Business Overview

5. GENERAL INFORMATION ON OUR GROUP 5. GENERAL INFORMATION ON OUR GROUP
5.1 INCORPORATION AND HISTORY Matang Berhad (Company No. 1142377-X) was incorporated in Malaysia on 28 April 2015 under the Act as a public limited company under our current name. We are incorporated as a special purpose vehicle to facilitate the listing of MHB on the ACE Market of Bursa Securities. Through our subsidiaries, we are involved in the management of plantation estate, sale of FFB and property investment holding. The shareholders of MHB had, at an Extraordinary General Meeting/Court Convened Meeting held on 15 October 2016 approved the Exchange of Shares. The Exchange of Shares was completed on 14 November 2016 and thereafter, MHB and its wholly-owned subsidiary, MRSB became our wholly-owned subsidiaries. Further details of the Exchange of Shares are set out in Section 5.3 of this Prospectus. Please refer to Section 6.1 of this Prospectus for detailed information of our Group’s history.
5.2 SHARE CAPITAL Our authorised share capital is RI”1300,OOO,OOO comprising 3,000,000,000 ordinary shares of RMO.10 each, of which RM168,OOO,025.60 comprising 1,680,000,256 Shares have been issued and fully paid-up as at the LPD. The movements in our issued and paid-up share capital since the date of our incorporation are set out below: Cumulative Issued and Paid­Date of up Share Capital Allotment RM 28 April 2015 200 RM20.00/ 0.10 20.00 Subscribers’ shares 14 November 1,680,000,056 RI”1168,OOO,005.60/ 0.10 168,000,025.60 2016 Issued pursuant to Exchange of Shares As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Matang. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. Upon completion of our IPO, our enlarged issued and paid-up share capital will be increased to RM181,OOO,025.60 comprising 1,810,000,256 Shares from the issuance of 130,000,000 Issue Shares.
5.3 EXCHANGE OF SHARES Pursuant to the Scheme Agreement, MHB undertook a members’ scheme of arrangement under Section 176 of the Act, to enable the entire issued and paid-up share capital of MHB of RM60,OOO,002 comprising 120,000,004 MHB Shares to be transferred to our Company and exchanged for 1,680,000,056 new Matang Shares on the basis of 14 new Matang Shares for every one (1) MHB Share held. 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) The following approvals have been obtained for the Exchange of Shares: (a) Approval of the shareholders of MHB in an Extraordinary General Meeting/Court Convened Meeting Pursuant to Section 176(1) of the Act, the High Court of Malaya (“High Court”) had on 19 September 2016 granted an order for fIIlHB to convene a Court Convened Meeting on the Exchange of Shares. On 15 October 2016, the Exchange of Shares was approved by a majority of the shareholders of MHB in number, representing three-fourths (3/4) in value of the shareholders of MHB present and voting in the Court Convened Meeting as required under Section 176(3) of the Act.
(b) Approval of the High Court Pursuant to Section 176(3) of the Act, subsequent to the approval by a majority of the shareholders of MHB during the Court Convened Meeting, MHB filed a notice to the High Court to seek its approval for the Exchange of Shares. On 7 November 2016, the High Court granted an order sanctioning the Exchange of Shares and a copy of the court order was lodged by MHB with the CCM on 14 November 2016, thereby effecting the Exchange of Shares. Resulting from the Exchange of Shares, 1,680,000,056 new Matang Shares were allotted to the existing shareholders of MHB on the basis of 14 new Matang Shares for every one (1) I\1HB Share held. In view that the issue price of the new Matang Shares is RMO.10 per Matang Share, the total exchange value is RM168,000,005.60. The exchange ratio of 14 Matang Shares for every one (1) MHB Share was arrived at after taking into consideration the audited consolidated NA of MHB as at 31 December 2015 of RM165,891,974. As such, the exchange value of RM168,000,005.60 represents a premium of approximately RM2,108,031.60 or 1.27% to the NA of MHB as at 31 December 2015 of RM165,891,974. The premium between the exchange value and the NA of MHB as at 31 December 2015 is apprOXimately 1.27%. In view of the minimal premium, the Board is of the opinion that the exchange ratio of 14 Matang Shares for every one (1) MHB Share is fair and reasonable. The new Shares issued pursuant to the Exchange of Shares rank pari passu in all respects with our existing issued and paid-up Shares inclUding voting rights and will be entitled to all rights and dividends and/or other distributions, the entitlement date of which is subsequent to the date of issue and allotment of the new Shares. Upon the completion of the Exchange of Shares, the shareholding structure of Matang is as follows:  Shareholders  No. of MHB Shares held before the Exchange of Shares  0/0 of share capital  Matang Shares held after the Exchange of Shares No. of Matang Shares 0/0
Subscriber  200  shareholders  Huaren  13,097,000  10.91  183,358,000  10.91  Rohua  1,412,000  1.18  19,768,000  1.18  MHB MI  105,491,004  87.91  1,476,874,056 (2)  87.91
Total 120,000,004 100.00 1,680,000,256 100.0 S. GENERAL INFORMATION ON OUR GROUP (Cont’dj Notes:  (1)  Negligible.  (2)  Comprising the following (as at 30 November 2016):  (a) (b)  1,225,611,562 Shares held by 13,918 sharehol251,262,494 Shares held by the Trustee on pursuant to the Trust Deed.  ders; and behalf of 4,709 shareholders
Our Group structure before and after the Exchange of Shares as well as upon completion of the Listing is as follows: Before the Exchange of Shares MeA 100.00% + +100.000/0
[ The rest of this page is intentionally left blank] 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) After the Completion of the Exchange of Shares MCA 100.00%~ 1100.00%
10.91% ~ 1.18% 87.91%
100.00%1
MRSB After the Exchange of Shares and Public Issue MCA
100.00%~ ~100.00% ,.——~  Huaren  Rohua  MHB MI*  IPO  shareholders
I 10.13%  I 1.09%  .! Matang  I 81.60%  I 7.18%  100.00%
MHB
100.00%~ MRSB 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) Notes: * Comprising the following (as at 30 November 2016): (a) 1,225,611,562 Shares held by 13,918 shareholders; and
(b) 251,262,494 Shares held by the Trustee on behalf of 4,709 shareholders pursuant to the Trust Deed.

5.4 LISTING SCHEME Details of our Listing Scheme are as follows: (a) Public Issue Pursuant to our Public Issue, we shall issue 130,000,000 Issue Shares at our IPO Price to be made available for application by the Malaysian Public, to be allocated via balloting. Upon completion of our Public Issue, our issued and paid-up share capital will increase from RIV1168,000,025.60 comprising 1,680,000,256 Shares to RM181,000,025.60 comprising 1,810,000,256 Shares. (b) Listing Upon completion of our IPO, our Company’s entire enlarged issued and paid-up share capital of RM181,000,025.60 comprising 1,810,000,256 Shares shall be listed on the ACE Market of Bursa Securities.
5.5 SUBSIDIARIES All of our subsidiaries are wholly-owned by our Company. As at the date of this Prospectus, we do not have any associated company. Details of our subsidiaries are summarised as follows: Issued and Authorised paid-up Effective Company Date I Date of share share equity (Company Place of commencement capital Capital interest Principal No.) incorporation of business RM RM 010 activities
MHB (38557-X)  3 April 1978/ Malaysia  8 October 1980  120,000,004  60,000,002  100.0  Investment holding, management of plantation estate and sale of FFB  MRSB (1) (89846-T)  11 September 1982/ Malaysia  9 October 1996  50,000,000  37,926,971  100.0  Property investment holding  l\lote:  (1)  Wholly-owned subsidiary of IV1HB.

 

5. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5.5.1 MHB (a) History and business MHB was incorporated in Malaysia on 3 April 1978 under the Act as a public limited company. MHB is involved in management of plantation estate and sale of FFB. The detailed history of MHB is set out in Section 6.1 of this Prospectus. MHB also owns the Larkin Investment Property which comprises three (3) units of detached bUildings at Kawasan Perindustrian Larkin, Johor Bahru. The said property is leased to multiple tenants for rental income. There have been no material changes in the manner in which fVlHB conducts its business or activities since the last three (3) years prior to the LPD. (b) Share capital As at the LPD, MHB’s authorised share capital is RM 100,000,000 compnslng 200,000,000 MHB Shares. Its issued and paid-up share capital is RM60,000,002 comprising 120,000,004 MHB Shares. The changes in the issued and paid-up share capital of MHB since its incorporation are as follows: Cumulative issued and No.ofMHB paid-up Date of Shares ConsiderationI Par value share capital allotment allotted Types of issue RM RM 3 April 1978 4 RM21 0.50 2.00 Subscribers’shares 15 December 120,000,000 RM60,000,0001 0.50 60,000,002.00 1981 Cash As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in MHB. In addition, there are no discounts, special terms or instalment payment terms applicable to the payment of the consideration for the allotment. (c) Substantial shareholders and directors fVlHB is a wholly-owned subsidiary of our Company. As at the LPD, the Directors of MHB are as follows: Name Designation Date of Appointment Datuk Kiat Swee Sung Executive Chairman 21 July 2014 Eng Cheng Guan Executive Director 19 September 2014 Ganasan AIL Perumal Plantation Director (1) 22 June 2015 Datuk Teoh Sew Hock Non-Executive Director 13 June 2013 Ng Keng Heng Non-Executive Director 13 June 2013

