Business Overview

5. INFORMATION ON OUR GROUP 5.1 OUR HISTORY We were incorporated in Malaysia under the Act on 17 October 2014 as a private limited company under the name of Kim Teck Cheong Consolidated Sdn Bhd. Subsequently, on 31 October 2014, our Company was converted into a public limited company and assumed our present name. We were incorporated as an investment holding company to facilitate our Listing. We had undertaken the Acquisitions prior to our Listing, details of which are as set out in Section 5.4 of this Prospectus. AMDA Marketing, Creamos Malaysia, KTC Brands, KTC Distribution, KTC Sdn Bhd and KTC Tawau became our wholly-owned subsidiary companies and KTC Sarawak became our 80% owned subsidiary company pursuant to the Acquisitions. Our Group structure is as follows:
100% 80% The details of our principal activities are as follows: Company KTC Consolidated AMDA Marketing Creamos Malaysia KTC Brands KTC Distribution KTC Sarawak KTC Sdn Bhd KTC Tawau  Principal Activities Investment holding Distribution of CPG(1 j Manufacture of bakery products Brand owner(2) and procurement arm for KTC Group’s own brand of products Distribution of CPG, focusing on F&B products(3) Distribution of CPG(4j Distribution of CPG(5j Distribution of CPG(oj
5. INFORMATION ON OUR GROUP (Cont’d) Notes: (1) Mainly focused on distribution of P&G products in Sabah and Labuan.
(2) Ownership of brands refers to ‘Orie’ and ‘Bamble’.
(3) Mainly focused on distribution of F&B products in 8abah and Labuan.
(4) Mainly focused on distribution of CPG in Sarawak and surrounding areas.
(5) Mainly focused on distribution of non-food related brands.
(6) Mainly focused on distribution of CPG in Tawau and surrounding areas.

For further details, please refer to Section 6.2.1 for the geographical coverage of our Subsidiary Companies. Our History and Key Milestones The history of our business can be traced back to 1938 with the establishment of Kim Teck Cheong, a sole proprietorship by our founder, the late Datuk Lau Yeong Ching. Kim Teck Cheong started its initial business activity as an operator of a sundry shop in Sabah. In 1967, Datuk Lau, the son of the late Datuk Lau Yeong Ching joined the business operations and finally took over the helm of the business operations as the Managing Director in 1973. As our Group Managing Director, he has been instrumental in the growth and development of our Group bringing with him approximately 40 years of experience in the distribution industry. Datuk Lau is currently supported by our Directors, Dexter Lau and Lim Hui Kiong. Our business philosophy has and continues to be based on achieving business success and continuity through integrity and ethical business practices. This is encapsulated in our com pany nam e, Kim (“~”) Teck(“t~”) Cheong(” ~ “). In 1946, Kim Teck Cheong started a departmental store in Kota Kinabalu until 1975 when KTC Sdn Bhd was incorporated to take over its operations. The intention then was to diversify into the provision of market access and coverage of CPG through the distribution of third party brands, initially with personal care products in Kota Kinabalu, Sabah. Subsequently in 1978, we started expanding the coverage of other third party brands of personal care products in Kota Kinabalu, Sabah with “Darkie” brand of toothpaste (now known as “Darlie”), followed by “Pureen” baby care products in 1979. In 1979, we were engaged by Tohtonku to provide market access and coverage for their brands of personal care and household products initially in Kota Kinabalu, Sabah, and later to Tawau and Sandakan, Sabah as well as Labuan in 2006. As at LPD, some of Tohtonku’s brands that we provide market access and coverage include “Ammeltz Yoko Yoko”, “Everyday”, “Follow Me”, “King Kong”, “Nanowhite”, “Nutox”, “Can Can” and others. In 1982, we started providing market access and coverage for P&G personal care and household products in Kota Kinabalu, Sabah. Over the years, our business has extended to other brands from P&G as well as covering additional markets namely Tawau and Sandakan, Sabah as well as Labuan for brands such as “Gillette”, “Head & Shoulders”, “Herbal Essences”, “Joy”, “Olay”, “Oral B”, “Pantene”, “Rejoice”, “Whisper”, “Ambi Pur”, “Downy”, “Dynamo”, “Fab”, and “Febreze”. In 1983, we were engaged by Unza Sdn Bhd (now known as Wipro Unza (Malaysia) Sdn Bhd) to distribute their range of household and personal care products initially in Kota Kinabalu, Sabah before expanding to cover other markets in Tawau, Sabah during the same year. As at LPD, we provide market access and coverage of Wipro Unza’s portfolio of brands including, among others, “Aiken”, “Carrie Junior”, “Dashing”, “Enchanteur”, “Eversoft”, “Gervenne”, “Maxkleen”, “New and Trendy”, “Safi”, “Sassy”, “Shurei” and “Skinz”. During the same year, we expanded our geographical presence by establishing a distribution centre in Tawau, Sabah to cover the east coast region of Sabah including Kunak, Lahad Datu, Semporna and Tawau. 5. INFORMATION ON OUR GROUP (Cont’d) Subsequently in 2000, we further expanded geographically and established a distribution centre in Sandakan, Sabah. This has enabled us to extend the market access and coverage of P&G products to the east coast of Sabah. In 2001, we commenced the construction of an office and warehousing facility on two parcels of land in Tawau, which was earlier acquired in 1997. Upon the completion of the construction works in 2002, we move our original Tawau distribution centre to this premises. In 2003, we incorporated AMDA Marketing to provide market access and coverage of P&G products in Sabah and Labuan, which subsequently commenced operations in 2004. As part of our expansion plans, we acquired three (3) parcels of land with building in SEDCO Light Industrial Estate (Kolombong) in Kota Kinabalu to cater to the growth of our business as well as to serve as our head office with warehousing facilities. The first parcel of land with building was acquired in 2004, followed by the acquisition of the two (2) remaining parcels of land with building in 2005. In 2006, we further expanded on our Tawau operations by acquiring an additional piece of land and constructed another warehousing facility adjacent to our existing distribution centre in Tawau. This additional warehousing facility commenced operations in 2008. As part of our management’s intention to increase our product portfolio to include the distribution of frozen and chilled food products, we acquired the business and the cold room facilities of a distribution company in Bundusan, Penampang in Sabah in 2006. In the same year in 2006, we expanded our operations to Labuan by establishing a distribution centre in Jalan Patau-Patau, Labuan. Subsequently in 2007, we extended our product range to cover OTC drugs and health supplements including, among others “Panadol”, “Scott’s”, “Eye Mo” and “Eno”, and new brands of beverage products, namely “Horlicks” and “Ribena”, and another new brand of oral care products, namely “Sensodyne” in Kota Kinabalu, Sabah as well as Labuan. In the same year, we commenced market access and coverage for milk powder, where we distributed brands such as “Mamex”, “Mamil”, “Dumil” and “Dugro” in Kota Kinabalu, Tawau and Sandakan in Sabah, as well as Labuan. In 2007, KTCS Holdings Sdn Bhd (now known as KTC Distribution) was incorporated and its initial business activity was a property investment company which commenced operations in 2008. In 2011, we acquired an additional warehouse in SEDCO Light Industrial Estate to provide AMDA Marketing, which is focused on providing market access and coverage for P&G products, with larger premises. As part of our intention to leverage from our core competency in providing market access and coverage of CPG, we started the distribution of our own brands of CPG namely “Bamble” for wet tissues in November 2011 and “Orie” for frozen and dry food, in May 2012 and May 2013 respectively. All these products are manufactured by external parties and packed under our own brand names. In 2013, we incorporated KTC Brands to focus on working with external manufacturers and suppliers for products to be distributed under our own brands. KTC Brands is also a holder of our own brands namely “Bamble” and “Orie”, and any other new brands of CPG that we may launch in the future. As part of our intentions to expand our coverage to Sarawak, we acquired an 80% equity interest in I K H Enterprise Sdn Bhd based in Sibu, Sarawak, a company focusing on the distribution of CPG, in September 2013. We subsequently changed the company name of I K H Enterprise Sdn Bhd to KTC Sarawak in November 2013, and the acquisition was completed in December 2013. The operational facilities in Sibu initially comprised one (1) distribution centre which has a branch office and warehousing facility. In the first half of 2014, we set-up a distribution centre in Kuching, and another in Miri, Sarawak. In the same year, we started distributing CPG to Bintulu. As at LPD, we have three (3) distribution centres in Sarawak, with one (1) distribution centre each in Sibu, Kuching and Miri. 5. INFORMATION ON OUR GROUP (Cont’d) In line with our management’s vertical expansion plans, Creamos Malaysia was incorporated in 2012 with the intention to manufacture bakery products. The company commenced operations in 2014 with the establishment of our manufacturing facility in SEDCO Light Industrial Estate (Kolombong) in Kota Kinabalu, Sabah, in the same premises as AMDA Marketing. As at LPD, Creamos Malaysia has been producing approximately 38,000 pieces of cream rolls per day under our own “Creamos” brand. Creamos Malaysia currently holds a Halal certification issued by JAKIM for cream rolls in chocolate, vanilla, corn, yam, strawberry and tiramisu flavours. Creamos Malaysia is also the holder of the “Creamos” brand. In August 2014, KTC Distribution commenced its distribution activity and took over the consumer packaged F&B products from our subsidiary company, KTC Sdn Bhd. In September 2014, we started providing market access and coverage for new beverage products including, among others, “A&W Sarsaparilla”, “Coca-Cola”, “Fanta”, “Schweppes” and “Sprite”. In April 2015, we further extended our product portfolio to cover new third party brands of personal care products, including “Aqua Label”, “Tsubaki” and “ZA” in Sabah, Sarawak and Labuan, as well as a new brand of household products, namely “Philips” in Sabah and Sarawak. Subsequently in June 2015, we commenced market access and coverage for additional brands of personal care products under the “Revlon” brand. We continued to expand on our own brands where we launched beverage products under “Orie” as well “Creamos” brands in January 2015 and August 2015 respectively. Since the commencement of KTC Sdn Bhd in 1975, we have expanded the business to become a provider of market access and coverage of third party brands as well as our own brands of CPG in East Malaysia, with a growing manufacturing business in bakery products. For FYE 30 June 2015, our total Group revenue was RM299.87 million. As at LPD, we have a total of 18 distribution centres in Sabah, Labuan and Sarawak, servicing East Malaysia. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5. INFORMATION ON OUR GROUP (Cont’d) 5.2 SHARE CAPITAL Our present authorised share capital is RM100,OOO,000 comprising 750,000,000 Shares, and 25,000,000 RCPS of RM1.00 each, of which RM36,827,700 comprising 368,277,000 Shares and RM24,001,858 comprising 24,001,858 RCPS have been issued and credited as fully paid-up. Upon completion of our IPO, our issued and paid-up share capital will increase to RM75,029,558 comprising 510,277,000 Shares and 24,001,858 RCPS. The changes in our issued and paid-up share capital since incorporation are as follows: Par  Date of  No. of shares/RCPS  value  Cumulative total  allotment  allotted  RM  Consideration  RM  Shares  17.10.2014  20  0.10  Cash  2.00  01.07.2015  368,276,980  0.10  Issued as  36,827,700  consideration for the  Acquisitions  RCPS  01.07.2015  24,001,858  1.00  Issued as  24,001,858  consideration for the  Acquisitions
There are no discounts, special terms or instalment payment terms applicable to the payment of consideration for the above allotment. Save for the RCPS, as at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in our Company. 5.3 SUBSIDIARY COMPANIES 5.3.1 AMDA Marketing (i) History and business AMDA Marketing was incorporated in Malaysia as a private limited company under the Act on 8 October 2003 and commenced operations in January 2004. It is principally involved in distribution of CPG. (ii) Share capital The present authorised share capital of AMDA Marketing is RM1 ,000,000 comprising 1,000,000 ordinary shares of RM1.00 each, all of which have been issued and fully paid-up. There is no change in the issued and paid-up share capital of AMDA Marketing in the past three (3) years preceding LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in AMDA Marketing. 5. INFORMATION ON OUR GROUP (Cont’d) (iii) Shareholders and Directors AMDA Marketing is our wholly-owned subsidiary company and its directors are Datuk Lau, Dexter Lau and Lim Hui Kiong. (iv) Subsidiary and Associated companies As at LPD, AMDA Marketing does not have any subsidiary or associated company. 5.3.2 Creamos Malaysia (i) History and business
Creamos Malaysia was incorporated in Malaysia as a private limited company under the Act on 9 April 2012 and commenced operations in February 2014. It is principally involved in manufacturing of bakery products.
(ii) Share capital

The present authorised share capital of Creamos Malaysia is RM500,000 comprising 500,000 ordinary shares of RM1.00 each, all of which have been issued and fully paid-up. The changes in issued and paid-up share capital of Creamos Malaysia since its incorporation up to LPD are as follows: Par  Cumulative  Date of  No. of shares  value  total  allotment  allotted  RM  Consideration  RM  09.04.2012  2  1.00  Cash  2  24.06.2013  499,998  1.00  Otherwise than cash(l)  500,000
Note: (1) Capitalisation of amount due to the directors of Creamos Malaysia. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Creamos Malaysia. (iii) Shareholders and Directors Creamos Malaysia is our wholly-owned subsidiary company and its directors are Datuk Lau, Dexter Lau, Sharin Bin Alimin and Lim Hui Kiong. (iv) Subsidiary and Associated companies As at LPD, Creamos Malaysia does not have any subsidiary or associated company. 5. INFORMATION ON OUR GROUP (Cont’d) 5.3.3 KTC Brands (i) History and business KTC Brands was incorporated in Malaysia as a private limited company under the Act on 8 February 2013 and commenced operations in July 2013. It is principally involved in being a brand owner and procurement arm for KTC Group’s own brand of products. (ii) Share capital The present authorised share capital of KTC Brands is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which RM2 comprising of 2 ordinary shares of RM1.00 each have been issued and fully paid-up. There is no change in issued and paid-up share capital of KTC Brands since its incorporation up to LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in KTC Brands. (iii) Shareholders and Directors KTC Brands is our wholly-owned subsidiary company and its directors are Datuk Lau, Dexter Lau and Lim Hui Kiong. (iv) Subsidiary and Associated companies As at LPD, KTC Brands does not have any subsidiary or associated company. 5.3.4 KTC Distribution (i) History and business KTC Distribution was incorporated in Malaysia under the name of Chin Chang Marketing Sdn Bhd as a private limited company under the Act on 19 October 2007 and commenced operations in property investment in September 2008. It subsequently changed its name to KTCS Holdings Sdn Bhd on 1 October 2009 and assumed its present name on 5 June 2014. It is principally involved in distribution of CPG, focusing on F&B products. (ii) Share capital The present authorised share capital of KTC Distribution is RM1 ,000,000 comprising 1,000,000 ordinary shares of RM1.00 each, all of which have been issued and fully paid-up. The changes in issued and paid-up share capital of KTC Distribution in the past three (3) years preceding LPD are as follows: Par  Cumulative  Date of  No. of shares  value  total  allotment  allotted  RM  Consideration  RM  04.08.2014  500,000  1.00  Otherwise than cash(l)  1,000,000
5. INFORMATION ON OUR GROUP (Cont’d) Note: (1) By way of contra against the amount owing by KTC Distribution to Datuk Lau as part settlement of debt amounting to RM500,OOO. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in KTC Distribution. (iii) Shareholders and Directors KTC Distribution is our wholly-owned subsidiary company and its directors are Datuk Lau, Datin Lim, Benedick Lau and Lindfay Lau. (iv) Subsidiary and Associated companies As at LPD, KTC Distribution does not have any subsidiary or associated company. 5.3.5 KTC Sarawak (i) History and business KTC Sarawak was incorporated in Malaysia under the name of I K H Enterprise Sdn Bhd as a private limited company under the Act on 8 August 2001 and commenced operations on Septem ber 2001. KTC Sarawak assumed its present name on 19 November 2013 and is principally involved in distribution of CPG. (ii) Share capital The present authorised share capital of KTC Sarawak is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which RM50,000 comprising 50,000 ordinary shares of RM1.00 each have been issued and fully paid-up. There is no change in the issued and paid-up share capital of KTC Sarawak in the past three (3) years preceding LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in KTC Sarawak. (iii) Shareholders and Directors KTC Sarawak is our 80% owned subsidiary company and its directors are Datuk Lau, Dexter Lau, Lim Hui Kiong, Yong Ing Kai and Datin Lim. The remaining 20% interest in KTC Sarawak is owned by Yong Ing Kai. (iv) Subsidiary and Associated companies As at LPD, KTC Sarawak does not have any subsidiary or associated company. 5.3.6 KTC Sdn Bhd (i) History and business KTC Sdn Bhd was incorporated in Malaysia as a private limited company under the Act on 18 April 1975 and commenced operations in the same year. It is principally involved in distribution of CPG. 5. INFORMATION ON OUR GROUP (Cont’d) (ii) Share capital The present authorised share capital of KTC Sdn Bhd is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each, of which RM600,000 comprising 600,000 ordinary shares of RM1.00 each have been issued and fully paid-up. There is no change in the issued and paid-up share capital of KTC Sdn Bhd in the past three (3) years preceding LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in KTC Sdn Bhd. (iii) Shareholders and Directors KTC Sdn Bhd is our wholly-owned subsidiary company and its directors are Datuk Lau, Dexter Lau and Lim Hui Kiong. (iv) Subsidiary and Associated companies As at LPD, KTC Sdn Bhd does not have any subsidiary or associated company. 5.3.7 KTC Tawau (i) History and business
KTC Tawau was incorporated in Malaysia as a private limited company under the Act on 8 February 1983 and commenced operations in March 1983. It is principally involved in distribution of CPG.
(ii) Share capital

The present authorised share capital of KTC Tawau is RM500,000 comprising 500,000 ordinary shares of RM1.00 each, all of which have been issued and fully paid-up. There is no change in the issued and paid-up share capital of KTC Tawau in the past three (3) years preceding LPD. As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in KTC Tawau. (iii) Shareholders and Directors KTC Tawau is our wholly-owned subsidiary company and its directors are Datuk Lau, Lim Hui Kiong, Datin Lim, Benedick Lau and Lindfay Lau. (iv) Subsidiary and Associated companies As at LPD, KTC Tawau does not have any subsidiary or associated company. 5. INFORMATION ON OUR GROUP (Cont’d) 5.4 LISTING SCHEME In conjunction with and as an integral part of our Listing, the details of our listing scheme is set forth below. 5.4.1 Acquisitions We had entered into a conditional share sale agreement dated 3 December 2014 with KTC Holdings to acquire the following: Company  Shareholding to be acquired %  No. of ordinary shares of RM1.00 each to be acquired  Purchase consideration RM  To be satisfied via  Shares issued @ RMO.10 per Share  RCPS issued @RM1.00 per RCPS  AMDA Marketing  100  1,000,000  4,041,409  24,467,680  1,594,641  Creamos Malaysia  100  500,000  59,438  359,850  23,453  KTC Brands  100  2  139,829  846,560  55,173  KTC Distribution  100  1,000,000  5,797,687  35,100,610  2,287,626  KTC Sarawak  80*  40,000  3,038,700  18,397,030  1,198,997  KTC Sdn Bhd  100  600,000  36,768,480  222,605,350  14,507,945  KTC Tawau  100  500,000  10,984,013  66,499,900  4,334,023  Total  60,829,556  368,276,980  24,001,858
Note: The remaining twenty percent (20%) is currently held by Yang Ing Kai. He is also a director of KTC Sarawak. He has approximately 30 years of experience in the distribution industry in Sibu, Sarawak and was the founder of IKH Enterprise Sdn Bhd (now known as KTC Sarawak). With his local market knowledge and experience in the distribution industry, he is able to contribute to the expansion and the future growth of KTC Sarawak. The purchase consideration was agreed upon on a willing-buyer willing-seller basis based on the total proforma NA (excluding non-controlling interest) as at 30 June 2014 of RM60,829,556 as tabulated above and after taking into account of the following: (a) the revaluation surplus of properties amounting to RM22,783,892 (after deducting the deferred taxation of 5%);
(b) the gain of RM822,OOO arising from the disposal of a property by KTC Sdn Bhd pursuant to a sale and purchase agreement dated 2 July 2014;
(c) the allotment of 500,000 new ordinary shares of RM1.00 each by KTC Distribution on 4 August 2014; and
(d) the proposed dividend by KTC Sdn Bhd and AMDA Marketing of RM7,602,884 and RM625,762 respectively to offset against the amount due from KTC Holdings to KTC Sdn Bhd and AMDA Marketing.

