Business Overview

5. INFORMATION ON OUR GROUP 5. INFORMATION ON OUR GROUP
5.1 History of Our Group
Our Company was incorporated in Malaysia under the Act on 4 November 2014 as a private limited company under the name of Rhone Ma Holdings Sdn Bhd and was subsequently convelied to a public company limited by shares on 5 June 2015. We are an investment holding company and are engaged in the provision of management services to our Subsidiaries. Our Subsidiaries are principally involved in the provision of end­to-end animal health solution and the distribution and supply of food ingredients. The provision of end-to-end animal health solution comprises the provision of veterinary advisory and consultation services, diagnostic laboratory analyses, R&D activities as well as manufacturing and distribution of animal health products. As at the LPD, our Subsidiaries and our Group’s corporate structure is as follows: Rhone Ma Holdings 1 I
The history of our Group can be traced back to 2000 with the establishment of Rhone Ma Malaysia by Dr. Raymond Choo and Foong Kam Weng, pursuant to a management buy-out of the animal health division of Rhodia Malaysia Sdn Bhd, to venture into marketing, trading and distribution of animal health products and the provision of veterinary advisory services with a pioneer team of seven (7) other members which included Dr. Lim and Dr. Yip. Since then, our Group was led by Dr. Raymond Choo up to his retirement in 2012. Subsequent to his retirement, our Group is headed by Dr. Lim together with Dr. Yip and Foong Kam Weng, all of whom are instrumental to our Group’s success. Currently, Dr. Raymond Choo is a substantial shareholder of Rhone Ma Holdings and a director of all the Subsidiaries. Nevertheless, Dr. Raymond Choo will cease to be our substantial shareholder upon Listing due to dilution of his shareholding from 5.00% to 3.73% of the equity interest in Rhone Ma Holdings upon Listing. In 2002, our Group ventured into the provision of diagnostic laboratory analysis via Vet Food AgI’o Diagnostics to offer a wide range of diagnostic laboratory analyses for the veterinary, agriculture and food industries, which allows us to extend from marketing, trading and distribution of animal health products to provide a wider range of offerings. In 2005, Asia-Pacific Special Nutrients was incorporated to undertake R&D activities related to animal health, food safety and agriculture, which provides us the platform to expand our product range and allows us to develop new animal health products and improve our existing products. Asia-Pacific Special Nutrients was awarded the BioNexus Status in 2007 and was granted 100% tax exemption on the statutory income for a period of ten (10) years. In order to build brand equity and create brand awareness for Asia-Pacific Special Nutrients, the sales of feed additives by Rhone Ma Malaysia, including both third party and in-house manufactured products was transferred to Asia-Pacific Special Nutrients progressively since March 2013 as majority of our in-house manufactured products are under the brand name of Asia-Pacific Special Nutrients. For the FYE 31 December 2013, FYE 31 December 2014, FYE 31 December 2015 and FPE 31 August 2016, the sales of feed additives manufactured by our Group contributed approximately 4.57%, 4.59%, 6.78% and 9.82% of our Group’s total revenue respectively. As at the LPD, the transfer of the sales of feed additives by Rhone Ma Malaysia to Asia-Pacific Special Nutrients has been completed and Rhone Ma Malaysia is no longer involved in the sales of feed additives to third pmiy customers. 5. INFORMAnON ON OUR GROUP (Conl’d) As part of our continuing effOlis as an end-to-end animal health solution provider, our Group launched the TSP programme in 2009. Under the TSP programme, we are able to integrate the core strengths of our Group which include the provision of veterinary advisory services, diagnostic laboratory analyses and R&D activities with the availability of more than 300 types of animal health products to meet the needs and requirements of each customer. For the FYE 31 December 2013, FYE 31 December 2014, FYE 31 December 2015 and FPE 31 August 2016, the sales of third party animal health products contributed 91.74%, 90.89%,88.33% and 84.11 % of our Group’s total revenue respectively. In 20 II, Dr. Lim saw an opportunity to leverage on our Group’s existing network as one of our suppliers is involved in the distribution of both animal health products and food ingredients. We expanded our business operations and ventured into the distribution and supply of food ingredients to food manufacturers in Malaysia through one of our Subsidiaries, Link Ingredients which was established in 2007 by promoting food ingredients to our customers who are involved in various downstream activities within the poultry products industry such as meat processing plants and distributors of processed poultry products. Link Ingredients was a dormant company with intended principal activities of manufacturing, R&D and trading in food products prior to the commencement of its business operations in 20 I I. To improve the control of the supply of our animal health products, since 2009, our Group also manufactures some animal health products at our manufacturing plant which carry our own brand names such as Rhomicosin, Rhonamox, Rholyte and Nystatin FG. In 2012, our manufacturing plant was certified as a GMP-compliant plant by NPRA.
5.2 Share Capital and Changes in Share Capital As at the LPD, the authorised share capital of our Company is RM500,000,000 comprising 1,000,000,000 Shares, of which RM61,939,000 comprising 123,878,000 Shares have been issued and fully paid-up. Upon completion of our lPG, the issued and paid-up share capital will be increased to RM83,000,000 comprising 166,000,000 Shares. The changes in our Company’s issued and paid-up share capital since incorporation are as follows: Date of allotment  No. of Shares allotted  Par value RM  Consideration RM  Cumulative total no. of Shares  Cumulative issued and paid-up share capital RM  04.11.2014  2  0.25  Cash  2  0.50  27.01.2016  2  0.25  Cash  4  1.00  28.01.2016  – 0.50  Consolidation of four (4) existing ordinary shares ofRMO.25 each into two (2) ordinary shares ofRMO.50 each  2  1.00  28.09.2016  123,877,998  0.50  Otherwise than cash(n)  123,878,000  61,939,000
Note:
(aJ issuance ojnell’ Shares as considerationjor the Acquisition oj Rhone Ma Malaysia, There were no discounts, special terms or instalment payment terms applicable to the payment of consideration for the above allotments. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in Rhone Ma Holdings. -43 ­5. INFORMAnON ON OUR CROUP (CoIlI’d)
5.3 Information on Our Subsidiaries 5.3.1 Asia-Pacific Special Nutrients (a) History and Business Asia-Pacific Special Nutrients was incorporated in Malaysia under the Act on 25 August 2005 as a private limited company and commenced its business operations in 2007. Asia-Pacific Special Nutrients is principally engaged in undertaking R&D activities related to animal health, food safety and agriculture and trading in animal health products. (b) Substantial Shareholders As a result of the Acquisition of Asia-Pacific Special Nutrients which was completed on 29 September 2016, Asia-Pacific Special Nutrients is a wholly-owned subsidiary of our Company. (c) Share Capital As at the LPD, Asia-Pacific Special Nutrients has an authorised share capital of RM5,000,000 comprising 5,000,000 Asia-Pacific Special Nutrients Shares. The issued and paid-up share capital of Asia-Pacific Special Nutrients is RM 1,000,002 comprising 1,000,002 Asia-Pacific Special Nutrients Shares. There are no changes in the issued and paid-up share capital of Asia-Pacific Special Nutrients for the past three (3) years preceding the LPD. As at the LPD, Asia-Pacific Special Nutrients does not have any outstanding warrants, options, conveliible securities or uncalled capital. (d) Subsidiary and Associated Company As at the LPD, Asia-Pacific Special Nutrients does not have any subsidiary or associated company.
5.3.2 Linl, Ingredients
(a) History and Business Link Ingredients was incorporated in Malaysia under the Act on 25 April 2007 as a private limited company under the name of Rhone Animal Nutrition (M) Sdn Bhd. Link Ingredients assumed its present name on 29 September 20 I0 and commenced its business operations in 20 I I. Link Ingredients is principally engaged in the distribution and supply of food ingredients. (b) Substantial Shareholders As a result of the Acquisition of Link Ingredients which was completed on 29 September 2016, Link Ingredients is a wholly-owned subsidiary of our Company. (c) Share Capital As at the LPD, Link Ingredients has an authorised share capital of RM I,000,000 comprising 1,000,000 Link Ingredients Shares. The issued and paid-up share capital of Link Ingredients is RM250,000 comprising 250,000 Link Ingredients Shares. 5. INFORMATION ON OUR GROUP (Conl’d) There are no changes in the issued and paid-up share capital of Link Ingredients for the past three (3) years preceding the LPD. As at the LPD, Link Ingredients does not have any outstanding warrants, options, convertible securities or uncalled capital. (d) Subsidiary and Associated Company As at the LPD, Link Ingredients does not have any subsidiary or associated company.

5.3.3 Rhone Ma Malaysia
(a) History and Business
Rhone Ma Malaysia was incorporated in Malaysia under the Act on 12 September 2000 as a private limited company under the name of Rhonema Malaysia Sdn Bhd. It commenced its business operations in 200 I and has assumed its present name since 2 I January 2002. Rhone Ma Malaysia is principally engaged in the marketing, trading, distribution and manufacturing of animal health products and the provision of veterinary advisory services.
(b) Substantial Shareholders
As a result of the Acquisition of Rhone Ma Malaysia which was completed on 28 September 20 16, Rhone Ma Malaysia is a wholly-owned subsidiary of our Company.
(c) Share Capital

As at the LPD, Rhone Ma Malaysia has an authorised share capital of RM5,000,000 comprising 5,000,000 Rhone Ma Malaysia Shares. The issued and paid-up share capital of Rhone Ma Malaysia is RM2,450,002 comprising 2,450,002 Rhone Ma Malaysia Shares. There are no changes in the issued and paid-up share capital of Rhone Ma Malaysia for the past three (3) years preceding the LPD. As at the LPD, Rhone Ma Malaysia does not have any outstanding warrants, options, convertible securities or uncalled capital. (d) Subsidiary and Associated Company As at the LPD, Rhone Ma Malaysia does not have any subsidiary or associated company.
5.3.4 Vet Food Agro Diagnostics (a) History and Business Vet Food Agro Diagnostics was incorporated in Malaysia under the Act on 5 October 2001 as a private limited company under the name of Vet Diagnostics (M) Sdn Bhd. It commenced its business operations in 2002 and has assumed its present name since 13 September 2006. Vet Food Agro Diagnostics is principally engaged in the provision of diagnostic laboratory analyses and consultation services to the veterinary, agriculture and food industries. 5. INFORMATION ON OUR GROUP (Co/lt’d) (b) Substantial Shareholders
As a result of the Acquisition of Vet Food Agro Diagnostics which was completed on 29 September 2016, Vet Food Agro Diagnostics is a wholly­owned subsidiary of our Company.
(c) Share Capital

As at the LPD, Vet Food Agro Diagnostics has an authorised share capital of RM 100,000 comprising 100,000 Vet Food Agro Diagnostics Shares. The issued and paid-up share capital of Vet Food Agro Diagnostics is RM30,000 comprising 30,000 Vet Food Agro Diagnostics Shares. There are no changes in the issued and paid-up share capital of Vet Food Agro Diagnostics for the past three (3) years preceding the LPD. As at the LPD, Vet Food Agro Diagnostics does not have any outstanding warrants, options, convertible securities or uncalled capital. (d) Subsidiary and Associated Company As at the LPD, Vet Food Agro Diagnostics does not have any subsidiary or associated company. 5.4 Listing Exercise
In conjunction with, and as an integral pal1 of the Listing, we undertook: (i) the Internal Restructuring;
(ii) the Acquisitions;

 

and will undel1ake the following corporate exercises: (iii) the IPO; and (iv) the Listing.
5.4.1 Internal Restructuring Rhone Ma Malaysia had on 28 March 2016 entered into two (2) conditional sale and purchase agreements to acquire the remaining shares in Link Ingredients not already owned by Rhone Ma Malaysia and the entire equity interest in Vet Food Agro Diagnostics for a total cash consideration ofRM3,655,865. 5.4.1.1 Acquisition of Link Ingredients by Rhone Ma Malaysia The acquisition of the remaining shares in Link Ingredients not already owned by Rhone Ma Malaysia involves the acquisition by Rhone Ma Malaysia of the remaining 40% of the issued and paid-up share capital of Link Ingredients from the vendor of Link Ingredients in cash. Prior to the acquisition of the remaining shares in Link Ingredients not already owned by Rhone Ma Malaysia, Rhone Ma Malaysia held 150,000 Link Ingredients Shares representing 60% of the issued and paid-up capital of Link Ingredients. 5. INFORMAnON ON OUR GROUP (Collt’d) The vendor of Link Ingredients and the number of Link Ingredients Shares that were acquired by Rhone Ma Malaysia are as follows: Vendor  No. of Link Ingredients Shares acquired by Rhone Ma Malaysia  % of issued and paid-up share capital  Cash consideration  RM  Dr. Lim  100,000  40.00  1,323,746
The cash consideration ofRMI,323,746 for the acquisition of the remaining equity interest in Link Ingredients by Rhone Ma Malaysia was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited NA of Link Ingredients as at 31 December 20 IS of RM3,309,365. The acquisition of the remaining shares in Link Ingredients not already owned by Rhone Ma Malaysia was completed on 27 September 2016. 5.4.1.2 Acquisition of Vet Food Agro Diagnostics by Rhone Ma Malaysia The acquisition of the entire equity interest in Vet Food Agro Diagnostics by Rhone Ma Malaysia involves the acquisition by Rhone Ma Malaysia of the entire issued and paid-up share capital of Vet Food Agro Diagnostics from the vendors of Vet Food Agro Diagnostics in cash. The vendors of Vet Food Agro Diagnostics and the number of Vet Food Agro Diagnostics Shares that were acquired by Rhone Ma Malaysia are as follows: Vendors  No. of Vet Food Agro Diagnostics Shares acquired by Rhone Ma Malaysia  % of issued and paid-up share capital  Cash consideration RM  Dr. Lim Dr. Raymond Choo  15,000 15,000  50.00 50.00  1,166,059.50 1,166,059.50  30,000  100.00  2,332,119.00
The cash consideration of RM2,332,119 for the acquisition of the entire equity interest in Vet Food Agro Diagnostics by Rhone Ma Malaysia was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited NA of Vet Food Agro Diagnostics as at 31 December 20 IS of RM2,332, 119. The acquisition of the entire equity interest in Vet Food Agro Diagnostics by Rhone Ma Malaysia was completed on 27 September 2016. 5. INFORMATION ON OUR GROUP (COlll’d) 5.4.2 Acquisitions
On 28 March 2016, we entered into two (2) conditional sale and purchase agreements in relation to the Acquisitions to acquire the entire equity interest of our Subsidiaries, for a total purchase consideration of RM63 ,219,001. 5.4.2.1 Acquisition of Rhone Ma Malaysia The Acquisition of Rhone Ma Malaysia involves the acquisition of the entire issued and paid-up share capital of Rhone Ma Malaysia comprising 2,450,002 Rhone Ma Malaysia Shares for a purchase consideration of RM6l,938,999 satisfied by the issuance of 123,877,998 new Shares. The vendors of Rhone Ma Malaysia, the number of Rhone Ma Malaysia Shares that were acquired by Rhone Ma Holdings and the number of new Shares that were issued to the vendors pursuant to the Acquisition of Rhone Ma Malaysia are as set out below: Vendors  No. of Rhone Ma Malaysia Shares acquired by Rhone Ma Holdings  % of the issued and paid-up share capital  Purchase consideration RM  No. of Shares issued  No. of Shares to be held under BASB on behalf of the vendorl  Dr. Lim  698,251  28.50  17,652,549  35,305,098′  31,588,800  Foong Kam Weng  514,500  21.00  13,007,200  26,014,400′  26,014,400  Dr. Yip  367,501  15.00  9,290,850  18,581,700′  18,581,700  Dr. Raymond Chao  122,500  5.00  3,096,950  6,193,900  – Ker Boon Tong  171,500  7.00  4,335,750  8,671,500  – Chew Chong I-lock  171,500  7.00  4,335,750  8,671,500  – Tan Leong Ann  171,500  7.00  4,335,750  8,671,500  – Chan Chew Yen  171,500  7.00  4,335,750  8,671,500′  8,671,500  Lim Hang Chern  61,250  2.50  1,548,450  3,096,900  – 2,450,002  100.00  61,938,999  123,877,998  84,856,400
Notes:
BASB is an investment holding company incorporated with the intention to hold the investment ojDr. Lim, Foong Kam Weng, Dr. Yip and Chan Chew Yen in Rhone Ma Holdings. Kindly reJer to Section 8.1.2 oj this Prospectus Jor jitrther details oj BASB 31,588,8()() Shares issued and allolled to Dr. Lim pursuant to the Acquisition oj Rhone lv/a Malaysia are held by BASB and the remaining 3,7J6,298 Shares issued and allotted to Df’. Lim pursuant to the AcqUisition oj Rhone Ma Malaysia are held by him directly. All the Shares issued and allotted to Foong Kam Weug, Dr. Yip and Chan Chew Yen pursuant to the AcqUisition ojRhone iv/a Malaysia are held by BASil. 5. INFORMATION ON OUR GROUP (Cont’d) The purchase consideration of RM61 ,938,999 for the Acquisition of Rhone Ma Malaysia was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited consolidated NA of Rhone Ma Malaysia as at 31 December 20 IS adjusted for the acquisition of the entire equity interest in Vet Food Agro Diagnostics by Rhone Ma Malaysia and the aggregate net revaluation surplus in respect of the following properties of Rhone Ma Malaysia: (a) a warehouse complex known as Lot 18A, Jalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Darul Ehsan;
(b) a warehouse complex known as Lot 18B, Jalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Darul Ehsan;
(c) a piece of industrial land located within Nilai Utama Enterprise Park, Nilai, Negeri Sembilan Darul Khusus held under GRN 212778, Lot 16008, BandaI’ Nilai Utama, Seremban, Negeri Sembilan Darul Khusus; and
(d) a piece of industrial land held under H.S.(D) 153802, PT 73996, Mukim Kapar, Klang, Selangor Darul Ehsan.