5. GENERAL INFORMATION ON OUR GROUP (Cont’d) Name Designation Date of Appointment Lau Kok Guan @ Low Kok Guan Non-Executive Director 30 July 2013 Lau Lia ng Fook Non-Executive Director 10 December 2013 Chong Pow On Non-Executive Director 10 December 2013 Datuk Tan Teck Poh @ Tan Ah Too Non-Executive Director 21 July 2014 Note: (1) Ganasan AIL Perumal is a board member of MHB. He holds an executive position on the board of MHB. (d) Subsidiaries and associated companies As at the LPD, details of the subsidiary of MHB are summarised as follows: Issued and  Authorised  Paid-up  Company!  Date!  Share  Share  Equity  Company  Country of  Capital  Capital  Interest  No.  Incorporation  RM  RM  %  Principal Activity
MRSBI 11 September 50,000,000 37,926,971 100 Property investment 89846-T 19821 holding Malaysia As at the LPD, MHB does not have any other associated company. 5.5.2 MRSB (a) History and business IVIRSB was incorporated in Malaysia under the Act on 11 September 1982 as a private limited company. The principal activity of MRSB is property investment holding. IVlRSB is the registered owner of the Matang Estate which comprises 45 contiguous pieces of agricultural lands located within the District of Ledang and District of Segamat, Johor with a total land area of 1,096.3 hectares. The said estate houses our Group’s plantation operations. MRSB is also the registered owner of the Tangkak Investment Land which is a vacant land measuring approximately 5,016.85 square metres which is held for property development. The development land is located in Tangkak, District of Ledang, Johor. There have been no material changes in the manner in which MRSB conducts its business or activities since the last three (3) years prior to the LPD. (b) Share capital As at the LPD, MRSB’s authorised share capital is RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each. Its issued and paid-up share capital is RM37,926,971 comprising 37,926,971 ordinary shares of RIVl1.00 each. S. GENERAL INFORMATION ON OUR GROUP (Cont’d) The changes in the issued and paid-up share capital of MRSB since its incorporation are as follows: Cumulative  issued and  No. of  paid-up share  Date of  shares  Considerationj  Par value  capital  allotment  allotted  Types of issue  RM  RM
11 September 2 RM2/ 1.00 1982 Subscribers’ shares 9 October 37,926,969 RM37,926,969/ 1.00 37/926/971 1996 Others(1) Note: (1) Issued in consideration for the sale of Matang Estate by MHB to MRSB. As at the LPO, there are no outstanding warrants, options, convertible securities or uncalled capital in IYlRSB. (c) Substantial shareholders and directors MRSB is a wholly-owned subsidiary of our Company. As at the LPO, the Oirectors of MRSB are as follows: Name Designation Date of Appointment Oatuk Kiat Swee Sung Oirector 25 July 2016 Oatuk Teoh Sew Hock Oirector 13 June 2013 (d) Subsidiaries and associated companies As at the LPO, MRSB does not have any other subsidiary or associated company. [ The rest of this page is intentionally left blank]

5. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5.6 MAJOR APPROVALS AND LICENCES Save for the major Iicencesr permits and certificates obtained by our Group as disclosed belowr as at the LPDr there are no other major approvalsr major licences and permits issued to our Group in order for us to carry out our operations: Nature of Issuing Authority Date of Date of Licences/ Permits Compliance No. Licencee / Registration No. issue expiry and Certificates Equity and/or major conditions imposed status 1. MHB Johor Bahru City 14 31 Business premise and (i) This licence is not transferable to another person; Complied Council/ December December advertising licence (ii) This licence may be revoked if the Iicencee isL2013LI00203 2015 2016 for office purpose found not to be conducting business at the business premise; Serial number for advertising license:
(iii) This licence shall be displayed in a place which is JB/I/2015/12/2039 significant and shall be produced to the officers of Johor Bahru City Council and/or police officers for inspection upon request; and (iv) The Iicencee is required to provide and make available fire extinguishers and first aid kit in the business premise. 2. MHB MPOB / 21 January 28 Licence to sell and (i) A Iicencee shallr in relation to the categories Complied 501755902000 2016 February move FFB specified in its Iicencer maintain and update on a 2017 daily basis records which are completer true and accurate; (ii) A Iicencee shallr in relation to the categories specified in its licencer submit monthly statement containing information which to their knowledge is completer true and accurate to the MPOB every month and shall be received by the MPOB not less than the seventh (7th) day of the following month; 55
S. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) No.  Licencee  Issuing Authority / Registration No.  Date of issue  Date of expiry  Nature of Licences/ Permits and Certificates  Equity and/or major conditions imposed  Compliance status  (iii)  A Iicencee shall, in relation to the categories specified in its licence, submit periodic information containing information which to their knowledge is complete, true and accurate to the MPOB every month and shall be received by the MPOB as may be determined by the MPOB;  (iv)  A Iicencee is not permitted to sell oil palm to anybody except to a person who has a licence to buy oil palm frUits;  (v)  A licencee is only permitted to sell and move oil palm fruit from the estates specified in the licence; and  (vi)  A Iicencee shall make a declaration of the oil palm fruit consignment by sea within Malaysia which to their knowledge is complete, true and accurate to the MPOB in form MPOB Q2 not less than two (2) days before the date of commencement of loading of the oil palm fruit.  3.  MHB  MPOB/ 566114011000  1 November 2016  31 October 2017  Licence to produce, sell, move and store oil palm seedlings  (i)  A Iicencee shall, in relation to the categories specified in its licence, maintain and update on a daily basis records for which is complete, true and accurate;  Complied  (ii)  A Iicencee shall, in relation to the categories specified in its licence, submit monthly statement containing information which to their knowledge is complete, true and accurate to the MPOB every month and shall be received by the MPOB not less than the seventh (7th) day of the following month;  56
No.  Licencee  Issuing Authority / Registration No.  Date of issue  Date of expiry  Nature of Licences/ Permits and Certificates  Equity and/or major conditions imposed (iii) A Iicencee shall, in relation to the categories specified in its licence, submit periodic information containing information which to their knowledge is complete, true and accurate to the MPOB every month and shall be received by the MPOB as may be determined by the MPOB; (iv) A Iicencee is required to submit document certifying the genuineness of the oil palm seeds or plants from oil palm tissues obtained from every purchase;  Compliance status  (v) (vi) (vii)  A Iicencee is not permitted to purchase oil palm seeds or oil palm seedlings or plants from oil palm tissues from anybody except from a person who has a licence to sell oil palm seeds or oil palm seedlings or plants from oil palm tissues; A Iicencee is not permitted to sell oil palm seedlings with age of less than ten (10) months old; A Iicencee shall comply with at least the minimum guidelines in the Guidelines for the Commercial Production and Maintenance of Oil Palm Seedlings from Germinated Oil Palm Seeds or any other gUidelines as may be determined by the MPOB;  (viii)  A Iicencee shall be required to have at least one (1) officer with qualifications as may be determined by the MPOB working for it;
57
5. GENERAL INFORMATION ON OUR GROUP (Cont’d) Nature of  No.  Licencee  Issuing Authority / Registration No.  Date of issue  Date of expiry  Licences/ Permits and Certificates  Equity and/or major conditions imposed  Compliance status  (ix)  A Iicencee shall ensure that all sale of oil palm seedlings is accompanied by the Oil Palm Planting Materials Declaration of Sale and Receipt Form which is completed with true and complete particulars; and  (x)  A Iicencee shall make a declaration of the oil palm seedlings consignment by sea within Malaysia which to their knowledge is complete, true and accurate to the MPOB in form MPOB Q2 not less than two (2) days before the date of commencement of loading of the oil palm seedlings.  4.  MHB  Ministry of Plantation Industries and Commodities, Malaysia and MPOBI CoPlET10095-1  21 April 2016  20 April 2019  Certificate confirming the fulfilment of the requirements of Code of Good Agricultural Practice for Oil Palm  None  Not applicable  Estates  and  Smallholdings based on the evidence of  compliance audit  5.  MHB  Ministry of Domestic Trade, Co­operatives and Consumerism, Malaysia I J023664  10 February 2016  10 February 2017  Permit for storage of 9,100 litres of diesel  (i) (ii)  A Iicencee is not permitted to store scheduled controlled item in any place other than the location set out in the permit; A Iicencee shall not own or control any scheduled controlled items in excess of the quantity set out in the permit;  Complied
58
S. GENERAL INFORMATION ON OUR GROUP (Cont’d) Nature of Issuing Authority Date of Date of Licences/ Permits Compliance No. Licencee / Registration No. issue expiry and Certificates Equity and/or major conditions imposed status (iii) This permit shall not be transferable to another person; (iv) The scheduled controlled item set out in the permit is for the Iicencee’s own internal use and not for resale;
(v) A Iicencee shall maintain all proof of purchase of the scheduled controlled items set out in the permit for inspection purposes; and
(vi) The skid tank used for storage of the scheduled controlled item shall be labelled.

