Business Overview

5. INFORMATION ON OUR GROUP 5. INFORMATION ON OUR GROUP OUR HISTORY Solid was incorporated in Malaysia under the Act as a public limited company on 12 September 2012 under the name Solid Automotive Berhad to facilitate our listing on the Main Market of Bursa Securities. As at the LPD, our Company’s authorised share capital is RMlOO,OOO,OOO comprising 200,000,000 ordinary shares ofRMO.50 each, of which 114,616,000 ordinary shares ofRMO.50 each has been issued and fully paid-up. For the purpose of our Listing, we have also completed the Acquisitions on 13 June 2013. Our Group structure is as follows:

Solid Trading and Distribution Twinco Solid Corporation Auto Empire Uni Point
Remanufacturing JBS
Others HKT Investment holding and provision of management services Trading and distribution of automotive engine and mechanical parts and components Trading and distribution of automotive electrical parts and components Trading and distribution of automotive engine and mechanical parts and components Trading and distribution of automotive electrical parts and components Remanufacturing of automotive alternators and starters Ceased operations Please refer to Section 6.1.2 of this Prospectus for further details in relation to Solid Group’s principal activities. Our Group’s history can be traced back to 1982, when our Managing Director, Ker Min Choo together with our Executive Director, Ker Mong Keng, and their brother, Ker Boon Kee, jointly established Solid Corporation in Johor Bahru, Johor. Solid Corporation was established to undertake the trading of automotive electrical parts and components in Malaysia. 5. INFORMATION ON OUR GROUP (Conl’d) They subsequently acquired the equity interest in Uni Point (formerly known as Pam Industries Sdn Bhd) in 1986 to undertake the wholesaling of various aftermarket third party branded automotive electrical parts and components in Johor. In 1990, we started to pursue the OBM business model to generate further business growth. Under this business model, a business entity typically outsources the manufacturing process to third party producers and concentrates on brand promotion as well as sales and marketing activities. This business strategy enabled our Group to move up the value chain and to obtain a higher profit margin. Our Group had in the same year started selling our in-house branded automotive electrical parts and components under our Group’s brand namely Hansa Parts. In 1991, we acquired a dormant company in Singapore named Auto Empire. Auto Empire commenced its business in 1992 in the import and export of third party branded automotive, engine and mechanical parts and components. In 1994, our wholly-owned subsidiary, Twinco, was incorporated to take over the trading business of third party branded automotive engine and mechanical parts and components from Europe for the commercial vehicle segruent from Tampoi Auto Supply Sdn Bhd, a related party which has since changed its principal activity to owning and managing properties for rental and investment holding company. In 1998, we obtained a distributorship ofUnipoint branded automotive electrical parts and components in Malaysia. The principal activity of Uni Point was then changed to the selling and distribution of Unipoint branded automotive electrical parts and components. In 2003, we expanded our business upstream by setting up JBS with Ong Pang Boon, who holds a 20.00% equity interest in the company. JBS was incorporated to focus on the business of remanufacturing of alternators and starters for passenger vehicle segment, under ~ (i.e. KIS) brand. Solid Corporation continued with its expansion over the years with the setting up of seven (7) sales branches in various regions across Malaysia. OUf first local sales branch was established in Kuala Lumpur in 1993. The subsequent branches were established in Perak (in 1997), Sabah (in 1998), Pahang and Melaka (in 2009) as well as Penang and Selangor (in 2011). Besides the local market, our Group has also managed to penetrate into over 30 countries such as Saudi Arabia, UAE, Libya, Ecuador, Indonesia, Syria, Yemen, Thailand, Sri Lanka and Sudan. In 2012, we registered another milestone in our Group’s history by signing a Trademark Licence Agreement with Lucas Industries Limited (“Lucas Ltd”) which grants our Group the exclusive use but not the ownership of the Lucas trademark on our automotive electrical parts and components for Malaysia and designated countries in Asia such as Singapore, Indonesia, Vietnam, Brunei and Cambodia. Lucas is a well known brand which was established in 1872 in the UK. The Lucas product range covers, amongst others, automotive bulbs, batteries, wiper blades, starters and alternators. This will help to enhance our reputation and image in the automotive aftermarket. Our automotive electrical parts and components manufactured by our contract manufacturers will be marketed under the Lucas brand, i.e. third party brand, and will be promoted in the designated countries in Asia. In February 2013, our Group commenced sales of automotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers. The contribution from Lucas brand for the three (3) months ended 30 April 2013 is approximately RMO.187 milJion. As at the LPD, we carry 18 in-house brands, over 100 third party brands and more than 7,000 SKU items.
5.2 SHARE CAPITAL Our present authorised share capital is RMI00,OOO,OOO comprising 200,000,000 ordinary shares of RMO.50 each, of which RM57,308,000 comprising 114,616,000 Shares are issued and credited as fully paid-up. Upon completion of our IPO, our issued and paid-up share capital will increase to RM75,000,000 comprising 150,000,000 Shares. The changes in our issued and paid-up share capital since our incorporation are as follows:
There are no discounts, special terms or instalment payment terms applicahle to the payment of consideration for the ahove allotments. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in our Company. SUBSIDIARY COMPANIES 5.3.1 Twinco (i) History and Business
Twinco was incorporated on 24 Novemher 1994 in Malaysia under the Act as a private limited company and commenced operations in the same year. It is principally involved in the trading and distribution of automotive engine and mechanical parts and components.
(ii) Share Capital

Twinco’s present authorised share capital is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each, of which RM1,878,417 compnsmg 1,878,417 ordinary shares of RM1.00 each have been issued and fully paid-up. The changes in the issued and paid-up share capital ofTwinco since its incorporation are as follows:
350,003 500,000 otherwise than 1,878,417 cash
There are 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 TwineD. 5. INFORMATION ON OUR GROUP (Conl’d) (iii) Shareholders and Directors Twineo is our wholly-owned subsidiary company and its Directors are Ker Min Choo, Ker Mong Keng and Gng Kheng Swee. (iv) Subsidiary and Associated Companies Twinco does not have any subsidiary or associated company.

5.3.2 Solid Corporation (i) History and Business Solid Corporation was incorporated on 5 August 1982 in Malaysia under the Act as a private limited company under the name of Solid Agencies Sdn Bhd and commenced operations in the same year. It assumed its current name on 28 January 1983. It is principally involved in the trading and distribution of automotive electrical parts and components. (ii) Share Capital Solid Corporation’s present authorised share capital is RM5,000,000 compnsing 5,000,000 ordinary shares of RM1.00 each, of which RM4,650,903 compnsmg 4,650,903 ordinary shares of RM 1.00 each have been issued and fully paid-up. The changes in the issued and paid-up share capital of Solid Corporation since its incorporation are as follows: Date:of  No~of()rdhla’ry  Par  Cuniulative:  AlJotolent  SharesAllotted  Vallie  Consideration  Tota!  RM  .’,  RM  05.08.1982  3  1.00  Cash  3  15.09.1983  190,000  1.00  Cash  190,003  18.10.1983  10,000  1.00  Cash  200,003  01.07.1985  100,000  1.00  Cash  300,003  25.04.1996  450,006  1.00  Otherwise than cash  750,009  28.04.1996  187,506  1.00  Cash  937,515  30.05.2000  62,485  1.00  Cash  1,000,000  29.04.2002  100,000  1.00  Cash  1,100,000  28.04.2003  150,000  1.00  Cash  1,250,000  29.04.2005  120,000  1.00  Cash  1,370,000  01.09.2007  100,301  1.00  Otherwise than cash  1,470,301  12.09.2007  2,940,602  1.00  Otherwise than cash  4,410,903  18.11.2011  240,000  1.00  Cash  4,650,903
There are no discounts, special tenns 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 Solid Corporation. (iii) Shareholders and Directors Solid Corporation is our 99.56% owned subsidiary company and its Directors are Ker Min Choo, Ker Mong Keng and Gng Kheng Swee.

 

5. INFORMATION ON OUR GROUP (Conl’d) (iv) Subsidiary and Associate Companies As at the date of this Prospectus, Solid Corporation has three (3) subsidiary companies, namely, JBS, Uni Point and HKT. Solid Corporation does not have any associate company. The details of the subsidiary companies of Solid Corporation are as follows: (a) JBS (i) History and Business JBS was incorporated in Malaysia under the Act as a private limited company on 17 March 2003 under the name of K1S Auto Industries (M) Sdn Bhd and commenced operations in the same year. JBS assumed its current name on 20 October 2003. It is principally involved in the remanufacturing of automotive alternators and starters. (ii) Share Capital JBS’ present authorised share capital is RM1,000,000 comprising 1,000,000 ordinary shares of RMl.OO each, of which RMI,OOO,OOO comprising 1,000,000 ordinary shares of RM 1.00 each have been issued and fully paid­up. The changes in the issued and paid-up share capital of JBS since its
incorporation are as follows:
23.09.2003 999,998 1.00 Cash 1,000,000