RM
Consolidated NA of Rhone Ma Malaysia as at 31 December 20 IS’ 55,910,882.00 Add: Aggregate revaluation surplus 6,718,992.00 Less: Deferred taxation for the revaluation surplus (690,970.20) Adjusted consolidated NA of Rhone Ma Malaysia 61,938,903.80 Note:
* Based on audited consolidated NA of Rhone Ma Malaysia as at 31 December 2015 ofRM55.910.882 andadjustedfor1nternalRestructuringassetout inSection5.4.1 ofthis Prospectus H’hich does not result in any net change to the consolidated NA of Rhone Ma Malaysia. The Acquisition of Rhone Ma Malaysia was completed on 28 September 2016. 5.4.2.2 Acquisition of Asia-Pacific Special Nutrients The Acquisition of Asia-Pacific Special Nutrients involves the acquisition by Rhone Ma Holdings of the entire issued and paid-up share capital of Asia-Pacific Special Nutrients comprising 1,000,002 Asia-Pacific Special Nutrients Shares from Rhone Ma Malaysia for a total purchase consideration of RMI ,000,002 which will be reflected as amount owing by Rhone Ma Holdings to Rhone Ma Malaysia. The purchase consideration of RM I,000,002 for the Acquisition of Asia­Pacific Special Nutrients was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the issued and paid-Up share capital of Asia-Pacific Special Nutrients as at 31 December 2015 of RM 1,000,002. The Acquisition of Asia-Pacific Special Nutrients was completed on 29 September 2016. 5. INFORMATION ON OUR GROUP (Cont’d) 5.4.2.3 Acquisition of Link Ingredients The Acquisition of Link Ingredients involves the acquisition by Rhone Ma Holdings of the entire issued and paid-up share capital of Link Ingredients comprising 250,000 Link Ingredients Shares from Rhone Ma Malaysia for a total purchase consideration of RM250,000 which will be reflected as amount owing by Rhone Ma Holdings to Rhone Ma Malaysia. The purchase consideration of RM250,000 for the Acquisition of Link Ingredients was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the issued and paid-up share capital of Link Ingredients as at 31 December 20 I5 of RM250,000. The Acquisition of Link Ingredients was completed on 29 September 20 16. 5.4.2.4 Acquisition of Vet Food Agro Diagnostics The Acquisition of Vet Food AgI’O Diagnostics involves the acquisition by Rhone Ma Holdings of the entire issued and paid-up share capital of Vet Food Agro Diagnostics comprising 30,000 Vet Food Agro Diagnostics Shares from Rhone Ma Malaysia for a total purchase consideration of RM30,000 which will be reflected as amount owing by Rhone Ma Holdings to Rhone Ma Malaysia. The purchase consideration of RM30,000 for the Acquisition of Vet Food Agro Diagnostics was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the issued and paid-up share capital of Vet Food AgI’O Diagnostics as at 3 I December 2015 ofRM30,000. The Acquisition of Vet Food Agro Diagnostics was completed on 29 September 2016. 5.4.3 IPO
In conjunction with our Listing, upon completion of the abovementioned exercises, we will undertake a public issue of 42,122,000 new Shares representing approximately 25.37% of our enlarged issued and paid-up share capital which will be allocated in the following manner: 5.4.3.1 Malaysian Public 8,300,000 Public Issue Shares, representing 5.00% of our enlarged issued and paid-up share capital will be made available for application by the Malaysian Public to be allocated via balloting, of which 50.00% will be set aside for the Bumiputera Public. 5.4.3.2 Eligible Directors and Employees of Our Group and Other Persons who have Contributed to the Success of Our Group 7,822,000 Public Issue Shares, representing approximately 4.7 1% of our enlarged issued and paid-up share capital will be made available for application by the eligible Directors and employees of our Group and other persons who have contributed to the success of our Group. 5.4.3.3 Bumiputera Investors Approved by MITI 16,600,000 Public Issue Shares, representing 10.00% of our enlarged issued and paid-up share capital will be made available for application by way of private placement to Bumiputera Investors approved by MIT!. 5. INFORMATION ON OUR GROUP (Coflt’d) 5.4.3.4 Selected Investors by Way of Private Placement 9,400,000 Public Issue Shares, representing approximately 5.66% of our enlarged issued and paid-up share capital will be made available for application by way of private placement to selected investors. 5.4.4 Listing
Upon completion of all the abovementioned exercises, we shall seek the listing of and quotation for our enlarged issued and paid-up share capital of RM83,000,000 comprising 166,000,000 Shares on the Main Market. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW 6.1
Business Model, Competitive Advantages and Key Strengths 6.1.1 Business Model Our business model is depicted in the figure below: Distribution ond
~~nd-to-End Animol Supply of Food
Hcalth Solution Ingrcdients Distribution lind
Mmlllfllclu”ng lindProvision ofAnimt\1 Supply ofFood
Dislribution ofAnitl1l1l Helllth Services Ingredients
Helllth Products End-to-End Animal Broad Rangc of
[n-House R&D CentreHellllh Solution Provider Products and Selv;ccs
In-House Manutactured ExperiencedProd”cts with Own N[anagement TeamBrnnd Names
Husiu(‘ss Focus Compctitivc Advnntages anu Kcy Stl’Cngths 6.1.2 Business Focus
Our Group is primarily an end-to-end animal health solution provider, integrating the provision of animal health services as well as the manufacturing and distribution of animal health products focused mainly on the livestock industry. The animal health services provided by our Group consist of technical and R&D services whereas the animal health products provided by our Group include vaccines, pharmaceuticals and feed additives which are mainly sourced from third party international manufacturers. Our Group also manufactures selected pharmaceuticals and feed additives at our own GMP-compliant plant. In addition, we also carry out repackaging and relabelling of products sourced from third parties at our GMP­compliant plant to cater to the local market as well as to meet the regulations of the local authorities. Kindly refer to Section 6.2.1.1 of the Prospectus for details on the provision of animal health services and Section 6.2.1.2 of the Prospects for details on the manufacturing and distribution of animal health products. As part of our Group’s continuing efforts as an end-to-end animal health solution provider, we have launched our TSP programme in 2009. The TSP programme is an approach to animal health solutions where the animal health services and products are customised to the needs and requirements of each customer. In general, our customers would have the flexibility and option to select the animal health services they need or require and pair it with the animal health products provided by our Group, thus forming their desired animal health solution via our TSP programme. In addition, our Group is also involved in the distribution and supply of food ingred ients. 6. BUSINESS OVERVIEW (Collt’d) 6.1.3 6.1.4 Revenue Streams
Our revenue is mainly derived from the provIsion of end-to-end animal health solution comprising the provision of animal health services and the manufacturing and distribution of animal health products. For the FPE 31 August 2016, revenue from our end-to-end animal health solution accounted for 78.42% of our Group’s total revenue where the provision of animal health services accounted for approximately 1.60% of our Group’s total revenue and the manufacturing and distribution of animal health products accounted for approximately 76.82% of our Group’s total revenue. In terms of revenue generated from the manufacturing and distribution of animal health products, approximately 84.11 % was derived from the sales of third party products whereas the remaining 15.89% was derived from the sales of in-house manufactured products. In addition, the distribution and supply of food ingredients accounted for approximately 21.58% of our total revenue for the FPE 31 August 2016. Competitive Advantages and Key Strengths Our competitive advantages and key strengths are important in sustaining our business and providing our Group with future growth opportunities. (i) End-to-End Animal Health Solution Provider One of the main competitive strengths of our Group lies in our ability to provide end-to-end animal health solution to our customers via our TSP programme. Through our TSP programme, we provide customised animal health solution to address the problems and meet the needs and requirements of each customer. Over the years, our Group which started with the distribution of animal health products has expanded our product range as well as service offerings towards developing into an end-to-end animal health solution provider. The business expansion plans that we have undertaken, amongst others, are as follows: • expansion of our product range;
• expansion of our business operations with the provision of technical services;
• establishment of an in-house R&D team and facility;
• establishment of a GMP-compliant plant;
• manufacturing of pharmaceuticals and feed additives that are marketed under our own brand names; and
• introduction of the TSP programme.