52 5. INFORMATION ON OUR GROUP (Cont’d) Further details are as follows: AMDA MarketinQ  RM  NA as at 30 June 2014  4,667,171  Less: Proposed dividend to be offset against the amount due from KTC Holdings  (625,762)  Adjusted NA as at 30 June 2014  4,041,409
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KTC Brands RM NA as at 30 June 2014 139,829
KTC Distribution  RM  Audited NA as at 30 June 2014  1,176,100  Less: Additional depreciation charges from 1 July 2014 to 31 October 2014  (119,070)  Add:  Recognition of the revaluation surplus arising from the revaluation of its  property (net off 5% deferred tax)*  4,240,657  Add: Allotment of new ordinary shares subsequent to 30 June 2014  500,000  Adjusted NA as at 30 June 2014  5,797,687
KTC Sarawak  RM  NA as at 30 June 2014  3,798,375  Less:Share of 20% NA by the non-controlling interests  (759,675)  80% NA as at 30 June 2014  3,038,700
KTC Sdn Bhd  RM  Audited NA as at 30 June 2014  28,464,803  Less: Additional depreciation charges from 1 July 2014 to 31 October 2014  (138,214)  Add:  Recognition  of the revaluation surplus arising from the revaluation of its  property (net off 5% deferred tax)*  15,222,775  Add: Gain arising from disposal of non-current asset held for sale  822,000  Less: Proposed dividend to be offset against the amount due from KTC Holdings  (7,602,884)  Adjusted NA as at 30 June 2014  36,768,480
KTC Tawau  RM  NA as at 30 June 2014  7,683,031  Less: Additional depreciation charges from 1 July 2014 to 31 October 2014  (19,478)  Add:  Recognition of the revaluation surplus arising from the revaluation of its  property (net off 5% deferred tax)*  3,320,460  Adjusted NA as at 30 June 2014  10,984,013
5. INFORMATION ON OUR GROUP (Cont’d) Note: The fair value adjustments and deferred taxation are as follows: Company KTC Distribution KTCSdnBhd KTC Tawau  (A) Market Value# RM 7,215,000 30,819,000 6,305,000  (B) NCA as at31 October 2014 RM 2,751,150 14,795,026 2,809,779  (C) = (A) -(B) Fair Value Adjustments RM 4,463,850 16,023,974 3,495,221  Deferred taxation@ RM 223,193 801,199 174,761
# The market value is based on the valuation conducted by the Independent Property Valuer on 20 October 2014. Please refer to Section 14 of this Prospectus for further details on the valuation of the respective properties and Section 6. 17 of this Prospectus for the details of the respective properties which were taken into consideration for the computation of the above fair value adjustments. @ Deferred taxation is computed based on the fair value adjustments multiply by the current real property gains tax rate of 5%. The Acquisitions were completed on 1 July 2015, resulting in our issued and paid-up share capital increasing from 20 Shares to 368,277,000 Shares and 24,001,858 RCPS. 5.4.2 IPO Subsequent to the Acquisition, we are undertaking an IPO, the details of which are set out in Section 3.1 of this Prospectus. 5.4.3 Listing on Bursa Securities The admission to the Official List and the listing of and quotation for our entire enlarged issued and paid-up share capital of RM51 ,027,700 comprising 510,277,000 Shares on the ACE Market of Bursa Securities. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5. INFORMATION ON OUR GROUP (Cont’d) 5.5 KEY AWARDS Our key awards and recognitions are as follows: Year  Key Awards and Recognition  1993/94  KTC Sdn Bhd was awarded champion of the Jobber(7) Recognition Programme (Jobber Category -East Malaysia) by P&G  1996  KTC Sdn Bhd obtained a “Recognition of Service Award” from P&G  2001  KTC Sdn Bhd received an recognition by Wipro Unza  “Appreciation of 20 Years of Business Partnership”  2004  KTC Sdn Bhd received the “DARLIE Star Performer Award” from Hawley & Hazel (M) Sdn Bhd  2004/05  AMDA Marketing received the “Malaysia Perfect Distributor Award” from P&G  2005  KTC Sdn Bhd was the winner of the “Excellence Performance Award” by Hawley & Hazel (M) Sdn Bhd  2008  KTC Sdn Bhd received the “Best Achievement Award” by KFC Marketing Sdn Bhd. (now known as QSR Trading Sdn Bhd)  KTC Sdn Bhd obtained the “Best Distributor Award” (Sabah-Kota Kinabalu) from  KFC Marketing Sdn Bhd (now known as QSR Trading Sdn Bhd)  KTC Sdn Bhd obtained the “Best Preferred Dealer Award” from GlaxoSmithKline  Consumer Healthcare Sdn Bhd  2008/09  KTC Sdn Bhd received the “Distributor Recognition Award” from SC Johnson and Son (M) Sdn Bhd  2009  KTC Sdn Bhd obtained the “Best Preferred Dealer Award” from GlaxoSmithKline Consumer Healthcare Sdn Bhd  2010/11  AMDA Marketing obtained Excellence Award” from P&G  the  “GO-TO-MARKET  EXCELLENCE:  IS  Growth  2011  KTC Sdn Bhd was acknowledged as “GSK Preferred Dealer” by GlaxoSmithKline Consumer Healthcare Sdn Bhd  2011/12  AMDA Marketing was awarded the “GO-TO-MARKET EXCELLENCE: Distribution Hero Award” by P&G  Numeric  KTC Sdn Bhd obtained a Certificate of Achievement from Wipro Unzafor achieving  the 2011/2012 target in East Malaysia and Brunei  2012  KTC Sdn Bhd was awarded with an “Appreciation of 30 Years Business Partnership in Sabah” recognition by Hawley & Hazel Marketing (M) Sdn Bhd  2012/13  AMDA Marketing Award” from P&G  obtained  the  “Multi-Functional  Team  Recognition  (Finance)  AMDA Marketing received the “Best Sales Function Award” from P&G  AMDA Marketing received the “Numeric Distribution Hero Award” from P&G  AMDA Marketing received the “Regional High Frequency Store Supervisor Award”  from P&G
5. INFORMATION ON OUR GROUP (Cont’d) Year  Key Awards and Recognition  2014  AMDA Marketing received the “Best in Class High Frequency Store Supervisor Award” from P&G AMDA Marketing was awarded the “Best Brand Distribution Award” from P&G
Note: (1) Jobber refers to a distributor that purchases large quantities ofgoods and resells to merchants. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW 6.1  OUR PRINCIPAL BUSINESS ACTIVITIES  6.1.1  Our Business Model  Our Group’s business model is depicted as below:

Notes: (1) The above business model reflects our normal business activities where sales are recorded under revenue. It excludes logistic services, which is not within our normal business activities where sales are recorded under ‘other income’.
(2) Including appointed distributors for bakery products and one appointed sub-distributor for CPG.

(a) Our Business Focus and Revenue Stream We are in the business of providing market access and coverage of CPG where we are involved in the distribution and warehousing of third party brands of products as well as our own brands of products. Within our portfolio of third party brands, we cover F&B products including dry, frozen and chilled food, as well as beverage products while non-food products include personal care, household, baby care, OTC drugs and health supplements. In addition, we are also continually building on the distribution and warehousing of our own brands of frozen and dry food as well as beverage products. We provide market access and coverage of CPG in East Malaysia namely Sabah, Labuan and Sarawak where we have a total of 18 distribution centres with warehousing facilities, of which 13 are in Sabah, three (3) in Sarawak and two (2) in Labuan as at LPD. 57 6. BUSINESS OVERVIEW (Cont’d) Part of our business activities is in the manufacture of our own brand of bakery products, which commenced operations in February 2014. As at LPD, we are producing approximately 38,000 pieces of cream rolls per day under our own “Creamos” brand and our products are avai~able for sale in various retail outlets including hypermarkets, supermarkets, sundry shops, convenience stores, petrol kiosks, and Chinese medical halls in Kota Kinabalu, Sandakan, Tawau and Labuan. For FYE 30 June 2015, revenue from the distribution of third party brands of CPG amounted to RM285.65 million or 95.26% of our total revenue. This is followed by the distribution of our own brands of CPG which accounted for RM7.95 million or 2.65% of our total revenue. For FYE 30 June 2015, revenue from the manufacturing of bakery products accounted for RM6.27 million or 2.09% of our total revenue. (b) Our Customer Base Our main customer base consists of retailers, wholesalers, food service operators and distributors which are further elaborated below: retailers including hypermarkets, supermarkets, departmental stores, sundry shops, convenience stores, pharmacies, petrol kiosks, Chinese medical halls, electrical and electronic hardware stores, clothing stores, stationery stores and book shops; wholesalers including smaller enterprises that supply to sundry shops and other retailers in outskirt areas and a ship chandler; operators of food services including restaurants, bakeries, hawker stalls, caterers, hotels, recreational clubs and other eateries; distributors, including appointed distributors for our bakery products and a sub-distributor for our CPG. For FYE 30 June 2015, revenue contribution from retailers accounted for 87.92% of our total revenue and this is followed by wholesalers at 8.11 %, distributors at 2.11 % and operators oUood services accounted for the remainder 1.86%. Sales from the above categories of customers are outright sales based on purchase orders. A small proportion of baby products are sold based on consignment basis, and the revenue contributions from the said products accounted for 0.66%, 0.53%, 0.45% and 0.29% of our total revenue for the FYE 30 June 2012, 2013, 2014 and 2015 respectively. Commercial terms with customers are assessed and approved on a case-by-case basis. In general, our credit terms with customers range from 30 days to 60 days. (c) Our Competitive Advantages and Key Strengths Our competitive advantages and key strengths are important in sustaining our business and providing our Group with future business growth and opportunities. These include the following: (i) We Cover a Wide Range of CPG We provide market access and coverage of a wide range of CPG covering F&B products, personal care products, household products, baby care products as well as OTC drugs and health supplements. 6. BUSINESS OVERVIEW (Cont’d) Subsequent to LPD, we distribute approximately 10,348 SKU of CPG covering various locations within Sabah, Sarawak and Labuan. One SKU represents one distinct product or stock item that can be purchased. Subsequent to LPD, we carry five (5) major product portfolio: 893 SKU of F&B products; 5,367 SKU of personal care products; 1,063 SKU of household products; 2,900 SKU of baby care products; and 125 SKU of OTC drugs and health supplements. (ii) We Cover Recognisable CPG Brands As a provider of market access and coverage of CPG, our core competency is in the distribution of a proliferation of third party brands across various product categories. As at LPD, we distribute approximately 194 third party brands of CPG for 36 brand owners inclusive of respective appointed distributors of brand owners. For more details, please refer to Section 6.2.1.2 of this Prospectus for third party brands that are carried by KTC Group as at LPD. (iii) We have a Wide Distribution Network As the general public is the end-consumer of CPG, having a wide distribution network is key in ensuring that the products we cover reach as many consumers as possible. In this respect, for FYE 30 June 2015, we have a customer base that includes 4,604 retailers namely hypermarkets, supermarkets, departmental stores, sundry shops, convenience stores, pharmacies, petrol kiosks, Chinese medical halls, and 96 wholesalers and distributors, as well as 1,239 food service operators in East Malaysia. Our wholesalers utilise their own existing network to resell CPG to smaller merchants. In addition, our business is supported by a total of 18 distribution centres in Sabah namely Kota Kinabalu, Sandakan, Tawau, Lahad Datu, Kudat and Keningau as well as in Sarawak namely Kuching, Sibu and Miri, and Labuan. As at LPD, we have 13 distribution centres to cover 21 districts in Sabah, three (3) distribution centres to cover 27 districts and nine (9) sub-districts in Sarawak as well as two (2) distribution centres to cover Labuan. This is inclusive of wholly owned, rented and outsourced facilities. Some of the distribution centres are equipped with warehousing facilities, some with cold room storage facilities to cater to the distribution of various types of CPG including F&B products, personal care products, household products, baby care products, as well as OTC drugs and health supplements. As a provider of market access and coverage of CPG, our sales and distribution points for the financial years under review grew at an AAGR of 30.60% from 2,678 sales and distribution points for FYE 30 June 2012 to 5,965 sales and distribution points for FYE 30 June 2015. Sales and distribution points are an indication of our ability to increase the market access and coverage of CPG. Sales and distribution points are our final delivery destinations from our distribution centres, which includes retail outlets, food service outlets, wholesalers and distributors. As at LPD, we have access to 6,419 sales and distribution points. We believe that our distribution network is a competitive advantage as it enables us to extend our product reach within the East Malaysia market. 6. BUSINESS OVERVIEW (Cont’d) For further details on our distribution network, please refer to Section 6.2.1 of this Prospectus. (iv) We have an Established Track Record We have a proven and established track record with a history that spans approximately 40 years since the commencement of KTC Sdn Bhd in 1975. As a further testament of our track record and performance, we have obtained numerous awards and recognition from our suppliers including among many others, “Special Recognition Award (Sales)” from P&G, “Appreciation of 30 Years of Business Partnership in Sabah” by Hawley & Hazel Marketing (M) Sdn Bhd, “Best Achievement Award” by KFC Marketing Sdn Bhd (now known as QSR Trading Sdn Bhd) and “Preferred Dealer” awarded by GlaxoSmithKline Consumer Healthcare Sdn Bhd. We have established long-term business relationships with our suppliers. As at LPD, our track record with our suppliers which include brand owners as well as their respective appointed distributors, are as depicted in the following: Our Track Record  Our Suppliers*  30 years or more  Hawley & Hazel Chemical Co (HK) Ltd, P&G, Summit Co (M) Sdn Bhd, Tohtonku and Wipro Unza. Alliance Cosmetics Sdn Bhd, Cottrich Marketing Sdn Bhd, Ethye Sdn Bhd, Gan & Sons Trading Sdn Bhd, Jetaine Corporation Sdn Bhd , Kara Marketing (M) Sdn Bhd, Leung Kai Fook Medical Store and O’Seeker Marketing Sdn Bhd.  10 to 29 years  5 to 9 years  Auric Chun Yip Sdn Bhd, Danone Dumex, GlaxoSmithKline Consumer Healthcare Sdn Bhd, Groupe SEB Malaysia Sdn Bhd, LH Sales and Marketing Sdn Bhd, QSR Trading Sdn Bhd, Rich Products (M) Sdn Bhd and Susu Lembu Asli Marketing Sdn Bhd. Asia Food and Beverage Sdn Bhd, Bake With Me Sdn Bhd, Coca-Cola, DKSH Malaysia Sdn Bhd, Ginvera Marketing Enterprise Sdn Bhd, Indofood (M) Indu~tries Sdn Bhd, Kimberly-Clark Trading (M) Sdn Bhd, L’Oreal Malaysia Sdn Bhd, McCain International Inc, Network Foods Sdn Bhd, Novel Link Malaysia Sdn Bhd, Philips Malaysia Sdn Bhd, Shiseido (Malaysia) Sdn Bhd, Wang Sheng Food Trading and Wang-Zheng Corporation Sdn Bhd.  Less than 5 years
Note: Our suppliers consist of brand owners as well as their respective appointed distributors. Our proven track record will provide us with the platform to compete effectively and grow our business in the future. 6. BUSINESS OVERVIEW (Cont’d) (v) We have Economies of Scale
We benefft from economies of scale arising from the bulk distribution of a range of CPG including F&B products, personal care products, household products, baby care products as well as OTC drugs and health supplements. The bulk distribution of CPG enables us to spread our fixed costs across a large volume of products, and may provide us with the bargaining power to obtain better commercial terms with regards to product costs, credit terms, logistics arrangements and others.
(vi) We have Experienced Directors and Key Management Personnel

The extensive experience of our Directors and key management personnel form a competitive advantage for our Group in terms of our market understanding and market knowledge, established customer and supplier relationships. Their experiences have been and still continue to be instrumental to the success, growth and development of our Group. Our Non­Independent Managing Director, Datuk Lau has approximately 40 years of experience in the distribution industry, while our Non-Independent Executive Directors, Dexter Lau and Lim Hui Kiong have approximately 12 years and 33 years of experience respectively. 6.1.2 Our Value Proposition Our value proposition differentiates us from other operators in the industry, as well as enables us to create wealth for our shareholders. These include the following: (i) We are a first tier provider of market access and coverage in the distribution of CPG in Sabah
According to the IMR Report, we are a major provider of market access and coverage of CPG in Sabah and pride ourselves as one of the top three first tier distributors in Sabah. Our market position provides us with the leverage to represent more brand owners, and to be able to provide wider market access and coverage for brand owners of CPG.
(ii) We operate in a large market for the distribution of CPG