There are no discounts, special tenns or instalment payment tenns 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 JBS. (iii) Shareholders and Directors JBS is the 80%-owned subsidiary company of Solid Corporation and its Directors are Ker Min Choo, Ker Meng Oi, Ong Kheng Swee and Ong Pang Boon. (iv) Subsidiary and Associate Companies JBS does not have any subsidiary or associate company. 5. INFORMAnON ON OUR GROUP (Cont’d) (b) Uni Point (i) History and Business Uni Point was incorporated in Malaysia under the Act as a private limited company on 24 June 1981 under the name of Pam Industries Sdn Bhd. Uni Point was acquired by our Group in 1986 and assumed its current name on II June 1998. Uni Point was initially involved in the trading of automotive electrical parts (for various automotive aftermarket brands) in Johor. In 1998, Uni Point obtained a distributorship of Unipoint branded automotive electrical parts and components in Malaysia and it has been focusing solely on marketing and distributing Unipoint branded products since then. (ii) Share Capital Uni Point’s present authorised share capital is RM500,000 compnsmg 500,000 ordinary shares ofRM1.00 each, of which RM410,000 comprising 410,000 ordinary shares ofRM1.00 each have been issued and fully paid­up. The changes in the issued and paid-up share capital of Uni Point since its incorporation are as follows: Date of
Pal’O: Cumulative Allotme’nt Value< Con’sideration Total RM RM 24.06.1981  2  1.00  Cash  2  20.03.1986  49,998  1.00  Cash  50,000  25.07.1990  200,000  1.00  Cash  250,000  28.022000  160,000  1.00  Cash  410,000
There are no discounts, special tenns or instalment payment tenns 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 Uni Point. (iii) Shareholders and Directors Uni Point is the wholly-owned subsidiary company of Solid Corporation and its Directors are Ker Min Choo, Ker Mong Keng, Ker Soo Ha, Lee Heng Haw and Eng Choon K wang. (iv) Subsidiary and Associate Companies Uni Point does not have any subsidiary or associate company. 5. INFORMATION ON OUR GROUP (Con/’d) (e)  HKT  (i)  History and Business  HKT was incorporated on 9 September 1997 in Malaysia under the Act as a private limited company under the name of Logical Topview Sdn Bhd and commenced operations in the same year. HKT changed its name to Pam Auto Electrical Parts Sdn Bhd in 22 October 1997 and subsequently to Solid Corporation (lpoh) Sdn Bhd on 28 June 2001. HKT assumed its current name on 24 March 2009. In 2011, HKT ceased its business operations after its automotive trading business was absorbed by Solid Corporation.  (Ii)  Share Capital  HKT’s present authorised share capital is RM500,000 comprising 500,000 ordinary shares ofRM1.00 each, of which RM200,000 comprising 200,000 ordinary shares ofRM1.00 each have been issued and fully paid-up.  The changes in the issued and paid-up share capital of HKT since its incorporation are as follows:

DatM.f No;: of;Pr~jilary Par; Anoimt~t Shares Allotted VahH~ RM 09.09.1997 2 1.00 11.08.2001 199,998 1.00 There are 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 inHKT. (iii) Shareholders and Directors HKT is the wholly-owned subsidiary company of Solid Corporation and its Directors are Ker Min Choo, Lee Heng Haw and Eng Choon Kwang. (Iv) Subsidiary and Associate Companies HKT does not have any subsidiary or associate company. 5.3.3 Auto Empire (i) History and Business Auto Empire was incorporated in Singapore under the Companies Act, Singapore, Cap. 50 as a private limited company on 3 November 1987 under the name of Via Gallia Trading (S) Pte Ltd. Auto Empire assumed its current name on 26 November 1990 and was acquired by our Group in 1991. Auto Empire commenced operations in 1992 and is principally involved in trading and distribution of automotive engine and mechanical parts and components. 5. INFORMATION ON OUR GROUP (Conl’d) (ii) Share Capital Auto Empire’s present issued and fully paid-up share capital is SGD1,900,000 comprising 1,900,000 ordinary shares. The changes in the issued and paid-up share capital of Auto Empire since its incorporation are as follows: 03.11.1987 03.06.1991 24.04.2012  2 299,998 1,600,000  Cash Cash Cash  2 300,000 1,900,000
There are 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 Auto Empire. (iii) Shareholders and Directors Auto Empire is our wholly owned subsidiary company and its Directors are Ker Min Choo, Ker Mong Keng, and Ong Choon Hua!. (iv) Subsidiary and Associate Companies Auto Empire does not have any subsidiary or associate company. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5. INFORMATION ON OUR GROUP (Conl’d) 5.4 LISTING SCHEME In conjunction with and as an integral part of our Listing, we proposed a Listing Scheme which was approved by the SC on 3 May 2013. The Listing Scheme involves the following: 5.4.1 Acquisitions The following Acquisitions were completed on 13 June 2013. Twineo Solid acquired the entire equity interest in Twinco of RMI,878,417 comprising 1,878,417 ordinary shares of RMI.OO each for a total purchase consideration of RM7,597,500 satisfied entirely by the issuance of 15,195,000 new Shares at par value. Pursuant to the conditional share sale agreement dated 8 October 2012, Solid acquired the entire equity interest in Twinco from the existing shareholders ofTwinco as follows:
KerMin Choo  523,910  27.89  2,118,942.50  4,237,885  Ker Mong Keng  1,080,477  57.52  4,370,082.00  8,740,164  KerMengOi  178,471  9.50  721,762.50  1,443,525  Ker Soo Ha  95,559  5.09  386,713.00  773,426  1,878,417  100.00  7,597,500.00  15,195,000
The purchase consideration of RM7,597,500 was arrived at on a willing-buyer willing-seller basis after taking into consideration the following adjustments: RM  Audited NA as at 30 April 2012  7,972,997  Less: Dividend payment to existing shareholders after 30 April 2012  (375,683)  Adjusted NA  7,597,314
Solid Corporation Solid acquired 99.56% equity interest in Solid Corporation of RM4,650,903 comprising 4,650,903 ordinary shares of RMI.OO each for a total purchase consideration of RM40,289,363 satisfied entirely by the issuance of 80,578,726 new Shares at par value. Pursuant to the conditional share sale agreement dated 8 October 2012, Solid acquired 99.56% equity interest in Solid Corporation from the existing shareholders of Solid Corporation as follows: 5. INFORMAnON ON OUR GROUP (Cont’d)
KerMin Choo  1,674,284  36.00  14,568,634.00  29,137,268  Kef Mong Keng  1,228,392  2641  10,688,768.50  21,377,537  KerMeng Oi  436,125  9.38  3,795,258.00  7,590,516  Kef Sao Ha  456,675  9.82  3,972,531.00  7,945,062  Yeo Guik J-Iiang  20,550  0.44  177,273.00  354,546  KekKok Swee  411,012  884  3,577,695.50  7,155,391  Ong Kheng Swee  20,549  0.44  177,273.00  354,546  Lee HengHaw  60,168  1.29  523,761.50  1,047,523  Eng Chaon Kwang  60,168  1.29  523,761.50  1.047,523  Chang San Hor  22,428  0.48  193.38900  386,778  Empressa Brilliante Sdn  240,000  5.17  2,091,018.00  4,] 82,036  Bhd  4,630,351  99.56  40,289,363.00  80,578,726
The purchase consideration of RM40,289,363 was arrived at on a willing-buyer willing-seller basis after taking into consIderation the adjusted NA of Solid Corporation as at 30 April 2012 and proportionate it in accordance to the percentage of shareholding acquired. The adjusted NA was arrived at after taking into consideration the following adjustments RM  Audited NA as at 30 Apnl2012  41,359.582  Add:  – Gain on disposal of 2,63% equity interest in Auto Empire  250,303′  – Dividend received from Auto Empire after 30 April 2012 but prior to its disposal  19,618  to Solid  Less: Dividend payment to existing shareholders after 30 April 2012  (1,162,726)  Adjusted NA  40,466,777/\
Notes,’, The gain on disposal was computed based on the following RM  Proceeds from disposal of263% equity interest in Auto Empire Less Carrying value ofinvestment by Solid Corporation in Auto Empire as at 30 April 2012  250.303  Gain on disposal  250.303
The purchase consideration is after taking into consideration the adjusted NA multiplied by 99,56% 5. INFORMATION ON OUR GROUP (Conl’d) JBS Solid Corporation acquired a 10.00% equity interest in JBS of RMl,OOO,OOO comprising 1,000,000 ordinary shares of RM1.00 each for a total purchase consideration of RM159,939 satisfied entirely by the issuance of319,878 new Shares at par value. Pursuant to the conditional share sale agreement dated 8 October 2012, Solid Corporation acquired the 10.00% equity interest in JBS from the shareholders of JBS as follows:
KerMin Choo  50,000  5.00  79,969.50  159,939  Ong Kheng Swee  50,000  5.00  79,969.50  159,939  100,000  10.00  159,939.00  319,878
The purchase consideration of RM159,939 was arrived at on a willing-buyer willing-seller basis after taking into consideration the audited NA of JBS as at 30 April 2012 of RM1 ,599,385 and proportionate it in accordance to the percentage of shareholding to be acquired. The acquisition price for the 10.00% equity interest in JBS will be an amount owing by Solid Corporation to Solid and resulted in Solid Corporation having a 80.00% equity interest in JBS. Auto Empire Solid acquired the entire equity interest in Auto Empire of SGD1,900,000 comprIsmg 1,900,000 ordinary shares for a total purchase consideration of RM9,511 ,500 satisfied by the issuance of 18,522,394 new Shares at par value and cash consideration ofRM250,303. Pursuant to fhe conditional share sale agreement dated 8 October 2012, Solid acquired the entire equity interest in Auto Empire from the existing shareholders of Auto Empire as follows:
KerMin Choo  690,666  36.35  3,457,510.00  6,915,020  Ker Mong Keng  1,159,334  61.02  5,803,687.00  11,607,374  Solid Corporation  50,000  2.63  250,303.00  250,303  1,900,000  100.00  9,511,500.00  250,303  18,522,394
5. INFORMATlON ON OUR GROUP (Cont’d) The purchase consideration of RM9,511 ,500 was arrived at on a willing-buyer willing-seller basis after taking into consideration the following adjustments: RM Audited NA as at 30 April 2012 10,256,000 Less: Dividend payment to existing shareholders after 30 April 2012 (745,500) Adjusted NA 9,510,500 5.4.2 Public Issue In conjunction with our Listing, we will undertake a public issue of 35,384,000 new Shares, representing approximately 23.59% of our enlarged issued and paid-up share capital at the IPO Price to be allocated in the following manner: (i) Public Tranche 7,500,000 Public Issue Shares, representing 5.00% of our enlarged issued and paid-up share capital, have been reserved for application by the Public, of which at least 50.00% shall be set aside for Bumiputera investors including individuals, companies, societies, co-operatives and institutions; (ii) Pink Form Tranche 9,847,500 Public Issue Shares, representing approximately 6.57% of our enlarged issued and paid-up share capital, have been reserved for application by our eligible Directors, employees and persons who have contributed to the success of our Group; (iii) MITl Tranche 15,000,000 Public Issue Shares, representing 10.00% of our Company’s enlarged issued and paid-up share capital, have been reserved for Bumiputera investors approved by the MIT!; and (iv) Placement Tranche 3,036,500 Public Issue Shares, representing approximately 2.02% of our enlarged issued and paid-up share capital, have been reserved for placement to selected investors. The Public Issue Shares shall rank pari passu in all respects with our existing issued and paid-up Shares, including voting rights and the rights to all dividends and other distributions that may be declared subsequent to the date of allotment thereof. 5.4.3 Offer for Sale In conjunction with our Listing, the Offerors will offer up to 8,361,000 Offer Shares, representing approximately up to 5.57% of our enlarged issued and paid-up share capital to selected investors, identified by us or our Placement Agent. 5.4.4 Listing on Bursa Securities The admission and the listing of and quotation for our entire enlarged issued and paid-up share capital ofRM75,000,000 comprising 150,000,000 Shares on the Main Market of Bursa Securities. 5. INFORMATION ON OUR GROUP (Conl’d) 5.5 KEY ACHIEVEMENTS AND MILESTONES Our key achievements and milestones since inception are as follows: Year  Key”  .  1982  Incorporated Solid Corporation for trading of automotive electrical parts and components  1986  Acquired equity interest in Uni Point (formerly known as Pam Industries Sdn Bhd) to undertake the wholesaling of various aftermarket branded automotive electrical parts in Johor  1990  Solid Corporation introduced our fIrst in-house brand, Hansa PaJts, for the automotive electrical parts and components  1992  Auto Empire commenced its business in the trading and distribution, i.e. the import and export of automotive engine and mechanical parts and components  1993  Established our fIrst sales branch in Kuala Lumpur  1994  Incorporated Twinco to undertake the trading and distribution of automotive engine and mechanical parts and components for commercial vehicle segment  1997  Established our sales branch in Perak  1998  Obtained distributorship ofUnipoint branded automotive electrical parts and components  Established our sales branch in Sabah  2001  Penetrated the Indonesian market  2002  Penetrated the Thailand market  2003  Established JBS for remanufacturing of automotive alternators and starters, under i!i’-1I (i.e. KIS) brand  Penetrated the Saudi Arabia and UAE markets  2004  Penetrated the Ecuador, Syria, Yemen, South Africa, Peru, Algeria and USA markets  2008  Penetrated the Egyptian market  2009  Established our sales branches in Pahang and Melaka  20 II  Established our sales branches in Penang and Selangor  2012  Signed Trademark Licence Agreement with Lucas Ltd for the exclusive use but not the ownership of the Lucas trademark in Malaysia and designated countries in Asia. Lucas is a well known brand which was established in 1872 in the UK. Lucas product range covers amongst other, automotive bulbs, batteries, wiper blades, starters and alternators. Under the said arrangement, the automotive electrical parts and components manufactured by our contract manufacturers will be marketed under the Lucas brand, i.e. third party brand  2013  First sale of automotive electrical parts and components under the Lucas brand
THE REST OF THIS PAGE HAS BEENINTENTIONALLY LEFT BLANK ICompany No. 1016725-P I 6. BUSINESS OVERVIEW 6.1  OUR BUSINESS  6.1.1  Onr Bnsiness Model  Our business model as at the LPD is illustrated in the foIlowmg chart
Establishing presence In the automothle aftermarket for automotive parts lind components In Malaysia lind overseas for the passenger and commercialvehicle segments Third Party Branded Automotive
Cores (Note I} Parts and Components (Nor!’ I} local Suppliers local Suppllers PrIncipal Remanufacturing of Activities Automotive Alternators and Starters
Twilleo, Solid Corporation JBSAuto Empire, Uni Point Processes Brands Main Types of Products Offered
i Remanufacturing~_.R_’_P’_’_k.'”.’~ 1
o Remanufactured o Slee,lnsParts • Clutch Parts Alternatorsorraller Pilns• Gearbox Part,