In addition, our Group is able to minimise the dependency on third parties in providing technical services as pati of our end-to-end animal health solution as our technical and R&D services are carried out by our in-house personnel. This would provide convenience and at the same time ensure faster and more reliable services to be provided to our customers. 6. BUSINESS OVERVIEW (Collt’d) (ii) (iii) (iv)
In-House R&D Centre We have established an in-house R&D centre in 2007. It is located at our head office in Petaling Jaya, Selangor Darul Ehsan and is operated by eight (8) personnel as at the LPD. Our in-house R&D centre provides us the platform to expand our product range and allows our Group to continuously develop new products as well as improve our existing products to meet existing market and our customers’ requirements. In addition, our in-house R&D centre is one of the key components of our TSP programme. The ability to undertake in-house R&D activities enables our Group to respond faster to the changing customer preferences and new market developments. The success of our R&D is evident by the development of various animal health products under our own brand names over the years. Since the establishment of our in-house R&D centre, we have successfully developed eleven (11) pharmaceuticals and thirteen (13) feed additives. The R&D efforts will increase the capabilities and product variety of our Group over time to compete with other market players. Broad Range of Products and Services Our Group has an extensive range of animal health products which consists of more than 300 types of products including vaccines, pharmaceuticals and feed additives for livestock and companion animals. For the FPE 31 August 2016, our Group sold a total of306 types of products of which 283 types are third party products and the remaining 23 types are in-house manufactured products. As part of our TSP programme, we also provide an extensive range of technical services comprising veterinary advisory and diagnostic laboratory analysis to our customers. The offering of a broad range of animal health products and services allows our Group to cater to the demands and requirements of our existing and new customers in order to serve as an end-to-end animal health solution provider. In addition, our sales team is able to cross sell our Group’s products and services, with an aim to provide convenience to our customers and meet their needs and requirements. With such broad product offerings, our Group’s reliance on the sales of any single product is reduced. In-House Manufactured Products with Own Brand Names Our Group emphasises on continuous product development in order to increase our product variety and address business opportunities arising from new market developments. We are able to develop and manufacture a range of pharmaceuticals and feed additives that are marketed under our own brand names and conform to the standards required by the relevant authorities through our in-house R&D activities and GMP-compliant plant. It also allows us to carry out product development and enhancement to ensure that we continue to meet the requirements of our customers. In addition, the offering of in-house manufactured products under our own brand names allows our Group to build brand equity and create brand loyalty, which is an important factor in promoting business sllstainability and growth. 6. BUSINESS OVERVIEW (Cont’d)
(v) Experienced Management Team Our Group is led by an experienced management team who has collectively contributed to the growth and development of our Group. Our Group has been jointly spearheaded by our Group Managing Director, Dr. Lim, Group Marketing & Technical Director, Dr. Yip and Group Sales Director, Foong Kam Weng, all of whom have played an impOliant role in the expansion of our Group over the years from a distributor of animal health products to an end-to-end animal health solution provider. The management team is suppOlied by our key personnel, compnsmg individuals with relevant experience in dealing with animal health products and food ingredients, providing veterinary advisory services, diagnostic laboratory analysis, R&D and accounting and finance related functions. In addition, as at the LPD, our Group has a total of thirteen (13) veterinarians that work with our technical and marketing team to carry out marketing campaigns, seminars and events as well as site visits to provide technical services to our customers. We believe the continuous effOli of our experienced management team will provide the basis for the business growth of our Group moving forward. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW (Cont’d) 6.2 Business Activities
Principal Business Aeth·ities of the Gronp
I I End-to-End Animal Health Solution
Provision of Animal Health
Manufacturing and Distribution Services
ofAnimal Health Products Distnbution and Supply ofFood Ingredients
Our Group is primarily an end-to-end animal health solution provider involved in the provision of animal health services and the manufacturing and distribution of animal health products. Our Group is also involved in the distribution and supply offood ingredients. 6.2.1 End-to-End Animal Health Solution 6.2.1.1 Provision of Animal Health Services The animal health services provided by our Group can be classified into the following two (2) categories: (a) Provision of Technical Services Our Group’s technical services involve the provision of veterinary advisory and consultation services as well as diagnostic laboratory analyses which can be grouped under routine, specific and advisory. The following table summarises the technical services provided by our Group: Type  De scription  Routine  • • • • • • • • • • •  Routine farm visits Technical consultation Product introduction and training In-house training Diagnostic laboratory services Disease investigation, control and monitoring Vaccination, medication programme and nutritional consultation Vaccination equipment Troubleshooting of closed house system and farm management Disease prevention and improvement of livestock production performance Farm accreditation scheme consultation  Specific  Advisory L­
6. BUSINESS OVERVIEW (Cont’d) (b)
Routine Routine technical services include services that are provided regularly or according to scheduled timelines. We conduct routine visits to our customers’ farms to assess the condition of their farms and monitor the health of their livestock to ensure that our products are able to fulfil the needs of our customers. In addition, we also routinely provide our customers with new product introduction and in-house training programme to familiarise them with the administration of our products. Specific Specific technical services include services that are provided to our customers to address their specific needs or requirements. Our Group provides a range of diagnostic laboratory analyses that can be divided into four (4) types, namely serology, microbiology, molecular biology and chemistry to assist our customers in assessing the health status oftheir livestock. We also offer disease investigation, control and monitoring programme as well as vaccination, medication programme and nutritional consultation for the livestock depending on the requirements of our customers and the results of our diagnostic laboratory analyses. Advisory Our advisory services include the provision of various type of vaccination equipment used for vaccine administration and troubleshooting services related to farm’s management, disease prevention and improvement of livestock production. Further, our Group also provides guidance and consultation to our customers in relation to good husbandry practices and assists our customers in obtaining the necessary farm accreditations such as Malaysian Good Agricultural Practices (“MyGAP”) and Hazard Analysis and Critical Control Points (“HACCP”) status. Provision of R&D Services Our R&D activities can be divided into three (3) types as follows: Type  Description  Basic research  Conduct experiments and / or analyses to acquire new knowledge of a subject Conduct specific investigations to acquire new knowledge of a subject with a practical aim or objective Conduct systematic work by using the existing knowledge gained from research and practical experience to develop new products / methods or improve existing products / methods  Applied research  Experimental development
6. BUSINESS OVERVIEW (Collt’d)
Our R&D activIties provide a vital support to our business operations as we are able to develop new testing methods, test kits and products in response to customer’s preferences and new market developments. 6.2.1.2 Manufacturing and Distribution of Animal Health Products Our animal health products can be classified into the following three (3) major categories: (a) Vaccines Vaccines are animal health products that are used to provide the animals with immunity against one or several diseases. They are widely used in the livestock industry as means of disease prevention and control. Our Group currently distributes more than eighty (80) types of vaccines for use in livestock and companion animals which are mainly sourced from third party international animal health product manufacturers. The following table sets out the different group of the vaccines distributed by our Group: Category  Type of animal  Origin  Avian vaccine  Chicken and duck  France, PRC, Italy and USA  Swine vaccine  Pig  France, United Kingdom and USA  Canine vaccine  Dog  France and USA  Feline vaccine  Cat  France and USA  Equine vaccine  Horse  France
As part of our TSP programme, our Group also stations vaccination equipment at our customers’ premises to enable them to administer the vaccines purchased from our Group. Such equipment is owned by our Group and we are responsible for the repair and maintenance of such equipment. (b) Pharmaceuticals Pharmaceuticals are animal health products that are used for the prevention and treatment of disease, disorder and injury in livestock and companion animals. Our Group currently offers more than 250 types of pharmaceuticals for the livestock and companion animals, of which eleven (II) products are manufactured by our Group whilst the remaining are sourced mainly from international animal health products manufacturers. 6. BUSINESS OVERVIEW (Conl’d)
Our Group’s pharmaceuticals consist ofthe following: (i) Water-Soluble Pharmaceuticals Water-soluble pharmaceuticals comprise pharmaceuticals which are added into the drinking water of the livestock in the farm, according to the dosage ofthe product. Such products distributed by our Group include antimicrobials (products used for treatment and / or prevention of microbes), health supplements (includes multi-vitamins, electrolytes, probiotics and other products indicated for better growth performance, improve health status and gut health), non-antimicrobials (products used as supplement for general health and curative treatments) and anticoccidials (products used for treatment and prevention of intestinal parasitic disease in poultry). (ii) Injectable Injectable pharmaceuticals are pharmaceuticals which are applied through injection using hypodermic syringes. Such products distributed by our Group are mainly antimicrobials and health supplement (used to supply additional nutrients and ingredients to improve livestock performance). (iii) Others Other pharmaceuticals distributed by our Group include a range of pesticides, test kits, disinfectants, pet shampoos and microbial tools. The table below sets out some of the pharmaceuticals manufactured by our Group: Type of products  Antimicrobial  Non-antimicrobial  Disinfectants  Pet shampoo  Microbial tools
Description  For  treatment  and  /  or  prevention  of  infectious
diseases Supplement for general health and heat stress control Use to sanitise farms Shampoo product for pets Microbial preservation, storage and recovery system Brand / Series Rhomicosin 25 LQ Rhonamox 50 WSP Rhobazin Plus Solution Rholyte Bioclean Farmsafe Relief Oatmeal Shampoo APSN Microcryobeads
6. BUSINESS OVERVIEW (Cont’d) (c)
The following table sets out some of the pharmaceuticals distributed by our Group: Type of products  Antimicrobial  Non-antimicrobial
Description  Origin  For treatment and / or prevention of infectious diseases  France, Ireland, Brazil and USA  For preventive and curative treatment of hypocalcemia and / or hypomagnesia and / or hypophosphatemia  France  For preventive and curative treatment of vitamin A, D3 and E deficiencies  France  Treatment and prevention of iron deficiency anaemia  France
Feed Additives Feed additives are substances that are added into animal feed for the following purposes: • As an antimicrobial for bacterial disease treatment and prevention;
• As a nutritional supplement to improve the growth performance and health status of livestock;
• As an anticoccidials for treatment and prevention of coccidiosis in poultry;
• As a mycotoxin binder for the control of mycotoxin contamination in feed;
• As an antifungal used for treatment of fungal infections;
• As a mold inhibitor;
• As supplements for gut health and growth performance enhancement;
• As an anthelmintic for treatment of parasite infestations; and
• As a premix for nutritional supplements for sows and pigs.

Our Group currently offers more than fifty (SO) types of feed additives of which thitieen (13) are manufactured by our Group whilst the remaining are sourced from local and international animal health product manufacturers. 6. BUSINESS OVERVIEW (Collt’d)
The table below sets out some of the feed additives manufactured by our Group: Type of products  Description  Brand / Series  Anti microbial  For bacterial disease  Rhonamox 50 FG  treatment and prevention  Imequyl 50 FG  Rhomicosin 20 FG  Nutritional  Supplement to  Alpha D3 250  supplement  improve the growth performance and health status of livestock  Prokel Se 1000  Antifungal  For treatment of fungal infections  Nystatin FG  Anthelmintic  For treatment of parasite infestations  Efendazole 8%  Premix for nutritional supplements for sows and  Nutritional supplements for sow  Sow Care Premium Birthcare Sow Care Premium Gestation Sow Care Premium Lactation  pigs  Feed supplement for piglets, growers and finisher pigs  Performix Performix Starter Performix Finisher
The following table sets out some of the feed additives distributed by our Group: Type of  products  Description Includes protein concentrates, Nutritional  supplement  fat powder, enzyme, probiotics, milk replacer, emulsifier and other products indicated to improve growth performance and health status of livestock  Anticoccidials  For treatment and prevention of  coccidiosis in poultry For the control of mycotoxin Mycotoxin  binder  contamination in feed Indicates for mold and Mold  inhibitor  microbial contamination in raw  materials used for feed  production For gut health and growth Supplements  for gut health  performance enhancement  and growth  performance  enhancement  For treatment of parasites infestations  Anthelmintic
Origin USA, Malaysia, Netherlands, India and Singapore USA and PRC USA Colombia France, Brazil, USA and Thailand Netherlands
-6] ­6. BUSINESS OVERVIEW (Collt’d)
Type of products  Descri ption  Origin  Premix for  Nutritional supplement for sow  Netherlands  nutritional  and pigs feed  supplements  for sows and  pigs
6.2.2 Distribution and Supply of Food Ingredients Our Group is also involved in the distribution and supply of food ingredients to bakeries and producers of confectioneries, ice creams, sauces and snacks, as well as to the food manufacturers and pharmaceutical companies in Malaysia. Our Group currently distributes more than thiliy (30) types of food ingredient products to customers in Malaysia. We do not have our own brand for the sale of food ingredients. However, we have registered the company’s logo of Link Ingredients as trademarks in respect of our food ingredients business. The following table summarised the food ingredients distributed and supplied by our Group: Product category  Food ingredients  Starch  Maize starch, wheat starch, potato starch, pea starch  Modified starch  Cross-linked and / or stabilised starches, pre-gelatinised starches  Sweetener  Dextrose monohydrate, maltitol, xylitol, sorbitol  Vegetable protein  Wheat gluten, pea / wheat protein  Soluble fibre  Wheat dextrin  Bulking agent  Maltodextrin  Vegetable powder  Sweet corn, tomato and pumpkin vegetable powder  Phosphate  Sodium acid pyrophosphate  Lubricant  White mineral oil (food grade)  Food additive  Potassium sorbate, sorbic acid, glucono delta lactone
Leveraging on our existing suppliers’ broad range of products, our Group is able to offer various types of food ingredients to food manufacturers, producers and wholesalers. 6.3 Output, Capacity and Utilisation The animal health products currently manufactured by our Group are categorised into powder­based products such as Nystatin FG, Rhonamox 50 FG, Efendazole 8%, Imequyl 50 FG and Rhonamox 50 WSP and liquid-based products such as Rhomicosin 25 LQ and Bioclean. The machineries that we use for our production are mixers. As at the LPD, our Group has three (3) powder-based mixer machines and two (2) liquid-based mixer machines which are located in our GMP-compliant plant. Our Group’s products are manufactured in batches. Each batch of our products only requires to go through one (I) of the mixer machine to complete the production process. The three (3) powder-based mixer machines do not operate simultaneously in order to avoid contamination of the different products manufactured. However, the two (2) liquid-based mixer machines can operate simultaneously together with anyone of the three (3) powder-based mixer machines. -62 ­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
The utilisation of our production equipment for the manufacturing of animal health products for the past three (3) financial years up to the FYE 31 December 2015 and FPE 31 August 2016 are as follows: Type of machinery  Operating days per year(a) No. of days  Maximum production capacity per year(b) tonnes  FYE 31 December  FPE 31 August 2016 2013  2014  2015  Actual production output(c) tonnes  Production utilisation %  Actual production output(C) tonnes  Production utilisation 0/0  Actual production output(c) tonnes  Production utilisation 0/0  Actual production output(c) tonnes  Production utilisation %  Powder-based  Paddle mixer  170  544.00  299.50  55.06  373.87  68.73  541.90  99.61  361.60  99.71(d)  Ribbon mixer  71  71.00  6.72  9.46  52.20  73.52  58.26  82.06  35.65  75.3id)  Cube mixer  43  21.93  15.38  70.13  14.03  63.98  14.44  65.85  14.00  95.76(d)  Total  N/A  636.93  321.60  50.49  440.10  69.10  614.60  96.49  411.25  96.85(d)  Liquid-based  Mixing vessell  284  284.00  23.28  8.20  2.46  0.87  4.20  1.48  11.10  5.86(dl  Mixing vessel 2  284  568.00  35.91  6.32  43.43  7.65  57.14  10.06  34.90  9.22(d)  Total  N/A  852.00  59.19  6.95  45.89  5.39  61.34  7.20  46.00  8.1O(d)
Notes:
(a) Based on the estimated number ofdays that our machineries are in operation after taking into consideration 365 days a year and subtracting fifty two (52) days for Sundays, twelve (12) days for repair and maintenance work (one (1) day per month) and seventeen (17) daysforfestiveperiods andotherpublicholidays. Thenumberofoperatingdays is allocated based on historical trends as the powder-based mixer machines cannot operate simultaneously in order to avoid contamination ofthe different products manufactured. The allocation ofthe number ofoperating days based on historical trends is asfollows:
(i) 60.00%ofthetotalnumber ofoperatingdays peryearforpaddlemixer;
(ii) 25.00%ofthetotalnumber ofoperatingdays peryearforribbonmixer;and

(iii) 15.00%ofthetotalnumber ofoperatingdays peryearforcubemixer. -63 ­6. BUSINESS OVERVIEW (COllt'(/)
(b) Based on operating hours 0/ eight (8) hours per day and the daily maximum production capacity 0/each machines as/ollows:
(c) Based on the actual production output/or the respective financial years / periods.
(d) Computed based on annualised production output/or comparison purposes.

Daily maximllm  Mac/tinery  prodllction capacity  tonnes  Paddle mixer  3.20  Ribbon mixer  1.00  Cube mixer  0.51  Mixing vessel 1  1.00  Mixing vessel 2  2.00
Based on the table above, the capacity of our Group’s production equipment for the manufacturing of animal health products is determined based on the number of days that our machineries are in operation per year, operating hours per day and the maximum production capacity per day. The operation of our mixer machines is dependent on the orders from our customers and the level of inventory required to be maintained for our business operations. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW (Com’d) 6.4 Production Process
6.4.1 Powder-Based Products The general production process of the powder-based products is as follows:
Material Receiving Weighing and Mixing and and Sieving Dispensing Blending

.­Sealing and Packing
(a) Material Receiving and Sieving Following the bill of materials, raw materials are supplied to the designated production area. Upon receiving the raw materials, our production staff will check to ensure the correct raw materials are received in accordance with the batch production record. Raw materials are then subjected to the sieving process to remove any foreign materials as well as to ensure the consistency of the material before the next process. (b) Weighing and Dispensing Once sieved, all the required raw materials are weighed by the production staffs according to the formula before dispensing them into the designated powder-based mixer machine. The mixer machine used depends on the type of powder-based products manufactured. (c) Mixing and Blending In this stage, all the raw materials are mixed and blended together in the mixer machine with a pre-set blending speed and time. The blending speed and time is determined based on the type of powder-based products being manufactured. Typically, the blending time takes up to several hours. (d) Labelling and Filling Once the mixing and blending process is completed, samples are collected and subjected to a series of tests at our laboratory to ensure product qual ity. Upon completion and passing of the test, the blend is filled into the labelled packaging materials according to the intended weight. Before filling the blend into the packaging materials, the packaging materials are labelled to display our brand name, product name, contents and ingredients used in the product, in accordance to the regulations set by the local authorities.