The Malaysian government policies and regulations pertaining to the palm oil industry that are applicable to Matang include inter-alia the following: • Land Acquisition Act 1960
• National Land Code 1965
• Workers Minimum Standard of Housing & Amenities Act 1990
• Occupational Safety & Health Act, 1994
• Malaysian Palm Oil Board Act 1998
• Malaysian Palm Oil Board (Licensing) Regulation 2005
• Environment Quality Act 1974

59
5. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5.7 PROPERTIES OF OUR GROUP 5.7.1 Properties owned by our Group Details of the properties owned by Matang Group as at the LPD are as follows: (i) Matang Estate Our oil palm plantation comprises of 45 contiguous pieces of agricultural lands located within the District of Ledang and District of Segamat, State of Johor Darul Takzim, collectively known as Matang Estate. Details of the oil palm plantation are as follows: Registered proprietor  MRSB  Total Net Land Area based on titles (1)  1,092.2 hectares (2,698.8 acres) 1,096.3 hectares (2J09.1 acres) RM141,000,000.00(2) as at 4 March 2016 RM140,293,501 as at 30 June 2016 Oil palm plantation Freehold Plantation area Age profile Hectares -Old area (21 to 25 years) 16.4 -Mature area (5 to 20 years) 831.7 -Immature area (1 to 4 years) 217.6 -Replanting 16.4 Total plantation area 1,082.1  0/0 1.5 76.9 20.1 1.5 100.0  Total Net Land Area (1)  Market Value  Net book value  Existing use  Tenure  Total plantation area and age profile of the oil palm (as at 30 June 2016) (3)
Notes: (1) The total net land area as stated in the particulars of titles is 1,092.2 hectares (2,698.8 acres). However, Jurukur Jasa Jaya Sdn Bhd, a licenced land surveyor, had vide its letter dated 26 June 2015 certified that the total land area is 1,096.3 hectares (2,709.1 acres). For the purpose of valuation, KGV International Property Consultants (Johor) Sdn Bhd has adopted the total net land area of the Matang Estate of approximately 1,096.3 hectares. 60

 

5. GENERAL INFORMATION ON OUR GROUP (Cont’d) (2) As valued by KGV International Property Consultants (Johor) Sdn Bhd using the Discounted Cash Flow approach. A copy of the valuation certificate is enclosed as Annexure of this Prospectus. The gain on the revaluation surplus amounted to RM46.63 million were recognised as retained earnings and has been reflected in the audited consolidated financial statements for FPE 2015. The above valuation does not require the approval of the Sc.
(3) The total plantation area of 1,082.1 hectares refers to the total area that is marked for plantation. The difference in the area of 14.2 hectares comprise nursery, building sites, roads, drains etc.

MRSB had received the following notifications on the compulsory acquisition of part of the Matang Estate pursuant to the Land Acquisition Act, 1960 to upgrade the existing Muar-Tangkak-Segamat Road Package 3: (a) Notification dated 27 September 2016 from Pentadbir Tanah Segamat (“PTS”) in relation to the land title Geran 37583 for Lot 6185 and Geran 37585 for Lot 6187 in Mukim Jementah, Daerah Segamat for which the land area to be acquired by the State Government of Johor is 0.7418 hectares and 1.2994 hectares respectively; and
(b) Notification dated 12 October 2016 from Pejabat Tanah Tangkak (“PTT”) in relation to the land title Geran 2752 for Lot 984 in Mukim Tangkak, Daerah Tangkak for which the land area to be acquired by the State Government of Johor is 0.1116 hectares.

Particulars of title  Owner  Age of trees planted on respective land  Titular land area (hectares)  Land area for compulsory acquisition (hectares)  °/0 land area for compulsory acquisition over Matang Estate* (°/0)  Net Book Value as at 30 June 2016 A (RM)  Compensation Sum by land office (RM)  Lot 6185, Geran 37583 (Mukim Jementah, Daerah Segamat)  MRSB  Over 18 years  1.968  0.7418  0.07%  94,928  432,464  Lot 6187, Geran 37585 (Mukim Jementah, Daerah Segamat)  MRSB  Over 18 years  3.403  1.2994  0.12%  166,284  767,212  Lot 984, Geran 2752 (Mukim Tangkak, Daerah Tangkak) TOTAL  MRSB  Over 12 years  1.776 7.147  0.1116 2.1528  0.01% 0.20°/0  14,281 275,493  41,000 1,240,676
61 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) Notes: Calculated based on land area of 1,096.3 hectares.
* Net book value for land area to be acquired under the compulsory acquisitions, the value of which is arrived at in proportion to total NBV of RM140,293,501 as at 30 June 2016 for the total land area of 1,096.3 hectares. As a result of the compulsory acquisitions, the land area of Matang Estate shall decrease by 2.1528 hectares or 0.20%. Nevertheless, the decrease in Matang Estate land area is not expected to materially impact the revenue, profitability and/or operations of Matang going forward due to the minimal reduction in land area of 0.20%. Kindly refer to Annexure A for additional details on Matang Estate. (ii) Larkin Investment Property Particulars of title Registered proprietor  Land area Tenure Category of la nd use  EXisting use, age occupancy rates
of building and HSD 8796, Lot No. TLO 703, Town of Bandar Johor Bahru, District of Johor Bahru, State of Johor Darul Takzim bearing postal address No. 83A, Jalan Langkasuka, Kawasan Perindustrian Larkin (also known as Dato’ Onn Industrial Estate), 80350 Johor Bahru, Johor Darul Takzim.  MHB  1.3 hectares (3.2 acres / 139,392 sq ft)  Leasehold for 60 years expiring on 24 September 2031 with a remaining leasehold period of approximately 15 years.  Industrial  Erected upon the land are three (3) units of detached buildings identified as Block A, Block B and Block C, two (2) guardhouses and other ancillary structures. Block A Block A is a 1 ‘h-storey detached warehouse. The age of Block A is approximately 40 years old and it has a total gross floor area of 15,340 sq ft. The net lettable area is 12,000 sq ft. As at LPD, it is fully occupied and used as a furniture showroom.
62 S. GENERAL INFORMATION ON OUR GROUP (Cont’d) Restriction-in-interest  Block B Block B is a 1 ‘h-storey warehouse cum factory. The age of Block B is approximately 27 years old and it has a total gross floor area of 32,160 sq ft. The net lettable area is 28,900 sq ft. As at the LPD, it is fully occupied and used as a badminton court. Block C Block C is a 5-storey detached flatted factory building with a lower ground floor. The age of Block C is approximately 18 years old and it has a total gross floor area of 203,137 sq ft. The net lettable area is 108,480.39 sq ft. As at the LPD, 54,894.99 sq ft is leased to multiple tenants while the remaining 53,585.40 sq ft is unoccupied. The occupancy rate is 50.60%. As at the LPD, the combined occupancy rate of Block A, Band C are approximately 64.10%.  Nil  Market value Net book value Date of Issuance of Certificate of Fitness for Occupation (“CFO”)  RMll,650,OOO(1) as at 30 April 2015  RMll,650,OOO as at 30 June 2016  The CFO for Block A, Block B and Block C were issued on 22 June 1976, 18 September 1989 and 26 November 1998 respectively.  Term of tenancy  Generally, the term of the tenancy is on a short-term basis between one (1) -three (3) years.
Note: (1) As valued by PPC International Sdn Bhd using the Comparison Approach and Cost Approach. A copy of the valuation certificate is enclosed as Annexure B of this Prospectus. The above valuation does not require the approval of the sc. 63 S. GENERAL INFORMATION ON OUR GROUP (Cont’d) (iii) Tangkak Investment Land Particulars of title  HSD 4636, Lot No. PTD 10109, Mukim of Tangkak, District of Ledang, State of Johor Darul Takzim  Location Registered proprietor  Situated along Jalan Bidara 9 and Jalan Bidara 10, Taman Tangkak Jaya, Tangkak, Johor Darul Takzim  MRSB 5,016.85 square metres (54,001 sq ft) Land area Tenure Category of land use Existing use Restriction-in-interest Market value Net book value Date of Issuance of Certificate of Fitness for Occupation  Freehold  Building Vacant 1. Once the ownership of this land is transferred to a Bumiputera, it shall not subsequently be sold, leased or transferred by any means to a non-Bumiputera without the consent from the state authority. 2. Once the ownership of this land is subdivided into subsidiary titles and transferred to a Bumiputera, it shall not subsequently be sold, leased or transferred by any means to a non-Bumiputera without the consent from the state authority. RM1,600,OOO(1) as at 30 April 2015

 

RM1,057,730 as at 30 June 2016  Nil
Note: (1) As valued by PPC International Sdn Bhd using the Comparison Approach. A copy of the valuation certificate is enclosed as Annexure C of this Prospectus. The above valuation does not require the approval of the Sc. The DDWG is of the view that none of the properties owned by our Group are in breach of any land use conditions and/or are in non-compliance with current statutory requirements, land laws or building regulations/by-laws. 64 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5.7.2  Property rented by our Group  Details of property rented by us as at the LPD are set out below:  No.  Address  Owner/ Tenant  Description/ Existing Use  Built-up Area Sq ft  Period of tenancy / Rental per month  Date of issuance of certificate of fitness for occupation
(a) Suite 90S, 9th Floor, City Plaza, 21 Han Kim Lan, Shu A unit located on 1,629 Six (6) months 18 November 1998 Jalan Tebrau, 80300 Johor Bahru, Tai Yong and So the 9th floor is being commencing from 1 Johor Heng Hock / used as an office / November 2016 and expiring on 30 April MHB Corporate office of 2017/ our Group RM3,450.00 The DDWG is of the view that none of the property leased by our Group is in breach of any land use conditions and/or is in non-compliance with current statutory requirements, land laws or building regulations/by-laws.

