (“Microsoft”)  iSystems  Solution Provider Agreement dated 29 Juiy 2011  Microsoft grants non-exclusive, non-transferabie, limited license to iSystems to provide the Licensed Microsoft software, as defined in the Solution Provider Agreement, and services to customer until 31 July 2013.
71 7. OUR BUSINESS (Cant’d) Licensor  Licensee  Date of agreement  Purpose  Siemens Product  iSystems  Non-Exclusive Distributor  iSystems has been appointed as Siemens’ non-exclusive distributor to market within  Lifecycle  Agreement dated 1 May  Singapore, Malaysia, Indonesia, Philippines and Vietnam the software as defined in the  Management  2007  Non-Exclusive Distributor Agreement for a period of three (3) years from 1 July 2007 unless  Software (SG) Pte  Amended Agreement  terminated earlier. The term of the Non-Exclusive Distributor Agreement will automatically  Ltd (“Siemens”)  dated 1 September 2008 Amended Agreement dated 4 September 2008  be extended for successive one-year periods unless terminated by either party at least 60 days prior to the end of each 12 month period, commencing on 1 JUly 2007 or anniversaries thereof while the Non-Exclusive Distributor Agreement is in force.  Amended Agreement dated 22 March 2010  Hewlett-Packard (M) Sdn Bhd (“HP”)  iSystems  Reseller Agreement dated 19 October 2009  HP grants iSystems right to purchase HP’s product through distribution channel for re-sale to end-user customers in Malaysia from 19 October 2oo9 until the Reseller Agreement is terminated .  Engineering  iSystems  Teamcenter Express  ECSS appoints iSystems as a non-exclusive reseller of the software products, parts and  Computer SelVices  Reseller Program dated  selVices listed in ECSS’s then-current listing of products and prices within Malaysia for an  (S) Pte Ltd  6 November 2006  initial term of one (1) year and shall thereafter be deemed automatically renewed for  (“ECSS”)  successive additional terms of one (1) year each.  Exploit  iMSC  Technology Licensing  Exploit Technologies agrees to grant iMSC Singapore a non-exclusive, non-transferable  Technologies Pte  Singapore  Agreement dated 18  license to develop, make, manufacture, distribute and sell or develop enhancements to such  Ltd (“Exploit  May 2010  software as specified in the Technology Licensing Agreement in the field of semiconductor  Technologies”)  manufacturing and electronics manufacturing for a period of ten (10) years in Singapore, Malaysia, Philippines, Indonesia, the People’s Republic of China, Hong Kong, the Republic of Korea, Japan and Thailand.
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7. OUR BUSINESS (Cont’d) 7.13 Dependency on Contracl/ Arrangemenl/ Document Save as disclosed below, we are not highly dependent on any contract, arrangement, document or other matter: (a) our trademarks as disclosed in Section 7.12.1 of this Prospectus;
(b) our major customer, namely the Unisem Group, as mentioned in Section 5.3.2 of this Prospectus; and
(c) the major licenses signed with our major suppliers, namely Microsoft Regional Sales Corporation (“Microsoft”) and Siemens Product Lifecycle Management Software (SG) Pte Ltd (“Siemens”) as mentioned in Section 7.12.3 of this Prospectus.

7.14 Our R&D 7.14.1 R&D policies Our R&D activities are primarily related to software development. Our R&D is focused on the following areas: (a) Developing manufacturing software solutions optimised for new manufacturing­based user industries;
(b) Developing manufacturing software solutions that operate on different computing platforms;
(c) Enhancing and improving our existing range of manufacturing system solutions; and
(d) Increasing the functionality of our manufacturing system solutions. Through the R&D activities listed above, we aim to realise the following benefits:
(a) Increase revenue and profitability;
(b) Sustain and grow our business;
(c) Expand our potential customer base by developing manufacturing software solutions for new user industries;
(d) Sustain competitive advantages; and
(e) Increase our customers’ satisfaction.

We are currently carrying out R&D work on several new manufacturing software solutions: (a) Test CAPS solution, which is a further development of our existing CAPS Assembly solutions;
(b) Manufacturing software solutions for process manufacturing industries, such as the pharmaceutical, chemical and food processing industries; and
(c) Manufacturing software solutions for discrete manufacturing industries, such as the automotive, precision parts and solar industries.