6. BUSINESS OVERViEW (Con/’ll)
(e) Sealing and Packing Upon completion of the filling process, the products are then sealed and packed. Packed products are then transferred for storage and / or delivery to customers. 6.4.2 Liquid-Based Products The general production process of the liquid-based products is as follows:

 

Material Receiving Mixingand and Dispensing Blending
Packing Labelling Filling and Capping (a) Material Receiving and Dispensing
Following the bill of materials, raw materials are supplied to the designated production area. Upon receiving the raw materials, our production staff will check to ensure the correct raw materials are received in accordance with the batch production record. Depending on the form of the raw materials, the raw materials in powder and / or liquid form are dissolved to reconstitute the specified concentration, percentage and consistency according to the formula before dispensing them into the designated mixer machine. The mixer machine is chosen according to the type of liquid-based products manufactured.
(b) Mixing and Blending
Once all the materials are prepared to the respective specifications, all the raw materials will be mixed and blended in the designated liquid-based mixer machine with a pre-set blending speed and time. The blending speed and time are determined based on the type of liquid-based products being manufactured. Typically, the blending time takes up to several hours.
(c) Filling and Capping

Once the mixing and blending process is completed, samples are coHected and subjected to a series of tests at our laboratory to ensure product quality. Upon completion and passing of the test, the manufactured liquid-based products are then filled into the intended containers before capping them. 6. BUSINESS OVERVIEW (Cont’d) (d) Labelling
The containers are then labelled to display our brand name, product name, contents and ingredients used in the product, in accordance to the regulations set by the local authorities. (e) Packing
The products are then packed in boxes for storage and I or delivery to customers. 6.4.3 Relabelling and Repackaging Our Group relabels and repackages some of the products imported from third party international animal health product manufacturers before distributing the products to our customers in order to meet the regulations and requirements set by the local authorities. The general production process of the relabelling and repackaging is as follows:

 

Removal of Label I Printing of Label in Packaging accordance with Local Compliances

 

Packing Repackaging or Relabelling (a) Removal of Labell Packaging In terms of repackaging, the products are first removed from their original external packaging. For relabeling, the original labels are removed from the original packaging. (b) Printing of Label in accordance with Local Compliances New labels I external packaging are printed with information that complies with local requirements. (c) Repackaging or Relabelling In terms of repackaging, the products are then repackaged to the new external packaging. For relabeling, the printed labels are labelled on the original packaging. -67 ­6. BUSINESS OVERVIEW (Cont’d) (d) Packing
The products with new labels / external packaging are then repacked and sealed in boxes, before they are transferred for storage and / or delivered to customers. 6.5 Location of Operations
Our Group’s head office and in-house R&D centre is currently located at Lot 18A and 18B, Jalan 241, Seksyen SIA, 46100 Petaling Jaya, Selangor Darul Ehsan. Details of our location of operations as at the LPD are set out below:
Location  Address  Petaling .Iaya, Selangor Darul Ehsan  Lot 18A, .Ialan 241 Seksyen 51A 46100 Petaling .Iaya Selangor Darul Ehsan  Petaling .Iaya, Selangor Darul Ehsan  Lot 18B, .Ialan 241 Seksyen 5 IA 46100 Petaling .Iaya Selangor Darul Ehsan  Petaling .Iaya, Selangor Darul Ehsan  Lot 4, Lorong 51 A/227B 46100 Petaling .Iaya Selangor Darul Ehsan  Klang, Selangor Darul Ehsan  Lot 28326, .Ialan Pelabuhan Utara 42000 Pelabuhan Klang Selangor Darul Ehsan  Klang, Selangor  Lot 19, Lebuh Sultan Muhamed 2  Darul Ehsan  BandaI’ Sultan Suleiman 42000 Pelabuhan Klang Selangor Darul Ehsan
Purpose Office and warehouse Office, warehouse, laboratory and manufacturing plant Warehouse Warehouse(a) Warehouse(a) Approximate built-up area sq. ft.  12,836  24,982  12,500  3,000  4,000

Note: (aj Provision o/warehousing services by third party logistics company.
I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW (Collt’d) 6.6
Types, Sources and Availability of Materials 6.6.1 Purchases and Sources of Materials 2013  FYE 31 December 2014  2015  FPE 31 August 2016  Value of purchases RM’OOO  Percentage of total Group purchases 0/0  Value of purchases RM’OOO  Percentage of total Group purchases 0/0  Value of purchases RM’OOO  Percentage of total Group purchases %  Value of purchases RM’OOO  Percentage of total Group purchases %  Animal health products -Trading products -Raw materials  38,072 2,613  66.80 4.59  37,301 3,085  64.83 5.36  48,134 8,009  65.97 10.98  34,304 7,193  63.76 13.37  Food ingredients -Trading products  16,305  28.61  17,148  29.81  16,821  23.05  12,301  22.87  Total  56,990  100.00  57,534  100.00  72,964  100.00  53,798  100.00  Animal health products -Overseas -Local  38,598 2,087  67.73 3.66  37,656 2,729  65.45 4.74  52,918 3,225  72.53 4.42  39,127 2,370  72.73 4.41  Food ingredients -Overseas -Local  15,689 616  27.53 1.08  16,553 596  28.77 1.04  15,725 1,096  21.55 1.50  11,642 659  21.64 1.22  Total  56,990  100.00  57,534  100.00  72,964  100.00  53,798  100.00
Our total purchases of materials for the past three (3) financial years up to the FYE 31 December 2015 and FPE 31 August 2016 were primarily sourced overseas. The prices of our materials are subject to price fluctuations as a result of demand and supply conditions. However, the prices of our materials purchased have been relatively stable over the financial years! periods under review. Purchases of trading products for both animal health products and food ingredients comprise products distributed and traded by our Group which are sourced from third parties. On the other hand, raw materials are purchased by our Group for the manufacturing of our in-hollse products with our own brand names which consist of active ingredients, non-biological carriers and stabilisers. The increase in purchases for the past three (3) financial years up to the FYE 31 December 2015 is attributed to the increased demand by our customers for such products as evident by the increase in our Group’s total revenue generated for the past three (3) financial years up to the FYE 31 December 2015. 6. BUSINESS OVERVIEW (Conl’d)
6.6.2 Availability ofInputs We have not faced any shortage in the availability of inputs required by our Group over the last twelve (12) months. 6.7 Principal Markets
For the past three (3) financial years up to the FYE 3 I December 2015 and FPE 31 August 2016, our Group’s revenue was primarily derived from Malaysia whilst a small pOliion was derived from overseas market. A breakdown of our principal markets is illustrated in the table below: FYE 31 December  FPE 31 Angnst 2016 2013  2014  2015  RM’OOO  0/0  RM’OOO  0/0  RM’OOO  0/0  RM’OOO  0/0  Malaysia  83,330  99.54  90,017  98.35  105,242  98.60  76,088  97.59  Overseas*  385  0.46  1,512  1.65  1,494  1.40  1,881  2.41  Total  83,715  100.00  91,529  100.00  106,736  100.00  77,969  100.00
Note:
Includes Brunei, France, Indonesia, the Philippines, Singapore, Thailand and Vietnam. Kindly refer to Section 12.2.1.3 ofthisProspectusforji.lrtherbreakdown oftherevenuefromeachrespectiveoverseasmarket. 6.8 Marketing and Distribution Network 6.8.1 Marketing Strategies Our Group adopts several marketing strategies which include our TSP programme, seminars and events, advetiisements, referrals and feedback from customers for our animal health business segment. Our sales team comprises thirteen (13) personnel which is headed by Foong Kam Weng and supported by our technical and marketing team headed by Dr. Yip. Our technical and marketing team comprises thirteen (13) personnel of which ten (10) are veterinarians that carry out marketing activities, seminars and events as well as site visits to provide technical services to our customers. The marketing strategies initiated by our Group for our animal health business segment are as follows: (i) TSP Programme Our TSP programme is an approach that integrates our Group’s key strengths which includes the provision of technical and R&D services with the availability of over 300 types of animal health products to meet the needs and requirements of our customers. Through the TSP programme, our Group is able to ensure that the provision of animal health solution is customised to the needs and requirements of each customer. (ii) Seminars and Events Our Group organises and participates in seminars and events both locally and overseas. Such seminars and events serve as a platform for our Group to create awareness of our services and products and at the same time, allow us to identify new products and latest industry trends. 6. BUSINESS OVERVIEW (Collt’d)
(iii) Advertisements Our services and products are advertised through various mediums including brochures, local newspapers, radio, television, cinema and animal health industry magazines. (iv) Referrals
Our Group has been involved in the animal health industry for over fifteen (15) years. As at the LPD, we have more than 660 customers and many of our new customers have been introduced to our services and products through referrals from existing customers. (v) Feedbacl, from Customers Our sales and marketing team will carry out routine VISitS to our key customers’ premises to obtain feedback and address any problems that our customers may encounter. In addition, all our customers are encouraged to provide their feedbacks to us via our annual survey forms. Such feedback will allow our Group to better understand the requirements of our customers and improve our services and products to meet their demands. For our food ingredients business segment, we update our websites periodically to provide information on the type of food ingredients distributed by our Group. We employ cross-selling synergies to promote our food ingredients to our customers who are involved in various downstream activities within the poultry products industry. Our sales and marketing team works closely with our customers to attain a better understanding of their business operations and value chain. Should the opportunity arises, we will offer and promote our food ingredients to satisfy their needs and requirements. 6.8.2 Distribution Network Our Group’s distribution network comprises direct and indirect channels as depicted in the diagram below:
6. BUSINESS OVERVIEW (Cont’d) Note: Integrators refer to companies that are involved in various upstream and downstream activities
*
within the poultry and poullty products induslty. Upstream activities involve all the early phases in the poullt:y farming including breeding, production and raising of poultry whereas downstream activities involve meat processing and distribution of the processed parts and products within the pOllllty and poultry products industry value chain. Kindly r~/er to Paragraph 2.1.1, Section 7 of the Prospectus for jitrther details on the upstream and downstream activities within the poultry and poullty products industry. (i) Direct distribution network We distribute our products to end-customers directly. This provides us with the opp0l1unity to work closely with our customers to obtain feedback on their requirements in order to improve our services and products. (ii) Indirect distribution network Some of our products are distributed through intermediaries, which will then rely on their own distribution network to reach the end-customers. This will effectively expand our Group’s market coverage. Our Group does not enter into any contract with the end users or intermediaries for the provision of products and / or services save for the vaccination equipment agreements entered into between Rhone Ma Malaysia and some of our customers to grant the use of our vaccination equipment to administer the products purchased from the Group and a distribution agreement entered into between Rhone Ma Malaysia and a distributor to market and distribute our products in Indonesia. We do not provide any warranty policy on our products. 6.9 Key Achievements, Awards and Recognition The following table lists our Group’s key achievements, awards and recognition since our establishment: Year  Milestones  2000  Establishment of Rhone Ma Malaysia Establishment of Vet Food AgI’O Diagnostics Rhone Ma Malaysia obtained MS ISO 9001 :2000 Quality Management System certification from SIRIM QAS Sdn Bhd (now known as SIRIM QAS International Sdn Bhd) Rhone Ma Malaysia obtained OI-ISAS 18001:1999 Occupational Health and Safety Management Systems certification from SIRIM QAS International Sdn Bhd Establishment of Asia-Pacific Special Nutrients Vet Food AgI’O Diagnostics obtained MS ISO/IEC 17025 accreditation from the Department of Standards Malaysia for its Laboratory Quality Management System Establishment of Link Ingredients Vet Food AgI’O Diagnostics won the ‘Anugerah lnovasi Penyelididikan Bersama Antara Sektor Awal11 Dengan Sektor Swasta’ awarded by Chief Secretary to the Government of Malaysia Asia-Pacific Special Nutrients was awarded BioNexus status by Malaysian Biotechnology Corporation Sdn Bhd Rhone Ma Malaysia launched the TSP programme Asia-Pacific Special Nutrients achieved AA-rating under I-InnoCERT Rating (Innovation Certification for Enterprise Rating and Transformation)  2001  2003  2005  2007  2009  2010
6. BUSINESS OVERVIEW (Cont’d)
Year  Milestones  2011  Rhone Ma Malaysia won the Industry Achievement Award at the Malaysian Livestock Industry Awards 20 II Asia-Pacific Special Nutrients won a Gold Award at the BioInnovation Awards 20 II Manufacturing plant certified as GMP-compliant by NPRA Rhone Ma Malaysia recognised as one of the top 10 outstanding SMEs at the Golden Bull Award 2012 Asia-Pacific Special Nutrients was awarded one Gold and two Bronze Awards at the BioInnovation Awards 2012 Asia-Pacific Special Nutrients was awarded the SME 100 Award 2013 in SME 100 Award 2013 -Fast Moving Companies by SME & Entrepreneurship Magazine, Malaysia Asia-Pacific Special Nutrients was awarded the BioMedical Excellence Award 2013 by Malaysian Biotechnology Corporation Sdn Bhd Establishment of Rhone Ma Holdings Rhone Ma Malaysia won the Halal Hi-Tech Challenge 2015 organised by PlaTCOM Ventures Sdn Bhd Rhone Ma Malaysia was awarded the Product and Service Excellence Award under the Sin Chew Business Excellence Awards 2015 by Sin Chew Daily and sinchew.com.my Rhone Ma Malaysia received the Outstanding Animal Health Provider Award at the Malaysian Livestock Industry Awards 2015 Certified entry into the Malaysia Book of Records by Vet Food Agro Diagnostics for being the First Testing Laboratory Accredited MS ISOIIEC 17025 (Veterinary Field).  2012  2013  2014  2015  2016
6.10 Quality Control
Our Group places significant emphasis on the quality of our services and products. Our Group’s dedication to quality control has been recognised through the ISO 9001:2008 certification, MS ISO/IEC 17025:2005 accreditation and GMP celiification. 6.10.1 ISO 9001:2008
The QMS of Rhone Ma Malaysia received the ISO 9001 :2008 celiification for the trading of animal health products and provision of related services fi’om SIRIM QAS International Sdn Bhd and The International Certification Network (IQNet). The QMS aims to ensure high quality of services and timely deliverance to our customers. In addition, our Group has put in place a QMS manual which details the processes and procedures of the QMS. (a) Product Realisation Product realisation is a series of processes and sub-processes required to achieve the required results. Planning of the realisation processes shall be consistent with the other requirements of the QMS and shall be documented in a format suitable for Rhone Ma Malaysia’s method of operation. In planning the processes for realisation of products, the following shall be determined, as appropriate: (i) quality objectives and requirements of the service;
(ii) the need to establish processes and documentation, and provide resources and facilities specific to the services;

6. BUSINESS OVERVIEW (Cont’d)
(iii) verification, validation, monitoring, inspection actIvities, and the criteria for acceptability, compliance with documented procedures and quality plan; and (iv) ensuring records and documentation necessary to provide confidence of conformity of the processes and products meeting the requirements. (b) Measurements, Analysis and Improvement As part of the QMS, Rhone Ma Malaysia plans and implements the monitoring, measurement, analysis and continual improvement processes to achieve the following: (i) demonstrating conformity ofthe product requirements;
(ii) assuring conformity ofthe QMS; and

(iii) achieving continuous improvement of the effectiveness of the QMS. (c) Management Responsibilities Our management shall provide commitment to the development and improvement of the QMS by: (i) communicating to our employees the importance of meeting customers’ requirements, as well as regulatory and legal requirements;
(ii) establishing the quality policy and distributing them to our employees;

(iii) ensuring quality objectives are established and displayed openly as a sign of commitment. Our Group will also present both the quality policy and quality objectives to new staff during orientation; (iv) conducting management reviews; and
(v) ensuring the availability of necessary resources.

(d) Resource Management As part of our QMS, we will determine and provide, in a timely manner, the resources needed: (i) to implement and maintain the QMS and continually improve on its effectiveness; and
(ii) to ensure client satisfaction.