 

5.7.3 Acquisition of properties Our Group has not acquired any properties during the past two (2) years preceding the date of this Prospectus.
5.7.4 Regulatory requirements and environmental issues The DDWG is of the view that there are no regulatory requirements and/or major environmental issues which may affect our Group’s operations arising from the utilisation of our assets. [ The rest of this page is intentionally left blank] 65 5. GENERAL INFORMATION ON OUR GROUP (Cont’d) 5.7.5 Material capital expenditures and divestitures Save as disclosed below, there were no other material capital expenditures (including interests in other corporations) made by us for the past four (4) financial years from FYE 2013 to FYE 2016: FYE 2013 FYE 2014 FYE 2015 FYE 2016 Description RM’OOO RM’OOO RM’OOO RM’OOO IViotor vehicles 102 11 Plant and machinery 34 55 10 9 136 66 10 9Total The above material capital expenditures were mainly for our operations and financed by internally generated funds.
5.7.6 Material plans to construct, expand or improve facilities Save as disclosed below, we do not have immediate plans to construct, expand or improve our existing facilities: (a) To replant 16.4 hectares or 1.5% of our total oil palm plantation area in 2017. Our replanting exercise is expected to improve the age profile of our oil palm estate and increase our FFB yield in the long term which will enhance our revenue; and
(b) To improve our facilities as well as the infrastructure located in our plantation estate as follows:
(i) road repair and resurfacing;
(ii) improve water drainage;

 

(iii) purchase of new equipment including nine (9) tractors, one (1) backhoe and one (1) lorry for our plantation operations; (iv) rewiring of electricity supply cables; and
(v) renovation of workers quarters.

The improvement of our facilities is expected to enhance our effectiveness in operating our estate and is expected to lead to cost savings (from the expected reduction in equipment maintenance costs and fuel reduction from the use of new vehicles and resurfaced roads) in the long term and contribute positively to our Group’s revenue and profitability. We have allocated RM2.80 million from the proceeds of our IPO for the abovementioned expenditures. Kindly refer to Section 3.10 of this Prospectus for detailed information on the utilisation of proceeds. Additional information on the abovementioned expenditures are also set out in Section 6.3 of this Prospectus. 6. BUSINESS OVERVIEW Unless otherwise stated, for the purpose of this Section 6, references to “Matang Group”, “Group”, “we”, “us”, “our” and “ourselves” are to Matang, MHB and MRSB taken as a whole or the Matang Group. 6.1 OUR HISTORY IVJatang Berhad was incorporated in IVJalaysia on 28 April 2015 under the Act as a public limited company under our current name. We are incorporated as a special purpose vehicle to facilitate the listing of IVJHB on the ACE Market of Bursa Securities. Through our subsidiaries, Matang Group is involved in the management of plantation estate, sale of FFB and property investment holding. The history of Matang Group can be traced back to the 1970’s era when businesses were mostly small family-owned sole proprietorships or partnerships that relied heavily on the involvement of family members. As the Malaysian economy grew, MCA felt the need for Chinese entrepreneurs to break away from traditional family business practices, and began to effect the formation of large corporations in order to withstand increasing business competition. This led to the establishment of Multi-Purpose Holdings Berhad (currently known as Magnum Berhad) in 1975 by MCA, a company that raised capital from the Chinese community for investment purposes. Subsequent to this successful initiative, another four (4) corporations were formed by various MCA branches during the period from 1978 to 1981 including Aik Hua Holdings Berhad by Selangor MCA, Panwa Development Berhad by Pahang MCA, Peak Hua Holdings Berhad by Perak MCA and IVIHB by Johor MCA. Our wholly-owned subsidiary, MHB was incorporated in Malaysia under the Act on 3 April 1978 as a public limited company under its present name. MHB began its fund raising exercise in 1981. The fund raising exercise was completed on 15 December 1981 and rvlHB successfully raised RM60 million with the issuance of 120,000,000 new MHB Shares at RMO.50 each. On 11 September 1982, MRSB, our wholly-owned subsidiary was incorporated. The principal activity of MRSB is property investment holding. In September 1983, MHB acquired Matang Estate for a total purchase consideration of RM19.64 million. Subsequent to the completion of acquisition of Matang Estate, we ventured into the plantation sector with the cultivation of rubber (on 72.6% of the land area) and oil palm (on the remaining 27.4% of land area) in Matang Estate in 1983. In 1984, MHB paid its first dividend of 2.5 sen per MHB Share to its shareholders. In 1988, MHB acquired the Larkin Investment Property for a total purchase consideration of RIVJ2.8 million. At the time of acquisition, the Larkin Investment Property had a l’h-storey detached warehouse (Block A) which was built in 1976. In 1989, MHB completed the construction of another l’h-storey detached warehouse cum factory (Block B) on the Larkin Investment Property. To continue to add value to our shareholders, from the 1980s to mid-1990s, we diversified our investment portfolio to include other business activities. These include the provision of financial services through Matang Factoring Sdn Bhd (initially known as Matang Credit and Leasing Sdn Bhd) from 1982 to 1992, invested in cocoa plantation through our stake in Susuki Sdn Bhd from 1984 to 1991, production of disposable examination gloves through
6. BUSINESS OVERVIEW (Cont’d) Matang Manufacturing Sdn Bhd from 1988 to 1993, as well as multiple investments in public listed companies throughout the period. In 1996, our rubber yield declined drastically due to our ageing rubber trees. During this period, palm oil demand was on the rise which led to our management’s decision to cease our rubber plantation activities and to replace the rubber trees with oil palms. In 1996, fVlHB sold the Matang Estate to fVlRSB for the total consideration of RM54.18 million, satisfied partly via the allotment of 37.93 million ordinary shares of RM1.00 each in MRSB to I\1HB and partly via cash payment of RI\116.25 million. In 1998, fVlHB completed the construction of a 5-storey detached flatted factory (Block C) on the Larkin Investment Property. In 2001, MRSB acquired the Tangkak Investment Land for a total purchase consideration of RM1.2 million. In 2012, I\1HB was certified as having fulfilled the requirements of the ‘Code of Good Agriculture Practice for Oil Palm Estates and Smallholdings’ from the MPOB. On 19 November 2012, Scope Industries Berhad (“Scope”) and MHB had entered into a conditional business merger agreement C’BMA”) for the sale and transfer of the entire business and undertakings, including all assets and liabilities of MHB to Scope for a total merger consideration amounting to RM145.0 million (“Scope Merger”). On 31 May 2013, the Scope Merger was tabled to the shareholders of I\1HB at an Extraordinary General Meeting. However, the resolutions in relation to the Scope Merger were not carried. On 8 September 2014, Scope notified MHB that the BMA was terminated as the conditions precedent of the BMA were not fulfilled in accordance with the timeframe stipulated under the BMA. Resulting thereto, the Scope Merger was aborted. On 6 May 2016, MHB and Matang entered into the Scheme Agreement to facilitate the Exchange of Shares. On 15 October 2016, the shareholders of MHB had, at an Extraordinary General Meeting/Court Convened Meeting approved the Exchange of Shares. The Exchange of Shares was completed on 14 November 2016 and thereafter, MHB and its wholly-owned subsidiary, MRSB became our wholly-owned subsidiaries. Further details of the Exchange of Shares are set out in Section 5.3 of this Prospectus. [ The rest of this page is intentionally left blank]

 

6. BUSINESS OVERVIEW (Cont’d) 6.2 COMPETITIVE STRENGTHS 6.2.1 Experienced key management Our Group has a management team with competent management capabilities, sound operational knowledge and in-depth industry expertise and experience in their respective fields. Our Group’s key management team, position and years of relevant experience are as follows: Years of  Years employed  relevant  in Matang  experience  Group  No.  Key management  Position  Years  Years  (i)  Datuk Kiat Swee Sung  Executive Deputy  36  2  Chairman  (ii)  Eng Cheng Guan  Executive Director  41  2  (iii)  Ganasan AIL Perumal  Plantation Director  32  32  (iv)  Woon Yoon Pa  Estate Manager  42  3  (v)  Cheong Siew Kin  Chief Financial  16  1  Officer  (vi)  Nyam Mei Ting  Finance and  22  5  Admin Manager
At the core of our business lies the expertise of our management team that manages our plantation operations. Our Executive Deputy Chairman, Datuk Kiat Swee Sung has over 36 years of experience in the oil palm plantation business, having been involved in various areas of the industry, ranging from plantation operations to estate maintenance to transportation. He is supported by Eng Cheng Guan, our Executive Director who oversees our estate division. He has more than 41 years of experience in various segments of the agricultural industry. Our Plantation Director, Ganasan AIL Perumal, has been involved in our plantation operations since 1984, and is responsible for the administrative functions within our plantation estate. Our Estate Manager, Woon Yoon Pa, has over 42 years of experience in daily field operations in plantation which includes but not limited to seedling planting, fertilisers and pesticides spraying, weeding and harvesting, estate infrastructure and estate maintenance. He has been with our Group as the Estate l’v1anager since 2013. Our Chief Financial Officer, Cheong Siew Kin, is responsible for our Group’s financial and accounting functions. In addition to being a Chartered Accountant and holding a Master of Business Administration, he has over 16 years of experience in the fields of audit and finance. Our Finance and Admin l’v1anager, I\lyam Mei Ting, has over 22 years of experience in various finance and administration roles. She is responsible for the general administrative functions of our Group. Please refer to Sections 8.2.2 and 8.3.3 of this Prospectus for further details of the credentials of our key management team. 6. BUSINESS OVERVIEW (Cont’d)