•a, • Remanufactured• Brake Parts
Starters

……I’I~~~~~-O-H-“-‘-‘i-S-‘-‘~~B-“-“-‘-h’-‘—–‘} r’——O-,-“-‘-.M’-D-“-‘-“-b’-‘-‘-,,—–‘) \ /’-“””””””-~ ——————” I[ Johor (HO) • Pahang jr.Middle East • East Asia 1 1• 0 Singapore • Melaka • South Ea,t Asia • sol.lth Asia iII •Kuala Lumpur • Penang • Central and South America • Others t “.Perak ;Il,·__~~,b_:~_, __,., ‘ ,’,._,,,’,._,’ .Selangor ,\..~ Afrl_:”~,~,~,:~__,-‘”‘,…”‘_,,,.._.,_-,~_”–”””’~,= .J I …I[—————W-,-,k-,-h,-P-,-,W-h-,-,.-,,-,-“-‘,-F-,.-.-‘-O-.-“-.-,,———–~~’ 50 6. BUSINESS OVERVIEW (Cont’d) Notes: • Imported directly from overseas distributors/manufacturers. .. Purchasedfrom localappointeddistributors oftheoverseassuppliers. J Number oflocal and overseas suppliers as at 30 April 2013 are as follows: Automotive Parts and Components  Cores Third Partv Brand  In-house Brand  No. oflaca! suppliers % of local purchases No. ofoverseas suppliers % ofoverseas purchases  173 34.56 100 65.44  6 6.52 61 93.48  2 100.00 . –
2 In 2012, we have been granted the exclusive use but not the ownership ofthe Lucas trademark With the signing ofthe Trademark License Agreement with Lucas in 2012 as disclosed in Sections 4.1.2, 6.6.3and 16.3(x) of this Prospectus, our Group had in February 2013, commenced the sale of automotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers. In this regard, our Group has expanded the category of offerings of our products i.e. third party brand but manufactured by our contract manufacturers. (i) Bnsiness focns
Our Group is involved in the trading and distribution of automotive parts and components as well as remanufacturing of automotive alternators and starters for the passenger and commercial vehicle segments in the automotive aftermarket in Malaysia and overseas. The details of our principal activities as well as marketing activities and strategies are provided in Sections 6.1.2 and 6.5.2 of this Prospectus, respectively.
(ii) Types of goods and snppliers

We obtain our supplies of automotive parts and components for our in-house branded products from our contract manufacturers in Malaysia and overseas. For Lucas branded products, we source our products from our overseas contract manufacturers. We source for third party branded automotive parts and components from local appointed distributors of the overseas suppliers as well as through direct imports from overseas distributors or manufacturers. Cores which are used in the remanufacturing activities are sourced locally. For further details on distributorships, contract manufacturing and remanufacturing, please refer to Section 6.11.2 ofthis Prospectus. (iii) Principal activities We operate within the automotive aftermarket. Our principal activities include trading and distribution of in-house and third party branded automotive parts and components as well as remanufacturing of automotive alternators and starters. Our principal activities are detailed in Section 6.1.2 of this Prospectus. (iv) Processes We repack automotive parts and components which are manufactured by our contract manufacturers under our in-house brands and Lucas brand. We also offer repacking service to our overseas customers to repack the automotive parts and components manufactured by our contract manufacturers under customers’ own brands. Third party branded automotive parts and components are received and subsequently delivered to our customers without any repacking. Cores procured from our suppliers are used in our remanufacturing activities. Please refer to Section 6.2 of this Prospectus for further details on our trading and remanufacturing processes. (v) Main types of prodnets offered Our products can be segregated into three (3) segments namely automotive electrical parts and components, engine and mechanical parts and components as well as remanufactured alternators and starters. Details of our products are shown in Section 6.1.2 of this Prospectus. 6. BUSINESS OVERVIEW (Conl’d) (vi) Distribution network Our Group’s distribution network consists of our HQ in Johor Bahru, seven (7) sales branches located in Malaysia, one (1) sales branch in Singapore as well as our overseas distributors in several regions including Middle East, South East Asia, Central and South America, Africa, East Asia and South Asia. Further details on our distribution network are highlighted in Section 6.5.1 of this Prospectus. (vii) Target market Our Group’s target markets include workshops, wholesalers and fleet owners. 6.1.2 Principal Activities Our principal activities can be grouped into two (2) main categories as follows: (a) Trading and distribution of automotive parts and components which include electrical, engine and mechanical parts and components; and
(b) Remanufacturing of automotive alternators and starters.