We currently distribute CPG to various locations within Sabah, Sarawak and Labuan. According to the IMR Report, the market size for the distribution of CPG in East Malaysia in 2014 was estimated at RM6.8 billion. The size of the combined markets comprising Sabah, Sarawak and Labuan in East Malaysia provides us with growth opportunities to create wealth for our shareholders. Please refer to Section 7 of this Prospectus for details on the IMR Report. 6. BUSINESS OVERVIEW (Cont’d) 6.1.3 Our Drivers of Growth Our drivers of growth incorporate a combination of expansionary strategies incorporating markets, products and business activities. These include the following: (i) We have horizontal expansion with our own brands of CPG As at LPD, the vast majority of our revenue is derived from the distribution of third party brands. Nevertheless, we have started on our own brands of frozen and dry food, beverage products and bakery products. For FYE 30 June 2015, our own brands of CPG and bakery products amounted to 4.74% of our total Group revenue. As part of our future plans, we intend to further expand on our portfolio of products under our own brands of CPG and we expect this segment to contribute further to our business growth and performance. (ii) We have vertical expansion with our manufacturing of bakery products We have recently expanded vertically into the manufacturing of our own brand of bakery products. This provides us with the platform for business growth, expansion as well as diversification. For FYE 30 June 2015, the manufacturing of bakery products amounted to 2.09% of our total Group revenue. While our bakery products as at LPD, cover cream rolls in a number of flavours, we intend to expand on our range to include other bakery products, which is expected to provide us with additional source of revenue. As our bakery products are mainly sold in Kota Kinabalu, Sandakan, Tawau and Labuan as at LPD, our future market expansion plans into Brunei and Sarawak is expected to further contribute to the growth of our manufacturing operations. (iii) Our market expansion in Sarawak and Brunei We have growth plans to expand further into Sarawak and Brunei in the provision of market access and coverage of CPG. For the FYE 30 June 2015, revenue from Sarawak represented 4.51 % of our total Group revenue. Since the acquisition of KTC Sarawak was completed in December 2013, we have started laying the ground works for further expansion by setting up three (3) distribution centres in Sarawak, one each in Kuching, Sibu and Miri as at LPD. As at LPD, through KTC Sarawak, we were appointed by eight (8) companies for distribution of CPG to cover Sarawak. We expect further revenue contribution from the Sarawak market itself as the market size for the distribution of CPG is estimated at RM3.9 billion and is approximately 1.3 times larger than Sabah. (Source: IMR Report) Our presence and continued efforts in penetrating the Sarawak market would provide further growth for our business. We intend to make further inroads into the Sarawak market through the following efforts: Continue to strengthen the sales and marketing team and increasing various marketing activities such as business development for new customers, expanding product range to existing customers, and undertaking more promotions. In terms of expanding our product range, we intend to focus on the distribution of our own brand of F&B products in Sarawak, one of which is to leverage on the existing presence of the ‘Orie’ and “Creamos” brands of F&B products. In addition, we intend to launch some of the other new products under our own existing brand name as well as the launch of a new brand namely “Butter Maid” as part of our future plans. Some of these new products include dry food, beverage, chilled and frozen food as well as personal care products to the Sarawak market. Part of our business intention is to continuously expand on the coverage of our existing brands as well as secure new brands under the distribution of third party brands of CPG covering both Sabah and Sarawak markets. 6. BUSINESS OVERVIEW (Cont’d) Expand warehousing facilities to increase total warehouse space from 25,360 sq ft to approximately 45,000 sq ft in Sarawak. The larger warehousing space will enable us to store a wider range of products to cater for business expansion. Part of our future plans is to enter the Brunei market which will form a new geographical expansion for our distribution of CPG. In 2014, the market size for the distribution of CPG in Brunei was estimated at RM542 million (Source: IMR Report). This is expected to provide an additional market which serves as a source of revenue growth for our business. (iv) Increase in our sales and distribution points As at LPD, we have access to 6,419 sales and distribution points for our CPG products including bakery products. In September 2014, we have commenced the distribution of beverages for a brand owner covering certain districts in Sabah and Labuan. As at LPD, there are approximately 2,000 potential sales and distribution points that we have yet to penetrate and these additional sales and distribution points would enable us to increase our access and coverage to a wider base of customers. The approximately 2,000 potential sales and distribution points are mainly for Sandakan, Tawau, Lahad Datu, Labuan and Kota Kinabalu as well as Kuching, Miri and Sibu. 6.2 OUR BUSINESS OPERATIONS, PRODUCTS AND SERVICES As at LPD, we cover the five (5) main product categories below: (i) F&B products mainly including dry food, frozen food, chilled food and beverage products;
(ii) personal care products which include skin and body care, hair care, oral care and others such as sanitary care, cosmetics and eye care, among many others;

(iii) household products, among others, include laundry detergents and other cleaning products, air fresheners, electrical appliances, kitchenware items, lighting products and others; (iv) baby care products, among others include diapers, baby wipes and accessories, baby body care products and baby food; and
(v) OTC drugs and health supplements.

Our provision of market access and coverage activity encompasses third party brands as well as our own brands of CPG. Our other business activity is in the manufacture of bakery products. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.2.1 Distribution of CPG Our main revenue stream is derived from the distribution of CPG incorporating warehousing and various marketing activities including, among others, point-of-sale promotions, trade visits and product demonstrations at retail outlets. As a provider of market access and coverage of CPG, we are supported by 18 distribution centres in East Malaysia as at LPD. This is as depicted below: Our Distribution Centres in East Malaysia 1 DC =3,000 sq. ft.
D. C=Distribution Centre Note: The built-up area of each distribution centre above comprised at the very least, a warehousing facility while other distribution centres have a combination of either a head office, an administration office or branch office together with warehousing facilities. 6. BUSINESS OVERVIEW (Cont’d) 6.2.1.1 Operation of the Distribution Centres As at LPD, out of the 18 distribution centres, we operate nine (9) while the remaining nine (9) are outsourced to external parties. The distribution centres as segmented by geographical coverage and Subsidiary Companies are as follows: Our Subsidiary Companies AMDA Marketing KTC Distribution KTC Sarawak KTC Sdn Bhd KTCTawau Total  Distribution Centres (by district) Kota Kinabalu Kota Kinabalu Sandakan(4) Labuan Tawau Lahad Datu(4) Kudat(4) Keningau(4) Sibu Kuching Miri Kota Kinabalu Sandakan(4) Labuan(4) Tawau(4)  Number of Distribution Centres 2 3  Geographical Coverage of districts by Subsidiary Companies(1) 18 districts in Sabah(2), namely Beaufort, Keningau, Kota Belud, Kota Kinabalu, Kota Marudu, Kuala Penyu, Kudat, Nabawan, Papar, Penampang, Putatan, Ranau, Sandakan, Sipitang, Tambunan, Tawau, Tenom and Tuaran, as well as Labuan. Sabah including 14 districts, namely Beaufort, Kota Belud, Kota Kinabalu, Kota Marudu, Kuala Penyu, Nabawan, Papar, Penampang, Putatan, Ranau, Sipitang, Tambunan, Tenom and Tuaran. Sandakan Labuan Tawau, Kunak and Semporna Lahad Datu Kudat Keningau 10 districts in Sarawak(3) namely, Dalat, Julau, Kanowit, Kapit, Meradong, Mukah, Sarikei, Selangau, Sibu and Song. 11 districts in Sarawak namely, Asajaya, Bau, Betong, Kuching, Lubok Antu, Lundu, Samarahan, Saratok, Serian, Simunjan, and Sri Aman, as well as seven sub-districts namely Debak, Engkilili, Kabong, Pusa, Roban, Sematan and Spaoh. 6 districts in Sarawak, namely Bintulu, Lawas, Limbang, Marudi, Miri, and Tatau, as well as two sub districts, namely Sebauh and Sibuti. 16 districts in Sabah(2), namely Beaufort, Keningau, Kota Belud, Kota Kinabalu, Kota Marudu, Kuala Penyu, Kudat, Nabawan, Papar, Penampang, Putatan, Ranau, Sipitang, Tambunan, Tenom and Tuaran. Sandakan Labuan Tawau, Lahad Datu, Kunak and Semporna
6. BUSINESS OVERVIEW (Cont’d) Notes:  (1)  Based on alphabetical order.  (2)  There are 25 districts in Sabah.  (3)  There are 31 districts and 28 sub-districts in Sarawak.  (4)  Outsourced to external parties, i.e.  Bakhtiar Logistic, Jessel Enterprise, Delta Expediters (M) Sdn Bhd,  Best Star Transport Sdn Bhd, Sahabat Jaya Enterprise and Star Borneo Logistics Sdn Bhd who are mainly  providers of warehousing space and/or warehousing and transportation services.  (5)  The total number of distribution centres excludes one of the warehousing facilities of KTC Distribution in
Sandakan as it shares the same premises with KTC Sdn Bhd. Depending on the location and the market coverage requirements of brand owners, our Group’s mode of operation will continue to have a combination of their own warehouses as well as outsourcing arrangements. The remaining nine (9) distribution centres are outsourced to external parties to minimise on capital expenses, such as purchase of land and building, and racking system, as well as reduce labour requirements and administration by our Group. Some consideration factors in appointing the external parties are manpower, location of warehouse, size and facilities of warehouse, as well as logistics for timely delivery. The IPO proceeds will provide our Group with funds to meet the capital outlay to construct and acquire warehousing facilities as disclosed in Section 6.18.1.1 of this Prospectus to cater for our future expansion. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Within each distribution centre, we are supported by the following facilities and services: (i) Warehousing Facilities As at LPD, out of the 18 warehouses, four (4) of these warehouses are owned by our Group, five (5) are rented facilities while the remaining nine (9) warehousing facilities are provided by our outsource partners. Details of the 18 warehousing facilities are as follows:
Includes cold room storage facility. Our distribution centres where the operation and premises are outsourced to external parties.
67 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) (ii) Cold Room Storage Facilities Of the 18 distribution centres, four (4) of these are equipped with cold room storage facilities including freezer rooms and chiller rooms. These cold room storage facilities are located in Kota Kinabalu, Tawau, Sandakan within Sabah as well as Labuan. As at LPD, details on the cold room storage facilities are as follows: Facilities Provided by  Owned Facilities  Outsourcing Party  TOTAL  Approximate Built- Approximate Built·  Approximate Built- Location  Units  up Area (sq ft)  Units  up Area (sq ft)  Units  up Area (sq ft)  Sabah  1  6,460  2  1,755  3  8,215  -Kota Kinabalu  1  6,460  – – 1  6,460  -Tawau  – – 1  630  1  630  -Sandakan  – – 1  1,125  1  1,125  Labuan  – – 1  286  1  286  TOTAL  1  6,460  3  2,041  4  8,501
Note: We currently distribute frozen and chilled food only to Sabah and Labuan. As such, there is no cold room storage facility in Sarawak as at LPD.
Our freezer rooms are used for frozen food such as processed food and ready-to-cook food, which need to be stored at a temperature of approximately minus 20 degrees Celsius (-20 DC). As for chiller rooms, these are commonly used to store chilled food such as dairy products, fruit juices, and desserts. The temperature of our chiller rooms is constantly maintained at approximately ODC. 68
6. BUSINESS OVERVIEW (Cont’d) (iii) Sales and Marketing As at LPD, we have 226 personnel focusing on sales and marketing activities. Our sales and marketing personnel are mainly involved in activities including, among others, customer business development, establishing product presence in the market including replenishment of stocks and distribution, implementation of promotions, trade visit to examine product shelf life and placement as well as collection of expired goods. We also undertake point-of-sale promotions where we have our product promoters to provide product demonstrations as well as distribute promotional materials to consumers in selected supermarkets and hypermarkets. (iv) Logistics We provide logistics services covering warehousing and delivery services to external customers where we provide storage and delivery of goods to specified locations or outlets in Kota Kinabalu. As at LPD, we provide logistics services for CPG covering certain products within personal care, certain products within OTC drugs and health supplements, and certain F&B products to food service outlets. For FYE 30 June 2015, income derived from our provision of logistics services was recorded under ‘other income’. Although these supporting facilities and services are non-revenue generating, they are complementary to our business operations. 6.2.1.2 Third Party and Own Brands of CPG (i) Third Party Brands of CPG Our business is mainly centred on the distribution of third party brands of CPG. As at LPD, we distribute approximately 194 third party brands of CPG for approximately 36 brand owners as well as their respective appointed distributors for the markets in East Malaysia. Details on all third party brands segmented by product categories are as follows: Product Categories F&B Products Personal Products Care  Number of Brands as at LPD 70 79  Brands A&W Sarsaparilla, Akasa, Aquarius, Arifmam, Arifpap, Ayamas, Berri, Brahim’s, Buttercup, Chefs Choice, Coca-Cola, Crispy, Dasani, Deka, Dua Kelinci, Dugro, Dulac, Durnil, Dupro, Fanta, Five Star, Glaceau, Goldenmaid, Gooal, Heaven & Earth, Horlicks, Hoya, Indomie, Just Juice, Kandos, Kara, Karta, Kewpie, Krip, Lactima, Ladaku, Leggo’s, Life, Mack Marine, Mamex, Mamil, Marjerin Seri, McCain, Meadow Lea, Melbourne, Minute Maid, Mission, Morin, Mother’s Choice, Nature’s Own, Old Village, Olive Grove, Pampas, Pop Mie, Rich’s, Sarimi, Schweppes, SCS, Simplot, Sprite, Sunshine, Sun Soya, Supermi, Tango, Toucan, Tudor Gold, Twin Cows, Uncle Sun, Wang Sheng and Wizefood. Aiken, Alaisyah, Aqua Label, Aquafresh, Avene, Bio­Essence, Cutex, Darlie, Dashing, Elienna, Elite, Elizabeth, Enchanteur, Etemal, Eucerin, Eversoft, Everyday, Follow Me, Forum, Gervas, Gervenne, Gillette, Ginvera, Gorich, Head & Shoulder, Herbal Essences, Irise, Izzi, Kleenex, Kerastase, Kotex, Le Scentuer, L’Oreal Professionnel, Loving, Nano White, New and Trendy, Nivea, Nutox, 02, Olay, Oral B, P. Love, Panmate, Pantene, Poise, Polident, Pureology, Quicklean, Rainna, Redken, Rejoice, Revlon, Revlon
6. BUSINESS OVERVIEW (Cont’d) Number of  Product  Brands as  Categories  at LPD  Household  18  Products Baby Care Products OTC Drugs and  15  12  Health  Supplements  TOTAL 194
Brands Absolute Radiance+, Revlon Brow Fantasy, Revlon ColorBurst, Revlon ColorSilk, Revlon ColorStay, Revlon Grow Luscious, Revlon New Complexion, Revlon Photoready, Revlon Super Lustrous, Romano, Safi, Sassy, Sawaday, Scott, Sensodyne, Shurah, Shurei, Silky, Skinz, Sumber Ayu, Syahirah, Teen, Tracia, Tsubaki, Uber, Whisper and ZA. Ambi Pur, Can Can, Carina, Downy, Duracell, Dynamo, Elastoplast, Fab, Febreze, Hansaplast, Joy, King Kong, King Lion, Maxkleen, Philips, Rowenta, ScoW, Supor and Tefal. Barney, Basic, Carrie Junior, Disney, Dry 5, Dryplus, Drypro, Ekonomi, Family, Heinz, Huggies, Inco, Maternity, PNJ and Pureen. Ammeltz, Axe Oil, Breathe Right, Ebene, Eno, Eye Mo, Panadol, Paradontax, Scott’s, Seirogan, Vicks and Zentel. Note: # Scott is counted as one brand under personal care products for its tissue paper products. (ii) Own Brands of CPG The strategy of distributing our own brands of CPG is to optimise on our existing network by supplying a wider range of brands of CPG and selection of products to the market. The following are our own brands of CPG segmented by product category: Type of CPG  Product Category  Brands  F&B Products  Frozen Food Dry Food Beverage Products  Orie(1) Orie(2) Orie(2), Creamos(2)  Personal Care Products  Wet Tissue  Bamble(3)
Notes: (1) The products are distributed in Sabah only.
(2) The products are distributed in Sabah and Sarawak.
(3) The products were only distributed in Sabah. However, subsequent to April 2014, the brand is no longer available in the market following the decision to review the price positioning of Bamble brand with the intention ofrelaunching the brand in the second half of 2016.

6. BUSINESS OVERVIEW (Cont’d) As for our own brands of CPG, we source the finished products from external manufacturers locally and overseas, which are packed under our own brand. This consists of frozen food, dry food and beverage products. In FYE 30 June 2012, we sourced our own brand of personal care products, which were the wet tissues from an external manufacturer in Malaysia. Nevertheless, we had stopped purchasing from the said external manufacturer since FYE 30 June 2013 as we are currently reviewing the price positioning of the Bamble brand with the intention of relaunching the brand in the second half of 2016. For the FYE 30 June 2015, we sourced our frozen food, dry food and beverage products from 10 external parties which comprised nine (9) manufacturers in Malaysia and one (1) manufacturer of frozen potato products in Belgium. 6.2.1.3 Product Categories We provide market access and coverage of the following product types of CPG, inclusive of third party brands and our own brands: (i) F&B Products Generally, we distribute the F&B products mainly comprising dry food, frozen and chilled food, beverage products. A sample of F&B products by brands is as follows: Category  (Revenue  Contribution  for  FYE 30 June  2015)  Type of Product  Dry Food (24.83% of revenue) Frozen Food (3.74% of revenue) Chilled Food (2.11% of revenue)  total total total  Milk Powder Powdered Drinks Canned Food Confectioneries and Snacks Sauces and Condiments Seasonings Coconut products Bread Spread Flour  Burger Patties Chicken Drummets Frankfurters/Sausages Potato-based Products Vegetables Nuggets Other Frozen Foods(2)  Butter Cheese Whipped Cream
Brands
Dugro, Dulac, Durnil, Dupro, Mamex, Mamil Horlicks, Sun Soya, Old Village Ayamas, Brahim’s Kara, Crispy
Ayamas, Brahim’s, Life, Orie(1) Uncle Sun Kara
Orie(1) Orie(1)
Ayamas
Ayamas Ayamas, Orie(1) Simplot, McCain, Orie(1) Ayamas, Simplot, McCain, Orie(1) Ayamas, Orie(1) Ayamas, Orie(1)
Buttercup Mother’s Choice Rich’s
6. BUSINESS OVERVIEW (Cont’d) Category (Revenue Contribution for FYE 30 June 2015) Beverage products (18.53% of total revenue) Type of Product Carbonated Drinks Non-Carbonated Drinks Brands  A&W Sarsaparilla, Schweppes, Sprite  Coca-Cola,  Fanta,  Minute Maid, Heaven and Dasani, Orie(1), Creamos(1)  Earth,
Notes: (1) KTC Group’s brand.
(2) Includes spring rol/ pastry and frozen seafood.

(ii) Personal Care Products A sample of personal care products by brands is as follows: Personal Care Products (Revenue Contribution for FYE 30 June 2015) Skin and Body Care (14.45% of total revenue) Hair Care (9.43% of total revenue) Oral Care (5.04% of total revenue) Others (0.35% of total revenue) Adult diapers Cosmetics Shaving Creams and Razors Sanitary Care Tissue paper Wet Tissue  Brands Aiken, Bio-Essence, Dashing, Enchanteur, Eversoft, Gervenne, Ginvera, Nanowhite, New & Trendy, Olay, Shurah, Follow Me, Nutox, Aiken, Dashing, Enchanteur, Eversoft, Everyday, Follow Me, Gervenne, Nivea, Shurah, and Tracia. Ginvera, Head & Shoulders, Herbal Essences, Pantene, Rejoice, Tracia, Shurah, Follow Me, Everyday, Gervenne, New & Trendy, L’Oreal Professionnel, Kerastase, Redken, Pureology Aquafresh, Oral-B, Sensodyne, Darlie, Follow Me P.Love Silky, Shurah, Follow Me, Enchanteur, Revlon Gillette Kotex, Poise, Tracia, Whisper Kleenex, Scott Bamble(1)(2)
Notes: (1) KTC Group’s brand.
(2) Subsequent to April 2014, the brand is no longer available in the market fol/owing the decision to review the price positioning of Bamble brand with the intention of relaunching the brand in the second half of 2016.