6.2.2 Superior FFB yield We achieved higher FFB yield than the average yield recorded in Johor and in IVJalaysia for FYE 2012 to FYE 2015. Average FFB Yield (Mt/hectare) July 2011 to June 2012  July 2012 to June 2013  July 2013 to June 2014  July 2014 to June 2015  July 2015 to June 2016  Matang Group(l) (FFB (Mt) /mature and old area) Johor(2) IVJalaysia(2)  23.54 18.35 18.42  24.97 19.72 19.43  24.97 19.81 19.22  24.66 20.23 18.48  17.37 18.14 17.13  Notes:  ( 1) (2)  Based on management recoBased on MPOB records.  rds.
We believe the following factors contributed to our superior FFB yield: (i) Terrain The majority of our plantation is located on flat or undulating terrain, which has a positive impact on our productivity as it eases our operations such as planting, field maintenance and harvesting. (ii) Use of high quality germinated seeds Our Group procures high quality germinated seeds from Felda Agricultural Services Sdn Bhd, an established seed producer. Our Group had selected the “Felda Yangambi” line of germinated seeds as it has historically generated higher FFB yield. (iii) Young age profile As at 30 June 2016, 76.9% or 831.7 hectares of our oil palms are mature, while only 1.5% or 16.4 hectares of our oil palms are above 21 years old, which are past the peak production age of 18 years old which produces less FFB. Notwithstanding the above, the FFB yield of Matang Group of 17.37 Mt/hectare (based on the average FFB Yield from July 2015 to June 2016) is lower as compared to previous financial years. We believe that the decrease in yield is due to the EI Nino phenomenon, which negatively impacted FFB yield. We further believe that the EI l’lino phenomenon has also affected the palm oil industry as a whole. The decrease in FFB yield was also due to the reclassification of 158.2 hectares of Matang Estate from immature area to mature area. The oil palms in the said area are five (5) years of age and its FFB harvested is generally not as high as the volume of FFB harvested from oil palms aged between seven (7) years to 18 years, being the peak production years. The FFB yield is calculated based on volume of FFB over total mature and old area. As a result of the reclassification, the total mature and old area increased from 706.3 hectares to 848.1 hectares. In relation thereto, the FFB yield for FYE 2016 had decreased as the FFB yield computed is based on lower FFB volume (primarily due to the EI Nino phenomenon) over an increased total mature and old area of 848.1 hectares. The estimated average FFB yield in the event where there are no reclassification of immature area of 158.2 hectares to mature area is 21.35 Mt/hectare.

 