(I) Principal Activities A summary of our principal activities is as follows: Remanufacturing’ Automotive.electr.icaI.parts and En~ineandril~ch~*jcatp~rts.atld comOOfltmts ‘~ombon’ei1ts’ Trading and distributioll Alternator:sand starters ‘name
In-housebrand* Twineo Solid Corporation ~’* Auto Empire Uni Point ~’* JBS Notes As at the LPD, our Group is involved in the trading and distribution ofautomotive parts and components of more than 100 brands, including New-Era, Unipoint, Bosch, OSRAM, Mercedes-Benz, Diesel-Technic, Heffa, Airtech, ZF andAPM H Our Group is also involved in the OEM business model by trading and distributing products manufactured by our ou(sourced manufacturing suppliers under our own in-house brands such as Hansa Parts, Solid, ZENEX, JMK Please refer to Section 6,13 ofthe Prospectus forfurther details ofourregisteredbrandnames Our Group is involved in the remanufacturing ofautomotive alternators and starters, Please refer to Section 613 of thisProspectus fordetailsoftheremanufacturingprocess, OurGroup’sremanufacturedstartersandalternatorsare c:pmarketed under our in-house brand, il2I (i.e, KIS) and distributed by Solid Corporation. in February 2013, our Group commenced the sale ofautomotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d) (ii) Products distributed and remanufactured by our Group Our products can be grouped into tbree (3) main categories: (a) Automotive electrical parts and components for the passenger and commercial vehicle segments;
(b) Engine and mechanical parts and components for the passenger and commercial vehicle segments; and
(c) Remanufactured alternators and starters for passenger vehicle segment. The table below sets out the major products distributed and/or remanufactured by our Group:

 

Automotive electrical parts and components  I Alternator  IHansa Parts  I  ,  I , ILucas  I’ I­ I: Unipoint Mitsubishi Prestolite  Starter  I Hansa Parts  I  ./  I ./  I Lucas  -1./  I – • Bosch I • Unipoint  • Mitsubishi  •  SAWAFUJI  • NIKKO  • Bosch  Solenoid switch  I • •  Hansa Parts Solid  I  ~  I ~  I­ I – I­ I:  New~Era Unipoint  • Mitsubishi  • TAMA  • Eiko Denki  • Bosch  Regulator  I  Hansa Parts  1 ./  I ./  I Lucas  – 1./ I­ • EPINA I· New-Era • Unipoint  • Bosch  • MitsublShl
.’ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ./ ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d)
(i) Automotive electrical parts and components (continued)
(ii) Engine and mechanical parts

and components Bulb Sealed beam Hom Wiper blade Plu cable Carburator
Relay Ignition coil Automotive wires LED lamps, head lamps and beacons Brake parts (pads, lining, shoes and booster) Coil spring Hansa Parts I •  ,/  ,/
I• Hansa Parts • ZENEX I Hansa Parts I• Hansa Parts • jpn INTERNATIONAL Hansa Parts • Hansa Parts
• Solid Hansa Parts

 

,/ ,/ ,/ ,/ ,/ ,/ ‘/1’/1­,/ ,/  ,/  ,/
,/Hansa Parts Hansa Parts Hansa Parts JMK I• Hansa Parts • jpnINTERNATIONAL ,/ I”
54 MOBILETRON ,/ ,/I: Osram ,/HELLA ,/• Top Band ,/• FlOsser ,/• KOITO Two Star ,/• Bosch ,/• Siebel ,/r-[: Bosch ,/Unipoint ,/I-I I Bosch I ,/• Britax
• ,/HELLA
• Mercedes-Benz I
• Mintye

I ,/ ,/ ,/ ,/ ,/ ,/ ,/ ,/ ,/ ,/ ,/ I ,/ I I ,/
,/
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) and components • Diesel-Technic (continued) Clutch discI ——SACHS cover • Maxecn • ITMercedes-Benz
• • Diesel-Technic Crankshaft I-1 I-I I-I. BF Germany • OEG Oil and water LASO pump I III I II: PobJeda Tesanj • Diesel-Technic ..
..
..
..
Piston and liner I-1-I -I-I-I-I. Goetze -..• KS IT..• MAHLE • Diesel-Technic Oil sump/ -dphI-I-I I-I-I-i: I~..-gasket Elring • Diesel-Technic 11 ..Intake and ——• Natamak ­exhaust • Diesel-Technic manifold ..Air I Oil filter ——• KS ­..• Bosch ­
• Mercedes-Benz ­

..-..• Diesel-Technic ..Fuelpump 1 -1 –I-I-I-BoschI I’• Diesel-Technic I I..Injection unit 1 • Bosch11 1II I • Diesel-Technic I ..Propeller shaft 1 1 GWB I LLL ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d)
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Con/’d)
Notes, # In February 2013, our Group commenced the sale ofautomotive electrical paris and components under the Lucas brand which were manufactured by our contract manufacturers, P denotes passenger vehicles, C denotes commercial vehicles, THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) OUf in-house branded automotive parts and components include automotive electrical, engine and mechanical parts and components as well as remanufactured automotive alternators and starters as shown below: (i) Antomotive electrical parts and components
6. BUSINESS OVERVIEW (Cont’d) 6. BUSINESS OVERVIEW (Cont’d)
(ii) Engine and mechanical parts and components
(iii) Remanufactured alternators and starters
(iv) Lucas brand (automotive electrical parts and components) 6. BUSINESS OVERVIEW (Conl’d)
(iii) Principal Markets Our in-house branded products are exported to various regions across the world namely the Middle East, South East Asia, Central and South America, Africa and other regions in Asia. Our Group’s principal markets comprise both domestic and export markets. Our Group’s revenue contributions by geographical locations for the past four (4) FYE 30 April 2010 to 2013 are as follows: ”  1  ….• ..-·  Domestic market:  – Overseas market:  – -Others'”  Total revenue
i.:. 1<.” …..Z01 2012’zm .:~5’:i”” ,,: loRI …..y:.•. %:I &/0’% RM’OOORM’OOO % RM’OOO Malaysia and Singapore# 54,221 56,245 67,728 65,558 602667.13 63.77 65.03 Middle East and Africa* 20,296 2513 25,766 2921 30,370 29.16 37,489 3446 6,250 7.74 6,190 7.02 6,057 5.81 5,747 5.28 80,767 10000 88,201 104,155 10000 108,794 1000010000 i ” ii “t Notes: # The sales generatedfor the Singapore market farmed less than rOO% of the total revenue for each afthe pastfour (4) financial years under review , Middle East and Africa market includes amongst others, Saudi Arabia, VA£, Libya, Egypt, Syria, Iran, Yemen, Oman, Turkey, Jordan and Cyprus Other overseas market includes amongst others, Ecuador, Indonesia, Thailand, Sri Lanka, Philippines, Peru, Guatemala, Taiwan, Colombia, China, USA, Hong Kong, EI Salvador, Fiji, India, Australia, Nepal, New Zealand, UK, Iran, Bolivia, Costa Rica, Pakistan, Russia, Ireland and Lithuania
The domestic market comprising Malaysia and Singapore, was our largest market accounting for approxImately 67.13%,63.77%,65.03% and 60.26% of our Group’s revenue for the past four (4) FYE 30 April 2010 to 2013 respectively. Export revenue made up the balance and was contributed by more than 30 countries around the world. For the past four (4) FYE 30 April 2010 to 2013, the Middle East and Africa was our largest overseas market contributing approximately 25.13%, 29.21%, 29.16% and 34.46% of our Group’s revenue respectively. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d) Our Group’s revenue contributions by end customer category for the past four (4) FYE 30 April 20 I0 to 2013 are as follows: ~.v.n,,~ •••• : ••••••••Local -Workshop -Fleet owner -Wholesaler Export -Wholesaler  ..””. ••••• No. of custom’er 1,136 122 1,273 76  2010 “. 25,533 9,410 19,449 26,375  •••••••••• To/” 31.61 11.65 24.08 32.66  …. ·····:11111 … ··.: •. .”;l’l9’2L ….;… ….•. 1::% 1,222 26,375 29.90 92 6,372 7.22 1,370 23,343 26.47 84 32,111 36.41  ¥J:i30. No. of cUstthner 1,255 110 1.505 90  ,,;;, 21112 RM’OOO 28,870 11,352 27,095 36,838  …. % 27.72 10.90 26.01 35.37  ..::  …… !’i0.o[ 1,117 85 1,435 96  .2013 ••.. : •••……••.. . : :0/;, 29,275 26.91 8,901 8.18 27,382 25.17 43,236 39.74  Total revenue  2,607  80,767  100.00  2,768  88,201  100.00  2,960  104,155  100.00  2,733  108,794  100.00
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
6. BUSINESS OVERVIEW (Cont’d) 6.2 BUSINESS PROCESSES The process flow of our businesses in trading and distribution of in-house and third party branded products and remanufacturing ofaltemators and starters are depicted below. 6.2.1 Trading and Distribution of In-house Branded Products and Third Party Branded Products (Le. Lucas) Manufactured by our Contract Manufacturers , —————,1 II I Product Identification I
I I\_——I——-‘ I——~——-‘ I Provision of Test Samples ~ : by ‘Contract I l Manufacturers
——-1:——-; Placing Order with Contract Manufacturers
~
Delivery from Contract Manufacturers -V
Repacking -V
Delivery to Customers … ——.. ,_. 1 Applicable to new products only (i) Product Identification
OUf Group identifies new products trom our partIcIpation in various international trade fairs and exhibitions as well as feedback received from our customers in respect of their new product requirements. We also undertake our in-house survey on current development and market trend in the industry.
(ii) Provision of Test Samples by Contract Manufacturers