7. OUR BUSINESS (Cont’d) In the near future, we expect to commence R&D work on new manufacturing software solutions, namely Test CAPS, iPASS Test LIP and iConnect as disclosed in Section 7.1 9.1 of this Prospectus. 7.14.2 R&D facilities and personnel Our R&D activities primarily involve software development work, which we carry out at our offices located at Cyberjaya and Ipoh. Our R&D equipment consists primarily of general IT hardware and software. Thus would include, among others: Hardware • servers; • storage devices; • output devices like printers;

• input devices like scanners;

Software • Linux operating system;
• Windows operating system;
• Mac OS X operating system;
• Solaris operating systems;
• C++. PERL, and PHP programming language. scripting and compilers;
• MySQL and Oracle databases;
• Web-based development tools.

As at LPD, we have 50 software engineers engaged in software development and support activities, including R&D. 7.14.3 R&D expenditure Our expenditure on R&D activities during the past three (3) financial years up to the FYE 31 December 2010 and the 4-month FPE 30 April 2011 are as follows: FYE 31 December  2008  2009  2010  E~pendit~~ RM ‘ODD  Proportion of Re7.~7ue%  E~pendl~~ RM ‘ODD  Proportion of Revenue 1%)  Expenditure -IRM ‘0001  Proportion of Revenue 1%1
R&D expendrture  593  7.72  814  6.82  1,353  9.05
FPE 30 Aoril 2011  Proportion of  E~pendit~~ RM ‘ODD  Re7.~.7ue%  R&D expenditure  361  6_50
7. OUR BUSINESS (Cont’d) 7.15 Business Interruptions There has been no material interruption to our business operations over the past 12 months. THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK 7. OUR BUSINESS (Cont’d)
7.16 Property, Plant and Equipment 7.16.1 Property iMSC is the registered owner of all the properties owned by our Group. Details of the properties owned as at LPD are set out as follows: Postal address! Title particulars  Tenurel Expiry date of lease  Built.up area (square feetl  Description! Existing use  Date of Certificate of Fitness for Occupation (“CFO”)  Major encumbrances  Net carrying amount as at 30 April 2011 (RM’OOOl  No. 13B-4, Block D2, Jalan PJU  Freehold  774  Shop office unit used as  17 July 1999  None  174  1139, Dataran Prima, 47301 Petaling  storage  Jaya, Selangor Darul Ehsan  Strata Title Geran 46494/M1­ B/4I229 No. Petak 229 Tingkat NO.4  Bangunan No. M1-B Lot No. 42410  Pekan Cempaka, Daerah Petaling,  State of Selangor  No. 5-4, Block E2, Jalan PJU 1/42A, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan Strata Title Geran 464961M1-A/4184 No, Petak 84 Tingkat NO.4 Bangunan No. M1-A Lot No. 42440 Pekan Cempaka, Daerah Petaling, State of Selangor  Freehold  1,733  Shop office unit occupied for office use  21 December 1998(1)  None  349  No. 7-4, Block E2, Jalan PJU 1142A, Dataran Prima, 47301 Petaling Jaya,  Freehold  1,733  Shop office unit occupied for office use  21 December 1998 (1)  None  340  Selangor Darul Ehsan  Strata Title Geran 46496IM1-A/4/83  No. Petak 83 Tlngkat NO.4  Bangunan No, M1-A Lot No. 42440  Pekan Cempaka, Daerah Petaling,  State of Selangor
76 7. OUR BUSINESS (Cont’d) Postal addressl Title particulars  TenureJ Expiry date of lease  BUilt-up area (square feetl  Descriptionl Existing use  Date of Certificate of Fitness for Occupation I”CFO'”  Major encumbrances  Net carrying amount as at 30 April 2011 IIRM’OOOl  No. 7-4, Block Fl, Jalan PJU 1/42, Dataran Prima, 47301 Petalin9 Jaya, Selan90r Darul Ehsan Strata Title Geran 46496/Ml­B/4/169 No. Petak 169 Tingkat No.4 Bangunan No. Ml-B Lot No. 42440 Pekan Cempaka, Daerah Petaling, State of Selangor  Freehold  774  Shop office unit rented out for a monthly rental payment of RM1,OOO  21 December 1998 (1)  None  165
Note:  (1)  The CFO only covers the groundlfirst floor units of each block explicitly and contains no specifIC mention of the upper floor units, including those owned by our Group. Based on checks with Majlis Bandaraya Petaling Jaya (formerly known as MajJis Perbandaran Petaling Jaya) (“MBPJ?, MBPJ has clarified verbally that it is their general practice to issue a general CFO for the entire block and that they do not list out each unit number on the CFO.