6. BUSINESS OVERVIEW (Cont’d) (iii) Household Products A sample of househotd products by brands is as follows:
Household Products (Revenue Contribution for FYE 30 June 2015)  Brands  Laundry Detergents (6.90% of total revenue) Other Cleaning Products (0.88% of total revenue) Air Freshener (3.01% of total revenue) Others* (0.33% of total revenue)  Downy, Dynamo, Fab, Febreze Joy, Maxkleen Ambi Pur Can Can, King Kong, Philips and Tefal
Note: Include household pesticides, electrical appliances and kitchenware. (iv) Baby Care Products A sample of baby care products by brands is as follows: Baby Care Products  Brands  Diapers Baby Wipes Baby Accessories Baby Food Baby Body Care Products  Dry 5, Drypro, Dryplus and Huggies Pureen Pureen Heinz Carrie Junior
For FYE 30 June 2015, baby care products represented 5.42% of our total revenue. (v) OTC Drugs and Health Supplements A sample of OTC drugs and health supplements by brands is as follows: OTC Drugs and Health Supplements  Brands  OTC Drugs Health Supplements  Axe Oil, Eye Mo, Panadol, Vicks Scott’s, Seirogan, Zentel
For FYE 30 June 2015, OTC drugs and health supplements represented 2.89% of our total revenue.
Some of our manufacturing processes are depicted below:
Pressing the dough Moulding
Slicing and Filling Automated Packing 6. BUSINESS OVERVIEW (Cont’d) 6.3 DISTRIBUTION Our distribution channel is illustrated in the diagram below: Distribution Channel
Note: Distributors as a channel is utilised mainly for bakery products only, with the exception of one (1) appointed sub-distributor for our CPG. We adopt both direct and indirect distribution channels. Direct distribution channel is where we sell our products to customers who are users of the products, namely food service operators. Indirect distribution channel is when we sell our products to intermediaries who does not use or consume our products directly, but resells our products in their original form to other customers. As at LPD, we distribute to 6,419 sales and distribution points, including retail outlets such as hypermarkets, supermarkets, departmental stores, sundry shops, convenience stores, pharmacies, petrol kiosks, electrical and electronic hardware stores, clothing stores, stationery stores and, book shops as well as wholesalers, distributors and food service operators. This applies to both CPG and bakery products. Indirect Distribution Channel We primarily use an indirect distribution channel for CPG namely through retailers and wholesalers to reach the end-consumers. For FYE 30 June 2015, our sales through indirect distribution channels such as retailers and wholesalers accounted for 98.14% of our total revenue. The strategy of using indirect distribution is in line with our objective to gain access to the mass market. In this respect, we distribute the products through intermediaries including retailers and wholesalers. As for our bakery products, as at LPD, we have 10 appointed distributors who resell our bakery products to retail outlets in the Kota Kinabalu, market covering Beaufort, Inanam, Keningau, Kinarut, Kota Marudu, Kudat, Menggatal, Penampang, Petagas, Putatan, Ranau, Sepanggar, Tamparuli and Tambunan, as well as Tawau and Labuan. These distributors, who are also our customers comprised mainly smaller enterprises. Utilising intermediaries including retailers, wholesalers and distributors enable us to use their existing network to expand our market coverage without the need for significant investments in logistics. 6. BUSINESS OVERVIEW (Cont’d) Direct Distribution Channel A small proportion of our CPG business is channelled to food service operators who would then utilise the CPG in their business operations. Food service operators are our customers. For FYE 30 June 2015, our sales through direct distribution channel accounted for 1.86% of our total revenue. 6.4 OUR PRINCIPAL MARKETS For FYE 30 June 2015, our Group’s principal market is Malaysia as it accounted for all of our total revenue. The breakdown of our Group’s revenue by markets for the FYE 30 June 2015 is as follows: Revenue Segmentation by Markets for FYE 30 June 2015 RM’OOO  %  Sabah  272,294  90.80  Labuan  14,062  4.69  Sarawak  13,510  4.51  TOTAL  299,866  100.00
For the FYE 30 June 2015, most of our revenue was derived from Sabah as it accounted for 90.80% of our total revenue while 4.69% was from Labuan. The remaining 4.51 % was contributed by Sarawak. 6.5 SEASONALITY Overall, our Group does not experience any significant seasonality trends. While we experience some fluctuations in our monthly sales records, there are no significant trends in seasonality on a year-to-year basis. This is partly due to our Group’s diversified portfolio of CPG which include F&B products, personal care products, household products, baby care products, and OTC drugs and health supplements. Our diversity in product range balances out any peaks and troughs. In addition, a large proportion of the CPG that we distribute are products which are used on a regular basis, therefore they are not subjected to any seasonality. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.6 TYPES, SOURCES AND AVAILABILITY OF RAW MATERIALS, PRODUCTS AND SERVICES As a provider of market access and coverage of CPG, our purchases are mainly products for our business operations, raw materials for the manufacture of bakery products and services. The following are the major types of products, raw materials and services that we purchased for our business operations during FYE 30 June 2015: Purchases of Products, Raw Material and Services for FYE 30 June 2015 Distribution of Third Party CPG F&B products -Dry Food
. Milk Powder . Other Dry Food (1)
_ Beverage Products (2) -Frozen and Chilled Food (3) _ Others (4)
Personal Care Products (5) Household Products (6) Baby Care Products OTC Drugs and Health Supplements Distribution of Own Brands of CPG Frozen and Dry Food, and Beverage Products (7) Raw Materials for Manufacture of Bakery Products Flour Flavourings Shortening and yeast Sugar Margarine Others (8) Packaging Materials Services Transportation and Warehousing TOTAL
Proportion of  Sources of Supply  Value of  Total Group  Purchases  Purchases  Local*  Import  (RM’OOO)  (%)  (%)  (%)  265,746  94.18  95.99  4.01  123,531  43.78  100.00  – 57,919  20.53  100.00  – 42,904  15.21  100.00  – 15,015  5.32  100.00  – 56,032  19.86  100.00  – 8,763  3.11  100.00  – 817  0.29  100.00  – 80,428  28.51  86.74  13.26  32,951  11.68  100.00  – 20,203  7.16  100.00  – 8,633  3.06  100.00  – 7,897  2.80  93.14  6.86  7,897  2.80  93.14  6.86  3,178  1.13  100.00  – 1,307  0.46  100.00  – 1,026  0.36  100.00  – 171  0.06  100.00  – 162  0.06  100.00  – 123  0.04  100.00  – 62  0.02  100.00  – 327  0.12  100.00  – 5,332  1.89  100.00  – 5,332  1.89  100.00  – 282,153  100.0  96.03  3.97
Notes:  Includes sourcing from suppliers with representative offices in Malaysia. This situation is recorded as local  supply.  (1)  Comprised powdered drinks, sauces and condiments, snacks, confectioneries, coconut milk and canned  food.  (2)  Comprised juices and other liquid form beverage products.  (3)  Comprised  burger patties,  chicken  drummets,  frankfurters  and  sausages,  potato-based products,  vegetables, nuggets, butter, cake, cheese, margarine, whipped cream and other meat products.  (4)  Others include instant noodle, instant soup, instant brown rice powder and brown rice.  (5)  Comprised hair care, body care, skin care, oral care and eye care products, cosmetics, and sanitary  products.  (6)  Comprised amongst others, cleaning products, laundry detergents, dishwashing detergents, air fresheners,  household pesticides, paper products, stationaries, kitchenware and electrical appliances.  77
6. BUSINESS OVERVIEW (Cont’d) (7) Comprised frozen and dry food and beverage products marketed such as sausages, nuggets, potato based products, margarine, spring roll, flour, dark soy sauce, vinegar, peanut butter, and mineral water under our own brand ‘Orie’.
(8) Others include sweeteners, condensed milk, salt, cooking oil and softener.

For FYE 30 June 2015, our total purchases of products, raw materials and services amounted to RM282.15 million. Our purchases of products, raw materials and services from local sources accounted for 96.03% whilst the remaining 3.97% were sourced directly from imports during FYE 30 June 2015. Local sources of supply include sourcing of products from external manufacturers for our own brand of CPG or suppliers with representative offices in Malaysia for the distribution of third party CPG. Distribution and Warehousing Operations As a provider of market access and coverage of CPG, our purchases are mainly finished products for our business operations, which represented 96.98% of our Group’s total purchases of products, raw materials and services for FYE 30 June 2015. Of this, purchases of CPG under third party brands accounted for RM265.75 million or 94.18% of our Group’s total purchases of products, raw materials and services for FYE 30 June 2015. The types of third party brands of CPG that we purchased were F&B products, personal care products, household products, baby care products, and OTC drugs and health supplements, which respectively accounted for 43.78%, 28.51 %, 11.68%, 7.16% and 3.06% of our Group’s total purchases of products and services. Within the F&B products category, dry food constituted the largest purchases at 20.53% of our total purchases. Within the same category, the next largest purchases were beverage products at 19.86% For distribution and warehousing of our own brands of CPG, we purchase our own brands of CPG, comprising frozen and dry food, and beverage products from external manufacturers. These included sausages, nuggets, potato based products, margarine, spring roll, flour, dark soy sauce, vinegar, peanut butter, and mineral water. For FYE 30 June 2015, purchases of our own brands of CPG accounted for 2.80% of our Group’s total purchases of products, raw materials and services. Manufacturing Operations For our bakery product manufacturing operations, we purchased raw materials and packaging materials which collectively accounted for 1.13% of our Group’s total purchases of products, raw materials and services. These included flour, flavourings, shortening and yeast, margarine, sugar, sweeteners, condensed milk, salt, cooking oil and softener. In addition, we engaged external parties for transportation and warehousing services for our business operations including the physical delivery of CPG and our bakery products. For FYE 30 June 2015, purchases on transportation and warehousing services accounted for RM5.33 million or 1.89% of our Group’s total purchases of products, raw materials and services. Our purchases of raw materials for manufacturing operations represented a small proportion of 1.13% of our total purchases of products, raw materials and services for FYE 30 June 2015. In this respect, the impact of fluctuations in prices of raw materials would be minimal to our Group. Nonetheless, there is no assurance that our financial performance may not be affected by fluctuations in the prices of our raw materials in the future. As at LPD, we have not encountered any interruptions in the supply of finished goods, raw materials or services for our business operations. 6. BUSINESS OVERVIEW (Cont’d) 6.7 TECHNOLOGY USED SAP Business Management Software System Our Group utilises SAP, an integrated computerised software solution to facilitate the management of our distribution and manufacturing operations. SAP is an ERP system that enables us to coordinate the capture, storage, management and processing of information for inventory control. The SAP system is built on a centralised database that allows different divisions within our Group to share information including: Incoming and outgoing movement of goods; Cost of our inventories; and Sales performance.
The benefits of the SAP system include: Simplifying the information collection and dissemination process; Speeding up the information collection process; Minimising labour requirements for data entry; Minimising data entry errors due to human mistakes; Providing better quality reports on inventory levels including inventory ageing report; and Improves work efficiency with real-time information.
We have also developed a customised module to monitor inventory levels as well as to facilitate analysis of inventory. The SAP system allows us to have better control of our inventory, improve the efficiency of our business processes, establish better methods for the delivery of goods and payment collection, and provide assurances to our suppliers whom are brand owners, as well as customers of our focus on service quality. This is only applicable to our own business and warehousing and manufacturing operations with the exception of AMDA Marketing which is dedicated to P&G. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.8 PRODUCTION FACILITIES AND OPERATION CAPACITIES (i) Production Capacities Distribution and Warehousing Operations As our business operations is primarily involved in the distribution and warehousing of CPG, the following capacity and estimated utilisation is based on our warehousing facilities as at LPD: Warehousing(3) Capacity and Estimated Utilisation Rates as at LPD Estimated  Available  Utilised  Capacity(1)  Capacity(2)  Estimated  (No. of  (No. of  Utilisation  Pallets)  Pallets)  Rate  General warehousing Cold room storage facilities -Kola Kinabalu  9,817 548  8,488 530  86% 97%
Notes: (1) Available capacity is calculated based on the total number of pallet space available from the racking system instalJed in our Group’s warehouse and cold room facilities. Racking system refers to a multi­level steel structure shelving system for the storage of goods on pallets.
(2) Estimated utilised capacity is based on the average number of pallet space filled over a period of seven (7) days just prior to LPD. To be prudent, we have taken into consideration the depletion of stocks and restocking over a period of 7 days just prior to LPD to be conservative and provide a reasonable estimate of warehouse space available. This is usually the basis used in our ordinary course of business to determine whether there is sufficient warehouse space to cater to new brand owners.
(3) The above estimated utilisation rates are only for owned and rented properties by our Group.

Estimated Warehouse Utilisation Rates Estimated Utilisation Rate(1)  As at 30 June 2012  As at 30 June 2013  As at 30 June 2014  As at 30 June 2015  General warehousing Cold room storage facilities -Tawau -Kola Kinabalu  77% 94% 62% 100%  92% 93% 58% 100%  90% 100%(2) 100% 100%  84% 90% 70% 95%
Notes:  (1)  The above estimated utilisation rates are only for owned and rented properties by our Group.  (2)  As at 30 June 2014, we recorded high utilisation rates due to the timing of the arrival of our own  brand of frozen products from our external manufacturer in the month ofJune 2014.
6. BUSINESS OVERVIEW (Cont’d) Manufacturing ofBakery Products As part of our business activities is in the manufacture of bakery products through our wholly owned subsidiary company, Creamos Malaysia, the production output, capacity and utilisation rate in relation to the manufacturing-of bakery products are presented in the table below: Production Output, Capacity and Utilisation Rate per Shift Production  Type of Product  Capacity per Shift (pieces)  Output per shift (pieces)  Utilisation Rate (%)  Bakery Products  51,200  38,000  74
Note: Capacity is calculated based on machinery and equipment installed capacity and running 12 hours per day for each shift. We are currently operating based on one (1) shift per day. (ii) Operational Facilities Our operational facilities are currently located in Malaysia: Companies within Our Group  Main Functions  Approximate Built-up Area (sq ft)  Location of Facilities  KTC Sdn Bhd  Head office Warehousing facility  8,400(3) 9,000  Lot 73  Administration office Warehousing facility  8,241(3) 13,743  Lot 74A & Lot 74B  Branch office  1,125  Lot 7, Block C, 1st Floor, Mile 8, North Road, 90000 Sandakan, Sabah(1)  Warehousing facility  30,000  KM 10.5, Jalan Batu Sapi, 90000 Sandakan, Sabah(2)  Administrative office Warehousing facility  300 45,300  Mile 5.5, Tuaran Road, Off Kolombong Road, BDC/SEDCO Industrial Estate, 88450 Inanam, Kota Kinabalu, Sabah(2)  Branch office Warehousing facility  506 19,240  Hub Halal Labuan Complex, Jalan Bebuloh, Kiansam, 87000 Federal Territory of Labuan(1)  KTC Tawau  Administration office Warehousing facility  2,400 19,574  Lot 1A, 2A & 3A  Warehousing facility  10,000  Lot 4, TB7774, Jalan Sungai Tajong, 91000 Tawau, Sabah(2)  AMDA Marketing  Administration office Warehousing facility  4,200 12,600  Lot 22
6. BUSINESS OVERVIEW (Cont’d) Companies within Our Group  Main Functions  Approximate Built-up Area (sq ft)  Location of Facilities  Creamos Malaysia  Factory  5,600  KTC Distribution  Administration office Warehousing and cold room storage facility  1,130 14,370  Lot 5  Warehousing facility  21,200  Lot 5 and 7, Dasamley Industrial Park, Jalan Pantai, Mile 2%, Off Jalan Apas, 91000 Tawau, Sabah(1)  Cold room storage facility  630  TB 1250, Jalan Bellunu, Jalan Merak, 91000 Tawau, Sabah(2)  Warehousing facility  20,000  Lot 25, POIC Area, Jalan Tengah Nipah, 91199 Lahad Datu, Sabah(2)  Warehousing facility  20,000  KM 10.5, Jalan Batu Sapi, 90009 Sandakan, Sabah, Malaysia(2)  Warehousing facility  3,000  Jalan Stesen Radio, KM 18, Jalan Sikuati, 89058, Sabah(2)  Warehousing facility  9,000  1 % KM, Kg. Limbawan, Jalan Nabawan, Keningau, Sabah(2)  Cold room storage facility  1,125  Lot 7, Block C, Ground Floor, Mile 8, North Road, 90000 Sandakan, Sabah(2)  Cold room storage facility  286  DT 0111, Jalan Pohon Batu, Kampung Durian Tanjung Simpang 10,87000 Labuan(2)  KTC Sarawak  Adm’mistration office Warehousing facility  1,890 6,360  Lot 73, Block 5, Seduan Land District, Ding Lik Kon~ Road, 96000 Sibu, Sarawak 1)  Branch office Warehousing facility  400 7,000  Lot 2363, Batu Kitang Light Industrial Park, Mile 7%, Jalan Batu Kitang, 93250 Kuching, Sarawak(1)  Branch office Warehousing facility  960 12,000  Lot 1259, Block 5, Kuala Baram Land District at Desa Senadin, Jalan MaiRold, 98000 Miri, Sarawak(
Notes:  (1)  Rented premises.  (2)  Property provided by outsourcing partners.  (3)  Excludes space rented out to external parties.
6. BUSINESS OVERVIEW (Cont’d) 6.9 OUR BUSINESS AND OPERATIONAL PROCESSES 6.9.1 Distribution and Warehousing of CPG The process flow for the distribution and warehousing of CPG is depicted in the diagram below:
,—Cair.rm–­–, information in ~ __~~P_~ts~e.!!L _ ,-*”————————–…. 1 : Dry Goods : Compartment I I !( Chiller Room HIl(FreezerRoom \ ‘~————————-~~ “”———-­…II Quality Check : J I ,———–, 6. BUSINESS OVERVIEW (Cont’d) Note: The printed invoices are usually delivered together with the goods. Under the Accountants’ Report, revenue recognition is derived from the sales of goods upon transfer of ownership of the goods to the customer. Please refer to Section 13, Subsection (6)(C)(p) of this Prospectus for details on revenue recognition. The process commences by obtaining supplies of CPG or inventory from our suppliers. The inventory received is then keyed into our SAP system. A stock count of the inventory is conducted by the logistic supervisors to confirm the information in the SAP system and/or ascertain if there are any stock variations for inventory reconciliation purposes. We will then proceed to confirm the information, such as inventory amount, into our SAP system. Once entered, this will ensure that the inventory quantity received is equivalent to the amount invoiced by our suppliers. This will also allow us to keep track of inventory levels. The inventories are then segmented by type such as dry F&B products, frozen and chilled food, personal care, household products, baby care products, OTC drugs and health supplements before they are stored in our warehousing and/or cold room storage facilities. Upon receiving purchase orders from our customer, a sales order is created and sent to the commercial supply chain division. The commercial supply chain division will then print out the invoices from our SAP system, which will also record all outgoing inventory. The next process involves the creation of a picking list containing itemised list of CPG in accordance to the invoices, which is then handed over to the warehouse assistants. At the warehousing and/or cold room storage facilities, products ordered by our customers are picked out from the pallets according to the itemised picking list. Depending on our customer’s request, we will break bulk and fulfil the customer’s orders into smaller required lots according to the invoices. While breaking bulk, the logistic supervisors will check on the condition of the CPG before they are repacked into smaller boxes, which will then be sealed tightly to prevent the goods from being damaged. The commercial supply chain division will then generate a delivery summary from our SAP system for our outgoing goods. The logistics supervisors will then undertake a final quality check on the condition of the CPG before delivery. Subsequently, we will appoint a logistics service provider to undertake the delivery of the products to the customer. The delivery time varies depending on the location of the customers. Usually, the delivery time for customers that are located in the central area such as Kota Kinabalu takes approximately two (2) days while customers in remote locations requires a longer delivery time of approximately one (1) week. The customer is required to sign and stamp the invoice as proof of delivery. The signed invoice is then returned to us for documentation and record keeping purposes. As part of our internal control procedures, our treasury and commercial development divisions are tasked to perform reviews on our customer credit limits on a bi-annual basis. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.9.2 Manufacturing of Bakery Products The process flow for the manufacture of bakery products is depicted in the diagram below: Source Raw Materials
i
Raw Material Inspection
i
Mixing +
Proofing (Dough resting period) i
Dividing i
Rounding i
Pressing ~
Moulding ~
Panning -+ Final Proofer i Oven i