After product identification, we request our selected contract manufacturers to produce samples of the products based on our specifications. This arrangement is applicable to new products which are currently not in our product range. Our contract manufacturers will produce the test samples for the new products. This process will generally take approximately three (3) to six (6) months. We will check the samples against our specifications before being accepted. 6. BUSINESS OVERVIEW (Conl’d) (iii) Placing Orders with Contract Manufacturers Upon receiving the purchase orders from our customers, we will proceed to place orders with our contract manufacturers for them to commence production. For our Group’s main contract manufacturers, our Group has entered into “supply agreement” detailing the scope of works required, pricing terms, duration, restrictive covenants and indemnity clause. We have six (6) aud 61 contract manufacturers based in Malaysia and China, respectively. Hence, we do not rely solely on any single contract manufacturer. (iv) Delivery from Contract Manufacturers
Generally, our contract manufacturers take up to six (6) months to fulfill our first orders. Subsequent orders may take between one and a half (1.5) months and three (3) months for delivery depending on the quantity of orders and the complexity of products. Our contract mauufacturers will deliver the products either to our rented warehouse which is located within the free trade zone of Pasir Gudaug Port for re-export or to our Johor Bahru warehouse for local distribution. All incoming products are checked to ensure that they are in compliance with our specifications as well as our customers’ requirements before being accepted. Any products which are not in compliance with our specifications will be returned to our contract manufacturers.
(v) Repacking

The products are repacked under our in-house brands such as Hansa Parts, Solid, ZENEX aud JMK as well as Lucas as detailed in Section 6.1.2(ii) ofthis Prospectus. If requested, we also repack products under our customers’ own brands. Before accepting such orders, we will conduct checks to satisfy ourselves on the ownership of the brands in question to avoid any infringements of known trademarks. The checks that we conduct include obtaining the Letter of Authorisation and Indemnity from our customers for repacking under private labels to indemnify our Group from any potential trademark infringement. We also conduct searches on the official registration of the requested private labels in the countries where the products are to be sold to verify the legitimate ownership of the private labels. We further seek confIrmation from our customers on the non-infringement of the use of the requested private labels before the delivery ofproducts to our customers. (vi) Delivery to Customers Once the products at our rented warehouse at Pasir Gudang Port are completely packed and checked, the products are then shipped to our overseas-based customers. Meanwhile, the products at our warehouse in lohor Bahru are delivered by third party transportation companies to our local customers or sales branches. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFTBLANK 6. BUSINESS OVERVIEW (Con/’d) 6.2.2 Trading and Distribution of Third Party Branded Products Placing Order with Third-party Brands’ Principals or Suppliers
~
Delivery of Orders by Third-party Brands’ Principals or Suppliers ~
Warehousing of Goods ~
Delivery to Customers (i) Placing Orders with Third Party Brands’ Principals or Suppliers
Our Group generally places orders for third party branded products directly with the respective principals or their exclusive distributors or agents. These parties are mainly based in Malaysia, Japan, China, Taiwan, Europe and Singapore. The third party brands that we sell include New-Era, Unipoint, Bosch, OSRAM, Mercedes-Benz and APM as detailed in Section 6.l.2(ii) of this Prospectus.
(ii) Delivery of Orders by Third Party Brand’s Principals and Suppliers

Generally, our third party brands’ principals or suppliers take up to three (3) months to deliver our orders. Goods from overseas are delivered either to our rented warehouse at lahor Port in Pasir Gudang, lahor for re-export or to our HQ in Johor Bahru, for local distribution. Goods from local suppliers are sent to either our HQ in Johor Bahru or our sales office cum warehouse in Kuala Lumpur. All incoming goods are checked to ensure that the goods are in compliance with our requirement before being accepted. (iii) Warehousing of Goods OUf warehousing team will store the goods according to brand and product group to facilitate the sorting and picking process. (iv) Delivery to Customers All our outgoing goods will be checked by our logistic team against the orders before being delivered to our local and overseas-based customers. 6. BUSINESS OVERVIEW (Conl’d) 6.2.3 Alternators and Starters Remanufacturing Processes Incoming and Sorting of Cores
~
Disassembly of Cores ~
Cleaning of Parts and Components
~
Repairing and Reconditioning of Parts and Components ~
Assemblyof Alternator and Starter’s Sub­components ~
Assembly of Alternators and Starters ~
Final Testing and Outgoing Quality Checks
~
Deliveryto Customers 6. BUSINESS OVERVIEW (Conl’d) (i) Incoming and Sorting of Cores
The cores are supplied by scrap collectors. Upon receiving the cores, these cores are firstly sorted by segregating them into different types of model and sizes while visnal examination on the condition of the cores is conducted at the same time. This visual examination is important to determine their suitability for remanufacturing. Any cores which are deemed not suitable for remanufacturing purpose will be returned to the suppliers. The good cores are transferred to the warehouse for storage before being transferred to the production line for processing.
(ii) Disassembly of Cores

The cores are completely dismantled into different parts and components. The dismantled parts and components are visually inspected and checked to identify any worn-out, missing, defective or damaged parts and components. The worn out, defective or damaged parts will be sent for repair and/or reconditioning. (iii) Cleaning of Parts and Components All the parts and components are thoroughly cleaned through a series of cleaning processes which include sand-blasting, steel brush cleaning and chemical cleaning to remove the dirt and grime. Meanwhile, bearings and gears are cleaned, checked and re-lubricated manually. (iv) Repairing and Reconditioning of Parts and Components The worn-out, defective or damaged parts and components are repaired (where possible). Part of the process includes rewiring of stator with new copper wires while components such as pulleys, rotors and shafts are milled or rethreaded and/or repainted if required. Our Group outsource the works involving electroplating ofparts and components such as covers, pulleys and bolts. All repaired or reconditioned parts and components are tested to ensure compliance with the desired specification. Parts or components which do not comply with our specification are not used in the subsequent process. These discarded parts and components are accumulated and later sold to the scrap metal dealers. (v) Assembly of Alternator and Starter’s Sub-components
The assembly process starts with the sub-assembly of the alternator and starter’s sub-components such as gear, solenoid and stator using the repaired and/or reconditioned parts and components. New components are used ifrequired.
(vi) Assembly of Alternators and Starters

Thereafter, the alternator and starter’s sub-components and other parts are assembled into complete alternators and starters according to the identified models/types. (vii) Final Testing and Outgoing Quality Checks Our outgoing QC team will perform a final testing on the assembled alternators and starters on our test bench. Quality checks are also conducted on the assembled alternators and starters to ensure compliance with our specifications. A QC approved stamp is marked on the alternators and starters which pass the final testing and QC checks. (viii) Delivery to Customers Our Group will engage the services of third party logistics providers to deliver the alternators and starters to our local customers or ship the alternators and starters to our overseas-based customers. 6. BUSINESS OVERVIEW (Cont’d) 6.3 PRODUCTION CAPACITY 6.3.1 Production and Storage Capacity and Production Output The production capacity and utilisation of our production machineries and equipment owned by JBS for our remanufacturing activities are illustrated in the table below:

 

• Mechanical 20,000 rotors I rust starter coils starter coils remover machine
• Manual 2 6,000 alternator 2,500 alternator 42.00 blaster coils coils machine
• Turbo 60,000 starter 10,000 starter coils! 16.6d2) 33,833

washer coils alternator coils machine
J3j50,000 starter 10,000 starter coils I # coils / alternator alternator coils coils • ISO-litre 12,500 small 6,500 small 5200 11,025 tumbling components components machine
5,00(4) blaster components components machine

• Semi auto 56,000 small 2,600 small 8,875

1300(5) vibratory parts cleaning machine
• 350-htre 62,500 housings 8,000 housings 2,875 Testing machine: • Starter 7,000 starters 4,000 starters 57.00 tester
• Alternator 5 5,000 alternators 1,200 alternators 24.00 21,600 tester