To the best of our Directors’ knowledge, all the properties disclosed above are not subject to any regulatory requirement or environmental issue, which may materially affect our Group’s operations and utilisation of assets. We had, on 30 June 2011, entered into a sale and purchase agreement with Sierra Peninsular Development Sdn Bhd to acquire the following property, which is only expected to be completed by 2014: Postal address! Title particulars  Tenurel Expiry date of lease  Built.up area (square feet)  Description  Major encumbrances  Acquisition price (RM’OOO)  Parcel no: A-05, Block no: A, 30 Jewels-Icon City to be constructed on the piece of leasehold land held under H.S.(M) 528, PT 245, Mukim Damansara, Daerah Petaling, Negeri Selangor  Leasehold/ 29 September 2074  14,021  Office unit  (1)  10,500
Note: (1) Pending application for loan to finance the acquismon. 77 7. OUR BUSINESS (Cont’d) Details of the rented properties of our Group as at lPD are set out as follows: Monthly  Built-up area  rental  Current tennl  Landlord  Tenant  Address  (square feet)  Description! Existing use  Dale ofCFO  payment  Expiration of lease  Cyberview Sdn Bhd  iMSC  A-1-02, Block A, 1” Floor SME Technopreneur Centre Cyberjaya, 2270 Jalan Usahawan 2, 63000  699  Office unit used as software development office  20 July 2005  RM1,748  Two (2) years ending 14 April 2012  Cyberjaya, Selangor  Ho Chew Yoke  iSystems  Block A-2-1, Prima Condominium Ascot, Jalan Raja DiHilir, 30350 lpoh, Perak  1,350  Condominium unit used as accommodation for staff  N/A (3)  RM1,4OO  One (1) year ending 31 July 2012  Chong Sau Leng  iSyslems  Block 1O-A-3, Prima Condominium Ascot, Jalan Raja DiHilir, 30350 lpoh, Perak  1,350  Condominium unit used as accommodation for staff  NlA(3)  RM1,200  Month-ta-month basis (1)  Lorraine Vellapan  iSystems  B-6-2, Kondominium Prima Ipoh, Prima Kondo, Jalan Raja DiHilir, 30350 Ipoh, Perak  1,552  Condominium unit used as accommodation for staff  N/A (3)  RM1,500  One (1) year ending 6 June 2012  Chong Ngun Kin  Lai Mee Chian I’)  846-A 1st Floor, Jalan Teratai 36117, Taman Indahpura, 81000 Kulai, Johor  1,650  Shop office unit used as sales and marketing office of iSystems  8 November 2002  RM1,650  Two (2) years ending 30 June 2012  Perak E­ OS Solutions  Suite g Level 10, Perak  765  Office unrt used as  11 June 2007  RM1,760  One (1) year ending  Organization Sdn  Techna-Trade Centre,  software development  31 January 2012  Bhd  Bandar Meru Raya, Off Jatan  offICe  Jelapang, 30020 Ipoh, Perak  Ang Hua Hua  iMSC  Blk 649, Ang Mo Kio Ave 5,  882  Condominium unit used as  NIA I’)  SGD1,900  One (1) year ending  Singapore  #13-3323, Singapore 560649  accommodation for staff  8 March 2012
78
7. OUR BUSINESS (Cont’d) Monthly  Built-up area  rental  Current lenni  Landlord  Tenant  Address  (square feet)  Description! Existing use  Date ofCFO  payment  Expiration of lease  Freedom Group  iMSC  14 Robinson Road #13-00,  N/A  Virtual office used as  N/A  SGD99  One (1) year ending  Private Limited  Singapore  Far East Finance Building,  business address of iMSC  10 November 2011  Singapore 048545  Singapore
Notes: NlA Not applicable.
(1) Although the tenancy agreement has expired on 5 June 2005, the tenancy continues on a month-to-month basis. Two (2) months prior notice is required for termination of the tenancy.
(2) The tenancy agreement was entered into by Lai Mee Chian, anemployee ofourGroup.It is our sales and marketing office in Kulai, Johor and we bear the rental costs.
(3) Unable to obtain CFO despffe checks with the respective landlords and efforts to contact the developer.
(4) Unable to obtain CFO. However, the rented property is developed by the Housing Development Board, a statutory board of the Government of Singapore.