Cooling i Slicing ~ Filling +
Packing i
Palletising ~
Storage ~ Loading &I-­Delivery 6. BUSINESS OVERVIEW (Cont’d) The process flow for the manufacture of bakery products begins with the sourcing of various raw materials such as flour, water, pre-mixes and other ingredients. Once the raw materials are delivered, they are thoroughly checked and inspected to ensure that the ingredients meet with the specifications. After checking, the raw materials are then weighed and placed in a mixer to be blended before being transformed into a homogenous dough mix. Upon completion of the mixing process, the dough will be left to rest for a specific period of time before being sent to a divider where it is divided into smaller individual pieces of dough that are uniform in terms of weight and size. Having gone through the divider, the pieces of dough are deformed and normally end up with sticky cut surfaces. As such, a rounder is used to smoothen the surface skin of each piece of dough. The next process involves the pressing and moulding of an array of dough pieces, which are then placed in baking pans before stacking in a trolley. Before being sent to an oven, the pieces of dough are deposited into a final proofer to facilitate fermentation process. After baking, the baked bread is taken out from the oven and left to cool down. The bread is then sliced in the middle for insertion of flavoured fillings before it is packed individually, palletised and stored or delivered to customers. 6.10 QUALITY ASSURANCE 6.10.1 Distribution and Warehousing Operations (i) Third Party Brands The following are some of the internal quality processes that we undertake in our distribution and warehousing operations: visual inspection of CPG is conducted during the bulk breaking process to ensure that there are no damaged goods before delivery to our customers; routine checks on our portfolio of CPG including their method of display, pricing and promotions, if any, to ensure consistency in different retail outlets; and as part of our customer service, our sales and marketing team consistently follow-up with respective customers to obtain their feedback on the sales performance, market acceptance and reaction to our portfolio of CPG. (ii) Own Brands As for our own brands of CPG, we source the finished products from external manufacturers locally and overseas, which are packed under our own brand. This consists of frozen and dry foods, as well as beverage products. For the FYE 30 June 2015, we sourced our frozen and dry foods, and beverage products from a total of 10 external parties which comprised nine (9) external manufacturers in Malaysia and one (1) manufacturer of frozen potato products in Belgium. As at LPD, all our external manufacturers in Malaysia are accredited with the following certifications: • ISO quality assurance certification;
• HACCP certification; and/or
• Halal certified products.

Part of our in-house procedures to qualify new external manufacturers as well as to maintain the quality of our existing external manufacturers of F&B products for our own brand of CPG includes the following: 6. BUSINESS OVERVIEW (Cont’d) for new manufacturers, we would conduct a visit to the respective manufacturer’s production facilities to audit their processes prior to engaging them as a supplier; request for recognised and industry quality certifications including, among others, ISO, HACCP and Halal certificate (if relevant) and continuous updates to these certifications; conduct a sample batch of production to assess the quality of the finished products before mass production; and continue to conduct bi-annual visits to the production plant to check on quality or discuss product improvements. 6.10.2 Manufacture of Bakery Products We adopt various quality management processes for the manufacture of our bakery products to ensure consistency in quality. Some of the quality checking processes that are undertaken at our production floor are as follows: quality checks and visual inspections on incoming raw materials such as premix ingredients, flour, sugar, yeast and margarine prior to using the raw materials in production. Types of quality checks at our production floor include monitoring water temperature, weightage of ingredients prepared, checking the weight and temperature of the dough, monitoring mixing time and speed, temperature and time for proofing, baking, and cooling, as well as visual inspection for packaging and sealing; in-process checking on various processes from mixing, fermentation, dividing, rounding, moulding, panning, proofing, baking and filling up for packing. Some of the consideration factors for assessment include mixing of ingredients, weighing of ingredients, timing, and temperature control relatively to humidity as well as baking temperature, for example, controlling the mixing time to ensure the dough reach its optimum stage with desired dough consistency and gluten structure. In addition, random samples are collected from our production on a daily basis to observe any visible fungus growth. We also send samples of each flavour of our bakery products to an external independent laboratory for microbiological tests on a weekly basis. Tests are then conducted on our samples every alternate day covering the period of our product shelf life. Microbiological tests undertaken include the following: standard plate count, refers to number of microorganisms such as bacteria, yeast and mould that will grow on a nutrient plate after 72 hours under controlled conditions; coliform count, refers to total number of coliform bacteria; and escherichia coli (E Coli) count, refers to total number of E Coli, which is one of the species of coliform. We are currently in the process of setting-up our own in-house laboratory to undertake basic microbiological tests in our new manufacturing facility in Kota Kinabalu Industrial Park (KKIP), Sabah by the second half of 2015 (please refer to Section 6.18.1.2 of this Prospectus for further details). As at LPD, we have three (3) personnel that is involved in the quality control and checking processes for our distribution and manufacturing operations. 6. BUSINESS OVERVIEW (Cont’d) As at LPD, we also have a Halal committee comprising 11 personnel led by a Halal executive who is responsible for developing, monitoring and controlling the Halal assurance system to ensure its effectiveness. Some of the responsibilities of the committee members include procuring Halal raw materials for the manufacturing operations, ensuring all processes for Halal products meet the Halal requirements, and ensuring there is no contamination of non­Halal items at the production area. 6.11 RESEARCH AND DEVELOPMENT (“R&D”) Policy on R&D We are primarily a provider of market access and coverage of third party brands as well as own brands of CPG, therefore R&D is not relevant to this part of our business. As for the manufacture of bakery products, we are mainly involved in product improvements and/or enhancements. As such, we do not undertake any specific R&D activities. R&D Expenditure Currently, our Group does not have dedicated R&D facilities or personnel. As we do not undertake any R&D, we did not recognise any expenditure that is specific to R&D activities for the FYE 30 June 2012, FYE 30 June 2013, FYE 30 June 2014 and FYE 30 June 2015. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.12 MAJOR CUSTOMERS For FYE 30 June 2015, we serviced a customer base of approximately 5,9-39 customers com prising: retailers including hypermarkets, supermarkets, departmental stores, sundry shops, convenience stores, pharmacies, petrol kiosks, Chinese medical halls, electrical and electronic hardware stores, clothing stores, stationery stores and book shops; wholesalers including smaller enterprises that supply to sundry shops and other retailers in outskirt areas and a ship chandler; operators of food services including restaurants, bakeries, hawker stalls, caterers, hotels, recreational clubs and other eateries; and distributors, including appointed distributors for our bakery products and a sub­distributor for our CPG. For FYE 30 June 2015, revenue contribution from retailers accounted for 87.92% of our total revenue, followed by 8.11 % from wholesalers, 2.11 % from distributors and 1.86% from operators of food services. Our customers that have contributed 10% or more of our total revenue for the past four (4) FYE 30 June 2012 to 2015 are as follows: Customers  Length of relationship (Years)  FYE 30 June 2012 RM’OOO (%)  FYE 30 June 2013 RM’OOO (%)  FYE 30 June 2014 RM’OOO (%)  FYE 30 June 2015 RM’OOO (%)  Total Revenue (RM’OOO)  200,332 22,904 11.43  222,731 24,947 11.20  229,530 24,617 10.72  299,866 26,936 8.98 Servay Hypermarket (Sabah) Sdn Bhd  18
Servay Hypermarket (Sabah) Sdn Bhd was our largest customer as the company accounted for more than 10% of our Group’s total revenue for FYE 30 June 2012, 2013 and 2014. However, this customer contributed less than 10% of our Group’s total revenue for FYE 30 June 2015, indicating a decline in customer dependency. We have been servicing this customer for approximately 18 years, indicating a stable business relationship and providing the basis for a continuing business relationship. Our business is dependent on a group of customers where Servay Hypermarket (Sabah) Sdn Bhd has common shareholders with Servay Jaya Supermarket Sdn Bhd, Servay Hypermarket (Sandakan) Sdn Bhd, Parkwell Departmental Store Sdn Bhd, Evergreen (1979) Trading Sdn Bhd, Servay Supermarket Sdn Bhd and Servay Jaya Superstore (Miri) Sdn Bhd (“Servay Group”), all of whom are also our customers. Collectively, the Servay Group of companies accounted for 16.84%,16.59%,15.79% and 13.50% and of our Group’s total revenue for FYE 30 June 2012, 2013, 2014 and 2015 respectively. 6. BUSINESS OVERVIEW (Cont’d) 6.13 MAJOR SUPPLIERS Our suppliers that contributed 10% or more of our total purchases over the past four (4) FYE 30 June 2012 to 2015 are as follows: Suppliers  Length of relationship (Years)  FYE 30 June 2012  FYE 30 June 2013  FYE 30 June 2014  FYE 30 June 2015  RM’OOO (%)  RM’OOO (%)  RM’OOO (%)  RM’OOO (%)  Total Purchases (RM’OOO)  178,470  199,344  207,690  282,153  Coca-Cola  1  – – – – – – 53,582  18.99  P&G  33  44,335  24.84  46,150  23.15  47,383  22.81  46,700  16.55  Danone Dumex  8  38,374  21.50  42,225  21.18  38,460  18.52  43,066  15.26  Wipro Unza  32  27,734  15.54  33,003  16.56  31,673  15.25  29,857  10.58  Sub-total  110,443  61.88  121,378  60.89  117,516  56.58  173,205  61.38
Our business is dependent on our top suppliers, Coca-Cola, P&G, Danone Dumex and Wipro Unza by virtue of their contribution to our total purchases, which represented 18.99%, 16.55%, 15.26% and 10.58% of our Group’s total purchases for FYE 30 June 2015 respectively. For FYE 30 June 2015, Coca-Cola was our largest supplier which accounted for 18.99% of our Group’s total purchases. In September 2014, we commenced the distribution of beverage products for Coca-Cola in Kota Kinabalu (designated areas within Kota Kinabalu), Sandakan, Tawau and Labuan. For FYE 30 June 2012, FYE 30 June 2013, FYE 30 June 2014 and FYE 30 June 2015, P&G represented 24.84%, 23.15%, 22.81 % and 16.55% of our Group’s total purchases respectively. P&G is one of our suppliers of personal care and household products. We have been working closely with P&G since 1982. This indicates a long and stable business relationship with P&G. As a further testament of our close business relationship with P&G, we incorporated AMDA Marketing in 2003, which is mainly responsible for distributing P&G products in Sabah and Labuan. As there is already an existing distribution and warehousing infrastructure in place for P&G at AMDA Marketing, it may take some time for this brand owner and supplier to search for alternative distributors to replicate a similar infrastructure. Danone Dumex represented 21.50%, 21.18%, 18.52% and 15.26% of our Group’s total purchases for the FYE 30 June 2012, FYE 30 June 2013, FYE 30 June 2014 and FYE 30 June 2015 respectively. Danone Dumex has been our supplier of milk powder for approximately eight (8) years. KTC Sdn Bhd has been an appointed distributor of Danone Dumex since 2007 and we have a subsisting distributorship agreement with Danone Dumex. This indicates a continuing business relationship. As at LPD, we were appointed by Danone Dumex to distribute their products in Sabah and Labuan. Wipro Unza represented 15.54%, 16.56%, 15.25% and 10.58% of our Group’s total purchases for the FYE 30 June 2012, FYE 30 June 2013, FYE 30 June 2014 and FYE 30 June 2015 respectively. Wipro Unza is one of our suppliers of personal care products, household products and baby care products and we have been dealing with the company for approximately 32 years. We have a subsisting long-term distributorship agreement with Wipro Unza, indicating a continuing business relationship. As at LPD, we were appointed by Wipro Unza to distribute their products in Kota Kinabalu and Tawau within Sabah, as well as Sibu in Sarawak. For Danone Dumex and Wipro Unza, our continuing ability to meet sales targets whilst fulfilling payments in a timely manner has enabled us to further strengthen our long-term relationship with these brand owners. In addition, our existing distribution network and infrastructure has enabled us to provide market access and coverage of their CPG products in East Malaysia. 90 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) 6.14 MAJOR LICENCES, PERMITS AND REGISTRATIONS The major licences, permits and registrations issued to our Group to enable us to operate our business as at LPD are summarised as follows:
Type of Licence Permit! Certification (Licence ! Permit Company !Certification No.) AMDA Trading Licence Marketing (DBKK:371540) Trading Licence (T173218) ! Issuing Authority  Issue Date  Validity Period  Description  Conditions imposed  Status of compliance  Kota Kinabalu  27.11.2014  27.11.2014to  Licence to undertake  None  Not  City Hall  31.12.2015  businesses such as import and export and wholesale of consumer products at Lot 22.  applicable  Tawau Municipal Council  06.01.2015  06.01.2015 to 31.12.2015  Licence to undertake business of consumer trading at Lot 1A, 2A & 3A.  None  Not applicable  Sandakan  03.12.2014  03.12.2014 to  Licence to undertake  None  Not  Municipal  31.12.2015  businesses such as  applicable  Council  wholesaler for necessities/ kitchen equipment/ sundries products and export/import of necessities/ kitchen equipment/sundries products at First floor of Lot 7, Block C, Mile 8, North Road, 90000 Sandakan, Sabah.
Trading Licence (A189624) 91 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company Creamos Malaysia  Type of Licence { Permit{ Certification (Licence { Permit {Certification No.) Trading Licence (DBKK: 372328)  Trading Licence (DBKK: 404854)
Food and Eating Premises Licence (LLM1400048) Food and Eating Premises Licence (LLl1500154)  Certificate Registration Premises  of  of Food
(S28P1131230­009871 ) Issuing Authority  Issue Date  Validity Period  Description Licence to undertake Kota Kinabalu  03.12.2014  03.12.2014  City Council  31.12.2015  businesses such as small food factory (manufacturing bread) at Lot 22. Licence to undertake businesses such as bakery (big) at Lot 3# Licence for small food factory to manufacture and process small food at Lot 22.  Kota Kinabalu City Council  24.08.2015  24.08.2015 to 31.12.2015  Kota Kinabalu Municipal Council  03.12.2014  01.01.2015 to 31.12.2015  Kota Kinabalu Municipal Council  24.08.2015  19.08.2015 to 31.12.2015  Licence for businesses such as bakery (big) at Lot 3 Licence is granted to Dexter  Ministry of  02.12.2014  30.12.2013 to  Health  29.12.2016  Lau to run the business  Malaysia  under the name of Creamos Malaysia at Lot 22 for food premises involved in food manufacturing.
Conditions imposed None None The licence shall be displayed in a place which can be seen by the public. The licence shall be displayed in a place which can be seen by the public. This Certificate of Registration of Food Premises is not transferable. Status of compliance  Not applicable  Not applicable  Complied  Noted and to be complied.@  Noted
92 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence I Permitl Certification (Licence I Permit ICertification No.) Issuing Authority Certificates of I JAKIM authentication Halal (Ref No. JAKI M/(S )/(22.00)/492/ 2/1 097-01/2014)  Issue Date 01.02.2014  Validity Period 01.02.2014 to 31.01.2016  Description Conditions imposed To certify that cream rolls I (i) manufactured / distributed / managed by Creamos at Lot 22 has complied with Islamic Law and Malaysian Halal Standard and approved by Halal Certification Panel of JAKIM. (ii) (iii) This Halal Certificate of Authentication (“the Certificate”) and the Malaysian Halal Logo (“Logo”) shall not be traded, transferred nor shall its contents be altered. The use of the Certificate is subject to the laws and regulations that are currently in force. Any changes to the name or address of the company, factory or premise, name of the product, ingredients, suppliers or anything related thereto shall be informed in writing to the Director General of JAKIM for further action.  Status of compliance Noted Complied Noted and complied
93 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company Type of Licence I Permitl Certification (Licence I Permit ICertification No.) Issuing Authority  Issue Date  Validity Period  Description

Conditions imposed (iv) The Certificate holder shall at all times be subject to inspection, monitoring and enforcement conducted either by JAKIM, Islamic Religious Council I Department (“MAIN I JAIN”) of the States or the Ministry of Domestic Trade, Co­operations and Consumerism (“KPDNKK”).
(v) The Certificate holder shall be held responsible for any abuse or misappropriation of the Certificate. Any loss or damage of the Certificate shall be reported to the Royal Malaysian Police and shall immediately be informed in writing to the Director General of JAKIM.

Status of compliance Noted and complied Noted 94
I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company Type of Licence I Permitl Certification (Licence I Permit ICertification No.) Issuing Authority  Issue Date  Validity Period  Description

Conditions imposed (vi) The Certificate may be suspended or withdrawn at any tim~ by JAKIM. MAIN I JAIN or KPDNKK if there is doubt in terms of Islamic Law or violation of any laws or regulations that are currently in force. (vii) The Certificate holder shall exhibit the Logo on the product or the approved premise as stated in the Certificate. (viii) The Certificate shall be signed by the certificate holder and a copy of the signed certificate shall be submittecj to the Director General of JAKIM. (ix) The Certificate shall be exhibit only at the address as stated in the Certificate. Status of compliance Noted Noted and complied Complied Complied 95
I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence I Permit! Certification (Licence I Permit ICertification No.)  Issuing Authority  Issue Date  Validity Period  Description  Conditions imposed  Status of compliance  (x)  The use of the Logo on the approved product or premise shall be accompanied by the reference number and standard number as stated in the Certificate for such product or premise.  Complied  Permit for Scheduled Controlled Goods (Serial No. S001 051)  Ministry of Domestic Trade, Co­operatives and Consumerism Sabah  21.01.2015  21.01.2015 to 20.01.2016  Permit to purchase 50,000 kg of wheat flour and 50,000 kg of sugar at one time.  (i)  The permit holder is I Noted and allowed to purchase: complied (a) 50,000 kg of wheat flour; and (b) 5,000 kg of sugar,  at one time, (collectively referred to as the “scheduled controlled goods”).  (ii)  The permit holder shall keep all the scheduled controlled goods at Lot 22.  Noted and complied  (iii)  The permit holder are not allowed to keep the scheduled controlled goods elsewhere than Lot 22 except with the written permission of the controller.  Noted and complied
96
I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company Type of Licence I PermiU Certification (Licence I Permit ICertification No.) Issuing Authority  Issue Date  Validity Period  Description

Conditions imposed (iv) The permit holder shall not keep in his possession or control of the scheduled controlled goods of more than the quantity specified in item (i) above.
(v) The license is not transferable.
(vi) The scheduled controlled goods are for personal use and not for sale.