6.10.2 MS ISO/lEe 17025:2005 Vet Food Agro Diagnostics’ laboratory is accredited with the MS ISO/lEe I7025 :2005 by the Department of Standards Malaysia under the fields of veterinary, biological and chemical testing, covering more than 200 types of test. 6. BOSINESS OVERVIEW (Cont'(/) 6.10.3 GMP
Our plant is certified as GMP-compliant by NPRA in 2012 for the manufacturing of powder-based and liquid-based animal health products. GMP is a system established to ensure that our products are consistently manufactured, stored and controlled to the quality and safety standards appropriate for their intended use and in accordance with their registration particulars and specifications. The basic requirements of GMP include, amongst others, the following: (i) all manufacturing processes are clearly defined and are systematically reviewed;
(ii) critical steps of manufacturing process and significant changes made to the manufacturing process are validated;

(iii) all necessary facilities for GMP are provided which include: (a) qualified, trained and / or experienced personnel;
(b) adequate premise and space;
(c) suitable equipment and services;
(d) correct materials, containers and labels;
(e) manufacturing process and instructions are approved and In accordance with GMP guidelines; and
(f) suitable storage facility and transportation.

(iv) instructions and procedures of the manufacturing processes are written clearly and unambiguous;
(v) proper records are to be kept during the manufacturing process to ensure that all steps required are in accordance to the defined procedures and instructions. Significant deviations from the aforementioned defined procedures and instructions are recorded and investigated;
(vi) retain and make accessible, records of manufacture including distribution information to enable the traceability of manufactured batches;

(vii) put in place a system that is able to recall any batch of products from sale or supply; and (viii) conduct examination of feedbacks about marketed products, the causes of quality defects investigated as well as take appropriate corrective and preventive measures in respect of defective products and to prevent re­occurrence. 6. BUSINESS OVERVIEW (Cont’d) 6.11 Technology Used
Our Group relies on the technology embedded in our machineries as detailed in Section 6.18.3 of this Prospectus for the manufacturing of our animal health products. In addition, our Group is using a password protected online system, VetLab Reporting System that provides customers with immediate reporting on the results of laboratory diagnostic analysis via a secure web login process. Our customers are able to access faster to the results of the laboratory diagnostic analysis through this system. Our Group also relies on the following laboratory equipment that are used to provide diagnostic laboratory analyses: Equipment  Description  LightCycler 480  A type of real-time PCR system that is able to provide medium to high­ throughput  real-time  platform  that  provides  various  methods  for  gene  detection, gene expression analysis and genetic variation analysis.  Liquid  An analytical chemistry technique that combines the physical separation  chromatography ­ capabilities  of  liquid  chromatology  (or  high-performance  liquid  mass spectrometry  chromatography) with the mass analysis capabilities of mass spectrometry.  High performance  A technique in analytic chemistry used to separate the components in  a  liquid chromatography  mixture, to identitY and quantify each component.  Crystal Identification  A  miniaturised  identification  method  employing modified conventional,  System  flu orogenic and chromogenic substrates. It is intended for the identification  of frequently isolated anaerobic, aerobic, enteric and fastidious bacteria.
Save as disclosed above, our Group does not use any other identified technology. 6.12 R&D
Our Group has the capability of providing R&D services which are carried out at our in-house R&D facility as part of our TSP programme and we are not dependent on any third party to carry out R&D activities. In addition, we also undeliake R&D activities to continuously develop new products and improve on existing products offered by our Group. 6.12.1 R&D Facilities
Our R&D facility and laboratory is currently located at our head office in Petaling Jaya, Selangor Daml Ehsan. Our R&D facility and laboratory are fitted with the required machineries and equipment to carry out our R&D activities. 6.12.2 R&D Team
As at the LPD, our R&D team consists of eight (8) members who are led by our Group Marketing & Technical Director, Dr. Yip. In addition, our Group also collaborates with external parties that include local universities and other international researchers, covering areas such as veterinary disease investigation, diagnosis, control, treatment and prevention to enhance our R&D activities. 6.12.3 R&D Milestones and Achievements As at the LPD, our Group has managed to develop eleven (11) pharmaceuticals and thilieen (13) feed additives. The pharmaceuticals and feed additives are also manufactured by our Group as disclosed in Section 6.2.1.2 of this Prospectus whilst the three (3) notable test kits (part of pharmaceuticals) developed by our Group are as follows: 6. BUSINESS OVERVIEW (C0I11’d)
Product name  Description  Year commissioned  Classification  QUICK test kit water  An eight (8) in one (1) test kit that is used for routine monitoring of the quality of animal drinking water and for the detection of contaminants in the drinking water. The test kit is able to detect coliforms, free chlorine, chloride, hardness, alkalinity, pH and nitrate / nitrite. This QUICK water test kit enables farmers or veterinarians to monitor the quality of animal drinking water in real time with easy steps, followed by the identification of the cause of contamination and actions to rectify it, to prevent further losses.  2013  Pharmaceuticals  Multi Porcine  Facilitates the detection of porcine  2010  Pharmaceuticals  Derivatives  derivatives in food, which IS  Detection Kit  crucial for the Halal authentication in food products. The detection kit employs Multiplex PCR technology to detect three (3) different porcine mitochondrial genes instead of a single gene as compared to other commercialised test kits.  CytoStain Plus  A four (4) second stain that delivers differential staining for blood, blood parasites, tissue, bacteria and fungi. It is a quick stain, cost-effective and offers good contrast and differentiation in cell and tissue morphology.  2006  Pharmaceuticals
In addition, our R&D team is capable to conduct disease surveillance which enables our Group to inform customers and the industry on latest disease situations as well as efficacy of certain vaccines available in the market. Some of the researches performed by our Group or with other institutions are as follows. Event for presentation of research Title of research findings Phylogenetic Characterisation of Porcine 22nd Intemational Pig Veterinary Circovirus Type 2 (PCV2) tn Malaysia Society Congress, Jeju, South Korea, Characterisation ofPCV2 in Malaysia 2012 An Update on the Status of Porcine Reproductive 6th Asian Pig Veterinary Society and Respiratory Syndrome Virus (“PRRSV”) Congress, Ho Chi Minh, Vietnam, Isolated in Malaysia 2013 A Report on Antibiotic Resistance of Escherichia 26th Veterinary Association Malaysia coli Isolated from Veterinary Samples in Malaysia Congress, 2014 from 2010 to 2013 Occurrence of variant infectious bronchitis virus World Veterinary Poultry (QX-like and 793/B strain) in Peninsular Malaysia Association, Bangkok, Thailand, 2014 6. BUSINESS OVERVIEW (Collt’d)
Title of research A High Resolution Melting (HRM) analysis to differentiate the Villegas-Glisson / University of Georgia (VG/GA) Avinew Strain from virulent Newcastle disease virus strains and pathotypes  Event for presentation of research findings 19th World Veterinary Poultry Congress 20 IS, Cape Town, South Africa Bio Med Central (BMC) Veterinary Research, 20 IS International Pig Veterinary Congress (IPVS) Ireland, 2016  Observation of risk factors, clinical manifestations and genetic characterisation of recent Newcastle Disease Virus outbreak in West Malaysia  Genetic Characterization of ORF5 and ORF7 from an atypical PRRSV case in 2014 in Malaysia
6.12.4 R&D Expenditures
Our Group’s R&D expenditures for the past three (3) financial years up to the FYE 31 December 2015 and FPE 31 August 2016 are as follows: R&D expenditures RM’OOO  Percentage of revenue %  FYE 31 December 2013  1,645  1.97  FYE 31 December 2014  1,412  1.54  FYE 31 December 2015  1,691  1.58  FPE 31 August 2016  1,310  1.68
6.12.5 Future R&D Directions / Development Our Group’s future R&D directions will focus on the development of new pharmaceuticals and feed additives. The table below shows the products that are currently under development: Percentage  Product category  Type of products  Product name  Current progress  of completion  Expected date of commercialisation .  Pharmaceuticals  Antimicrobial  • Rhomiquyl  Formulation study  10%  Fourth (4th) quarter 01’2017 Third Ofd) quarter • Rhotarsin 20  Formulation  60%  WSP  study  01’2017 Fi rst (I st) qUalier of 2017 Second (2nd ) quarter  Disinfectants  • Farmsafe Max  Formulation study  50%  • Iodine  Formulation  20%  Solution  study  0[2017 Decembel’ 20 16 Feed additives  Antimicrobial  • Florxin 20 FG  Approved by  100%  NPRA on 30  • Tyloxin FG  June 2016  Fourth (4th ) quarter 01’2017  Formulation study  20%
Note:
The expected date ofcommercialisation is sll~iect to approvalFom NPRA. -78 ­I Company No.: IIHi225-A I 6. BUSINESS OVERVIEW (Cont’d)
6.13 Brand Names, Registrations and Trademarks 6.13.1 Trademarks
Our Group has registered or applied for the registration of the following trademarks with the Intellectual Property Corporation of Malaysia as at the LPD: Registered trademarks No.  Trademark  Registered owner  Trademark no.  Class  Description  Condition  Validity period  Type of products attached  1.  I.  Rhone Ma Malaysia  02002891  16  Note a  – 19.03.2012 to 19.03.2022  Vaccines, pharmaceuticals and feed additives  2.  II  Rhone Ma Malaysia  02002895  16  Note a  – 19.03.2012 to 19.03.2022  Vaccines, pharmaceuticals and feed additives  3.  r:JeII.  Rhone Ma Malaysia  08009856  44  Note b  – 20.05.2008 to 20.05.2018  Animal health services  4.  TSP  Rhone Ma Malaysia  09000637  44  Note b  – 15.01.2009 to 15.01.2019  Animal health services  5.  TSP  Rhone Ma Malaysia  09000638  10  Note c  – 15.01.2009 to 15.01.2019  Pharmaceuticals  6  TSP  Rhone Ma Malaysia  09000640  5  Note d  – 15.01.2009 to 15.01.2019  Animal health services  7.  (lllStain)  Asia-Pacific Special Nutrients  07016346  10  Note c  – 20.08.2007 to 20.08.2017  Pharmaceuticals
-79 ­[ Company ~o.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
No.  Trademark  Registered owner  Trademark no.  Class  Description  Condition  Validity period  Type of products attached  8.  ~  Asia-Pacific Special Nutrients  07016347  10  Note c  Registration of this trademark shall give no right to the exclusive use of the letters and symbol “R&D”.  20.08.2007 to 20.08.2017  Pharmaceuticals  9.  !IIJ …  Asia-Pacific Special Nutrients  07016348  44  Note b  Registration of this trademark shall give no right to the exclusive use of the letters and symbol  20.08.2007 to 20.08.2017  Animal health services  “R&D”.  10.  m g  Asia-Pacific Special Nutrients  08009861  5  Note e  Registration of this trademark shall give no right to the exclusive use of the letters and symbol “R&D”.  20.05.2008 to 20.05.2018  Animal health services  II.  Asia-Pacific  09001488  44  Note b  – 04.02.2009  Animal health  Special  to  services  ~  Nutrients  04.02.2019  ~  12.  Asia-Pacific  09001489  5  Note e  – 04.02.2009  Animal health  Special  to  services  ~  Nutrients  04.02.2019  ~
-80 ­I Company “10.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
No.  Trademark  Registered owner  Trademark no.  Class  Description  Condition  VaJidity period  Type of products attached  13.  fi’  Asia-Pacific Special Nutrients  09001490  10  Note c  – 0402.2009 to 04.02.2019  Pharmaceuticals  fi’  14.  T….. ,…””e~ ~ ~  Asia-Pacific Special Nutrients  09002187  10  Note c  Registration of this trademark shall give no right to the exclusive use of the device of”molecule”.  16.02.2009 to 16.02.2019  Pharmaceuticals  ~’.  15.  “,…T ……~ ~ ~ ……….–‘.•T ….. ,………—­~ . ~’.•T ….. ,…….–­~ .~ ~’.  Asia-Pacific Special Nutrients  09002188  5  Note e  Registration of this trademark shall give no right to the exclusive use of the device of”molecule”.  16.02.2009 to 16.02.2019  Animal health services
-81 ­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
No.  Trademark  Registered owner  Trademark no.  Class  Description  16.  ‘-.~t.~, ~ ~e””‘­.~ e..;..~T-.~, ~ ~e””‘­J,  Asia-Pacific Special Nutrients  09002189  44  Noteb  17.  ROBOTIX  Asia-Pacific Special Nutrients  2010000972  44  Note b  18.  SPARROX  Asia-Pacific Special Nutrients  2010000974  9  Note f  19.  MERIMYCIN  Asia-Pacific Special Nutrients  2012007678  5  Note g  20.  RHOMICOSIN  Asia-Pacific Special Nutrients  2012007679  5  Note g  21.  RHONAMOX  Asia-Pacific Special Nutrients  2012007680  5  Note g  22.  RHOLYTE  Asia-Pacific Special Nutrients  2012007682  5  Note g  23.  DR RHONE  Asia-Pacific Special Nutrients  2012007681  5  Noteg
Condition  – – – – – – – By  consent  of  the  registered  proprietor  of the  trademark  no.  08009856.
Validity  Type of products  period  attached  16.02.2009  Animal health  to  services  16.02.2019  19.01.2010  Animal health  to  services  19.01.2020  19.01.2010  Animal health  to  services  19.01.2020  10.05.2012  Pharmaceuticals  to  10.05.2022  10.05.2012  Phannaceuticals  to  and feed additives  10.05.2022  10.05.2012  Phannaceuticals  to  and feed additives  10.05.2022  10.05.2012  Pharmaceuticals  to  10.05.2022  10.05.2012  Phannaceuticals  to  10.05.2022

-82­~mpany No.: 1116225;] 6. BUSINESS OVERVIEW (Cont’d)
No.  Trademark  Registered owner  Trademark no.  Class  Description  24.  Q Link Ingredients  Link Ingredients  2013001669  30  Note h  25.  G Link Ingredients  Link Ingredients  2013001670  31  Note i  26.  VETLAB  Vet Food Agro Diagnostics  2010000973  9  Note f  27.  VETLAB  Vet Food Agro Diagnostics  2010001087  44  Note b
Condition Registration of this trademark shall give no right to the exclusive use of the words “Link Ingredients”. Registration of this trademark shall give no right to the exclusive use of the words “Link Ingredients”. –Validity  Type of products  period  attached  30.01.2013  Food ingredients  to  30.01.2023  30.01.2013  Food ingredients  to  30.01.2023  19.01.2010  Animal health  to  services  19.01.2020  20.01.2010  Animal health  to  services  20.01.2020

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Applications have been submitted but pending approval for registration No.  Trademark  Applicant  Class  Description  Application no.  Application date  1.  -I:.  Rhone Ma Malaysia  5  Note e  08009855  20.05.2008  2.  ~ IIP Products Services Solutions  Rhone Ma Malaysia  5  Note d  2015058210  29.05.2015  3.  Products Services Solutions  Rhone Ma Malaysia  10  Note c  2015058209  29.05.2015  4.  ProduClS Services Solutions  Rhone Ma Malaysia  44  Note b  2015058208  29.05.2015  5.  ‘JWMm ‘JWMm ‘.1WMm ‘JWMm ~WMm ~~  Asia-Pacific Special Nutrients  44  Notej  08004940  14.03.2008  6.  Rhobazin Plus  Asia-Pacific Special Nutrients  5  Note k  2016055507  29.03.2016  7.  Cytostain  Asia-Pacific Special Nutrients  5  Note 1  2016057429  22.04.2016  8.  mil  Vet Food Agro Diagnostics  5  Note m  2014063174  05.09.2014  9.  mil  Vet Food Agro Diagnostics  44  Note n  2014063171  05.09.2014
6. BUSINESS OVERVIEW (Collt’d) Notes: (a)
(b)
(c)
(d)
(e)