Notes:  Actual production output is calculated based on I2~hour shift per day and 26 working days per month  #  These machineries and equipment have beenfully depreciated  (1)  One unit is  a  refurbished unit purchased in 2003 while the second unit  was  bought  new  in 2005  Due to  the  importance ofthe sandhlastingprocess to production, the second unit was purchased to be a standby machine in case  the first unit breaks down  (2)  The machine was purchased in January 2013 and only used to clean heavily soiled components,  which are low  volume by nature. This machine has a larger than the required capacity  (3)  The machine was replaced with the new machine purchased in 2013 as above, due to its poor condition It is no  longer used in production process and after refurbishment is currently retainedfor standby purpose  (4)  The machine is only used to clean rusty components, which are not high in volume by nature Also, this machine is a  refurbished unit and has a larger than the required capacity  (5)  The machine is a refurbishea unit and has a larger than the required capacity
6. BUSINESS OVERVIEW (Cont’d) Our storage capacity as at LPD is as detailed below: Owned properties Location No.5, Ja1an Dataran 5 Taman Kempas 81200 Johor Bahru Johor Daml Takzim No.7, Jalan Dataran 5 Taman Kempas 81200 Johor Bahru Johor Darnl Takzim No. 17, Jalan Kukuh Off Jalan Tampoi Kawasan Perusahaan Tampoi, Larkin 80350 Johor Bahru Johor Darul Takzim No. 30, Persiaran Segambut Tengah 51200 Segamhut Kuala Lumpur No. 10, Laluan Perusahaan Menglembu 6 Kawasan Perusahaan Menglcmbu 31450 Mcnglembu Perak Darul Ridzuan Lot 4740, Jalan Wong Ah Jang 25100 Kuantan Pahang Darul Makmur* A249, Jalan Wong Ah Jang 25100 Kuantan Pahang Darul Makmur* G4, G5, G6 & G7, BJok B4 Jalan Rahmat 3 Taman Malim Jaya 75250 Meiaka No.3 & 5, Lorang Limbungan Indah 1 Taman Limbungan Indah 12100 Butterworth Pulau Pinang No. 29, Jalan Jela! 1OIKS 1 Teluk Gadong Besar 42000Pclabuhan Klang Selangor Darul Ehsan  Built-up Area so.ll. 41,360 23,025 43,527 6,068 5,400 7A70 3,887 4,824 7)88 4,750  Area Allocated for Storage so.ll. 20,160 18,254 6,437 4,400 4,200 6,670 2,380 3,450 5.. 632 4,200  AppTo~irnate Utilised Area Allocated for Storage so.ll. 17,942 16,429 6,115 3,960 3,570 5,670 2,933 4,224 3,570 Approximate Utilisation Rate ‘% 89.00 90.00 95.00 90.00 85.00 85.01 85.02 75.00 85.00
Note: , As disclosed in Section 615,1 ofthis Prospectus, our Group has on 26 July 2013 relocated the office and warehouse ofKuantan branch to the adjacent property which is owned by Solid Corporation i-e ./110, A249, Jalan Wong Ah Jang, 25100 Kuantan, Pahang Daml Makmur, 6. BUSINESS OVERVIEW (Cont’d) Rented properties
Jalan Wisma Kontena Johor Port Berhad, 81750 Pasir Gudang Johor Darnl Takzim Lot 13 & 14, Lorong Durian 3 8,400 7,516 6,764 90.00 Kian Yap Light Industrial Estate Jalan Kolombong 88450 Sabah 10 Admiralty Street 4,003 2,250 2,137 95.00 #01-86 Singapore 757695 10 Admiralty Street 3,584 2,971 2,822 95.00 #01-64 Sin apore 757695 Under the proposed expansion plan, our Group intends to house the Group’s entire operations including the remanufacturing of alternators and starters and warehousing at a location to be identified. OUf Group intends to utilise RM9.000 million from the proceeds raised from the Public Issue for the said purpose. For further details on centralisation of our Group’s operations, please refer to Section 6.16.I(ii) of this Prospectus. 6.3.2 Technology Used For OUf manufacturing activity, we are currently involved in the remanufacturing of used alternators and starters, as described in the production process in Section 6.2.3 of this Prospectus. The machinery used for manufacturing includes mechanical rust remover machine, manual blaster machine, alternator tester, starter tester, turbo washer machine, tumble belt cleaning machine, 350-litre vibratory parts cleaning machine, 150-litre twnbling machine and semi auto blaster machine as detailed in Section 6.3.1 of this Prospectus. In view of this, our Group is not using any identified technologies other than technologies available/embedded in the said machinery. 6.4 SEASONALITY OF OUR BUSINESS Generally, our Group’s business is not affected by seasonality. However, we do experience slightly lower sales in our domestic market during the major festive periods, particularly during the Chinese New Year and RamadanlHari Raya period. 6. BUSINESS OVERVIEW (Cont’d) 6.5 6.5.1 DISTRIBUTION AND MARKETING Distribution Network Our Group’s local distribution network covers the whole of Malaysia. As at the LPD, Solid Corporation has its HQ in Johor Bahru, seveu (7) sales branches/warehouses iu Malaysia and oue (I) sales branch in Siugapore. Twiueo’s aud Uui Poiu!’s sales persounel are all based at our HQ in Johor Bahru whereas Auto Empire’s sales personnel are based in Singapore. Our Group has 95 overseas distributors, which are wholesalers, to market and sell our products in their respective countries to their respective customers which mainly comprises of spare parts shops and other retailers. These distributors enable us to broaden our geographical reach to penetrate into the overseas markets. As at the LPD, the summary of the number of our regional sales personnel for the local market and distributors for export market is as follows: ” ‘::ii’.:,: : .···.Reglo”.l$”lo,’.’ > .’::: .:::> <.{ …:.,:…• ” …..:•…• : “. ·····Pers.nJ1d: Distributors Malaysia • Central region (Kuala Lumpur, Selangor and Melaka) 17 ­• Northern region (Perak and Penang) 12 ­• Southern region (Johorr 19 ­• Eastern region (Pahang) 8 ­• East MalaySia (Sabah) 7 ­Singapore 1 ­Overseas markets 2 • Middle East: -Saudi Arabia -27 -Others (UAE, Syria, Yemen, Turkey, Oman and Jordan) -12

• Africa (Libya, Sudan, Egypt, Algeria, South Africa and Mauritius) -14
• Others -South East Asia (Indonesia, Thailand and Philippines) -15

 