(vii) The permit holder is required to retain proof of purchase specified scheduled controlled goods for inspection. (viii) Skid tank for the storage of the scheduled controlled goods to be labeled. (ix) This permit is valid for a period as stated in the permit and application for renewal should be made 1 month before expiry. Status of compliance Noted and complied Noted Noted and complied Noted Noted and complied Noted 97 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Type of Licence Permit! Certification (Licence I Permit Company ICertification No.) KTC Trading Licence Brands (DBKK:371539) KTC Trading Licence Distribution (DBKK: 371537) Trading Licence (T173220) I Issuing Authority  Issue Date  Validity Period  Description Licence to undertake businesses such as import, export, wholesale and retailing of consumer goods, distribution of dry, chilled and frozen products at Lot 5.
Kota Kinabalu City Council  27.11.2014  27.11.2014 to 31.12.2015  Kota Kinabalu City Council  27.11.2014  27.11.2014to 31.12.2015  Licence to undertake businesses such as import, export and distribution of dry, chilled and frozen products and consumer goods at Lot 5. Licence to undertake business of consumer trading at Lot 1A, 2A & 3A.  Tawau Municipal Council  06.01.2015  06.01.2015 to 31.12.2015
Conditions imposed (x) If the permit holder shall no longer use the scheduled controlled goods, the permit shall be returned to the supply controller. None None None Status of compliance  Noted  Not applicable  Not applicable  Not applicable
98
I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company

 

Type of Licence I PermiU Certification (Licence I Permit ICertification No.) Trading Licence (T174771 ) Trading Licence (A189623) Trading Licence (T174767) Description Issuing Authority  Issue Date  Validity Period  Tawau Municipal Council  08.01.2015  08.01.2015 to 31.12.2015  Sandakan Municipal Council  03.12.2014  03.12.2014 to 31.12.2015  Tawau Municipal Council  08.01.2015  08.01.2015 to 31.12.2015
Licence to undertake business of consumer trading at Lot 5, Dasamley Industrial Park, Jalan Pantai, Mile 2Y2, Off Jalan Apas, 91000 Tawau, Sabah. Licence to undertake businesses such as export/import of necessities/kitchen equipmenUsundries products at First floor of Lot 7, Block C, Mile 8, North Road, 90000 Sandakan, Sabah. Licence to undertake businesses such as consumer trading at Lot 7 Dasamley Industrial Park, Jalan Pantai Mile 2 Y2, Off Jalan Apas, 91000 Tawau, Sabah. Status of  Conditions imposed  compliance  None  Not  applicable  None  Not  applicable  None  Not  applicable
99 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence / Permit/ Certification (Licence / Permit /Certification No.) Trading Licence (PL 65893) Wholesale Licence (MALLB20140917) Wholesale license (No. AB92365)  Issuing Authority Labuan Corporation Malaysia Drug Control Authority, Ministry of Health Ministry of Domestic Trade, Co­operatives and Consumerism Sabah  Issue Date 12.12.2014 16.12.2014 16.03.2015  Validity Period 12.12.2014 to 31.12.2015 01.01.2015to 31.12.2015 10.03.2015 to 09.03.2016  Description Licence to undertake businesses such as supplier/ wholesaler/ exporU import / wholesaler/supplier of retail items (rice, sugar, flour and others), wholesaler /supplier of vegetables/ fish / wet foods / frozen / dry /fruits at Hub Halal Labuan Complex, Jalan Bebuloh, Kiansam, 87000 Federal Territory of Labuan. To sell as wholesaler/ supplier of Registered Products’ other than scheduled poisons as defined under the Poisons Act 1952 at Lot 5 To conduct business, sell, wholesale of wheat flour at Lot 73  Conditions imposed None Pursuant to the Control of Drugs and Cosmetics Regulations 1984 (“CDCR 1984”), the licensee is authorised to sell by wholesale the Registered Products’ as listed in the register of products provided under Regulation 9(1) of the CDCR 1984 Status of compliance Not applicable Complied (i) The license holder shall I Complied keep all wheat flour at Lot 5. (ii) The license is not I Noted transferable.
100 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Company

 

Type of Licence I Permit! Certification (Licence I Permit ICertification No.) Issuing Authority  Issue Date  Validity Period
Ministry of  16.03.2015  16.03.2015 to  Domestic  15.03.2018  Trade, Co­ operatives and  Consumerism  Sabah
Conditions imposed Description (iii) The license holder shall not keep in his possession, custody or control or allow anyone to keep in his possession, custody or control on behalf of the license holder of more than 4 tonnes of wheat flour. (i) The license holder shall whole-sale of wheat flour at To conduct business, sell,Wholesale license keep all wheat flour at(No. AB92362) the premises. Keling, Jalan Rancha-Rancha, 87008 Labuan, Lot 205350312, Kg. Sg. (ii) The license is notW.P. Labuan./\ transferable. (iii) The license holder shall not keep in his possession, custody or control or allow anyone to keep in his possession, custody or control on behalf of the license holder of more than 1,000kg of wheat flour. 101 Status of compliance Noted and complied Not applicable/\ Noted Noted I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company

KTC Sarawak

Type of Licence 1 Permitl Certification (Licence 1 Permit ICertification No.) Cold Room Certificates (381/15, 382115 and 383/15 (HALAL)) Cold Room Certificates (385/15 and 386115 (HALAL)) Trading Licence (No. 415444) Trading Licence (No. 738600) Description Issuing Authority  Issue Date  Validity Period  Department of Veterinary Services and Animal Industry Sabah  02.03.2015  02.03.2015 to 31.12.2015  Department of Veterinary Services and Animal Industry Sabah  02.03.2015  02.03.2015 to 31.12.2015  Sarawak State Government  05.08.2015  05.08.2015 to 31.08.2016  Sarawak State Government  29.06.2015  29.06.2015 to 02.07.2016
Licence in respect of cold room situated at Lot 5 Licence in respect of cold room situated at Lot 1A, 2A &3A. Licence to undertake businesses such as wholesales of foods, cold storage and toiletries products at Lot 73, Block 5, Seduan Land District, Ding Lik Kong Road, 96000 Sibu, Sarawak. Licence to undertake business as wholesaler of foods at Lot 2363, Batu Kitang Industrial Park, Mile 7Y2 Jalan Batu Kitang, 93250 Kuching. Status of  Conditions imposed  compliance  None  Not  applicable  None  Not  applicable.  None  Not  applicable  None  Not  applicable
102 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence I Permitl Certification (Licence I Permit ICertification No.) Trading Licence (No. 738702) Trading Licence (No. 738701) Trading Licence (No. A416512) Wholesale license (No. AB92305)  Issuing Authority Sarawak State Government Sarawak State Government Sarawak State Government Ministry of Domestic Trade, Co­operatives and Consumerism Sarawak  Issue Date 29.06.2015 29.06.2015 20.08.2015 20.01.2015  Validity Period 29.06.2015 to 02.07.2016 29.06.2015 to 02.07.2016 20.08.2015 to 12.11.2016 20.01.2015 to 19.01.2017  Description Licence to undertake business in relation to toiletries products at Lot 2363, Batu Kitang Industrial Park, Mile 7’h, Jalan Batu Kitang, 93250 Kuching. Licence to undertake business in relation to cold storage at Lot 2363, Batu Kitang Industrial Park, Mile 7’h, Jalan Batu Kitang, 93250 Kuching. Licence to undertake business in relation to wholesale of foods, cold storage & toiletries products at Lot 1259, Block 5, Kuala Baram Land District, at Jalan Maigold, Desa Senadin, 98000 Miri, Sarawak. To conduct business, sell, whole-sale of wheat flour at Lot 2363, Batu Kitang Light Industrial Park, Mile 7’h, Jalan Batu Kitang, 93250 Kuching, Sarawak.  Conditions imposed None None None (i) The license holder shall keep all wheat flour at Lot 2363, Batu Kitang Light Industrial Park, Mile 7’h, Jalan Batu Kitang, 93250 Kuching only.  Status of compliance Not applicable Not applicable Not applicable Complied
103 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company
KTC Sdn Bhd
Type of Licence I Permitl Certification (Licence I Permit ICertification No.) Conditions imposed (ii) The license is not transferable. (iii) The license holder shall not keep in his possession, custody or control or allow anyone to keep in his possession, custody or control on behalf of the license holder of more than 20,000kg of wheat flour. None (DBKK:371536) Trading Licence Status of compliance Issuing Authority  Issue Date  Validity Period  Description Licence to undertake businesses such as import and export, wholesale and retailing of English and Chinese pharmaceutical product, drugs and general medicines, canned food, consumer vine, selling and storage of pesticides at Lot 73, Lot 74A and Lot 74B.
Kota Kinabalu City Council  27.11.2014  27.11.2014 to 31.12.2015
Noted. Noted and complied Not applicable 104 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence / Permit/ Certification (Licence / Permit /Certification No.) Trading Licence (PL 65894) Trading Licence (A189622)  Issuing Authority Labuan Corporation Sandakan Municipal Council  Issue Date 04.12.2014 03.12.2014  Validity Period 04.12.2014 to 31.12.2015 03.12.2014 to 31.12.2015  Description Conditions imposed Licence to undertake I None businesses such as wholesaler/supplier of sundry products (rice/sugar/flour and others) at Hub Halal Labuan Complex, Jalan Bebuloh, Kiansam, 87000 Federal Territory of Labuan. Licence to undertake I None businesses such as sale of pesticides/ insecticides, wholesaler of necessities/ kitchen equipment and sundry products, wholesaler of pesticides/ insecticides and export! import of necessities/ kitchen equipment and sundry products at Lot 3, Block E, Tingkat Bawah, CL 20964 Batu 8, Jalan Labuk, Sandakan, Sabah with address for correspondence at First floor of Lot 7, Block C, Mile 8, North Road, 90000 Sandakan, Sabah.  Status of compliance Not applicable Not applicable
105 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Company  Type of Licence I Permit! Certification (Licence I Permit ICertification No.) Licence to sell pesticides (SAB/2015/1016/04/SJ)  Issuing Authority Department of Agriculture Malaysia  Issue Date 20.04.2015  Validity Period 12.05.2015 to 11.05.2018  Description Licence to sell pesticides class II, III and IV at warehouse Lot 74B.  Conditions imposed (i) (ii) The licence shall be displayed; and Application for renewal should be made 3 months before expiry  Status of compliance Complied Noted  Wholesaler Licence (MALLB 20141000)  Malaysia Drug Control Authority Ministry of Health  23.12.2014  01.01.2015 to 31.12.2015  To sell as wholesaler/ supplier of Registered Products’ other than scheduled poisons as defined under the Poisons Act 1952 at Lot 74A and Lot 74B with storeroom at Lot 73.  Pursuant to the Control of Drugs and Cosmetics Regulations 1984 (“CDCR 1984”), the licensee is authorised to sell by wholesale the Registered Products’ as listed in the register of products provided under Regulation 9(1) of the CDCR 1984.  Complied  Wholesaler Licence (MALLB 20140997)  Malaysia Drug Control Authority Ministry of Health  23.12.2014  01.01.2015 to 31.12.2015  To sell as wholesaler/supplier of Registered Products’ other than scheduled poisons as defined under the Poisons Act 1952 at Block C, Lot 7, 1st floor, Mile 8, 90000 Sandakan, Sabah with storeroom at KM10.5, Jalan Batu Sapi, 90009 Sandakan, Sabah.  Pursuant to the Control of Drugs and Cosmetics Regulations 1984 (“CDCR 1984”), the licensee is authorised to sell by wholesale the Registered Products’ as listed in the register of products provided under Regulation 9(1) of the CDCR 1984.  Complied
106 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Type of Licence / Permit/ Certification  Company  (Licence / Permit /Certification No.)  Issuing Authority  Issue Date  Validity Period  Description  Conditions imposed  Status of compliance  Certification of  I JAKIM  16.07.2014  16.07.2014 to  To certify that the chicken  I None  Not  Authentication HALAL  15.07.2016  frankfurter and chicken  applicable  (A 31015)  nugget distributed by KTC Sdn Bhd (manufactured by Perusahaan Saudee Sdn Bhd) has complied with Islamic Law and Malaysian Halal Standard and approved by Halal Certification Panel of JAKIM.  KTC Tawau  I Trading Licence (T174754)  Tawau Municipal Council  08.01.2015  08.01.2015 to 31.12.2015  Licence to undertake businesses such as import and export wholesale of general merchandise, sundries, English/Chinese drugs and cold storage at Lot 1A, 2A & 3A.  I None  Not applicable  Wholesaler Licence  Malaysia Drug  24.11.2014  01.01.2015 to  To sell as wholesaler/  Pursuant to the Control of  Complied  (MALLB 20140581)  Control Authority Ministry of Health  31.12.2015  supplier of Registered Products* other than scheduled poisons as defined under the Poisons Act 1952 at Lot 1A, 2A & 3A.  Drugs and Cosmetics Regulations 1984 (“CDCR 1984”), the licensee is authorised to sell by wholesale the Registered Products* as listed in the register of products provided under Regulation 9(1) of the CDCR 1984.
107 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Notes: Registered products are products registered with the Drug Control Authority and a register of the products registered are kept and maintained by the Secretary to the Drug Control Authority. The list of the registered products can be found at the website of the National Pharmaceutical Control Bureau. A In the process of transferring the license to a new location. # According to the (Food &Eating Premises) By-Law, 1966, “big bakery” means a bakery with a floor area of 3,500 sq ft and above. @ Lot 3 is currently under renovation. Creamos Malaysia will occupy this new premises upon completion of the renovation. The licence will be displayed by Creamos Malaysia upon commencing operation in Lot 3. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 108 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) 6.15  INTELLECTUAL PROPERTY  6.15.1  Trade Marks  As at LPD, we own the following trademarks:
No. I Trademark Logo 2.  Registered Owner/ Registrant I Class No. KTC Brands KTC Brands KTC Brands Class 16 Class 5 Class 29  Description of Class Heading of Trademark Application No. Wet wipes of tissue, paper I 2011052360 or cellulose included in Class 16. Antiseptic wipes included in I 2011052549 Class 5. Butter; butter (chocolate I 2015063424 nut); butter (cocoa); butter (coconut); butter (peanut); cheese; margarine; blended butter; butter cheeses; butter oil; butter portions; butter preparations; butter with herbs; caviar butter; clarified butter; concentrated butter; garlic butter; lemon butter; non­dairy butter; nut butter; savoury butters.  Validity Period/Status 22.07.2011­22.07.2021 01.08.2011­01.08.2021 Filed on 14.08.2015. Pending approval.
109 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registered Owner/  Description of Class  Validity  No.  I Trademark Logo  Registrant  I Class No.  Heading of Trademark Application No.  Period/Status  3.  KTC Brands  Class 29  Butter; butter (chocolate I 2015064924  Filed on 08.09.2015.  nut); butter (cocoa); butter  Pending approval.  (coconut); butter (peanut);  cheese; margarine; peanut  butter; blended butter;  butter cheeses; butter oil;  butter portions; butter  preparations; butter with  herbs; caviar butter;  clarified butter;  concentrated butter; garlic  butter; lemon butter; non­ dairy butter; nut butter;  savoury butters.  KTC Brands  Class 32  Aerated water; cider, non-I 2015055609  Filed on 13.04.2015  alcoholic; cocktails, non- Pending publication in  alcoholic; fruit juices/ fruit  the Gazette.  juice; isotonic beverages;  lemonades; mineral water  (beverages); preparations  for making mineral water;  non-alcoholic fruit juice  beverages; non-alcoholic  beverages; seltzer water;  soda water; table waters;  vegetable juices  (beverages); waters  (beverages); all included in  Class 32.

110 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d)
Registered Owner/ Description of Class Validity No. Trademark Logo Registrant Class No. Heading of Trademark Application No. Period/Status Class 32KTC Brands Aerated water; cider, non­2015055610 FilE;ld on 13.04.2015 alcoholic; cocktails, non-Pending publication in alcoholic; fruit juices / fruit the Gazette. juice; isotonic beverages; lemonades; mineral water (beverages); preparations for making mineral water; non-alcoholic fruit juice beverages; non-alcoholic beverages; seltzer water; soda water; table waters; vegetable juices (beverages); waters (beverages); all included in Class 32. 6. Biscuits; bread; bread rolls; I 2013060729 110.10.2013 ­breadcrumbs; bun; cakes; 10.10.2023
Creamos I Class 30 Malaysia cookies; crackers; cream of tartar for cooking purposes; cream of tartar for culinary purposes; all included in Class 30. Creamos Butter; butter (chocolate I 2013060727 10.10.2013 ­nut); butter (cocoa); butter 10.10.2023 I Class 29 Malaysia (coconut); butter (peanut); buttercream; coconut butter; margarine; milk; milk beverage; milk predominating; milk products; peanut butter; all included in Class 29. 111 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) No.  I Trademark Logo  Registered Owner/ I Registrant I KTC Sdn Bhd # I KTC Sdn Bhd’  Class No. Class 39 Class 29  Description of Class Heading of Trademark Application No. Arranging of distribution 2011052999 and logistics services of fast moving consumables. Processed meat products; I 2011055438 poultry, not live, all included in Class 29.  Validity Period/Status 16.08.2011­16.08.2021 116.12.2011­16.12.2021  10 11   I KTC Sdn Bhd* I KTC Sdn Bhd* I KTC Sdn Bhd  I Class 29 I Class 29 I Class 29  I Butter; butter (chocolate I 2013055856 nut); butter (cocoa); butter (coconut); butter (peanut); cheese; margarine; peanut butter; sardines; mixed vegetables; potato fries, all included in Class 29. Sausages; meat; 2013053663 margarine; potato chips; potato crisps; potato flakes; potato fritters; poultry, not alive, all included in Class 29. Milk; milk beverages; milk 2013061447 products; all included in Class 29.  118.06.2013­18.06.2023 17.04.2013­17.04.2023 29.10.2013­29.10.2023

 