6. BUSINESS OVERVIEW (Cont’d) 6.2.3 Young age profile of our plantations Oil palms require approximately four (4) years to mature. Oil palms will typically start to produce FFB at the age of five (5) years. The mature age for oil palms ranges from five (5) years to 20 years. While oil palms typically start to produce FFB at the age of five (5) years, there are instances where immature oil palms start producing FFBs which are smaller in size and have lower oil content. Notwithstanding the above, the peak production years for oil palms typically range from seven (7) years to 18 years after planting, which are within the mature period. Oil palms that are of 21 years of age and above are considered old, with their production of FFB gradually declining over time. Our total sales volume, plantation area and FFB yield for FYE 2013 to FYE 2016 are shown in the table below: FYE 2013 FYE 2014 FYE 2015 FYE 2016* Total sales volume of FFB (Mt) 17,452 18,135 17,415 14,731 Plantation area (hectares) -Old area (21 to 25 years) 52.8 52.8 32.8 16.4 -Mature area (5 to 20 years) 646.0 673.5 673.5 831.7 -Immature area (1 to 4 years) 364.0 355.8 355.8 217.6 -Replanting 19.3 20.0 16.4 Total 1,082.1 1,082.1 1,082.1 1,082.1 FFB yield (FFB/mature and old area) 24.97 24.97 24.66 17.37 Note: * The details of the plantation area of Matang Estate are as follows: Immature  Mature  Mature  Mature  Old  area  area  area  area  area  (1-4  (5-10  (11-15  (16 ­ 20  (21 ­25  Replanting  years)  years)  years)  years)  areas)  Total  Plantation  16.4  217.6  244.9  216.8  370.0  16.4  1,082.1  area  (Hectares)  %  1.5  20.1  22.6  20.1  34.2  1.5  100.0
As at 30 June 2016, 76.9% or 831.7 hectares of our oil palms are mature, which is between five (5) to 20 years of age, while 20.1% or 217.6 hectares of our oil palms are immature, being one (1) to four (4) years of age. Only 1.5% or 16.4 hectares of our oil palms are above 21 years old, which are past the peak production age which produces less FFB while 1.5% or 16.4 hectares of our oil palm is undergoing replanting as at the LPD. Our replanting schedule is as follows: Year Hectares July 2016 -June 2017 16.4* July 2017 -June 2018 16.4 6. BUSINESS OVERVIEW (Cont’d) Note: * Replanting has commenced. The next replanting schedule subsequent to June 2018 has yet to be determined at this juncture. From FYE 2013 to FYE 2016, we produced 17,452 Mt, 18,135 Mt, 17,415 Mt and 14,731 Mt of FFBs, respectively. In addition, we have also undertaken a replanting programme in FYE 2012 and FYE 2013, replanting 16.48% or 178.3 hectares and 1.78% or 19.3 hectares of our total plantation area, respectively. The first batch of the oil palms replanted in FYE 2012 will start producing fruits in 2016 and will provide us with additional FFB. We undertook another replanting programme in 2015 and 2016 for 20.0 hectares and 16.4 hectares, or 1.90% and 1.50% of our total plantation area respectively. Our expected plantation area for FYE 2017,2018 and 2019 are as follows: FYE  FYE  FYE  2017  0/0  2018  0/0  2019  0/0  Plantation area (hectares)  -Mature and Old area (5 to  1,010.0  93.3  1,029.3  95.1  1,029.3  95.1  25 years)  -Immature area (1 to 4  55.7  5.2  52.8  4.9  52.8  4.9  years)  -Replanting  16.4  1.5  Total  1,082.1  100.0  1,082.1  100.0  1,082.1  100.0
We believe that our FFB yields will improve accordingly as more of our oil palms reach their mature age. The total mature and old plantation area will increase to 1,010.0 hectares* in 2017 (93% of total plantation). Resulting from the expected increase in total mature and old plantation area in 2017, the total sales volume of FFB for future financial years is expected to increase as well and this will contribute positively to the revenue of MHB. For FYE 2018 and FYE 2019, the total mature and old plantation area will maintain at 1,029.3 hectares* (95% of total plantation area). Note: * Net of area undergoing replanting and immature area. 6.2.4 Application of the best agronomy practices Our Group has adopted the following best practices in our oil palm plantations. (i) Use of high quality germinated seeds Our Group procures high quality germinated seeds from Felda Agricultural Services Sdn Bhd, an established seed producer. Our Group had selected the “Felda Yangambi” line of germinated seeds as it has historically generated higher FFB yield, and our Group has used this germinated seeds since 2011. FFB produced from the “Felda Yangambi” line of germinated seeds are also preferred by palm oil mills due to its higher oil extraction rate. Higher oil extraction rate is preferred as the oil mills may extract a higher proportion of palm oil from the FFB. 6. BUSINESS OVERVIEW (Cont’d) (ii) Use of high quality fertilisers Our Group is also committed to using high quality fertilisers that are suitable for the oil palms in our plantations. We fertilise our oil palm with “NPK fertilisers”, which are inorganic fertilisers composed of Nitrogen, Phosphorus and Potassium, each of which are essential for optimum oil palm nutrition. Nitrogen helps in the growth of oil palm by increasing the production of fruits; Phosphorus aids in the photosynthesis process by supporting the formation of oils, sugars and starches in the plant; Potassium, on the other hand, improves the fruit quality and helps to reduce the chances of disease. In addition to the use of inorganic fertilisers, organic fertilisers are also applied in our plantations. Continuous use of inorganic fertilisers will result in higher acidity in the soil that will ultimately harden the soil, impeding the delivery of nutrients from fertilisers to oil palm. Organic fertilisers, on the other hand, help to soften soil and would improve the soil nutrients if used continuously. Therefore, inorganic fertilisers are used interchangeably with organic fertilisers in order to maintain the optimum condition of the soil. The recommended dosage for the application of fertiliser is ascertained by applying leaf and soil tests. Our Group believes that the optimum use of fertilisers involves the right application of the right type of fertiliser in the right dosage and at the right time. (iii) Use of legume ground cover In an oil palm plantation, the legume ground cover can help to improve the soil structure by protecting the soil from erosion and enriching its organic content leading to better aeration, infiltration and retention of moisture. This cover plant can also minimise the leaching losses of nutrients, and they can increase the amount of nitrogen in the soil that is available to the oil palms. Our Group prefers the use of mucuna as the leguminous cover plant in our plantations as it has superior shade, drought tolerance and deep roots. It can also smother noxious weeds well, deter cattle and insects, and produce significant quantities of litter that decomposes slowly to increase the fertility of surface soil. The ground coverage of mucuna after planting: (A) three (3) months; (B) six (6) months; (C) 12 months; and (D) 24 months is shown below:
6. BUSINESS OVERVIEW (Cont’d) Our approach to best agronomy practices was recognised by the fIIIPOB. In 2012, MHB was certified as having fulfilled the requirements of the ‘Code of Good Agriculture Practice for Oil Palm Estates and Smallholdings’ from the MPOB. Our Group believes the continued adoption of best agronomy practices in our plantation activities will lead to the stable development of our plantation and increase our FFB yield. 6.2.5 Close proximity to a palm oil mill FFB harvested from oil palm plantations must be delivered to palm oil mills for processing within 48 hours to prevent a rapid rise in free fatty acids, which could affect the quality of the extracted crude palm oil. Therefore, the strategic location of our plantation that is situated near to a palm oil mill facilitates the timely transportation of our FFB. Our Group has chosen to focus on the oil palm plantation segment without venturing into the milling activity, as the size of our plantation and the production levels of FFB do not warrant an investment in milling activities. Notwithstanding the above, our plantation is strategically located in close proximity to a palm oil mill owned by Lenga in Tangkak, Johor. For FYE 2016, 100% of our harvested FFB are sold to Lenga which is located approximately 38 kilometres from Matang Estate. As such, we are able to deliver our FFB to the palm oil mill with minimal spoilage whilst minimising the transportation costs associated with FFB delivery. Subsequent to FYE 2016, we began selling our FFB to Milik Mestika which operates Kilang Ledang Mas, a palm oil mill located approximately eight (8) kilometres from Matang Estate. Kilang Ledang Mas started operations on 1 August 2016. In view of the close distance between Matang Estate and Kilang Ledang IVlas, the Board of MHB has decided to sell our harvested FFB to Milik Mestika. The sale of FFB to Milik Mestika will reduce our dependency on Lenga in addition to providing an opportunity to bring down our transportation costs. 6.3 FUTURE PLANS AND PROSPECTS 6.3.1 Continuing replanting exercise As at 30 June 2016, 16.4 hectares, or 1.5% of our total oil palm plantation area has reached 21 years and above, which is past its peak production age and produces less FFB. Our Group is committed to maintaining a low average age profile of our oil palms. As such, we plan to replant this field in 2017. It will take approximately four (4) years before our replanted oil palms mature and start producing FFBs. Our Group utilises the “Felda Yangambi” line of germinated seeds as it has historically generated a higher FFB yield. In addition, the line of seeds is also preferred by palm oil mills due to its higher oil extraction rate. The replanting process in our estate begins by procuring high-quality germinated seeds and planting them in our nursery. Then, we clear out the old oil palms by felling the oil palms and shredding them. This allows for nutrient recycling, soil improvement and faster establishment of the oil palm field as compared to the burning method for removing old oil palms. The oil palm seedlings are planted after this, and leguminous cover plants are subsequently established around them to improve the soil structure and minimise the loss of nutrients. Constant maintenance and care of the young oil palms after this is essential in cultivating high-yielding oil palms. We believe that our replanting programme can help to improve the age profile of our oil palm estate and increase our FFB yield in the long term. We have earmarked RMO.25 million of our IPO proceeds for our replanting exercise. We target to replant 16.4 hectares of our plantation area in 2017. 6. BUSINESS OVERVIEW (Cont’d) 6.3.2 Increasing FFB yield through greater usage of fertilisers Oil palms cultivated in well fertilised soil will have sufficient mineral salts and nutrients to bear more fruits leading to higher FFB yields. Using high quality fertilisers can also result in larger fruit sizes. Hence, the use of fertilisers in an oil palm plantation is essential. Our Group seeks to increase the amount of high grade fertilisers we procure from established distributors, to ensure that our estate is optimally fertilised with high quality fertilisers. Currently, we carry out four (4) to five (5) fertilising rotations of both organic and inorganic fertilisers on the plantation every year. Upon completion of IPO, we plan to improve our fertilising rotation with the purchase of 1,200 Mt of inorganic fertiliser to be applied in our plantation four (4) times a year, as well as 700 IVlt of organic fertiliser to be applied two (2) times a year. Continuous use of inorganic fertilisers will result in higher acidity in the soil that will ultimately harden the soil, impeding the delivery of nutrients from fertilisers to oil palm. Organic fertilisers, on the other hand, help to soften soil and would improve the soil nutrients if used continuously. Therefore, inorganic fertilisers are used interchangeably with organic fertilisers in order to maintain the optimum condition of the soil. We have earmarked RM9.00 million of our IPO proceeds for this purpose. 6.3.3 Increasing operational efficiency through improvement of infrastructure and equipment In order to increase the efficiency of our operations, our Group plans to improve our facilities as well as the infrastructure located in our plantation estate as follows: (i) Road repair and resurfacing To ensure smoother field operations and collection of FFB, improvements and repairs are planned for the roads within the plantation. We plan to improve our main and secondary roads by implementing road grading and resurfacing. We have earmarked RMO.50 million of our IPO proceeds for this purpose. (ii) Improve water drainage We plan to improve water drainage by installing U-shaped culverts in areas of our estate where water flow is obstructed. The total length of the drainage to be constructed is estimated at 35 kilometres. The drainage will help improve water flow and accessibility throughout the estate. We have earmarked RMO.20 million of our IPO proceeds for this purpose. (iii) Purchase of new equipment As at the LPD, we have nine (9) tractors on our estate for field operations of which five (5) tractors are used for the spraying of fertilisers (with an averqge age of 25 years) and manuring and four (4) tractors are used for transporting FFBs within our estate (with an average age of 11 years). We plan to replace all nine (9) tractors which are expected to improve efficiency on our plantation estate as well as to avoid high maintenance costs in the future. 6. BUSINESS OVERVIEW (Cont’d) We utilise Empty Fruit Bunches (EFB) for mulching on the estate. Mulching is done by applying EFB on the area surrounding the oil palm which seeks to conserve moisture, improve fertility and health of the soil and reduce weed growth. We plan to purchase one (1) unit of backhoe for the loading/unloading of EFB and one (1) lorry for EFB distribution. We have earmarked RM1.50 million of our IPO proceeds for this purpose. (iv) Rewiring of electricity supply cables Currently, the existing electricity supply cables are old and are in need of repair. As such, we plan to reinstall a new set of over-head wiring. This helps to avoid any potential interruptions in our electric supply. We have earmarked RMO.15 million of our IPO proceeds for this purpose. (v) Renovation of workers’ quarters Currently, our workers’ quarters are more than 25 years old. As such, we plan to renovate our workers’ quarters which will provide our employees with improved living conditions. We have earmarked RMO.20 million of our IPO proceeds for this purpose. Our future plans are expected to be fUlly implemented within five (5) years from the date of our Listing. 6.4 KEY ACHIEVEMENTS AND MILESTONES Our key achievements and milestones are as follows: Year Achievement or Milestones 1981 MHB completed a capital raising exercise and raised RM60 million 1983 Acquisition of Matang Estate and ventured into the plantation sector with the cultivation of rubber (on 72.6% of the land area) and oil palm (on the remaining 27.4% of land area) in Matang Estate in 1983 1988 Acquisition of Larkin Investment Property which comprises a l’h-storey detached warehouse (Block A) 1989 Construction of another l’h-storey detached warehouse cum factory (Block B) on the Larkin Investment Property 1996 Replanting of Matang Estate to focus on oil palm and ceased our rubber plantation activities 1998 Construction of a 5-storey detached flatted factory (Block C) on the Larkin Investment Property Certified as having fulfilled the requirements of the ‘Code of Good Agriculture Practice for Oil Palm Estates and Smallholdings’ from the IVIPOB 6. BUSINESS OVERVIEW (Cont’d) 6.5 DESCRIPTION OF OUR BUSINESS Our Group is principally involved in the management of plantation estate, sale of FFB and property investment holding.
Note: * Total plantation area Our oil palms are cultivated and our FFBs are harvested on 1,082.1 hectares of plantation estate land located in Johor known as the Matang Estate. Based on the valuation report prepared by KGV International Property Consultants (Johor) Sdn Bhd on IVJatang Estate, there are approXimately 134 oil palms for every hectare of plantation. Oil palm age profile The age profile of our oil palms as at 30 June 2016 is as follow: Total plantation area  % of Total  Age profile  Hectares  plantation area  Replanting (less than 1 year)  16.4  1.5  Immature (1-4 years)  217.6  20.1  Mature (5-20 years)  831.7  76.9  Old (21-25 years)  16.4  1.5  Total  1,082.1  100.0
6. BUSINESS OVERVIEW (Cont’d) As at 30 June 2016, 76.9% or 831.7 hectares of our oil palms are mature, which is between five (5) to 20 years of age, while 20.1% or 217.6 hectares of our oil palms are immature, being one (1) to four (4) years of age. Only 1.5% or 16.4 hectares of our oil palms are above 21 years old, which are past the peak production age which produces less FFB while 1.5% or 16.4 hectares of our oil palm is undergoing replanting as at the LPD. Soil type Our oil palms are planted on two (2) main soil types namely Renggam soil and Gajah Mati soil. A summary of the soil profile of our plantation estate is as follows: Total plantation area  0/0 of Total plantation  Soil Type  Hectares  area  Renggam  541.1  50.0  Gajah Mati  486.9  45.0  others  54.1  5.0
Total 1,082.1 100.0 Both Renggam soil and Gajah Mati soil are generally suitable for a wide range of crops. Renggam soil is well drained and has good permeability, allowing water to pass through qUickly. On the other hand, Gajah Mati soil has low acidity, allowing the root to better access to water and nutrients. As such, these soils are also suitable for the cultivation of oil palms. Our Group further improves the soil condition by applying organic and inorganic fertilisers. Terrain 429.6 hectares or 39.7% of our plantation area is on flat terrain, with a slope class of 0-2 degrees, and 357.1 hectares or 33.0% of our plantation area is on undulating terrain, with a slope class of 2-6 degrees. Details of our terrain are as follows: Total plantation area 0/0 of Total plantation Terrain type Hectares area Flat (slope class 0-2) 429.6 39.7 Undulating (slope class 2-6) 357.1 33.0 Rolling (slope class 6-12) 71.4 6.6 Hilly (slope class >12) 224.0 20.7 Total 1,082.1 100.0 Having a majority of the oil palms on flat and undulating terrain, as opposed to rolling and hilly slope terrain eases our plantation operations as it allows our vehicles and machinery to have easier access to the oil palms as well as minimises soil erosion. This makes our harvesting, maintenance and planting operations more efficient and cost effective. 6.6 PROCESS FLOW The major processes involved in the planting of oil palm are as follows: ~~—————————-‘, I\ II II II II II II II II 10-12 Months 5 Years II I 5 Years onwards I \I ,,—————————-;~
6. BUSINESS OVERVIEW (Cont’d)
FFB production begins with the selection of oil palm seeds. Planting seedlings in the nursery
The germinated seeds are planted and grown in our nursery for a period of 10 to 12 months. During this period, the seedlings are nurtured with structured topsoil to promote optimal seedling growth. In the meantime, we prepare the palm groves in which the seedlings are to be planted in, fertilise the soil so that it is rich in minerals and suitable for oil palms, as well as establishing leguminous cover plants over the palm grove to prevent surface run-off and improve soil structure. Planting seedlings in palm groves
6. BUSINESS OVERVIEW (Cont’d) After 10 to 12 months in the nursery, the seedlings are planted in the palm groves. The distribution and planting density ranges from 104 to 163 oil palms per hectare depending on the terrain of the land. We fertilise our oil palms to ensure that they have enough minerals and nutrients to absorb by carrying out four (4) to five (5) fertilising rotations with both organic and inorganic fertilisers on the plantation every year. We carry out pruning on our oil palms two (2) times every year to ensure the oil palms grow well. Additionally, we spray pesticides around the plantation three (3) to four (4) times a year, and spray the young oil palms (aged one (1) to four (4) years) two (2) times a month. This is to minimise crop losses and also ensure pests do not adversely affect the growth of the oil palms. The oil palms will begin producing clusters of fruit in approximately four (4) years. Harvesting FFB from mature oil palms
Oil palms begin to bear fruits three (3) to four (4) years after replanting. FFBs are harvested five (5) years after the oil palms are planted using sickles and chisels. Prior to harvesting, FFBs are examined through visual inspection and observation of loose fruits that have detached from the bunch. For visual inspection, a reddish-orange colour of the fruit indicates ripeness and as a result better palm oil quality, compared to unripe frUits, which would be blacker in colour and would yield a relatively low amount of palm oil. The number of loose fruits that have separated from the bunch also indicates the level of ripeness of the FFB. If 5­10 fruits have detached from the bunch, it is categorised as ripe and is harvested. The yield per oil palm will continue to increase progressively throughout the mature production years, from five (5) to 20 years. The yield of the oil palms will increase from five (5) to seven (7) years after replanting and the peak production years for oil palms typically range from seven (7) years to 18 years after planting. At its peak production, the average yield per oil palm will range from 23 Mt/hectare to 27 Mt/hectare. We generally replant the oil palm in stages when they are above 24 years of age and are low yielding, ie below 10 Mt/hectare. 6. BUSINESS OVERVIEW (Cont’d) Sale of FFB to third party millers
FFBs harvested are then loaded onto our trailer lorry. The weights of the FFBs are recorded by weighing the trailer lorry on a weighbridge before and after FFBs are loaded. To ensure the quality of the FFB, FFBs are transported to third party millers within 48 hours after harvesting. 6.7 PRINCIPAL MARKET For the four (4) financial years from FYE 2013 to FYE 2016, our Group’s revenue was generated solely from the sale of FFB in the Malaysian market. 6.8 SALES AND MARKETING NETWORK Our Group’s FFB are sold to customers located in Malaysia based on prevailing market prices. All sales records are lodged with the MPOB before the 7th day of every month in accordance with the IVlPOB’s licensing requirements. [ The rest of this page is intentionally left blank] 6. BUSINESS OVERVIEW (Cont’d) 6.9 MAJOR CUSTOMERS Our major customers for the past four (4) financial years from FYE 2013 to FYE 2016 are as follows: Rank  Customer  FYE 2013 Revenue RM 0/0  FYE 2014 Revenue RM 0/0  FYE 2015 Revenue RM 0/0  FYE 2016 Revenue RM 0/0  Length of relationship Years  1  Irawi Holdings Sdn Bhd  1,251,525  14.4  117,533  1.2  3  2 Lenga  4,922,346  52.4  7,41OJ26  100.0  7,168,904  100.0  10  3  Mewah Mega Enterprise  7,468,228  85.6  4,362,106  46.4  3  Total  8,719,753  100.0  9,401,985  100.0  7,410,726  100.0  7,168,904  100.0
We take into consideration the following in determining our customers: (i) Payment terms
The normal credit period granted by our Group in respect of our trade receivables is 14 days from the date of invoice. As such, we prefer customers who are able to make payment within our normal credit period. For FYE 2016, all payments for trade receivables are received within 14 days from the issuance of the relevant invoices.
(ii) Delivery distance