To the best of our Directors’ knowledge, our rented properties are not subject to any regulatory requirement or environmental issue, which may materially affect our Group’s operations and utilisation of assets. II
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7. OUR BUSINESS (Cont’d) 7.16.2 Material plans to construct, expand or improve facilities As at LPD, we do not have any material plan to construct, expand or improve our facilities. 7.17 Our Major Customers The customers that accounted for 10% or more of our revenue for the past three (3) financial years up to the FYE 31 December 2010 and the 4-month FPE 30 April 2011 are set out as follows: Customer Name  FYE 31 December  2008  2009  2010  Revenue CRM’OOOl  %of Revenue (‘/01  Revenue CRM’OOOl  %of Revenue C’/ol  Revenue (RM’OOOl  % of Revenue (‘/01  Unisem (M) Berhad  3,587  48.67  3,637  30.48  4,755  31.81  PT Unisem  789  10.27  2,337  19.58  1,744  11.67  NEC Semiconductors (Malaysia) Sdn Bhd (now known as Renesas Semiconductor KL Sdn Bhd)  – 0.00  1,323  11.09  – 0.00  Unisem Chengdu Co., Ltd  872  11.35  817  6.85  1,734  11.60  Lexmark International (Philippines) Inc  795  10.34  372  3.12  685  4.58  iDimension Systems Pte Ltd (now known as Paradigm Excellence Pte Ltd) (1)  156  2.03  1,384  11.60  14  0.09  Stats Chippac Malaysia Sdn Bhd  – 0.00  – 0.00  – 0.00
Customer Name  4-month FPE 30 ADI;I 2011  Revenue IRM’OOOl  % of Revenue (‘/01  Unisem (M) Berhad  1,424  25.64  PT Unisem  36  0.65  NEC Semiconductors (Malaysia) Sdn Bhd (now known as Renesas Semiconductor KL Sdn Bhd)  87  1.57  Unisem Chengdu Co., Ltd  287  5.17  Lexmark International (Philippines) Inc  – 0.00  iDimension Systems Pte Ltd (now known as Paradigm Excellence Pte Ltd) (1)  – 0.00  Stats Chippac Malaysia Sdn Bhd  1,027  18.49
Note: (1) iDimension Systems Pte Ltd, now known as Paradigm Excellence Pte Ltd, was a related party. It has ceased to be a related party on 25 May 2010 pursuant to being disposed by Daniel Boo and Pang Laa Fung. We may be dependent on the the Unisem group of companies, which consists of Unisem (M) Berhad and its subsidiaries, namely Unisem Chengdu Co., Ltd and PT Unisem (collectiveiy known as the “Unisem Group”), by virtue of the Unisem Group’s contribution to our revenue as illustrated in the tabie above. Please refer to Section 5.3.2 of this Prospectus for details in relation to our dependence on the Unisem Group and our mitigating factor against this dependence. 7. OUR BUSINESS (Cont’d) 7.18 Our Major Suppliers Suppliers that accounted for 10% or more of our purchases for the past three (3) financial years up to the FYE 31 December 201 0 and the 4-month FPE 30 April 2011 are set out as follows: Supplier Name  FYE 31 December  2008  2009  2010  Purchases tRM’OOOl  %01 Purchases (%l  Purchases IRM’OOOI  %01 Purchases (‘/ol  p(~rchas~ls RM’OOO  %01 pu~,~~ses %  Siemens Product Lilecycle Management Software (SG) Pte Ltd Microsoft Regional Sales Corporation Datanet Quality Systems Miracom Inc Perfect Model Sdn Bhd  31 701 150 824 – 1.71 38.54 8.25 45.30 0.00  617 607 426 — 34.92 34.35 24.11 0.00 0.00  401 599 200 172 304  22.38 33.43 11.16 9.60 16.96
Supplier Name  FPE 30 April 2011  ~~rchas~lsRM’OOO  %of pur~,~~ses %  Siemens Product Lilecycle Management Software (SG) Pte Ltd Microsoft Regional Sales Corporation Datanet Quality Systems Miracom Inc Perfect Model Sdn Bhd  38 438 18 -18  7.04 80.74 3.33 0.00 3.33
Our business is somewhat dependent on our three (3) largest suppliers, Siemens Product Lifecycle Management Software (SG) Pte Ltd, Microsoft Regional Sales Corporation and Datanet Quality Systems by virtue of our considerable volume of purchases from them as illustrated in the table above. Please refer to Section 5.3.3 of this Prospectus for details in relation to our dependence on our major suppliers and our mitigating factor against this dependence. THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK 7. OUR BUSINESS (Cont’d) 7.19 Our Future Plans, Strategies and Prospects Our future plans are focused in the follOWing key areas:
7.19.1 New manufacturing software solutions (a) Test CAPS We plan to develop Test CAPS, which is a centralised system designed to facilitate automatic capacity planning, The capacity planning process is based on relevant information such as forecasts, product attributes, machine and tooling inventory and capability, resource processing rate and utilisation across all manUfacturing facilities within a company, regardless of where the facilities’ physical locations are. Test CAPS centralises capacity planning and standardises capacity methodologies to generate accurate, reliable and realistiC planning, resu~ing in shorter planning calculation cycle from days to hours and faster response to customer demand change. In addition to considering Tester and Handler inventory figures, the system also takes into account loading preferences, supported by information such as whether or not the Testers are consigned, and highest revenue generation per period of time. The availability of test card, load board and change kit will also be a differentiating factor on which Testers and Handlers the chips are going to load into. Test cards are Printed Circuit Boards (PCB) in ATE systems which can conduct different current, voltage, digital test and frequencies. load boards and test boards are the interface between the semiconductor device under test and the test head ofthe parametric tester or ATE. A load board usually consists of a test socket or a contractor that holds a semiconductor device and mounts to a PCB, which mounts to the test head of the ATE. Ideally, the load board provides an essentially transparent mechanical and electrical interface between the semiconductor device and the ATE. This allows for accurate and reliable verification of semiconductor dev’lce cirCUit integrity and performance, Change kits are used to enable equipment to make use of semiconductor devices that may be packaged differently. 82 7. OUR BUSINESS (Cont’d) We expect to begin commercialising Test CAPS by 2012. (b) iPASS Test Lots Issuance Plan (LIP) We plan to develop iPASS Test LIP, which is a multi-constraint based lot release method and system with finite capacity modelling on bottleneck quantity recognition, machine resource utiiisation plan and with respect to real-time shop floor work-in-progess (“WIP”) status. iPASS Test LIP achieves this by following previous ioading pattems and balancing line WIP in back-end packaging for test process. Information on production shop fioor status, including the inventory and WIP date, is captured before iPASS Test LIP starts the lot release. The system releases iots by firstiy prioritising them according to a multi-attribute lot prioritisatlon criteria, and then appiying the predefined mUltiple constraints to the sorted queue of iots, and finally the finite capacity is allocated to them sequentially. The released schedule serves, as the guide for the production controi to ensure the right mix of iots will be released into the shop floor. Forecasted and committed finished goods dates are generated at the planning levei for customer order commitment and Avaiiable-to-Promise (ATP) is provided for ad hoc customer enquiry. We expect to begin commerciaiising iPASS Test LIP by 2013. (c) iConnect We plan to develop iConnect, which is a cross platform EA solution that can easily integrate MES with semiconductor equipment through an open-source JMS messaging framework. The following are some of iConnect’s features: • Extensible Markup Language (XML)-based component development methodology for large and high speed protocol communication;
• Powerful and flexible built-in data collection;
• No down time required to modify tool host application;
• Graphical User Interface (GUI)-based development tool support;
• Use XML to implement business logic;
• Configurable channel support;
• Callback function development;
• Minimum coding for callback function development to connect with automation components (reuse support); and
• Compliant with Semiconductor Equipment and Materials International (SEMI) E4, E5, E10, E30, E42, EDA standards.