(j) (g)
(h)

(i) (;) (k) (I)
Logo, name card; letterhead; signboard made ofpaper or cardboard; paper and paper articles; cardboard and cardboard articles (not included in other classes); printed matter and publications; plans; periodicals, newsletters; blueprints; brochures; pamphlets; handbooks; advertising mats ofpaper or cardboard, poster, photographs; calendars, display signs ofpaper or cardboard, cardboard store signs; label (non-textiles) and decals, stickers, business printing information; envelop, receipts, invoices; plastic materials for packaging; wrapping paper; adhesive materials for office or household purposes; charts; sacks and bags of paper or plastics for wrapping and packaging; pens; pencils; note books; stencil paper; memo paper; index cards (stationer)’); ledgers book; graph papers; books; atlases; all iucluded in Class 16, Veterinw)’ services and assistance; medical services and assistance; all included in Class 44, Testing apparatus, instruments and kits for medical purposes; surgical, medical, dental and veterinary apparatus and instruments; all included in Class 10, Pharmaceutical and veterinm)’ preparations; biological preparations for medical and veterinary plllposes; bacterial and bacteriological preparations for medical and veterinary use; bacteriological cultures; bloodfor medical plllposes; blood plasma; enzymes and enzyme preparations for medical and veterinary pUiposes; culWres ofmicroorganisms for medical and veterinary use; all included in Class 5, Veterinary and pharmaceutical preparations; biological preparations for veterinary, medical or pharmaceutical purposes; chemical preparations for veterinary, medical or pharmaceutical purposes; chemical reagents for medical or veterinw)’ plllposes; diagnostic preparations for veterinary or medical purposes; dietetic substances adaptedfor medical use; drugs for medical purposes; enzyme preparations for veterinm)’, medical and pharmaceutical purposes; medicines for veterinary purposes; cultures and preparations of microorganism for veterinary and medical pwposes; food preparations adapted for wedical purposes; all included in Class 5,
Bar code readers; computer programs, computer software, data processing apparatus; all included in Class 9, Antibiotics; antiseptics; bicarbonate of soda for pharmaceutical purposes; chemical preparations for veterinary purposes; chemico-pharmaceutical preparations; dietary supplements for animals; fungicides; glucose dietw)’ supplements; glucose for medical purposes; medicines for veterinw)’ purposes; pharmaceutical preparations; potassium salts for medical purposes; pharmaceutical preparations for skin care; sodium salts for medical purposes; veterinary preparations; all included in Class 5, Bakingpowder; bakingsoda (bicarbonate ofsodafor cookingpurposes); bicarbonate ofsoda for cooking purposes (baking soda); binding agents for ice cream (edible ices); corn flour; corn meal; essencesforfoodstuffs, except etheric essences and essential oils; flavourings, other than essential oils; flavorings, other than essential oils, for beverages; flavourings, other than essential oils, for cakes; glucose for culinary plllposes; gluten additives for culinary purposes; gluten prepared as foodstlrff; honey; maize flour; malt extract for food; malt for human consumption; maltose; oat-based food; potato flour for food; cake powder; powders for ice cream; salt for preserving foodstuffs; sago; tomato sauce; sausage binding materials; seasonings; soya flour; starch for food; natural sweeteners; tapioca flour for food; thickening agents for cooking foodstzrffs; vanilla (flavoring) (flavouring); vanillin (vanilla substitute); \vheat flour; wheat germ for human consumption; preparations for stifjening whipped cream; yeast; all included in Class 30, Algae for huwan or animal consumption; raw barks; maize; wheat; wheat germ for animal consumption; yeastfor animal consumption; all included in Class 31, VeterinGl)’ services and assistance; medical services and assistance; fertilizers and other agricultural chemicals; pharmacy advice; all included in Class 44, Antibiotics; antiparasitic collars for animals; antiparasitic preparations; biological preparations for veterinary pwposes; chemical preparations for pharmaceutical plllposes; chemical preparations for veterinary pwposes; chemical reagents for medical or veterinary pwposes; drugs for medical pwposes; medicines for veterinw)’ plllposes; cultures of microorganisms for wedical and veterinary use; pharmaceutical preparations; poisons; chemical reagents for medical or veterinw)’ purposes; veterinary preparations; all included in Class 5, Biological preparationsfor medical purposes; biological preparations for veterinary purposes; bloodformedical pUI/Joses; bloodplasma; chemicalpreparationsforpharmaceuticalplllposes; chemical preparations for veterinary plllposes; chemical reagents for medical or veterinary plll/Joses; diagnostic preparations for medical purposes; haemoglobin; chemical reagents for medical or veterinary purposes; veterinwJ’ preparations; all included in Class 5, -85 ­6. BUSINESS OVERVIEW (Cont’d)
(m) Animal washes; antibiotics; bacterial preparations for medical and veterinwy use; bouillons for bacteriological cultures; media for bacteriological cultures; bacteriological preparations for medical and veterinary use; biocides; biological preparations for veterinwy purposes;
biological tissue cultures for veterinwy purposes; chemical preparations for veterinwy purposes; chemical reagents for medical or veterinary purposes; cultures qf microorganisms for medical and veterinary use; diagnostic preparations for medical plllposes; bacteriological culture mediums; nutritive substances for microorganisms; preparations qfmicroorganismsfor medical and veterinary use; veterinGly preparations; all included in Class 5.
(n) Animal grooming; pet grooming; veterinary assistance; all included in Class 44.

I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I [COffiPany No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
6.13.2 Patents Our Group has registered or applied for the registration ofthe following patents as at the LPD: Registered patents No.  Patent title  Patent owner  Country of registration  Patent no.  Filing date  Expiry date  l.  An improved microplate  Asia-Pacific Special Nutrients  Malaysia  MY-1452l6-A  26.06.2009  26.06.2029  2.  Detection of porcine derivatives  Asia-Pacific Special Nutrients  Malaysia  MY-153l52-A  24.04.2009  24.04.2029  3.  An internal amplification control for polymerase chain reaction  Asia-Pacific Special Nutrients  Malaysia  MY-153643-A  06.11.2009  06.11.2029
Applications have been submitted but pending approval for registration No.  Patent title  Applicant  Country of registration  Application no.  Filing date  1.  A universal polymerase chain reaction  Asia-Pacific Special Nutrients  Malaysia  PI 20093284  07.08.2009  2.  A method for differentiating vaccine-type from wild-type microbial strain  Asia-Pacific Special Nutrients  Malaysia  PI 20094788  11.11.2009  3.  High resolution melt genotyping ofIBV, CSFV and NDV  Asia-Pacific Special Nutrients and Merial Limited  USA  61/738,688 and 14/1 09, 104  18.12.2012 and 17.12.2013  4.  High resolution melt genotyping ofIBV, CSFV and NDV  Asia-Pacific Special Nutrients and Merial Inc.  *  PCTIUS20 13/075695  17.12.2013  5.  High resolution melt genotyping ofIBV, CSFV and NDV  Asia-Pacific Special Nutrients and Merial Limited  Taiwan  102146755  17.12.2013
Note:
An international application filed under the Patent Cooperation Treaty (World Intellectual Property Organisation) through United States Patent and Trademark Of/ice as the receiving of/ice. The application has entered into national phase in the following countries namely, Australia, New Zealand, European Patent Office, Japan. Republic of Korea. the Philippines, Canada, PRC, Singapore, Penl, Colombia, Indonesia, Thailand, India, Vietnam, Brazil, Mexico, Qatar, Saudi Arabia, Chile, United Arab Emirates and Malaysia.
-87­6. BUSINESS OVERVIEW (COllI’d)
6.14 Dependency on Commercial Contracts / Agreements / Other Matters Save for the trademarks, patents and major licences as disclosed in Sections 6.13.1, 6.13.2 and 6.17 of this Prospectus and the agreements below, our Group is not dependent on any contracts, arrangements or any matters that could materially affect our business as at the LPD: (i) A distribution agreement dated 7 November 2000 between Rhone Ma Malaysia and Merial SAS (“Merial”) as amended on 31 July 2001, 31 January 2003, 6 June 2003 and 23 July 2014 whereby Merial grants Rhone Ma Malaysia the exclusive right to market and sell Medal products in Malaysia for non-avian products and Malaysia, Brunei and Singapore for avian products (“Territory”). The salient terms of the agreement are as follows:
(a) the agreement is effective from 1 January 2001 for an initial term ofthree (3) years;
(b) the agreement will be renewed automatically for subsequent terms of two (2) years each, unless terminated by either party by giving at least ninety (90) days’ written notice before the expiry ofthe term;
(c) Medal may terminate the agreement by giving three (3) months’ prior notice if Rhone Ma Malaysia is no longer managed and controlled by Dr. Lim, Foong Kam Weng, Dr. Yip, Dr. Raymond Choo and Chan Chew Yen (“Change”). These five (5) persons are deemed to have control of Rhone Ma Malaysia if they own, directly and / or indirectly, fifty percent (50%) of Rhone Ma Malaysia’s voting shares. Rhone Ma Malaysia must inform Merial immediately when such Change occurs;
(d) Rhone Ma Malaysia will purchase a minimum quantity of the products from Merial every year (“Target”). The Target will be revised annually after discussion between the pmiies;
(e) If the pmiies cannot agree on the establishment ofa Target for any pmiicular year, the previous years’ Target plus a fixed percentage will be adopted. Merial can terminate the agreement without any compensation to Rhone Ma Malaysia by giving ninety (90) days’ prior notice if the parties cannot establish the Target for two (2) years continuously. Medal may waive its right to remove Rhone Ma Malaysia’s distribution rights if Rhone Ma Malaysia cannot meet Medal’s marketing plan of the products in any year due to disaster or destruction of animals;
(f) Merial can terminate the agreement by giving a thiliy (30) days’ prior notice or delete specific product(s) from the agreement without any compensation to Rhone Ma Malaysia, if Rhone Ma Malaysia cannot meet celiain percentage of the Target set for the product(s) on a given period; and
(g) the agreement is governed by the laws of Singapore.

 

(ii) A distribution agreement dated I October 2015 between Roquette Singapore Pte Ltd (“RSP”) and Link Ingredients whereby RSP grants Link Ingredients the non­exclusive distribution rights in Malaysia of the products as set out in the agreement. The salient terms of the agreement are as follows:
(a) RSP may exclude or add other product(s) to the agreement by giving three
(3) months’ notice without any compensation to Link Ingredients;
(b) the delivery to Link Ingred ients shall be composite full loads of the products approximating eighteen (18) metric tonnes deliveries and be minimum one
(I) full container load by sea; 6. BUSINESS OVERVIEW (COlll’d)

(c) the agreement is effective from 1 October 2015 for two (2) years;
(d) the agreement will be renewed from year to year if both parties decide to continue the distribution at the end of the term. Each patiy may terminate the agreement at any time by giving six (6) months’ prior notice;
(e) RSP may terminate the agreement at any time and without prior notice in the event of serious misconduct by Link Ingredients or a change in Link Ingredients’ legal structure, management or financial situation; and
(f) the agreement is governed by the laws of Singapore.

 

6.15 Major Customers
The table below lists the customer that accounted for ten percent (10%) or more of our Group’s revenue for the past three (3) financial years up to the FYE 31 December 2015 and FPE 31 August 2016:
Customer  Type of products  Length of relationship as at the LPD  FYE 31 December  FPE 31 August 2016 2013  2014  2015  Years  RM’OOO  %  RM’OOO  0/0  RM’OOO  %  RM’OOO  %  An established bread manufacturer in Malaysia (“Customer A”)  Starch, modified starch, sweetener, vegetable protein, vegetable powder, lubricant and food additive  5  9,425  11.26  12,498  13.65  11,660  10.92  7,751  9.94
Customer A has been our customer since the commencement of our food ingredients business segment in 2011, which demonstrates the stable and long-term business relationship that we have with Customer A. In addition, our Group has enjoyed long-term business relationships with our customers. As at the LPD, we have more than 660 customers and over 130 of our customer have had dealings with us from as early as 2005. This provides us with a stable customer base to sustain and grow our business. 6.16 Major Suppliers
The table below lists the suppliers that accounted for ten percent (10%) or more of our Group’s purchases for the past three (3) financial years up to the FYE 31 December 2015 and FPE 31 August 2016: Suppliers  Type of products  Length of relationship as at the LPD  FYE 31 December  FPE 31 August 2016 2013  2014  2015  Years  RM’OOO  %  RM’OOO  0/0  RM’OOO  %  RM’OOO  %  Merial Group  Animal health products comprising vaccines, pharmaceuticals and feed additives  15  25,847  45.35  25,490  44.30  31,072  42.59  23,481  43.65  Raquette Group  Food ingredients  5  15,Q70  26.44  15,813  27.48  16,854  23.10  12,356  22.97
6. BUSINESS OVERVIEW (Cont’d)
Our Group is dependent on the abovementioned suppliers for the distribution rights of certain animal health products and supply of food ingredients. However, we have cultivated strong and good business relationships with the suppliers through periodic meeting with the suppliers to provide feedback on the products, timely settlement of amount payable and provide adequate lead time between placement of an order and delivery ofthe products. In the past, we have not experienced any difficulty in obtaining supplies of animal health products and food ingredients from our suppliers. There is no competition between our in-house manufactured animal health products and products purchased from the Merial Group as our in-house manufactured products consist of different ingredients which are used for the treatment of different disease and different type of parasite infestations as compared to Merial’s products. FUl1her, our Group does not manufacture any food ingredients and majority of our food ingredients are sourced fi·om the Roquette Group. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
6.17 Approvals, Major Licences and Permits As at the LPD, save as disclosed below, there are no other approvals, major licenses and permits obtained by our Group.
Licence no. 1 Certificate no. 1
Issuing No. Reference no. authority Rhone Ma Malaysia LTPP 1604614 Majlis Bandaraya Petaling laya I. 2. Majlis Bandaraya Petaling laya LTPPI604618 Board of Architects Malaysia 3. LAM/S/No.3291 4. SEL 2014/3891134(Sl) Department of Agriculture Malaysia 5. MALLP20151361A Ministry of Health Malaysia Subject matter 1Purpose
Licence for trades, business and industries to store animal medications and operate an administrative office at Lot 18A, lalan 241, Seksyen 51A, 46100 Petaling laya, Selangor Darul Ehsan Licence for trades, business and industries to import 1 distribute animal medications 1 animal feed, manufacture and process animal medications 1 animal feed and to display illuminated and non-illuminated advertisements at Lot 18B, lalan 241, Seksyen 51 A, 46100 Petaling laya, Selangor Darul Ehsan Certificate of Completion and Compliance issued for the amendment plan to the approved plan to build on the existing factory on Lot 18A & 18B, lalan 241, Seksyen 51A, 46100 Petaling laya, Selangor Darul Ehsan Licence to sell pesticides Manufacturer’s licence Major conditions imposed Issue 1  Expiry date  Renewal  1Validity  date  period
18.12.2015  01.01.2016 to  31.12.2016  18.12.2015  01.01.2016 to  31.12.2016  08.06.2015  – 29.09.2014  29.09.2014 to  28.09.2017  13.11.2015  01.01.2016 to  31.12.2016
Licence must be displayed at the premises. Licence must be displayed at the premises. -This licence shall be displayed. For products to which the Control of Drugs and Cosmetics Regulations 1984 apply, the holder of this licence is allowed to manufacture only the registered products as approved by the Drug Control Authority.
Status of compliance  Complied  Complied  N/A  Complied  Complied
-91 ­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d) No.  Licence no. / Certificate no. / Reference no.  Issuing authority  6.  MALLl20151376A  Ministry of Health Malaysia  7.  B 004432  Fisheries Development Authority of Malaysia  8.  064959  Health Department, State ofSelangor  9.  064916  Health Department, State ofSelangor  10.  AMH(B)(C)20151 I 1­2016  Feed Board