As we deliver our FFB to our customers, we seek to minimise transportation charges by selling to the oil palm mills located nearest to our plantation estate. For FYE 2016, 100% of our revenue is derived from sales of FFB to Lenga. The palm oil mill of Lenga is located approXimately 38 kilometres from Matang Estate. Subsequent to FYE 2016, we sold FFB to Milik Mestika Sdn Bhd, which is approximately eight (8) kilometres from Matang Estate. Apart from Lenga and Milik Mestika Sdn Bhd, Irawi Holdings Sdn Bhd is approximately 100 kilometres from Matang Estate. The distance between Mewah Mega Enterprise and Matang is not available as Mewah Mega Enterprise is a FFB trader and does not own any palm oil mill. In addition, FFBs sold to Mewah Mega Enterprise are collected by them directly from Matang Estate and we are charged a transportation cost. 82 6. BUSINESS OVERVIEW (Cont’d) For the past four (4) financial years from FYE 2013 to FYE 2016, our revenue was generated from the sale of FFB to three (3) customers, namely Lenga, Mewah Mega Enterprise and Irawi Holdings Sdn Bhd. For FYE 2013, Mewah Mega Enterprise contributed to 85.6% of our revenue and Irawi Holdings Sdn Bhd contributed to 14.4% of our revenue. For FYE 2014, Lenga contributed to 52.4% of our revenue, Mewah Mega Enterprise contributed to 46.4% of our revenue and Irawi Holdings Sdn Bhd contributed to 1.2% of our revenue. For FYE 2015 and FYE 2016, 100% of our revenue is derived from sales of FFB to Lenga. As all revenue is derived from sales to one (1) customer, our Board is of the opinion that we are dependent on Lenga for our revenue. Lenga first emerged as the major customer of our Group in FYE 2006, contributing 38% of our total sales for FYE 2006. Prior to FYE 2012, Lenga was our major customer. However, during FYE 2012, Lenga has informed that it does not have the capacity to accept sales from Matang. As such, between FYE 2012 to FYE 2014, we had sold our FFB to Irawi Holdings Sdn Bhd and Mewah Mega Enterprise. In FYE 2014, Lenga had informed that they have the capacity to accept our FFB and as such, we resumed sales to Lenga. In FYE 2015, we ceased sales to Irawi Holdings Sdn Bhd and Mewah Mega Enterprise. 6.10 MAJOR SUPPLIERS Our major suppliers which contributed more than 5% of the total purchases for each of the four (4) financial years from FYE 2013 to FYE 2016 are as follows: FYE 2013  FYE 2014  FYE 2015  FYE 2016  Length  Purchase  Purchase  Purchase  Purchase  of  value  value  value  value  relationship  Products  Rank  Supplier  RM  0/0  RM  0/0  RM  0/0  RM —­ 0/0  Years —-­ Sourced
1.  Fertitrade (M) Sdn Bhd  396,390  14.6  1,953,385  89.0  551,043  38.5  38,160  2.1  6  Fertilisers  2.  Hextar Fertilisers Sdn Bhd  1,192,950  44.0  28,000  1.3  505,580  35.3  4  Fertilisers  3.  Sing Lean Hing Sdn Bhd  11,100  0.4  138,485  6.3  28,320  2.0  17  Pesticides  4.  SK Pee Trading  224,034  8.3  4  Tools, hardware  and pesticides  5.  Kien Leong Trading  744,529  27.4  5  Provision of  machineries and  replanting  earthworks  83
6. BUSINESS OVERVIEW (Cont’d) FYE 2013 FYE 2014 FYE 2015 FYE 2016 Length Purchase Purchase Purchase Purchase of value value value value relationship Products Rank Supplier RM 0/0 RM 0/0 RM 0/0 RM 0/0 Years Sourced
6. Twin Arrow Fertilizer Sdn 219,802 15.4 1,259,545 68.2 2 Fertilisers Bhd

7. Nisin Bio-Technology (M) 358,386 19.4 1 Fertilisers Sdn Bhd

 