-Central and South America (Ecuador, Peru, Guatemala, -14 Colombia and El Salvador) – East Asia (Taiwan, China and Hong Kong) -5 – South Asia (Sri Lanka, India and Nepal) -3 – Others (USA, FIJI, AustralIa, New Zealand and UK) -5 Total 66 95 Note: including sales personnelfrom Solid Corporation, Twineo and Uni Point Both our sales team and distributors are organised to work as a cohesive distribution network to serve all our existing and potentia] customers in the domestic and overseas markets. Marketing Activities and Strategies Our marketing approach and promotion strategies are implemented through various channels which are aimed primarily to promote our brands and introduce our products to potential customers. Our Group is committed to developing effective marketing and promotion strategies that can help to increase the visibility of our product offerings and drive sales. 71 6. BUSINESS OVERVIEW (Conl’d) Our marketing team is currently led by our Managing Director and Executive Director, Ker Min Choo and Ker Mong Keng respectively, and supported by our 66 regional sales personnel. The marketing activities initiated by our Group include the following: (i) Participation in Trade Shows and Exhibitions We participate in overseas trade shows and exhibitions as a means of promoting our Group’s brands and products to potential customers. Our Group also solicits overseas-based customers from these trade shows and exhibitions. In the past four (4) years, we have received grants from MATRADE to help finance our participations in selected international trade shows and exhibitions. Our Group has also registered with MATRADE for potential participation in the international trade fairs and promotional booths which are coordinated by MATRADE. Amongst the trade shows and exhibitions we took part from 20I0 up to the LPD are as follows: Year 2010 20 II 2012 2013  Name of·Trade Shows or Exhibitions Automechanika Middle East 20 I0 Automechanika Frankfurt 20 I0 Automechanika Shanghai 2010 Automec International Trade Fair for Autoparts, Equipment and Services Automechanika Middle East 20 II Automechanika Shanghai 20 II The Indonesia International Auto Parts, Accessories and Equip Exhibition and Conference 2012 (lNAPA) Central Asia Autoparts 2012 (CATEXPO) 6th International Exhibition for Autoparts, Garage Equipment and Petrol Station Antomechanika Middle East 2012 Automechanika Frankfurt 2012 Automechanika Dubai, 2013 ReMaTec 2013 (Exhibition for automotive parts remanufacturing activities)  Venue UAE Germany China Brazil UAE China Indonesia Kazakhstan UAE Germany Dubai The Netherlands
Such participations enable our Group to keep abreast with the latest industry development particularly on the competitive landscape which helps to shape our marketing strategies. In addition, these automotive trade shows and exhibitions is another avenue for us to gather valuable feedbacks from our customers and to increase awareness for our brands. 6. BUSINESS OVERVIEW (Cont’d) (ii) Personalised services via face-to-face communications Our Group places a high priority on satisfying the needs of our cnstomers. We have identified face-to-face communication as a key marketing tool in our effort to offer a more personalised service that can help to address their specific needs effectively and to foster a closer relationship with our customers. We have a team of dedicated marketing personnel to provide personalised services to both our domestic and international customers. We travel regularly across various regions to our customers’ site (both local and overseas) to improve OUf business relationship and to gather their feedbacks pertaining to our products and services. (iii) Repacking services under a private label Our automotive electrical parts and components manufactured by our contract manufacturers are generally packed under our in-honse brands before being distributed locally and re­exported to other destinations. Nevertheless, our Group does provide the flexibility to our overseas-based customers to have the automotive electrical parts and components repacked under their own private labels. These private labels will be subject to checking and verification to prevent any trademark infringements as disclosed in Section 6.2.1 of this Prospectus. Our Group’s marketing strategies are as follows: (i) We will continue to enhance the reputation of our in-house brands such as Hansa Parts and ItiiJ (i.e. KIS) in Malaysia and overseas by ensuring our products provide reliable quality and competitive prices; (ii) We will continue to increase our market penetration and market share in our main overseas markets such as Saudi Arabia, UAE, Libya, Ecuador and Indonesia. On our emerging markets in other conntries such as Egypt, Brazil, Mexico, Kenya, Nigeria, Sndan, South Africa, Bangladesh, Pakistan and Philippines, we will continne with our market seeding programs to introduce our products and brands and establish footholds in these countries. We will also explore new markets in other countries not presently served by our Group; (iii) We have positioned our prodncts as an alternative to OEM products in tenns of quality, perfonnance and competitive pricing. We will continue to stress these features in all our markets and maintain strict quality control over our products; (Iv) We have signed a Trademark Licence Agreement in 2012 with Lucas Ltd for the exclusive use but not the ownership of the Lucas trademark on our automotive electrical parts and components for Malaysia and designated countries in Asia. The Lucas brand is a well kno\¥I1 brand which was established in 1872 in the UK. The Lncas prodnct range covers, amongst others, automotive bulbs, batteries, wiper blades, starters and alternators. This will help to enhance our reputation and image in the automotive aftennarket. We have launched these products under the Lucas brand in February 2013 as a third party brand; and (v) We also intend to expand our in-house branded product range to include more items from our engine and mechanical parts range for commercial vehicle segment. As our in-house brands are already distributed in Malaysia and overseas, we will capitalise on the market acceptance of our in-house brands to widen our product range. 6. BUSINESS OVERVIEW (Conl’d) 6.6 OUR COMPETITIVE STRENGTHS In order to achieve our vision to be a leading player in the automotive parts and components industry, it is vital for our Group to strengthen and leverage on our key competitive strengths as follows: 6.6.1 Experienced Human Capital Our Group is led by our Managing Director and our Executive Director. Ker Min Choo and Ker Mong Keng respectively. Both of them have accumulated more than 30 years of experience each in the automotive parts and components industry. Our Group is also supported by a team of dedicated personnel who possess the necessary experience and expertise in the automotive parts and components industry. Having a management team with such experience and expertise in the automotive parts and components industry is an added advantage for our Group in maintaining the quality of our customer service and the relationship with our customers. 6.6.2 Wide Distribution Network We have developed a wide distribution network that reaches out to our local customers throughout Malaysia. As at the LPD, in addition to our HQ in Johor and our sales branch in Singapore, we have established seven (7) branches in Malaysia, namely in Perak, Penang, Pahang, Kuala Lumpur, Selangor, Melaka and Sabah to better serve our local customers. On the other hand, our overseas markets are being served by our distributors in their respective countries, who are overseen by two (2) of our Group Regional Sales Personnel. Our distributors are located in more than 30 countries covering our overseas market as disclosed in Sections 6.1.2(iii) and 6.5.1 of this Prospectus. 6.6.3 A wide range of automotive parts and components and brand selection We aim to cater to the requirements of our customers by offering a wide range of automotive parts and components. Our automotive parts and components cater to both passenger and commercial vehicle segments. Please refer to Section 6.1.2 (ii) for our major products distributed and/or remanufactured by our Group. As at the LPD, we have a total SKU ofmore than 7,000 part items for automotive electrical, engine and mechanical parts and components for passenger and commercial vehicles. We also carry more than 100 third party brands such as New-Era, Unipoint, Bosch, OSRAM and Mercedes-Benz as well as 18 in-house brands such as Solid and Hansa Parts under our product portfolio. In February 2013, our Group commenced the sale of automotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers. We are also involved in the remanufacturing of alternators and starters which are packaged under our in-house brand ~ (i.e. KIS). 6.6.4 Established business relationship with customers We currently have a large customer base with approximately 2,700 customers from both the local and export markets. As at the LPD, approximately 60.00% of our customers have been with us for more than five (5) years. 6. BUSINESS OVERVIEW (Cont’d) 6.7 QUALITY CONTROL PROCEDURES (i) Remanufacturing ofautomotive alternators and starters For our remanufacturing of alternators and starters at JBS, we place emphasis on the quality of the remanufactured alternators and starters. Our QC procedures can be divided into the following major sections namely: (a) Incoming QC
All arriving cores are subject to visual inspection to ensure their suitability for remanufacturing before being accepted by JBS.
(b) In-process QC

During the manufacturing process, quality checks are performed on each sub­component of alternator or starter. Before a sub-component or sub-assembly can proceed to another stage, it needs to meet specific parameters. (c) Outgoing QC Quality check is performed on outgoing products to ensure that their specifications are within an acceptable level. All remanufactured alternators and starters are tested and inspected visually before being packed for delivery or warehousing. (ii) In-house branded products Visual inspection is perfonned on incoming products to ensure that the products are acceptable. Periodic review is perfonned on the test reports submitted by our contract manufacturers to ensure that the products supplied comply with the agreed specifications. QMS JBS obtained the ISO 9001 :2008 certification from SGS (Malaysia) Sdn Bhd for flte remanufacturing andassembly ofalternatorsandstarters inNovember 20I2. As part of the said ISO requirements, JBS has established a QMS that will enable us to meet our customers’ quality requirements. A quality manual has also been prepared and our Management is committed to the execution of flte procedures established in the quality manual. The quality manual is reviewed as and when necessary. 6.8 RESEARCH AND DEVELOPMENT Our Group’s revenue for the past four (4) FYE 30 April 2010 to 2013 comprises trading and distribution of automotive electrical, engine and mechanical parts and components for our in-house brands and third party branded products as well as flte remanufacturing of alternators and starters. Our remanufacturing activities consist of disassembly of cores, cleaning, repair and replacement of the sub-components and reassembly ofalternators and starters. As our in-house branded products are manufactured by our contract manufacturers and our remanufacturing activities basically involve the repairing, cleaning and reassembling of alternators and starters as detailed in Section 6.2 of this Prospectus, our Group does not undertake any R&D activities. 6. BUSINESS OVERVIEW (Cont’dj
6.9 AFTERMARKET PRODUCT IDENTIFICATION We keep abreast of market requirements by continuously identifying new products to be added to our Group’s product range. As such, our Group places a strong emphasis on continuous product identification to cater to the needs of both our existing and potential customers. 6.9.1 Product Launches Our Group has continuously introduced new in-house branded products as part of our strategies to maintain a wide range of products to serve our customers’ requirements. Details of these products can be found in Section 6.1.2(ii) of this Prospectus. Notable products launched under our in-house brands are as follows: Product  Year of Launching  “Brand Names  Targeted Customers  Sealed beam  1993  Hansa Parts  Workshops and wholesalers  Wiper blade  1995  Hansa Parts  Workshops and wholesalers  Remanufactured alternator and starter  2003  ~ (i.e. KIS)  Workshops and wholesalers  Brake parts for passenger vehicle segment  2005  Hansa Parts and JMK  Workshops, fleet owners and wholesalers  LED light  2007  Hansa Parts  Workshops and wholesalers  Coil spring  2007  Hansa Parts and Solid  Workshops and wholesalers  Distributor  2007  Hansa Parts  Workshops and wholesalers  Ignition coil  2009  Hansa Parts  Workshops and wholesalers  Carburator  2009  Hansa Parts  Workshops and wholesalers  Spark plug  2011  Hansa Parts  Workshops and wholesalers  Fuel pump  2011  Hansa Parts  Workshops and wholesalers
In February 2013, our Group commenced the sale of automotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers.

6.10 MAJOR CUSTOMERS We do not have any customers that represent 10.00% or more of our total Group revenue for the last four (4) FYE 30 April 2010 to 2013. As such our Group is not dependent on any of our Group’s customers. Please refer to Sections 6.1.2(iii) of this Prospectus for the breakdown of our Group’s end customer category. Company No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d) 6.11 6.11.1 SUPPLIERS Types, Sonrces and Availability of Supplies The breakdown of the major product types/raw materials purchased by our Group for the FYE 30 April 2013 are as follows: FYE 30 April 2013 Vocal Overseas Purchases Type ofProducfl Raw MateriaJ, Purchases Direct* Indirect”
Total %% 0’/0 %. Trading and distribution ofautomotive electrical parts and components: 10000• In-house brands 7.55 9245 ­100.00• Third party brands 24.24 63.12 12.64 Trading and distribution of engine and mechanical parts and components: • In-house brands -100.00 ­100.00 100.00• Third party brands 1894 68.02 13.04 Remanufacturing ofautomotive alternators and starters Cores 10000 -.
100.00 Notes: • Imported directly from overseas distributors/manufacturers” including Japan Parts Service Co Ltd and Unipoint Electric MFC Co Ltd Purchasedfrom locally appointed distributors ofIhe overseas suppliers including Robert Bosch Sdn Bhd, ZF Sales & Services (Malaysia) Sdn Bhd, ZF Asia Pacific Pte Ltd Distributorships, contract manufacturing and remanufacturing (i) Distributorship
The distributorships granted to our Group by Ihe suppliers of third party branded automotive parts and components are non-exclusive which’ are generally non restrictive on the trading of other third party branded products, and there are no formal agreements involved. Notwilhstanding that there are no formal agreements involved, our Group has established a long relationship with our suppliers for third party brand names and we expect this relationship to continue in the foreseeable future. As at the LPD, we have a total of273 suppliers for third party branded automotive parts and components. However, none of these suppliers contributed 10.00% or more of our Group’s tolal purchases for each of the past four (4) FYE 30 April 2010 t02013.
(ii) Contract Manufacturing