Subject matter / Purpose Import licence Licence to deal, import, export and process fish at Lot 18B, Jalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Daml Ehsan Pharmacist’s poisons licence (Type A licence) issued to Law Sok Fern with the business address of Lot 18A & 18B, Jalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Daml Ehsan to import, store and deal generally in all poisons by wholesale onl/b) Pharmacist’s poisons licence (Type A licence) issued to Chan Khai Xuen with the business address of Lot 18A & 18B, Jalan 241, Seksyen 51 A, 46100 Petaling Jaya, Selangor Daml Ehsan to import, store and deal generally in all poisons by wholesale onl/b) Licence to import feed additives specified in the licence under the Feed Act 2009 Issue /  Expiry date  Renewal  / Validity  date  period  13.11.2015  01.01.2016 to  31.12.2016  07.03.2016  March 2017  17.11.2015  01.01.2016 to  31.12.2016  16.11.2015  01.01.2016 to  31.12.2016  31.12.2015  31.12.2015 to  31.12.2016
Major conditions imposed A copy of authentic invoice and certificate of analysis for each group of imported goods shall be submitted to the authority upon receipt of each consignment. For products to which Control of Drugs and Cosmetics Regulations 1984 apply, the holder of this licence is allowed to import only the registered products as listed in the attachment to the licence. Dealing and processing shall be conducted at the place specified in the licence only. Subject to the provisions of the Poisons Act 1952 and of any regulations made under it and such other terms and conditions specified in it. Subject to the provisions of the Poisons Act 1952 and of any regulations made under it and such other terms and conditions specified in it. Any importation of feed or feed additives must be for the purposes declared by the Feed Board.
Status of compliance  Note (a) Complied  Complied  Complied  Complied  Complied
-92 ­I Company No.: 1116225-AJ 6. BUSINESS OVERVIEW (Cont’d)
Licence no. /  Issue /  Expiry date  Certificate no. /  Issuing  Renewal  / Validity  Status of  No.  Reference no.  authority  Subject matter / Purpose  date  period  Major conditions imposed  compliance  II.  AMH(G)022016114­ Feed Board  Certificate  of Registration  of Seller of  30.03.2016  30.03.2016 to  N/A  2016(10)  Feed or Feed Additive issued to Dr. Lim  29.03.2017  of Rhone  Ma  Malaysia  with  business  address at Lot  18A &  18B, Jalan 241,  Seksyen  51 A,  46100  Petaling  Jaya,  Selangor Daml Ehsan
12. JPV :PSTT/I 00-3/1 /33 Ministry of Agriculture and Agro-Based Industry Asia-Pacific Special Nutrients Malaysian I00076/LOA-TAX/afh 13. CSSD/BNX-Biotechnology Corporation Sdn Bhd (“Biotech Corp”)
Notification on the status of import, I 05.08.2016 manufacture and sale of feed additives under the Feed Act 2009(c) Letter of award of BioNexus Status and tax incentive issued to Asia-Pacific Special Nutrients with address at Lot 18B, Jalan 241, Seksyen 51A, 46100 Petaling Jaya granting 100% tax exemption of the statutory income for a period of ten (10) years to conduct the following qualifying activities: Research, development, manufacturing and sale of diagnostic products for use in veterinary, food, agriculture and medical / pharmaceutical applications (“Qualifying Activities,,)(d)(e) 29.09.2008 31.12.2016 Effective 23.07.2007 (i) The notification must not be used when licence or registration certificate has been issued.
(ii) The notification does not exempt the applicant from the requirements of other relevant act.
(i) Asia-Pacific Special Nutrients must undertake continuous R&D on new diagnostic kits production as proposed.
(ii) Asia-Pacific Special Nutrients must invest at least 5% of its annual revenue in R&D.

(iii) Asia-Pacific Special Nutrients must employ at least 40% knowledge workers of its total workforce.(f) (iv) Any change to the Qualifying Activities must have prior written approval of Biotech Corp.
(v) Asia-Pacific Special Nutrients must not conduct any activities other than the Qualifying Activities.(g)
(vi) Asia-Pacific Special Nutrients must commence the Qualifying Activities within one (I) year from the date of the letter of award.

Complied Pending compliance (g)
-93 ­I Company No.: 1116225-1\ I 6. BUSINESS OVERVIEW (Cont’d)
No.  Licence no. / Certificate no. / Reference no.  Issuing authority  Subject matter / Purpose  Issue / Renewal date  Expiry date / Validity period

Major conditions imposed (vii) Asia-Pacific Special Nutrients must conduct the Qualifying Activities at the following location: Lot 18B, Jalan 241, Seksyen 5 IA, 46100 Petaling Jaya, Selangor, Malaysia. (viii) Where there is a change in the location of Asia-Pacific Special Nutrients’ operations from the address specified in the letter of award, Asia-Pacific Special Nutrients must immediately notify Biotech Corp in writing. (ix) Where there are justifiable reasons for relocating any portion of the Qualifying Activities to be conducted outside of Malaysia on a temporary basis, Asia-Pacific Special Nutrients must seek prior written approval of Biotech Corp, which may in its sole discretion evaluate the proposal, and if approved, such approval may be subject to conditions as Biotech Corp deems fit.
(x) Permanent relocation outside Malaysia will result in the revocation ofthe BioNexus Status.
(xi) Asia-Pacific Special Nutrients must immediately notify Biotech Corp of:

(a) any circumstances that have occurred that would materially affect Asia-Pacific Special Nutrients or its performance of the Qualifying Activities; Status of compliance
-94­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
Licence no. /  Issue /  Expiry date  Certificate no. /  Issuing  Renewal  / Validity  Status of  No.  I Reference no.  authority  Subject matter / Purpose  date  period  I Major conditions imposed  compliance  (b) any substantial change in the nature of the operations of Asia­Pacific Special Nutrients or the manner in which Asia-Pacific Special Nutrients implements and operates the Qualifying Activities;  (c) any claim, allegation, action or prosecution in respect of any improper or wrongful use or possible infringement of any intellectual property rights of any third party which comes to Asia­Pacific Special Nutrients’ attention; and  (d) any other matter that may materially affect the interests of Biotech Corp or the biotechnology industry.  (xii) The award of the BioNexus Status is personal to Asia-Pacific Special Nutrients and cannot be assigned, pledged or otherwise transferred, in whole or in part, to any other entity.  14.  LTPP 160461 7  Majlis Bandaraya Petaling Jaya  Licence for trades, business and industries to store pharmaceutical products at Lot 18B, Jalan 241, Seksyen 51 A, 46100 Petaling Jaya, Selangor Daru! Ehsan  18.12.2015  01.01.2016 to 31.12.2016  Licence must be displayed at the premises.  Complied  15.  MALLB20150526A  Ministry of Health Malaysia  Wholesaler’s licence  27.10.2015  01.01.2016 to 31.12.2016  For products to which the Control of Drugs and Cosmetics Regulations 1984 apply, the holder of this licence is allowed to sell by wholesale registered products as set out in the register of products provided under Regulation 9( I).  Complied
-95 ­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d) No.  Licence no. 1 Certificate no. 1 Reference no.  Issuing authority  16.  063470  Health Department, State ofSelangor  17.  B 000291  Fisheries Development Authority of Malaysia  18.  AMH(B)(C)20 15109­2016  Feed Board  19.  AMH(G)0220 16125­2016(10)  Feed Board  20.  JPV:PSTTIl 00-3/1/33  Ministry of Agriculture and Agro-Based Industry  21.  JPVIPBS(Z)/600-8/8/5 JId 1(18)  Ministry of Agriculture and Agro-Based Industry

Subject matter 1Purpose Pharmacist’s poisons licence (Type A licence) issued to Gerard Choo Thean Yoon with the business address of Lot 18B, Jalan 241, Seksyen 51 A, 46100 Petaling Jaya, Selangor Darul Ehsan to import, store and deal generally in all poisons by wholesale onl/b) Licence to deal, import, export and process fish at Lot 18B, Jalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Darul Ehsan Licence to import feed additives specified in the licence under the Feed Act 2009 Certificate of Registration of Seller of Feed or Feed Additive issued to Lim Hang Chern of Asia-Pacific Special Nutrients with business address at Lot 18A, Jalan 241, Seksyen 51 A, 46100 Petaling Jaya, Selangor Darul Ehsan Notification on the status of import and sale of feed additives under the Feed Act 2009(c) Approval to be registered as a local agent 1importer of veterinary vaccine Issue 1 Renewal date  Expiry date 1Validity period  Major conditions imposed  Status of compliance  03.09.2015  01.01.2016 to  Subject to the provisions of the Poisons Act  Complied  31.12.2016  1952 and of any regulations made under it and such other terms and conditions specified in it.  05.05.2016  May2017  Dealing and processing shall be conducted at the place specified in the licence only.  Complied  31.12.2015  31.12.2015 to 31.12.2016  Any importation of feed or feed additives must be for the purposes declared by the Feed Board.  Complied  22.04.2016  22.04.2016 to 21.04.2017  – N/A  05.08.2016  31.12.2016  (i) The notification must not be used when licence or registration certificate has been issued. (ii) The notification does not exempt the applicant from the requirements of other relevant act.  Complied  03.09.2013  – If the result of appraisal by the Department of Veterinary Services on the vaccine 1 biologic storage and distribution facilities of the company fail or not satisfactory, the Department of Veterinary Services reserves the right to cancel the registration of the company and the said vaccine 1biologic.  Complied

-96­[COffipany No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d) Licence no. / Certificate no. /
Issuing No. Reference no. authority Link Ingredients Majlis Bandaraya Petaling lara 22. LTPP1611778 23. LTPPI604615 Majlis Bandaraya Petaling lara JPV: PSTT/lOO-3/l/33 Ministry of Agriculture and Agro-Based Industry
24. Vet Food Agro Diagnostics LTPPI604616 Majlis Bandaraya Petaling 1aya 25. Notes:
Subject matter / Purpose Licence for trades, business and industries for food ingredients distributor warehouse at Lot 18B, lalan 241, Seksyen 51A, 46100 Petaling Jaya, Selangor Darul Ehsan Licence for trades, business and industries for food store and to display non-illuminated advertisement at Lot 4, Lorang 51N227B, 46100 Petaling laya, Selangor Daml Ehsan Notification on the status of import and sale ofCGM under the Feed Act 2009(c) Licence for trades, business and industries for research laboratory at Lot 18B, lalan 241, Seksyen 51 A, 46100 Petaling laya, Selangor Daml Ehsan Issue /  Expiry date  Renewal  / Validity  date  period
29.01.2016  29.01.2016 to  3 I. 12.201 6  18.12.2015  01.01.2016 to  31.12.2016  05.08.2016  31.12.2016
01.01.2016 to 31.12.2016 18.12.2015 Major conditions imposed Licence must be displayed at the premises. Licence must be displayed at the premises. (i) The notification must not be used when licence or registration certificate has been issued.
(ii) The notification does not exempt the applicant from the requirements of other relevant act.

Licence must be displayed at the premises. Status of compliance  Complied  Complied  Complied  Complied

(a) The Ministry ofHealth Malaysia had vide an electronic mail dated 29 October 2014 confirmed that Rhone Ma Malaysia is not required to submit to the authority a copy ofauthentic invoice and certificate of analysis for each group of imported goods upon receipt of each consignment. However, Rhone Ma Malaysia must keep a copy of the said invoice and certificate ofanalysis which are subject to inspection by the authority. Rhone Ma Malaysia has complied with this condition.
(b) Pursuant to Section 26(2) ofthe Poisons Act 1952, this licence may only be granted to a person who is a licensed pharmacist.
(c) This notification states that the company is in the process ofcompleting the documentation for the application oflicence or registration certificate under the Feed Act 2009.

-97 ­6. BUSINESS OVERVIEW (Collt’d)
(d) Biotech Corp had vide a leiter dated 18 August 2010 informed Asia-Pacific Special Nutrients that the Minister of Finance had approved the following extension in the scope of BioNexus activities 11’ith effect from 21 June 2010:
(I) commercialisation of microbial and enzyme based productsfor veterinary and agricultural use and its related R&D activities;
(ii) provision ofcontract research services; and

(iii) out licensing ofin-house developed 1P.
(e) Biotech Corp had vide a leiter dated 17 May 2012 informed Asia-Pacific Special Nutrients that the Minister ofFinance had approved the following additional Qualifying Activities with effect from 16 April 2012:
“Provision of contract manufacturing activities subject to it being consequential to contract research· services rendered by the company”.
(f) Biotech Corp had vide a leiter dated 12 May 20lJ informed Asia-Pacific Special Nutrients that the Minister of Finance had approved Asia-Pacific Special Nutrients’ application to reduce the required amount ofknowledge workers to be employedfrom 100% to 40% oftotal workforce.
(g) Asia-Pacific Special Nutrients had on 5 May 2016 wrillen to Biotech Corp to inform Biotech COl]) that Asia-Pacific Special Nutrients has been canying out trading activities and paid taxes on income generated from such trading activities since 2013. Asia-Pacific Special Nutrients also sought permission from Biotech Corp to (1) maintain the status quo of Asia-Pacific Special Nutrients and continue to make all relevant income tax payment in relation to the income generatedfromtrading activities; or (2) transfer the trading activities currently undertaken by Asia-Pacific Special Nutrients to another subsidimy under the Group by end of2017.