Sub-total 2,569,003 94.7 2,119,870 96.6 1,304,745 91.2 1,656,091 89.7 Other purchases 144,415 5.3 74,060 3.4 125,333 8.8 190,838 10.3 Total purchases 2,713,418 100.0 2,193,930 100.0 1,430,078 100.0 1,846,929 100.0 Our Group’s main purchases are fertilisers, which are essential in ensuring that our oil palms have sufficient minerals and nutrients to yield an optimal level of FFB. We also purchase pesticides, which are used for pests control on the plantation. Diesel is required as fuel for our vehicles. Our major suppliers for the past three (3) financial years from FYE 2013 to FYE 2015 were Fertitrade (M) Sdn Bhd and Hextar Fertilisers Sdn Bhd. All of the purchases from Fertitrade (M) Sdn Bhd and Hextar Fertilisers Sdn Bhd were for fertilisers for our oil palms. For FYE 2016, our major suppliers were Twin Arrow Fertilizer Sdn Bhd and Nisin Bio-Technology (M) Sdn Bhd, both were for the purchases of fertilisers. For FYE 2013, Fertitrade (M) Sdn Bhd contributed to 14.6% of our purchases, while Hextar Fertilisers Sdn Bhd contributed to 44.0% of our purchases. For FYE 2014, Fertitrade (M) Sdn Bhd contributed to 89.0% of our purchases, while Hextar Fertilisers Sdn Bhd contributed to 1.3% of our purchases. For FYE 2015, Fertitrade (M) Sdn Bhd contributed to 38.5% of our purchases, while Hextar Fertilisers Sdn Bhd contributed to 35.4% of our purchases. For FYE 2016, Twin Arrow Fertilizers Sdn Bhd contributed to 68.2% of our purchases, while Nisin Bio-Technology (M) Sdn Bhd contributed to 19.4% of our purchases. In determining our suppliers, we first take into consideration the quality of the products offered by the suppliers. If two (2) or more suppliers are able to provide products of similar quality, we shall then take into consideration the pricing of the product. 84 6. BUSINESS OVERVIEW (Cont’d) For the past financial years/period, there were fluctuations between our purchases from fertiliser suppliers, namely Fertitrade (M) Sdn Bhd, Hextar Fertilisers Sdn Bhd, Twin Arrow Fertilizer Sdn Bhd and Nisin Bio-Technology (M) Sdn Bhd. As these suppliers were able to offer fertilisers of similar quality, we had purchased from suppliers which offered the lowest pricing. Our fertiliser suppliers are all based in Malaysia. There are numerous fertiliser producers and traders that are able to supply us fertilisers that meet our quality requirements and specifications. Hence, we are not dependent on any of our current fertiliser suppliers. 6.11 TYPES, SOURCES AND AVAILABILITY OF RESOURCES Our Group’s purchases for FYE 2016 are as follows: 0/0 of total Value of purchases Group Purchases RM purchases Fertilisers 1,656,091/\ 89.7 Pesticides 16,371 0.9 Diesel 61,475 3.3 Others* 112,992 6.1 Total 1,846,929 100.0 Notes: The value of fertilisers purchased of RM1,656,091 represents the fertilisers purchased by Matang during FYE 2016; while the fertiliser cost for FYE 2016 amounted to RM1.398 million disclosed in Section 3.10.1(iii)(b) above represents the value of fertilisers utilised during FYE 2016. * Includes machinery and motor vehicles parts, small tools used for harvesting. All materials purchased were sourced locally. The primary raw material used for our plantation operation is fertiliser. In FYE 2016, our fertilisers are sourced from Twin Arrow Fertilizer Sdn Bhd, Nisin Bio-Technology (M) Sdn Bhd and Fertitrade (I”l) Sdn Bhd. For FYE 2016, fertilisers purchased amounted to RM1.66 million (89.7% of total purchases). Prices of fertilisers are determined based on prevailing market prices. Although the fertilisers used in our plantation operation were sourced from our local suppliers and transacted in RM, our local suppliers may import selected ingredients that are not available locally. Therefore, the cost of fertilisers provided by our local suppliers are affected by, exchange rate fluctuation. The main ingredients are imported by our local suppliers from People’s Republic of China, Peru, Canada and USA. As the import of these ingredients are generally denominated in USD, a depreciation of the RM against USD may increase our fertilisers cost and adversely affect our financial performance. 6.12 SEASONAL OR CYCLICAL EFFECTS Our Group’s revenue solely comes from the sale of FFB grown and harvested at our plantation. The seasonal factor that affects our revenue is mainly the weather conditions which affect the oil palm production. 6. BUSINESS OVERVIEW (Cont’d) In the event of an EI Nino phenomenon, insufficient rainfall results in moisture stress in oil palms which can adversely affect our FFB production. Conversely, periods of heavy rainfall such as monsoons or La Nina phenomenon can be disruptive towards the harvesting and transportation operations, thus affecting the amount of FFBs harvested. Generally, our Group experiences higher FFB production during the second and third quarter of the year, attributed to favourable weather and rainfall patterns in Johor during these times. 6.13 TECHNOLOGIES USED Our operations in the plantation industry are labour dependent with some application of mechanisation in field maintenance activities, which involves the utilisation of tractors in spraying of fertilisers and pesticides as well as for FFB transportation within the plantation estate. The functions of our tractors are shown below: Function Spraying of fertilisers and pesticides as well as manuring within our estate FFB transportation within our estate
Other than the mechanisation mentioned above, we are not dependent on other technologies in the operation of our estate. 6.14 INTELLECTUAL PROPERTIES Save as disclosed below, we have not registered any brand names, patents, trademarks or other intellectual property rights: Application Issuing Issuance Expiry no./ Class Mark authority Description date date 2015062513 / Intellectual Business 29 April 31 July Class 35 Property management; 2016 2025 Corporation business planning and Malaysia business strategic planning 6. BUSINESS OVERVIEW (Cont’d) Application Issuing Issuance Expiry no./ Class Mark authority Description date date
Intellectual Commercial property 5 May 31 July Class 36 2015062517 / Property investment services; 2016 2025 Corporation property portfolio Malaysia management and leasing of property Intellectual Agricultural, 20 May 31 July Class 31 2015062509 / Property horticultural and 2016 2025 Corporation forestry products (not Malaysia included in other classes) 6.15 QUALITY We adopt stringent quality control practices at our plantations, and are committed to the use of best estate practices, which includes good field and harvesting standards and proper application of fertilisers to optimise FFB yield. We also place emphasis on the ripeness and freshness of our FFB to ensure the quality of our FFB is consistently maintained. Over-ripe FFBs lead to poor quality CPO after processing, as such, we aim to minimise the amount of over-ripe FFBs by conducting harvesting rounds no less than two (2) times a month on average, to ensure that the ripe FFBs are harvested on time. Our plantation workers are also trained to identify ripe FFBs, harvest them and collect all the loose fruits as well. All harvested FFBs are transported to the palm oil mill within 48 hours of being harvested. Prior to delivery, we conduct inspections on the FFBs to ensure that the fruits we send out are of high quality, and will yield high oil extraction rate for the oil palm mill we sell to. FFBs that are not of high quality are discarded. Our approach to best agronomy practices was recognised by the MPOB. In 2012, MHB was certified as having fulfilled the requirements of the ‘Code of Good Agriculture Practice for Oil Palm Estates and Smallholdings’ from the MPOB. The accreditation is in recognition of our continuous improvement in yield and productivity and also proper handling of FFB during harvesting process. 6.16 HEALTH, SAFETY AND ENVIRONMENTAL FACTORS Our compliance to the health, safety and environmental requirements and regulations are essential to ensuring the well-being of our employees, and the continUity of our day-to-day operations. Our Group has established an in-house policy on health, safety and environment to provide a favourable working environment for our employees and to fulfil our role as a responsible corporate citizen. All employees are required to adhere to the requirements of our Group’s health, safety and environmental policy. 6. BUSINESS OVERVIEW (Cont’d) 6.17 VEHICLES, EQUIPMENT, PLANT AND MACHINERY (i) Vehicles and equipment As at 30 June 2016, our material vehicles and equipment are as follows: Average Audited age!Average NBV as at estimated Estimated Vehicles 30 June remaining cost per and No of 2016 useful life unit Equipment Description! Function units RM Years RM Pick-up truck General plantation operations 3 4,602 6/2 90,000 Tractor Spraying of fertilisers and 5 5 25/(1) 70,000 pesticides as well as manuring Tractor Transporting FFBs within our 4 1,865 11 / 1 80,000 estate Trailer lorry Transporting FFBs to oil palm 1 18,627 4/4 340,000 mill Electronic Weighing FFBs and fertilisers 2 91,218 4/9 160,000 road weighbridge Total 116,317 Note: (1) Notwithstanding that the average useful life of a tractor is 12 years, our Group has continued using these tractors. Maintenance of our vehicles and equipment are carried out based on our maintenance schedule to ensure that our operations are not affected by the breakdown of vehicles and equipment. (ii) Plant and machinery As at 30 June 2016, our material plant and machinery are as follows: Audited NBV as at  30 June 2016  Plant  Description! Function  RM  Workers’  Bungalow, gate railing and improvements  263,889  quarter  to staff quarters at Matang Estate  Road and  Culverts,  estate  road,  bridges  and  97,782  bridge  walkway at Matang Estate  Office buildi ng Safety signboard,  renovation  for  estate  64,631  and garage  office, store, extension of office building  at IVlatang Estate  Total  426,302
6. BUSINESS OVERVIEW (Cont’d) 6.18 INTERRUPTIONS TO OUR PLANTATION OPERATIONS We have not encountered any interruptions in our plantation operations which had a significant effect on our revenue during the past 12 months preceding the LPD. 6.19 OTHER INVESTMENTS Apart from our plantation operations, we have the following investments: (i) Larkin Investment Property Matang owns an investment property located at No. 83A, Jalan Langkasuka, Kawasan Perindustrian Larkin (also known as Dato’ Onn Industrial Estate), 80350 Johor Bahru, comprising one (1) unit of 11h-storey detached warehouse (Block A), one (1) unit of 11h-storey detached warehouse cum factory (Block B), a 5-storey detached flatted factory (Block C), two (2) guardhouses and other ancillary structures. As at the LPD, the premises are currently being tenanted by third parties. Kindly refer to Section 5.7 .1(ii) of the Prospectus for further details of the Larkin Investment Property. (ii) Tangkak Investment Land MRSB owns a vacant land measuring approximately 5,016.85 square metres which is held for property development. The development land is located in Tangkak, District of Ledang, Johor. MRSB had initially intended to venture into property development to develop the said land into 24 units of three-storey terrace shop offices. However, the proposed development was rejected by the Majlis Daerah Tangkak on 29 l’Jovember 2011 due to the requirement for an additional electricity substation which was not agreed by MRSB. Thereafter, plans to develop the said land were halted. At this juncture, the Board has the following options: (i) to seek the requisite approvals and recommence the development of this land; or
(ii) to dispose the land and realise its investments.

Nevertheless, the Board has not finalised its plans with regards to this development land. [ The rest of this page is intentionally left blank]

 

 

 

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