112 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registered Owner/ Description of Class Validity No. I Trademark Logo Registrant I Class No. Heading of Trademark Application No. Period/Status
Class 42KTC Sdn Bhd 12 Computer programming; I 2014054649 Filed on 28.03.2014. computer Pending registration.@ programs(duplication); computer software consultancy; computer software design; computer software (maintenance); computer software (updating); computer system analysis; computer system design; computer virus protection services; consultancy in the design and development of computer hardware; creating and maintaining web sites for others; data conversion of computer programs and data; installation of computer software; computer hardware (consultancy in the design and development); conversion of data or documents from physical to electronic media; hosting computer sites; software (rental of computer); all included in Class 42. 113 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Notes:  #  KTC Sdn Bhd had on 1 November 2014 granted an exclusive licence and royalty-free to KTC Consolidated to use this mark in connection with its business for a consideration of  RM1.00.  ”  KTC Sdn Bhd has assigned all its rights, benefits, title and interest of this mark to KTC Brands via a deed of assignment dated 1 July 2014.  KTC Sdn Bhd has assigned all its rights, title and interest of these marks to KTC Brands via a deed of assignment dated 15 December 2014.  @  Notice of opposition has been filed to oppose the registration. KTC Sdn Bhd’s trade mark agent has filed counter-statement against the notice of opposition.
6.15.2 Industrial Design As at LPD, we have applied for the registration of the following industrial design:
No.  Name of Article  Registrant  Class No.  Description  Application No.  1.  Bottles  KTC Brands  09-01  Plastic bottle.  15-E0062-0101
Validity Period/Status Filed on 05.03.2015. Pending approval**. Note: A notice of objection has been issued by Intellectual Property Corporation of Malaysia. The application was objected on the ground that it is not in compliance with Section 12(1) of the Industrial Designs Act 1996 and Industrial Designs Regulations 1999. The design in the said application is not registrable because it is not new. KTC Brands is required to proof that the article is new and materially different from existing article. 114 6. BUSINESS OVERVIEW (Cont’d) 6.16  DEPENDENCY  ON  PATENTS,  INTELLECTUAL  PROPERTY  RIGHTS,  LICENCES,  INDUSTRIAL, COMMERCIAL OR FINANCIAL CONTRACTS  6.16.1  Dependency on Intellectual Property Rights
Save as disclosed in Section 6.15 of this Prospectus, our Group is not dependent on any other intellectual property rights for our business operations. 6.16.2 Dependency on Major Licences Save as disclosed in Section 6.14 of this Prospectus, our Group is not dependent on any other major licences for our business operations. 6.16.3 Dependency on Industrial, Commercial and Financial Contracts Save as disclosed below, our Group is not dependent on any material contracts or agreements including industrial, commercial and financial contracts, which are material to our business or profitability: (i) Distribution Agreement dated 1 March 2010 between KTC Sdn Bhd and Danone Dumex The salient terms of the abovementioned agreement is as follows: Description  Danone Dumex grants to KTC Sdn Bhd the exclusive rights only to carryon the distribution and resale of the Danone Dumex’s Products by KTC Sdn Bhd in the Territory (“Business”) with effect from the Commencement Date (hereinafter defined), and Danone Dumex shall not appoint any other person to act as its distributor of the Danone Dumex’s Products in the Territory. From 1 January 2009 (“Commencement Date”) until terminated in accordance with the agreement. State of Sabah and Federal Territory of Labuan, excluding all pharmacies and areas covered by certain distributor(s). KTC Sdn Bhd shall pay Danone Dumex for all Danone Dumex’s Products sold to KTC Sdn Bhd within 45 days from the invoice date or within such other period as Danone Dumex may, from time to time, and at its absolute discretion, vary by notice to KTC Sdn Bhd. Milk powder Either party may terminate the agreement by giving at least one (1) month’s written notice to the other party.  Term! Duration  Territory  Payment Term  Danone Dumex’s Products  Termination! Events of default
6. BUSINESS OVERVIEW (Cont’d) Notwithstanding the above, Danone Dumex shall have the right at any time to terminate the agreement immediately by giving written notice to KTC Sdn Bhd if KTC Sdn Bhd, inter alia: (i) breached any of the provisions of the agreement; and (ii) shall cause or implement, or if there shall be, any change in ownership or management of the Business which Danone Dumex reasonably considers to be detrimental to the continuance of the relationship between the parties.
(ii) Distribution agreement dated 17 September 2015 between P&G and AMDA Marketing The salient terms of the abovementioned agreement is as follows: Description Term/ Duration Territory Payment term Products  Non-exclusive distributorship granted by P&G to AMDA Marketing for the resale and distribution of certain products manufactured or supplied by P&G (” P&G’s Products”) in the Territory subject to the terms and conditions of the agreement. For the avoidance of doubt, P&G reserves the right for itself and its affiliated companies: (a) to appoint other distributors to sell and distribute the Products in the Territory; (b) to sell the Product to anyone in the Territory (including, without limitation, directly, or through other independent distributors and wholesalers) other than to AMDA Marketing; and (c) to conduct, at its own costs, direct marketing activities in the Territory (such as going to consumers directly via sampling activities, direct selling, special events and/or internet). From 1 July 2015 (“Commencement Date”) to 30 June 2017 Sabah and Labuan AMDA Marketing shall make the payment in accordance with prompt payment discount agreement. In the event that AMDA Marketing is unable to pay on or before the due date as stated in the prompt payment discount agreement, but wishes to apply for a credit term of 30 days of the receipt of the Products, AMDA Marketing must write to the credit controller of P&G to apply for the said term. Certain products of P&G
6. BUSINESS OVERVIEW (Cont’d) Terminationl Events of default  The Agreement may be terminated at any time:­(i) by giving the other party 60 days’ advance notice in writing; (ii) immediately upon giving notice to the other party if the other is, inter alia, insolvent, committed an act of bankruptcy, there has occurred a substantial change in ownership or administrative control of the party. The Agreement may be terminated by AMDA Marketing if P&G commits a material breach of its obligations pursuant to the agreement and in the case of a breach capable of remedy, fails to remedy such breach within two (2) weeks after receipt of written notice specifying such breach. The Agreement may be terminated by P&G in the event that AMDA Marketing commits a material breach of its obligations pursuant to the agreement by giving two (2) weeks’ notice to AMDA Marketing, specifying the breach.
(iii) Distribution agreement dated 1 April 2011 between Wipro Unza and KTC Sdn Bhd The salient terms of the abovementioned agreement is as follows: Description  Wipro Unza hereby appoints KTC Sdn Bhd as the exclusive distributor to promote, market, distribute and sell Wipro Unza’s Products in the Territory during the continuance of the agreement and upon the terms and subject to the conditions hereinafter appearing. Wipro Unza reserves the right to sell Wipro Unza’s Products direct to any customer in the Territory but undertakes not to appoint any other distributor for the sale of Wipro Unza’s Products in the Territory during the period of the agreement and for so long as KTC Sdn Bhd shall comply with its obligations under the Agreement. From 1 April 2011 until terminated by either party. Kota Kinabalu, Sabah Payment shall be made 60 days from the date of invoice through KTC Sdn Bhd’s bank. Products of Wipro Unza  Terml Duration  Territory  Payment term  Wipro Unza’s Products
6. BUSINESS OVERVIEW (Cont’d) Termination! Events of default  Either party shall be entitled to terminate the Agreement as follows:  (i) immediately by notice in writing if the other party shall not have remedied any breach of any of the terms and conditions of the agreement within 14 days after being called upon to do so or if the other party shall become insolvent or go into liquidation; (ii) either party shall be entitled to terminate the agreement on giving to the other not less than 3 months prior written notice.
(iv) Distribution agreement dated 30 July 2014 between Coca-Cola and KTC Distribution The salient terms of the abovementioned agreement is as follows: Description  Coca-Cola appoints KTC Distribution as a duly appointed distributor, on a non-exclusive basis and KTC Distribution undertakes to purchase the Beverages (hereinafter defined) only from Coca-Cola and authorised suppliers and to distribute and sell the same throughout Territory (hereinafter defined). From 1 September 2014 until 31 August 2016 Sabah East Coast 1. Sandakan 2. Tawau (for Tawau and Lahad Datu) Sabah West Coast 1. Kota Kinabalu (for Kudat, Ranau, Keningau and Beaufort) 2. Labuan KTC Distribution shall place purchase orders of Products, and pay the purchase price, in the form and manner directed from time to time by Coca-Cola. Certain beverages of Coca-cola Termination by either party Either party may terminate the Agreement: (i) by giving not less than 90 days’ prior written notice of termination of the agreement without assigning any reasons whatsoever; or  Term! Duration  Territory  Payment term  Products  Termination! Events of default
6. BUSINESS OVERVIEW (Cont’d) (ii) with immediate effect by giving written notice to the other party if any part of the agreement ceases to be in conformity with the app~icable law and, as a result thereof, or as a result of any other laws affecting the agreement, anyone of the material stipulations in the agreement cannot be legally performed or the Beverages cannot be stored, transported, handled, distributed or sold in accordance with the instructions issued by Coca-Cola pursuant to the agreement. Termination by Coca-Cola Coca-Cola shall have the right at any time to terminate the Agreement immediately by giving written notice of such termination to KTC Distribution upon the occurrence of any of the following events, inter alia: (i) if the KTC Distribution is in breach of any of its payment obligations; or (ii) if a change in ownership or control of KTC Distribution takes place without the Company’s consent under the agreement or without adhering to the conditions set for Coca-Cola’s consent under the agreement; or (iii) if the KTC Distribution commits a breach of any of its obligations under the agreement and it fails to remedy such breach within the time stipulated.
The abovementioned distribution agreements consist of exclusive and non-exclusive distributorship whereby the value and percentage of the cost of sales for FYE 30 June 2015 attributable to the abovementioned exclusive and non-exclusive distribution agreements are as follows: Distribution Agreements  RM’OOO  %  Exclusive  77,497  29.95  Non-exclusive  91,516  35.36  Total  169,013  65.31
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) 6.17  PROPERTIES  6.17.1  Own Properties  As at LPD, we own the following properties:
Registered/  Beneficial  Owner  Title/ Address  Creamos  Title  Malaysia  Master Title CL No. 015585501, , District of Kota Kinabalu, State of Sabah  Address Lot No.3, Lorong 1F  KKIP Selatan,  Industrial Zone 4 (I.Z.  4), Kota Kinabalu  Industrial Park, 88460  Telipok, Kota  Kinabalu, Sabah  KTC  Title  Distribution  Master Title CL 015585501, District of Kota Kinabalu, State of Sabah
Description! Existing Use Description Industrial land with a detached 3-storey office cum single-storey warehouse building Existing Use Vacant and intended to be used as factory cum office of Creamos Malaysia Description Industrial land with a detached single-storey warehouse/cold room storage industrial building(1) Age of the Building~/ Tenure  Encumbrances  Land / Built-up Area sq ft  Issuance Date of Occupation Certificate / Occupation Permit  NCA as at 31 October 2014 RM  Market Value# RM  Revaluation Surplus / (Deficit) as at 31 October 2014 RM  Approximate  Encumbrances  81,457+/ 20,595  18.08.2008  Not applicable**  Not applicable**  Not applicable** age of the  Assigned to CIMB Islamic  building  7 years  Bank Berhad  Tenure  99 years  expiring 31  December  2098  Approximate  Encumbrances  105,809* /15,500  17.05.2013  2,751,150  7,215,000  4,463,850  age of the  Assigned to HSBC Bank Malaysia Berhad  building 1 year Tenure 99 years expiring on 31.12.2098
120 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registeredl  Beneficial  Owner  Titlel Address  Address Lot No.5, Jalan 1F  K.K.I.P, Kota  Kinabalu Industrial  Park (KKIP),  Industrial Zone 4  (IZ4), 88460 Kota  Kinabalu, Sabah  KTC Sdn Bhd  Title  CL 015379674, District of Kota Kinabalu, State of Sabah
Descriptionl Existing Use Existing Use Entire building is used by KTC Distribution as office and warehouse storage. A small part of the exterior of the building at Lot 5 is used by Digi Telecommunications Sdn Bhd for the installation of base transceiver station facility and for the installation of antennas and/or other telecommunications equipment. Description Industrial land with a detached 2-storey office building annexed with a single-storey warehouse and an extended warehouse Age of the Building~ I Tenure  Encumbrances  Land I Built-up Area sq ft  Issuance Date of Occupation Certificate I Occupation Permit  NCA as at 31 October 2014 RM  Market Value# RM  Revaluation Sl,Irplus I (Deficit) as at 31 October 2014 RM
Approximate  Encumbrances  53,580 I 26,600  10.01.1983 and 10.11.1987 (for extended warehouse)  7,884,789  11,029,000  3,144,211  age of the  Charged to HSBC Amanah Malaysia Berhad  building 31 years and 27 years (for extended warehouse)  Tenure  60 years  expiring on  31.12.2034
121 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registeredl Beneficial Owner
KTC Sdn Bhd
Titlel Address Address No. 22, Jalan Kilang, SEDCO Light Industrial Estate, Kolombong, Off KM 9, Jalan Tuaran 88450, Kota Kinabalu Sabah Title CL 015620701, District of Kota Kinabalu, State of Sabah Descriptionl Existing Use Existing use (i) Ground floor of the 2-storey office building is used by AMDA Marketing
as office(2)(a);
(ii) First floor of the 2­storey office building is currently vacant;

(iii) Existing warehouse is used by Creamos Malaysia as factory(2)(b); and (iv) Extended warehouse is used by AMDA Marketing as warehouse storage. Description Industrial land with a semi-detached 2-storey showroom/office-cum­single-storey­warehouse Issuance  Revaluation  Age of the Building~ I Tenure  Encumbrances  Land I Built-up Area sq ft  Date of Occupation Certificate I Occupation Permit  NCA as at 31 October 2014 RM  Market Value# RM  Surplus I (Deficit) as at 31 October 2014 RM
Approximate  Encumbrances  20,076″ I 11,592″  02.09.2005  2,195,064  5,092,000  2,896,936  age of the  Nil  building  9 years
122 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registered/  Beneficial  Owner  Title/ Address  Address  Lot 74A, Jalan Kilang,  SEDCO Light  Industrial Estate,  Kolombong, Off KM 9  Jalan Tuaran, 88450  Kota Kinabalu, Sabah  KTC Sdn Bhd  Title  CL 015620710, District of Kota Kinabalu, State of Sabah  Address  Lot 74B, Jalan Kilang,  SEDCO Light  Industrial Estate,  Kolombong, Off KM 9  Jalan Tuaran, 88450  Kota Kinabalu, Sabah
Description/ Existing Use Existing Use (i) Ground floor of the showroom/ office is used by KTC Sdn Bhd as office;
(ii) First floor is used by KTC Sdn Bhd as office; and

(iii) Warehouse is used by KTC Sdn Bhd for warehouse storage.
Description Industrial land with a semi-detached 2-storey showroom/office-cum­single-storey­warehouse Existing Use (i) Ground floor of the showroom/office is used by KTC Sdn Bhd as office; Age of the Building~ / Tenure  Encumbrances  Land / Built-up Area sq ft  Issuance Date of Occupation Certificate / Occupation Permit  NCA as at 31 October 2014 RM  Market Value# RM  Revaluation Surplus / (Deficit) as at 31 October 2014 RM  Tenure  60 years  expiring on  31.12.2072  Approximate  Encumbrances  19,540″ /11,592″  02.09.2005  2,121,219  4,998,000  2,876,781  age of the  Nil  building  9 years  Tenure  60 years  expiring on  31.12.2072
123 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registeredl Beneficial Owner
KTC Sdn Bhd
Titlel Address Title CL 015424423, District of Kota Kinabalu, State of Sabah Address Lot 73, Jalan Kilang, SEDCO Light Industrial Estate, Kolombong, Off KM 9 Jalan Tuaran, 88450, Kota Kinabalu, Sabah Descriptionl Existing Use (ii) First floor is used by KTC Sdn Bhd as office and a portion is used by Danone Dumex as office(3); and (iii) Warehouse is used by KTC Sdn Bhd for warehouse storage. Description Industrial land with a detached single-storey warehouse cum 2­storey office building Existing Use (i) Ground floor and first floor of the office building are used by KTC Sdn Bhd as office and a portion of Ground floor (approximately 100 sq tt) is used by Glaxosmithkline Consumer Healthcare Sdn Bhd as office(4) Issuance  Revaluation  Age of the BUilding~1 Tenure  Encumbrances  Land 1 Built-up Area sq ft  Date of Occupation Certificate 1 Occupation Permit  NCA as at 31 October 2014 RM  Market Value# RM  Surplus 1 (Deficit) as at 31 October 2014 RM
Approximate  Encumbrances  42,857″ 117,600  27.10.1993  2,593,954  9,700,000  7,106,046  age of the  Nil  building  21 years  Tenure  60 years  expiring on  31.12.2070
124 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) Registeredl  Beneficial  Owner  Titlel Address  Title CL 105508601, CL 105508610, CL 105508629, District of Tawau, State of Sabah  KTC Tawau  Address  TB 9889, Lot 1A, 2A  and 3A, Perdana  Square, KM 6, Jalan  Apas, 91000 Tawau,  Sabah
Descriptionl Existing Use (ii) a portion of Ground floor (approximately 100 sq tt) is used by Kimberly-Clark Trading (M) Sdn Bhd as office(5); and (iii) Warehouse is used by KTC Sdn Bhd as warehouse storage. Description Three (3) parcel of commercial lands with 2-storey office cum single-storey warehouse building with an extended cold room storage area Existing Use (i) First floor of the building is used as office; and
(ii) Ground floor of the building and high ceiling warehouse area is used as warehouse storage.

Age of the Building~I Tenure  Encumbrances  Landi Built-up Area SQ ft  Issuance Date of Occupation Certificate I Occupation Permit  NCAas at 31 October 2014 RM  Market Value# RM  Revaluation Surplus I (Deficit) as at 31 October 2014 RM
Approximate  Encumbrances  35,7611\ I 21,974A  23.03.2010  2,809,779  6,305,000  3,495,221  age of the  Nil  building  4 years  Tenure  99 years  expiring on  31.12.2101
125 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Notes: J1 Determined based on the date of the issuance of the occupation certificate. Conversion of original measurement for properties in hectare to sq ft at 1 hectare = 107,639 sq ft. Conversion of original measurement for properties in sq m to sq ft at 1 sq m= 10.7639 sq ft. + Conversion of original measurement for properties in acre to sq ft at 1 acre = 43,560 sq ft. # Based on valuation on 20 October2014 prepared by our Independent Property Valuer.
Creamos Malaysia has acquired the said property from Orion Integrated Sdn Bhd (formerly known as Orion Shipping & Forwarding Sdn Bhd) pursuant to sale and purchase agreement dated 24 November 2014 at a purchase consideration of RM6,225,000. The transaction was completed on 9 July 2015. (1) A small part of the exterior of the building at Lot 5 is currently tenanted by Digi Telecommunications Sdn Bhd for the installation of base transceiver station facility and for the installation of antennas and/or other telecommunications equipment for the period from 15 December 2013 to 14 December 2016.
(2) (a) The Ground floor and extended warehouse of Lot 22 is tenanted to AMDA Marketing for a fixed term from 20 May 2013 to 19 May 2016.
(b) The existing warehouse of Lot 22 is tenanted to Creamos Malaysia for a fixed term from 1 January 2013 to 31 December 2015.
(3) A portion of the First floor at Lot 74B (approximately 1,000 sq ft) is currently tenanted by Danone Dumex for the period from 1 September 2013 to 31 August 2016 as office premises only.
(4) A portion of Ground floor at Lot 73 (approximately 100 sq ft) is currently tenanted by Glaxosmithkline Consumer Healthcare Sdn Bhd for the period from 1 June 2013 to 31 May 2016 (and continues thereafter from year to year until terminated by either party by giving two (2) months’ notice of termination).
(5) A portion of Ground floor (approximately 100 sq ft) is tenanted to Kimberly-Clark Trading (M) Sdn Bhd for a fixed term from 1 January 2015 to 31 December 2016 as office.