We expect to begin commercialising iConnect by 2012. 7.19.2 Software solutions for other industries (a) Solutions for process/discrete manufacturing industries We plan to develop manufacturing software solutions for customers in process manufacturing industries, such as the pharmaceutical, chemical and food processing industries. Our current range of manufacturing software solutions is optimised for customers involved in discrete manufacturing, such as in the semiconductor and consumer electronics manUfacturing industries. 83 7. OUR BUSINESS (Cont’d) In process manufacturing industries, products are produced continuously or as batches. In discrete manufacturing, individual items are produced. As a result, the tracking methodol09Y and factors that have to be tracked in process manufacturing and discrete manufacturing are different. In discrete manufacturing, factors such as raw materials and routing are important, whereas in process manufacturing the important factors may include formulation, routing, ingredients, units of measure, and pricing. We expect to begin commercialising our software solutions for process and discrete manufacturing industries by 2012. (b) Software solutions for the plantation industry We are also currently looking into the development of plantation management solutions to complement our current suite of applications in the manufacturing sector These solutions would be either developed in-house or together with an identified partner We expect to begin commercialisin9 our software solutions for the plantation industry in 2011. 7.19.3 Overseas business expansion We plan to undertake overseas business expansion to further diversify our markets and expand our customer base. We plan to expand our presence in Thailand, Indonesia, China and the Philippines. We intend to market our proprietary and customised manufacturing software solutions and value-added third-party solutions to customers in these countries. We expect to have a presence in each of these countries by 2012. We have also appointed overseas resellers to help distribute our manufacturing software solutions in overseas markets. We have appointed resellers to market and distribute our proprietary OSTrack solutions in the Philippines and in the United Kin9dom. 7.19.4 Prospects of our Group The prospects of our Group are favourable in light of the following factors: • Our strong business performance to-date;
• Our competitive advantages and key strengths;
• Our future plans to create growth; and
• Industry outlook.