Biotech Corp had vide a leiter dated 24 May 2016 informed Asia-Pacific Special Nutrients that Biotech COl]) has no objection for Asia-Pacific Special Nutrients to transfer the trading activities currently undertaken by Asia-Pacific Special Nutrients to either an existing subsidimy or a newly incorporated subsidiary within the Group by either ofthefollowing stipulated timeline: (i) six (6) months ajier Rhone Ma Holdings has been listed on Bursa Securities; or
(ii) eighteen (18) months commencing on 5 May 2016, the date of the leiter froll1 Asia-Pacific Special Nutrients to Biotech Corp,

whichever is later.
ITHE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
6.18 Property, Plant and Equipment 6.18.1 Properties Owned by Our Group No.  Registered owner  Title / Location  1.  Rhone Ma Malaysia  PN 33666, Lot 603 Seksyen 32, Bandar Petaling Jaya, Petaling, Selangor  Lot. 18A, Jalan 241 Seksyen 5 IA, 46100 Petaling Jaya, Selangor Daml Ehsan  2.  Rhone Ma Malaysia  PN 33667, Lot 604 Seksyen 32, Bandar Petaling Jaya, Petaling, Selangor  Lot. 18B, Jalan 241 Seksyen 5 IA, 46 100 Petaling Jaya, Selangor Daml Ehsan

Description / Existing use A piece of industrial land erected with an individual-designed warehouse complex which comprises a three (3)-storey office building, a single-storey warehouse annexed, a guardhouse and a pump house A piece of industrial land erected with an individual-designed warehouse complex which comprises a three (3)-storey office building, a single-storey warehouse annexed, a guardhouse and a pump house Tenure  Land area / Gross floor area sq. ft.  Audited NBV as at 31 August 2016 RM’OOO  Market value as at 28 March 2016′ RM’OOO  Revaluation surplus. RM’OOO  Date of issuance of certificate of completion and compliance  Encumbrances  Leasehold  27,082/  5,619  6,200  581  8June2015  Charged to  expiring on  12,836  Public Bank  2 September  Berhad(a)  2072  Leasehold expiring on 2 September 2072  27,082/ 24,982  5,956  7,300  1,344  8June2015  Charged to HSBC Bank Malaysia Berhad and HSBC Amanah  Malaysia Berhad
-99­I Company No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d) No.  Registered owner  Title / Location  3.  Rhone Ma Malaysia  GRN 212778, Lot 16008, Bandar Nilai Utama, Seremban, Negeri Sembilan  Lot 16008, Bandar Nilai Utama, Seremban, Negeri Sembilan  4.  Rhone Ma Malaysia  H.S.(D) 153802, PT 73996, Mukim Kapar, Klang, Selangor  PT 73996, Mukim Kapar, Klang, Selangor

Description / Existing use A piece of industrial land  vacant  A piece of industrial land  vacant
Tenure  Land area / Gross floor area sq. ft.  Audited NBV as at 31 August 2016 RM’OOO  Market value as at 28 March 2016′ RM’OOO  Revaluation surplus. RM’OOO  Date of issuance of certificate of completion and compliance  Encumbrances  Freehold  165,323  3,070  6,500  3,430  N/A  Charged to Public Bank Berhad(a)  Freehold  94,561  5,286  6,800  1,514  N/A  Charged to OCBC Bank (Malaysia) Berhad
Notes:  The Independent Valuers had conducted a valuation on the properties on 28 March 2016.  *  The revaluation surplus is calculated based on the market value as at 28 March 2016 minus the net book value as at 31 August 2016. The revaluation surplus has not been incorporated in the financial statements ofthe Groupfor the FPE 31 August 2016.  (a)  It should be noted that PIVB is a wholly-owned subsidiary ofPublic Bank Berhad. Public Bank Berhad, has in its ordinary course ofbusiness, granted credit facilities to our Group. However, PIVB is ofthe view that the aforementioned extension ofcreditfacilities does not result in a conflict of interest situation as the total creditfacilities granted to our Group are not material when compared to the net assets ofPublic Bank Berhad as at 31 December 2015. Kindly refer to Section 10.5.1 ofthis Prospectusfor jitrther information on the declaration ofconflict ofinterest by PlVB.
-100 ­[COmpany No.: 1116225-A I 6. BUSINESS OVERVIEW (Cont’d)
6.18.2 Properties Rented by Our Group No.  Tenant  1.  Link  Ingredients  2.  Link  Ingredients  3.  RhoneMa  Malaysia

Landlord Orinoco Corporation Sdn Bhd Mac Pack Warehousing Sdn Bhd Marine Supplies & Warehousing Sdn Bhd Note:
Location Lot 4 Lorong 51A/227B, 46100 Petaling Jaya, Selangor Daml Ehsan Lot 28326, Jalan Pelabuhan Utara, 42000 Port Klang, Selangor Darul Ehsan Lot 19, Lebuh Sultan Muhamed 2, Bandar Sultan Suleiman, 42000 Pelabuhan Klang, Selangor Darul Ehsan Description / Existing use A semi-detached factory used as a warehouse Storage space warehouse(a)  in  a  Storage space warehouse(a)  in  a
Approximate rented area sq. ft.  Rental payable per annum RM  Tenure of tenancy  12,500  288,000  01.08.2014 to 31.07.2017  3,000  36,000  Since 01.09.2015, valid until and unless terminated  4,000  86,400  Since 01.04.2011, valid until and unless terminated

(a) Provision ofwarehousing services by third party logistics company. None of the existing use of the abovementioned properties breached any laws, regulations, rules and requirements in relation to land and buildings. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I -101 ­6. BUSINESS OVERVIEW (Collt’d)
6.18.3 Plant and Equipment As at 31 August 2016, the material plant and equipment used and owned by our Group are as follows: Machinery  Description  No. of units  Audited NBV as at 31 August 2016 RM’OOO  Paddle blender  Blending and mixing of powder  I  254  Ribbon blender  Blending and mixing of powder  I  6  Cube blender  Blending and mixing of powder  I  4  Mixing vessel  Mixing ofliquid  2  3  Auger filling machine  Filling  1  45  Total  6  312
Save as disclosed above, all other plant and equipment of our Group are individually immaterial to the operations of our Group to be disclosed separately. Our Directors are of the opinion that our Group has sufficient capacity to carry out our operations, the details of which are set out in Section 6.3 ofthis Prospectus. 6.18.4 Material Capital Expenditures and Divestitures Save as disclosed below, there is no other material capital expenditure incurred by our Group for the past three (3) financial years up to the FYE 31 December 2015, FPE 31 August 2016 and up to the LPD: FYE 31 December 2013 2014 2015 RM’OOO RM’OOO RM’OOO  FPE 31 August 2016 RM’OOO  As at the LPD RM’OOO  Freehold land  – – 5,286  – – Renovation  – 55  – – – Motor vehicles  – 742  384  79  79  Office equipment  – – 100  20  20  Laboratory equipment  948  165  – 579  579  Product applicator and vaccination equipment  – – 85  – – Production equipment  – 85  20  – – Total  948  1,047  5,875  678  678
The material capital expenditure was primarily financed by a combination of bank borrowings and internally generated funds. 6. BUSINESS OVERVIEW (Collt’d)
Save as disclosed below, there are no other material capital divestitures made by our Group for the past three (3) financial years up to the FYE 31 December 2015, FPE 31 August 2016 and up to the LPD: FYE 31 December  FPE 31 August 2016 RM’OOO  As at the LPD RM’OOO  2013 RM’OOO  2014 RM’OOO  2015 RM’OOO  Investment property Laboratory equipment Motor vehicles  1,400 553 – 3,971 — –176  — — Total  1,953  3,971  176  – –
6.18.5 Material Plans to Construct, Expand or Improve Facilities As at the LPD, our Group has no immediate plans to construct, expand or improve on existing facilities, save for the following: Description  Estimated expenditure amount RM’OOO  Amount already paid as at the LPD RM’OOO  Method of financing  Estimate timeframe for completion from the date of Listing  Estimated increase in capacity after completion  Construction and  20,000  661  Utilisation of  Within twenty  Approximately  commissioning  lPQ proceeds,  four (24)  four (4) times  ofa new GMP- internally  months  of existing  compliant plant  generated funds and lor bank borrowings  maximum production capacity  Construction of a  8,500  38  Utilisation of  Within twenty  Approximately  new warehouse  lPQ proceeds,  four (24)  50,000 sq. ft.  with three (3)­ internally  months  of gross floor  storey office  generated funds and lor bank borrowings  area
6.19 Regulatory Requirements and Environmental Issues As at the LPD, our Group has complied with all material regulatory requirements and environmental issues which may materially affect our Group’s operations and I or utilisation of assets. In addition, there are no environmental proceedings or investigations to which we are or might become a party to. 6.20 Seasonality
Generally, our Group’s business is not subjected to any cyclical or seasonal trend. 6.21 Interruptions in Business
We have not experienced any interruption in our business, which had a significant effect on our operations for the past twelve (12) months preceding the LPD. 6. BUSINESS OVERVIEW (Cont’d)
6.22 Future Plans, Strategies and Prospects 6.22.1 Future Plans and Strategies (i) Construction of a New GMP-Compliant Plant CUlTently, our Group has a GMP-compliant plant located at Petaling Jaya, Selangor Darul Ehsan. As part of our business expansion plans for the provision of end-to-end animal health solution and our eff011s to increase our production capacity to cater to the increasing demand for our in-house manufactured products, we intend to construct a new GMP-compliant plant on a piece of vacant land in Nilai, Seremban, Negeri Sembilan Darul Khusus which was acquired in 2009. As at the LPD, we have appointed a consultant for the overall project management in relation to the construction of the new GMP-compliant plant. We are currently in the designing stage which is expected to be finalised and approved by our management team and appointed GMP consultant in the fOUl1h (4Ih) qum1er of 2016 and the submissions to the relevant authorities will be made thereafter. The construction of the GMP-compliant plant is expected to commence in the second (2nd) quarter of 2017, subject to obtaining approval from the relevant authorities which amongst others, includes approval for the planning permission and building plans from Majlis Perbandaran Nilai and approval for the layout plans from NPRA. The construction of the new GMP-compliant plant is estimated to be completed within eighteen (18) months from the commencement date of the construction.
The new GMP-compliant plant is intended to manufacture powder-based products. As disclosed in Section 6.3 of the Prospectus, the current maximum production capacity of our production equipment for the manufacturing of powder-based products is approximately 636.93 tonnes per year and actual production utilisation of our production equipment for the manufacturing of powder-based products for the FYE 31 December 2015 is approximately 96.49%. Upon full commissioning and commencement of operations of the new GMP-compliant plant, our maximum production capacity for powder-based products is estimated to increase by approximately four (4) times the existing maximum production capacity based on our management long-term aspiration for the new production output in view that the production of our powder-based products have increased by approximately 91.11 % from 321.60 tonnes in the FYE 31 December 2013 to 614.60 tonnes in the FYE 31 December 2015. The total estimated cost to be incurred for the new GMP-compliant plant is approximately RM20.00 million which includes cost of construction (including cost of furnishing and fitting) amounting to approximately RM13.00 million and cost of purchase of the machineries and equipment amounting to approximately RM7.00 million. We intend to utilise RMl1.00 million of our IPa proceeds to fund the estimated cost of construction and RM7.00 million of our IPa proceeds to fund the estimated cost of purchase of the machineries and equipment. The remaining funds required for the construction of the GMP-compliant plant will be financed through internally generated funds and / or bank borrowings. Any difference arising from the utilisation of proceeds for the purchase of machineries and equipment will be adjusted accordingly with our working capital requirements. 6. BUSINESS OVERVIEW (Cont’d) (ii) (iii)
Construction of a Warehouse with Three (3)-Storey Office Our Group intends to build a warehouse with three (3)-storey office with a total estimated gross floor area of approximately 50,000 sq. ft. on a piece of vacant industrial land in Kapar, Klang, Selangor Darul Ehsan to cater to our increasing storage needs for both animal health products and food ingredients. This is in line with the expected increase in our business volume from both existing and new customers. In addition, we intend to use the warehouse as our main distribution centre to facilitate import of the products which will then be distributed to our customers. As at the LPD, we have appointed a consultant for the overall project management in relation to the construction of the new warehouse with three (3)-storey office. We are currently in the designing stage which is expected to be finalised in the fourth (4th) quarter of2016 and the submissions to the relevant authorities will be made thereafter. The construction of the new warehouse with three (3)-storey office is expected to commence in the first (1 st) qualter of 2017 subject to obtaining approval from the relevant authorities which amongst others, includes approval for the planning permission and building plans from Majlis Perbandaran Klang. The construction is estimated to be completed within eighteen (18) months from the commencement date of the construction. The total estimated cost to be incurred for the construction of warehouse with three (3)-storey office including the cost of furnishing and fitting is approximately RM8.50 million. We intend to utilise RM6.50 million of our IPO proceeds to part finance the construction of warehouse with three (3)­storey office. The remaining funds required will be financed through internally generated funds and / or bank borrowings. Expansion of Product Range The continuous expansion of our Group’s product range remains as one of our future plans moving forward. Our Group aims to develop and introduce new pharmaceuticals and feed additives through our in-house R&D capabilities. Our new product development committee comprising members from various departments such as marketing, regulatory, laboratory and GMP is responsible to develop new products based on market needs. Once a new product is proposed, our R&D team will conduct active ingredient testing, formulation study and solubility test before finalising the formula for commercialisation. Meetings will be held every six (6) months or whenever required to discuss and follow-up on the development progress of new products. The number of products to be developed and introduced each year will depend on the R&D and product registration process. Fmther, we intend to expand our existing range of animal health products and food ingredients from third party international animal health products manufacturers and third party food ingredients producers. We will conduct market research and identify new product categories to be launched within the animal health and nutrition market as well as food ingredients market in response to the latest market trends and our customers’ preferences. 6. BUSINESS OVERVIEW (Collt’d) 6.22.2
(iv) Business Expansion in Regional Markets Currently, our Group exports our animal health products to regional markets such as Brunei, Indonesia, the Philippines, Singapore, Thailand and Vietnam. Our Group intends to f1ll1her our reach in the regional markets focus on Indonesia, the Philippines, Thailand and Vietnam by identifying and appointing local distributors to market and distribute our animal health products focused mainly on our in-house developed products. In order to expand our market presence and create awareness for our animal health products and services in the regional markets, we will participate in exhibitions and conventions, organise seminars and visit potential customers or distributors in the regional markets. The expansion of our business in regional markets is expected to broaden our customer base geographically and reduce our reliance on the local market. Prospects of Our Group We are an end-to-end animal health solution provider that is able to provide a customised animal health solution with our extensive range of animal health services and products to meet the needs and requirements of our customers. Further, our business operations are supported by our in-house R&D centre which provides us the platform to expand our product range and continuously develop new products as well as to improve our existing products. Through our in-house R&D centre and GMP­compliant plant, we are able to develop and manufacture our in-house products that conform to the standards required by the relevant authorities. In addition, our Group is led by an experienced management team that will provide the basis for our Group’s continuing growth and success. Further details on our competitive advantages and key strengths are set out in Section 6.1.4 of this Prospectus. Moving forward, our Group’s future plans and strategies will focus on the expansion of our manufacturing activities by constructing and operating a new GMP-compliant plant in Nilai, Negeri Sembilan Darul Khusus which will increase our production capacity by approximately four (4) times of the existing maximum production capacity. In addition, we will focus on the expansion of our product range which includes in-house developed products and products from third party international animal health products manufacturers. We also intend to expand our market presence in the existing regional markets as part of our future plans. Further details on our future plans and strategies are set out in Section 6.22.1 of this Prospectus. According to the IMR Report, the total revenue of the animal health and nutrition market in Malaysia stood at RM 1.42 billion for 2015 and is expected to grow to RM 1.84 billion for 2020. Fm1her, the total revenue of the food ingredients market in Malaysia stood at RM6.54 billion for 2015 and is expected to reach RM8.02 billion for 2020. Further details on the industry prospects and outlook are set out in Section 7 of this Prospectus. Our Directors believe that the prospects of our Group are favourable given the competitive advantages and key strengths of our Group as well as the continued expansion of our Group’s capacity and operations through our future plans which would provide us the platform to grow and sustain our business amidst the favourable outlook of the animal health and nutrition market and food ingredients market in Malaysia.

 

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