Save for Lot 3, the properties listed above have been valued by our Independent Property Valuer on 20 October 2014. Please refer to Section 14 of this Prospectus for the valuation certificates from the Independent Property Valuer in relation to the valuation of the above properties. The revaluation surplus was recognised in the audited financial statements of the respective companies for the FYE 30 June 2015. 126 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cont’d) 6.17.2 Rented Properties In addition, as at LPD, the following properties are held by our Group under leases and tenancies for our operations:
Tenant! Lessee  KTC Distribution  KTC Distribution  KTC Sarawak
Landlord! Lessor Flora Blossom Sdn Bhd Flora Blossom Sdn Bhd Wong Ming Sing & Sons Sdn Bhd Address Address Lot 5, Dasamley Industrial Park, Jalan Pantai, Mile 2Yz, Off Jalan Apas, 91000 Tawau, Sabah, Malaysia Address Lot 7 Dasamley Industrial Park, Jalan Pantai Off Mile 2 Yz, Jalan Apas, 91000 Tawau, Sabah, Malaysia Address Lot 73, Block 5, Seduan Land District, Ding Uk Kong Road, 96000 Sibu, Sarawak Description! Existing use  Rental Period  Annual Rental RM  Built-up Area sq ft  Issuance Date of Occupation Certificate! Occupation Permit  Description A single storey detached warehouse Existing Use Used as warehouse storage.  02.09.2014 to 01.09.2017, with option to renew for a further 3 years  211,200  17,600  23.09.2013  Description A single storey detached warehouse Existing Use Used as warehouse storage.  01.09.2015 to 31.08.2017 with an option to renew  42,000  3,600  05.01.2005  Description Double storey detached industrial building annexed with a single storey warehouse Existing Use (i) Ground floor of the office building is used as warehouse storage;  13.06.2014 to 12.06.2024  96,000 for the first five years; 120,000 for the following 3 years; 144,000 for the last 2 years of the tenancy  8,250  13.06.2014
127 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Tenant!  Landlord!  Lessee  Lessor  (i) Peter Ting Chek Min and  KTC Sarawak  (ii) Sun Siew Khieng Chung Huat KTC  Sarawak  Industries  Sdn Bhd
Address Address Lot 2363, Batu Kitang Light Industrial Park, Mile 7 Y2 Jalan Batu Kitang, 93250 Kuching Sarawak Address Lot 1259, Block 5, Kuala Baram Land District at Desa Senadin, Jalan Maigold, 98000 Miri, Sarawak Description! Existing use (ii) First floor of the office building is used as office; and (iii) Single storey warehouse is used as warehouse storage. Description One and a half (1 Y2) storey semi-detached industrial building annexed with a warehouse Existing Use (i) Ground floor is used for warehouse storage;
(ii) First floor is used for office; and

(iii) Warehouse is used for warehouse storage. Description Single storey detached industrial building Rental Period 07.04.2014 to 06.04.2019, with option to renew for a further 5 years 01.09.2014 to 31.08.2017, with option to renew for a further 3 years Annual Rental RM  Built-up Area sq ft  Issuance Date of Occupation Certificate! Occupation Permit
60,000  7,400  28.10.2004  132,000  12,960  29.11.2005
128 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Tenant I Lessee
KTC Sdn Bhd  KTC Sdn Bhd
Landlord I Lessor Sri Sanlewah of Lot 7, Sdn Bhd Mile 8, North 90000 Labuan Halal Hub Labuan Sdn Bhd# Jalan Kiansam, 87000 Federal Territory (“Lot Halal Address Address  First floor Block C, Road, Sandakan, Sabah Address  Hub Halal Complex, Bebuloh, of Labuan Hub”)
Description! Existing use  Rental Period  Existing Use Used as warehouse office.  and  Description First floor of storey shop lot  a  double  01.12.2014 30.11.2015″  to  Existing Use Used as office.  Description Single storey warehouse and double storey office. Existing Use The single storey warehouse is used as warehouse storage.  01.05.2015 to 30.04.2020 with option to renew for a further 5 years  The ground floor of the office building is used as walkway.  The first floor of the office building is used as office.
Annual Rental RM  Built-up Area sq ft  Issuance Date of Occupation Certificate I Occupation Permit
9,000  1,125  18.04.2006  312,000 for the first year and 324,000 for the remaining 4 years.  19,746  10.09.2015
129 I Company No.: 1113927-H I 6. BUSINESS OVERVIEW (Cant’d) Notes: # The registered proprietor of the Lot Halal Hub is The Federal Lands Commissioner (“Land Commissioner?, a body established under section 3 of the Federal Lands Commissioner Act 1957. By way of Lease Agreement between the Land Commissioner and Perbadanan Labuan, a statutory body established under section 3 of the Perbadanan Labuan Act 2001, Perbadanan Labuan is the beneficial owner of the Lot Halal Hub. Pursuant to a Management Agreement dated 30 June 2012 entered into between Perbadanan Labuan and the Labuan Halal Hub Sdn Bhd, the interest to Lot Halal Hub had been assigned and transferred to Labuan Halal Hub Sdn Bhd. 1\ KTC Sdn Bhd is currently looking for a suitable premises to relocate. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 130 6. BUSINESS OVERVIEW (Cont’d) 6.17.3 Regulatory Requirements and Environmental Issues As at LPD, we are in compliance in respect of all regulatory requirements (including land rules and building regulations) and environmental issues which may materially affect our Group’s operations and/or utilisation of assets. We further confirmed that the non-compliance disclosed below have been complied with as at LPD: (a) Lot 74A There is an aluminium framed glass enclosure (6.09m (20 ft) x 2.44m (8ft)) (UAluminium Framed Glass Enclosure”) which boxes over an external timber staircase leading to the first floor office of the building near the front entrance of Lot 74A which was constructed without formal planning approval by the local authority. We have on 11 February 2015, via our consultant, Wang Haron & Goh Sdn Bhd, submitted an application together with the revised layout plan to the local authority for approval. In the event that the said approval is not obtained, we had on 25 February 2015 undertake to demolish the Aluminium Framed Glass Enclosure prior to the Listing. As at LPD, we have received a letter of no objection from Dewan Bandaraya Kota Kinabalu dated 7 August 2015 informing that Dewan Bandaraya Kota Kinabalu (UDBKK”) has approved the revised layout plan submitted and has since registered the revised layout plan. We are unaware of any penalties imposed by the relevant authorities for the Aluminium Framed Glass Enclosure. (b) Lot 74B
The open driveway between Lot 74B and the neighbouring building is partly roofed over with metal roofing sheets. This roofing canopy was undertaken without formal planning approval by the local authority. We had on 9 December 2014, via our consultant, Wang Haron & Goh Sdn Bhd, submitted an application together with the revised layout plan to the local council to rectify the non-compliance. In the event that the said approval is not obtained, we had on 23 December 2014 undertake to demolish the roofing canopy prior to the Listing. As at LPD, we have received a letter of no objection from DBKK dated 7 August 2015 informing that DBKK has approved the revised layout plan submitted and has since registered the revised layout plan. We are unaware of any penalties imposed by the relevant authorities for the roofing canopy.
(c) Lot 73
There is a separate simple metal storage shed behind the warehouse building with a dimension of 6.1 Om (width) x 9.15m (length) and which is of simple construction and walled up with metal cladding (UMetal Storage”) which was constructed without formal planning approval by the local authority. The Metal Storage is currently being used by KTC Sdn Bhd to store expired goods and damaged goods returned by customers. We had on 23 December 2014 undertake to demolish the Metal Storage prior to our Listing. As at LPD, the Metal Storage has been demolished and we are unaware of any penalties imposed by the relevant authorities for the Metal Storage.
(d) Lot 1A, 2A &3A

The former underside of the eaves (beyond the main building line) to the eastern side of the warehouse building (east of Lot 1A) and to part of the rear (north) of the warehouse building have been extended and walled up/enclosed. The extended rear portion is currently used to accommodate the cold storage area while the side extension is used for general storage. The total extended/enclosed area is about 309.55 m2 is without formal planning approval by the local authority and/or is deemed not in accordance with the requirements of the building by­laws. We had on 23 December 2014 undertake to demolish the said extension and relocate the said cold room storage facility to a fully compliant rented property prior to Listing. 6. BUSINESS OVERVIEW (Cont’d) As at LPD, we have demolished the extended rear portion and we are unaware of any penalties imposed by the relevant authorities for the said extension. 6.17.4 Interruptions to Business and Operations We have not experienced any material interruption in business which had a significant effect on our operations during the past twelve (12) months preceding LPD. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSIN-ESS OVERVIEW (Cont’d) 6.18  FUTURE PLANS, STRATEGIES AND PROSPECTS  6.18.1  Future Plans and Strategies  Our future plans are focused in the following areas:  Our Group’s Future Plans

Expansion of Distribution Operations
Establish a New Distribution Centre in Brunei
Acquisition of Warehousing Facilities in Sarawak Construction of New Warehousing Facility in Kota Kinabalu, Sabah
Expansion of Own Brands of CPG
Expansion of Manufacturing Operations
New Markets for Manufactured Bakery Products
Expansion of Manufacturing Facility and New Bakery Products in Sabah Setting-up a New Manufacturing Facility for Bakery Products in Sarawak 6. BUSINESS OVERVIEW (Cont’d) 6.18.1.1 Expansion of Distribution Operations (i) Establish a New Distribution Centre in Brunei Our distribution operations is supported by 18 distribution centres in East Malaysia and these are located in Kota Kinabalu, Sandakan, Tawau, Lahad Datu, Kudat, Keningau, Kuching, Miri, Sibu and Labuan. Part of our future plans is to extend our distribution arm to cover territories outside of Sabah and Sarawak. In this respect, part of our expansion plans includes the acquisition of an existing distributor of CPG covering a range of F&B products, personal care and household products in Brunei to address opportunities in this market. In August 2014, we have started negotiations with a distributor in Brunei and we are in the process of undertaking an internal due diligence exercise. The proposed acquisition is expected to be completed by the first half of 2016. The proposed acquisition of the distributor includes an operational facility, which comprised a rented warehouse and office with a total built-up area of approximately 10,000 sq ft. The acquisition of the distribution entity in Brunei would potentially provide us with access to approximately 500 sales and distribution points in the Brunei market. The total estimated cost of the acquisition in Brunei is approximately RM1.54 million. We intend to acquire this distribution business through internally generated funds and bank borrowings. (ii) Acquisition of Warehousing Facilities in Sarawak Our existing distribution operations in Sarawak including offices and warehousing facilities are on rented premises. As part of our future plans, we intend to acquire our own warehousing facilities in Sarawak with the following proposed timing by locations: Acquisition of Warehousing Facilities  First Half of 2016  Second Half of 2016  One warehouse in Sibu  -V  One warehouse in Miri  -V  One warehouse in Kuching  -V
We intend to relocate our existing distribution centres in Sibu, Miri and Kuching to these new warehousing facilities in 2016. It is expected that each of these warehousing facilities would have an estimated built-up area of 15,000 sq ft. The total estimated cost of the acquisition of the three (3) warehousing facilities is approximately RM9.0 million, which will be financed using IPO proceeds. In the event that the cost of warehousing facilities exceeds the proposed RM9.0 million, the additional amount will be funded through internally generated funds and/or bank borrowings. 6. BUSINESS OVERVIEW (Cont’d) (iii) Construction of New Warehousing Facility in Kota Kinabalu, Sabah In May 2015, we submitted a development plan to the local authority to construct an additional warehousing facility on our existing land in Lot 5 with a total land area of approximately 105,809 sq ft, which is pending approval. This new warehousing facility in Kota Kinabalu, Sabah is expected to house and cater for the expansion of our CPG products. It is expected that this additional warehousing facility would have an estimated built-up area of approximately 35,914 sq ft while the driveway, apron and loadl unloading bay will have a total built-up area of approximately 54,115 sq ft. In addition, we intend to purchase the following equipment for the said facility: ten (10) units of forklifts; one (1) configuration of pallet racking system; 3,600 units of wooden pallets.
We envisaged that the construction of the warehousing facilities will commence by the second half of 2016 and completed by the end of the same year. The total cost of the construction of the new warehousing facility including the purchase of equipment is estimated at RM8.5 million, of which RM6.5 million will be utilised for the construction of the building and RM2.0 million for the purchase of equipment. Of the total RM8.5 million, we intend to utilise RM3.0 million from IPO proceeds to fund part of the construction cost while the remaining RM5.5 million will be funded through internally generated funds andlor bank borrowings. (iv) Expansion of Own Brands of CPG In line with our intention to expand on our existing brands of CPG, part of our future plans is to commercialise additional packaged F&B products, mainly under our “Orie” and “Creamos” brand names. The following table indicates the type of CPG by timing of commercial launch:
Dry Food  -Packaged seasonings -Condensed milk -Sauces and condiments  Orie Orie Orie  -v ……………………………………………….­-V  . ……….. -V  -Biscuit products .  Creamos-v . .  -Bakery products”  Creamos-v  Beverage products  Creamos  Chilled and Frozen Food -Potato-based products ……………………………………………………………………………..­-Margarine ····~··i~·~·tt~~······································· -Burger Patties  Orie -Orie B~tt~~ ..·~iajd# Orie ……………………………­–V …………………………………….­-V …………………………………………………………….._…… -V -_ . -V  ..

6. BUSINESS OVERVIEW (Cont’d) Notes: A Will be manufactured by in-house manufacturing plants. # New brand to be launched.
In line with our mode of operations, we will continue to source these new products from external manufacturers in Malaysia, with the exception of bakery products. We intend to utilise internally generated funds for the expansion of our own brands of CPG, which consists of F&B products and personal care products. 6.18.1.2 Expansion of Manufacturing Operations (i) New Markets for Manufactured Bakery Products Our in-house manufactured bakery products are sold under our own “Creamos” brand in Kota Kinabalu, Sandakan, Tawau and Labuan. We intend to expand on our market coverage to Brunei and Sarawak by second half of 2015. The market expansion will be carried out through the appointment of distributors and/or wholesalers at the said locations. We plan to utilise internally generated funds for the market expansion of our own manufactured bakery products. (ii) Expansion of Manufacturing Facility and New Bakery Products in Sabah Our existing manufacturing facility in SEDCO Light Industrial Estate Kota Kinabalu, Sabah is mainly focused on the manufacturing of bakery products, namely cream rolls. The built-up area of our existing manufacturing facility is approximately 5,600 sq ft. In order to cater to the geographical and product expansion of our bakery products business, we intend to move to larger premises. In July 2015, we have completed the acquisition of a piece of 1.87 acre land and building with a total built-up area of approximately 20,596 sq ft in Kota Kinabalu Industrial Park (KKIP), Sabah for a purchase price of approximately RM6.23 million. Part of our plans is to move our existing bakery products manufacturing line from SEDCO Light Industrial Estate in Kota Kinabalu to this new premise by second half of 2015. As at LPD, we are still operating at our existing location in SEDCO Light Industrial Estate in Kota Kinabalu. The total cost of the land and building is approximately RM6.23 million which will be funded using internally generated funds and bank borrowings. In addition to the existing manufacturing line, this newly acquired land and building is expected to house three (3) new production lines to cater to the product expansion where we intend to launch the following categories of bakery products by the second half of 2015: cakes in a range of flavours; and other bakery products. In this respect, we plan to purchase the following types of equipment for the three (3) additional production lines: two (2) unit of industrial mixers; three (3) units of ovens; one (1) conveyor system; and two (2) units of automated packing machines.
6. BUSINESS OVERVIEW (Cont’d) The anticipated production capacity of the new bakery products is estimated at 40,000 pieces per day. The estimated cost of the purchase of the above equipment is approximately RM1.0 million which will be funded through IPO proceeds. In the event that the cost of equipment exceeds the proposed RM1.0 million, the additional amount will be funded through internally generated funds and/or bank borrowings. (iii) Setting-up a New Manufacturing Facility for Bakery Products in Sarawak As part of our business expansion plans, we intend to set-up a new manufacturing facility in Sarawak for our bakery products to cater to the Sarawak market. The built-up area of the manufacturing facility is estimated to be approximately 10,000 sq ft, which is expected to be on rented premises. In this respect, we intend to purchase the following equipment as part and parcel of the new production line: two (2) units of industrial mixers; three (3) units of ovens; one (1) conveyor system; and two (2) units of automated packing machines. We intend to set-up and commence the manufacturing facility by the second half of 2016. The total cost of purchasing the equipment is approximately RM1.5 million which RM1.0 million will be funded using IPO proceeds while the remaining RMO.5 million will be funded using internally generated funds and/or bank borrowings. 6.18.2 Our Prospects Our prospects are dependent on the following factors: our sound business performance to-date as a platform for future business sustainability and growth; our competitive advantages and key strengths to sustain and enlarge our customer base; our future plans to provide sustainable growth; and industry prospects and outlook.
(i) Our Sound Business Performance To-date as a Platform for Future Business Sustainabilityand Growth Our sound business performance is reflected by the following financial achievements between the FYE 30 June 2012 and FYE 30 June 2015: FYE 30 June 2012  FYE 30 June 2015  AAGR FYE 30 June 2012 to FYE 30 June 2015  Revenue  RM200.33 million  RM299.87 million  14.39%  GP  RM25.69 million  RM41.07 million  16.92%  PST  RM5.60 million  RM10.35 million  22.73%  PAT  RM3.97 million  RM7.08 million  21.28%
6. BUSINESS OVERVIEW (Cont’d) Note: Please refer to Section 12. 1.1 for further financial analysis. Our financial performance over the last four (4) financial years will provide us with the platform to sustain and grow our business in the future. (ii) Our Competitive Advantages and Key Strengths to Sustain and Enlarge Our Customer Base Our competitive advantages and key strengths will help us sustain and enlarge our customer base. This includes the following: we cover a wide range of CPG; we cover recognisable CPG brands; we have a wide distribution network; we have an established track record; we have economies of scale; and we have experienced directors and key management personnel.
(Please refer to Section 6.1.1 (c) of this Prospectus for further details) (iii) Our Future Plans to Provide Sustainable Growth We have in place a sound business and expansion plans for moving forward, which includes the following: expansion of our distribution operations covering expansion into Brunei market, acquisition of warehousing facilities in Sarawak, and construction of a new warehousing facility in Sabah, as well as expansion of own brands of CPG; and expansion of manufacturing operations by expanding into new markets for our manufactured bakery products, expansion of manufacturing facility and new bakery products in Sabah, and setting-up a new manufacturing facility in Sarawak. Our future plans would provide us with the platform to sustain and grow our business. (Please refer to Section 6.18 of this Prospectus for further details) (iv) Industry Prospects and Outlook The prospects and outlook of the distribution of CPG in Malaysia are mainly dependent on the following factors: socio-economic factors that drive local consumption where a growing economy provides the impetus for spending, which will have a positive flow-on effect on the CPG industry; performance of user-industries to sustain demand where growth in the retail sector of CPG and food services sector would also contribute to the demand for CPG, including products covered by our Group; and 6. BUSINESS OVERVIEW (Cont’d) government initiatives to spur the growth of the demand for CPG as demonstrated in the NKEA initiatives for the wholesale and retail sector which are expected to contribute RM107.8 billion in terms of GNI and create 595,400 jobs by 2020. In addition, the NKEA initiatives include increasing the number of retail outlets like hypermarkets, superstores and departmental stores, which will drive the growth of the wholesale and retail sector including stimulating consumption expenditure. All these would benefit providers of market access and coverage of CPG including our Group. (Please refer to “Independent Assessment of the Distribution of Consumer Packaged Goods in Malaysia” in Section 7 of this Prospectus) THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

 

 

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