(a) Our strong business performance to-date Our good business performance is supported by the following financial achievements between the financial years ended 31 December 2008 and 2010: (i) Our revenue grew from approximately RM7.69 million to approximately RM14.95 million between the financial years ended 31 December 2008 and 2010. This represented an average annual growth rate of approximately 40.28%; 84 7. OUR BUSINESS (Cont’d) (ii) Our PST grew from approximately RM4.03 million to approximately RM8A8 million between the financial years ended 31 December 2008 and 2010. This represented an average annual growth rate of approximately 92%; and (iii) Our PST margin grew from 52A8% to 56.72% between the financial years ended 31 December 2008 and 2010. The good financial performance over the last three (3) years will provide us with the platform for continuing business success and growth. (b) Our competitive advantages and key strengths We have significant competitive advantages and key strengths that will enable us to compete successfully as well as provide us with growth prospects. Our competitive advantages and key strengths are as follows: (i) We have developed proprietary and customised software solutions, which enables us to resell our proprietary and customised software solutions without constraint.
(ii) We have in-house software development capability, which allows us to develop new applications, functions and solutions to meet market needs. We also have the ability to undertake modifications, customisation and updates expediently and cost effectively. Our in­house software development capabilities means all our software source codes are our intellectual property.

(iii) We specialise in the semiconductor industry, and have served customers in the semiconductor industry since the formation of our Group, providing us with a strong knowledge and skills base pertinent to the semiconductor industry. For the FYE 31 December 2010 and the 4­month FPE 30 April 2011, revenues derived from servicing customers in the semiconductor industry amounted to approximately 57.06% and 56.90% respectively of our total revenue. (iv) We are a total integrated solutions provider, and are engaged in providing total integrated manufacturing software solutions. This capability is a key strength as it enables us to position ourselves as a one-stop supplier of manufacturing software solutions. We can position ourselves as the main solutions provider when we compete for manufacturing software solutions projects, and exercise a high degree of control over our projects.
(v) We earn recurring revenue, as we are also retained to provide systems maintenance for our customers.
(vi) We have developed an export customer base, with export revenue ranged between 41.24% and 49.83% of our total revenue for the past three (3) financial years up to the FYE 31 December 2010. Our export base will provide us with reference sites to help us gain new customers locally as well as overseas.

7. OUR BUSINESS (Cont’d) (vii) We have a potentially large overseas market place, as we own the intellectual properties of our software solutions and are able to export these software overseas with only minor modifications. This allows us to enlarge our potential markets significantly compared to being restricted only to Malaysia and also helps diversify our reliance on anyone market. (c) Our future plans to create growth Our future plans will create growth opportunities and promote business diversity. All these factors will contribute to the favourable prospects of our Group. Our planned Test CAPS is a centralised system designed to facilitate automatic capacity planning. We also intend to develop iPASS Test LIP, which is a multi­constraint based lot release method and system with finite capacity modelling. In addition, we plan to develop iConnect, which is a cross platform EA solution that can easily integrate MES with semiconductor equipment through an open-source JMS messaging framework. We plan to develop manufacturing software solutions to serve a wider range of user industries, including process and discrete manufacturing industries. We are also currently looking into the development of plantation management solutions to complement our current suite of applications in the manufacturing sector. These future plans will broaden and enlarge our customer base. We plan to expand overseas in countries such as Thailand, Indonesia, China, and the Philippines to enlarge the size of our potential market. (d) Industry outlook In general, the outlook of the IT industry in Malaysia will be dependent on the performance of the Malaysian economy as a whole, and on the performance of its main user industries such as the manufacturing sector. Please refer to Section 11 of the Independent Assessment of the IT Industry Focusing on the Development and Provision of Manufacturing Software Solutions, particularly for the Semiconductor Industry prepared by Vital Factor as enclosed herein under Section 8 of this Prospectus for further information on the industry outlook. THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK

 

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