All orders placed with our contract manufacturers are on demand basis without any long term contracts. Our Group outsources the manufacturing of our in-house branded automotive electrical parts and components to our contract manufacturers. The deliveries for our orders may take between one and a half (1.5) months and three (3) months for delivery depending on the quantity of orders and the complexity ofproducls 6. BUSINESS OVERVIEW (Cont’d) As described in Section 6.2.1 of this Prospectus, our Group has entered into a “supply agreement” with our main contract manufacturers detailing the scope of works required, pricing term, duration, restrictive covenants and indemnity clause. The terms and conditions relating to the products to be manufactured and other terms of the contracts are provided in the purchase orders. As at the LPD, we have a total of 67 contract manufacturers, of which six (6) of them are Malaysian companies and 61 of them are China-based companies. However, none of these contract manufacturers contributed 10.00% or more of our Group’s total purchases for each of the past four (4) FYE 30 April 201 0 to 2013. (iii) Remanufacturing Cores are the main raw materials used for our remanufacturing operations. All our cores are sourced locally and we do not have any long-term supply agreement with our suppliers. However, none of these suppliers contributed 10.00% or more ofour Group’s total purchases for each of the past four (4) FYE 30 April 2010 to 2013. As at the LPD, our Group is not dependent on any of the suppliers of third party branded products, contract manufacturers and cores suppliers. 6.11.3 Major Suppliers OUf Group is not dependent on any suppliers given that none of our suppliers individually contributed 10.00% or more of our total purchases in each of the past four (4) FYE 30 April 2010 to 2013. THERESTOF THIS PAGEHASBEENINTENTIONALLYLEFTBLANK ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) 6.12 APPROVALS, LICENCES AND PERMITS The major licences, permits and registrations of our Group together with the conditions attached and status of compliance are as follows:
lssuing  “aIUIIIY  Status’fif  Company  Issuine:Authoritv  Date  SaliCl)t  Petibd  Solid  Johor Rahru City  24.12.2012  Trading Licence and Advertising Pennit (for  Nil  01.01.2013 ­ Not  Corporation  Council  premise located at No.7, Jalan Dataran 5, Taman  3112.2013  Applicable  Kempas, 81200 Jahar Bahru, Johar Daru!  Takzim)
Kota Kinabalu City Hall Kota Kinabalu City Hall Kuala Lumpur City Hall Kuala Lumpur City Hall Ipoh City CouncIl Ipoh City CouncIl Kuantan City Council 29.12.2012 2912.2012 0808.2012 0702.2013 01.01 2013 01.01.2013 31 122012 Trading Licence (for premise located at Lot 13 & Nil 14, Lorong Durian 3, Kian Yap Light Industrial Estate, 1alan Kolombong, 88450 Kota Kinabalu, Sabah)
Advertising Permit (for premise located at Lot 13 & Nil 14, Lorong Durian 3, Kian Yap Light Industrial Estate, Jalan Ko1ombong, 88450 Kota Kinabalu, Sabah)
frading Licence (for premise located at 30. Nil Persiaran Segambut Tengah, 51200 Kuala Lumpur)
Advertising Permit (for premise located at 30, Nil Persiaran Segambut Tengah, 51200 Kuala Lumpur)
Trading Licence (as distributor) and Permit for Nil Storage/ Warehouse (for premise located at 10, Laluan Perusahaan Menglembu 6, Kawasan Perusahaan Menglembu, 31450, Menglembu, Perak Daru1 Ridzuan)
Advertising Permit (for premise located at 10, Nil Laluan Perusahaan Menglembu 6, Kawasan Perusahaan Menglembu, 31450, Menglembu, Perak Darul Ridzuan)
Trading Licence, Advertising Pelmit and Nil Temporary Building Permit (for premise located at Lot 4740, lalan Wong Ah lang, 25100 Kuantan, Pahang Darul Makmur)
0311.2012­ Not  31.12.2013  Applicable  01.01.2013 ­ Not  31.122013  Applicable  01.092012 – Not  31.082013  Applicable  01.03 2013­ Not  28.02.2014  Applicable  01.01. 2013 – Not  31.12.2013  Applicable  01.01.2013 – Not  31.122013  Applicable  01.012013 – Not  31.12.2013  Applicable
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Commmv  lssuinj! Alithol”itv Kuantan City Council  ISsuing Date 27.08.2012  Description Trading Licence and Advertising Permit (for premise located at A249, Tingkat Bawah, Jalan Wong Ah lang, 25100, Kuantan, Pahang Darul Malanur)  SalientCOriditions Approval from the Building Division ofKuantan City Council and the Fire and Rescue DepaJ1rnent must be obtained for any alteration constructed on the building.  Validity Period 27.08.2012 ­27.08.2013  Stattisof Coritriliallce, Noted  Melaka City Council  21.12.2012  Trading Licence and Advertising Permit (for premise located at G4, 5, 6 & 7, Blok 84, .falan Rahmat 3, Taman Malim Jaya, 75250 Melaka)  Nil  31.12.2012 ­31.12.2013  Not Applicable  Scbcrang Perai City Coneil  26.11.2012  Trading Licence (for premise located at No.3 & 5, Lorang Limbungan Jndah 1, Taman Limbungan Jndah, 12100 Butterworth, Pulau Pinang)  Nil  26.11.2012 ­29.11.2013  Not Applicable  Klang City Council  20.12.2012  Trading Licence and Advcrtising Permit (lor premise located at No. 29, Jalan Jelai I O/KS 1, Taman Teluk Gadong Besar, 41200 Port Klang, Selangor Darul Ehsan)  Nil  20.12.2012 -31.12.2013  Not Applicable  Energy Commission  19.06.2012  Registration Certificate for the installation of generating set pursuant to s. 2 J ofthe Electricity Supply Act 1990  Nil  19.06.2012 ­18.06.2014  Not Applicable  Twinco  Jahar Bahru City Council  24.12.2012  Trading Licence and Advertising Permit (for premise located at 5, Jalan Dataran 5, Taman Kempas, 81200, Johor Bahru, Johor Darul Takzim)  Nil  01.01.2013 -31.12.2013  Not Applicable  JBS’  Jahar Bahru City Council  02.01.2013  Trading Licence and Advertising permit (for premise located at No. 17, Jalan Kukuh, Kawa’ian Perindustrian Larkin, 80350 Johor Bahru, Johor Daml TakLim)  Nil  01.01.2013 -31.12.2013  Not Applicable  Jahar Bahru South District Police of Royal Malaysia Police  01.01.2013  Licence to trade used automotive parts and components at No. 17, Jalan Kukuh, Kawasan Pcrindustrian Tanlpoi, 81200, Johor Bahru, .Iohor Daml Takzjm  Nil  01.01.2013 ­31.12.2013
ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Conl’d) Company  Issuing-Authority Ministry of Borne A1Tairs Department of Occupational Safety and Health (Johor Bahru)  Issuing Date 25.062012 21.012013  Approval of Foreign Workers -“Perakuan Kelulusan Program Pemutihan (6P)” Certificate offitncss for the oil separator tank pursuant to Regulation 10(2) ofthe Factories and Machinery (Notification, Certificate ofFitness and Inspections) Regulations, 1970  Salient Gondifi<ins· 11 Foreign workers (9 Bangladeshi and 2 Nepalese) named are approved for the Program Pemutihan with JBS having to pay a total levy of RM 13, 750.00 The payment was made on 5 July 2012 Nil  Validity l)e’nod One time registration 21.012013­26.02.2014  StatiJso’f CQntpliitn’ce Complied
Note: If  As at the LPD, ;SS is not required to obtain a manufacturing licence as the company’s shareholders funds is less than RM2,5 million and it does not employ more than 75 full time employees, The company has on 16 April 2012 jiled an application to the Malaysian Investment Development Authority (“MlDA ‘) to obtain a conjirmatlon letter that it is exempted from manufacturing licence and MlDA has by way of letter dated 17 August 2012 acknowledged the application made by the company and informed that pursuant to Perintah Penyelarasan Pendaftaran (Pengecualian) (Pindaan) 1986 P U (A) 456/86″ dated 27 November 1986, the company is exempted  THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) 6.13 TRADEMARKS As at the LPD, save as disclose below, our Group has no other registered intellectual property rights:
Trademark O.H.K- Re2istrantiComoan Solid Corporation  Class No.* 12  Registration! Application No. 2010020231  Place of Registration! Ar)l)lication Malaysia  Validity Period 25.10.201 0 ~ 2510.2020  Solid Corporation  12  2010020232  Malaysia  2510.20 I0 -25.10.2020  Solid Corporation  7  2010006774  Malaysia  1604.2010 ­16.Q4.2020  Solid Corporation  7  2010011263  Malaysia  24.06.2010 -24.06.2020  ZENEX ZEllli~’t” lPN INTERNATIONAL•.I1!!! HKT @  Solid Corporation Solid Corporation So lid Corporation  12  I  2010011262 09022880 05012837  I  Malaysia Malaysia Malaysia  I  24.06.2010 -24.062020 29.12.2009 -29.122019 02.08.2005 -02.08.2015

I Company No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) Trademark SAR SAR  Rcgistf’antfConiPan:y’ Solid Corporation  Class No.* 11  j{egistrationl ApplkationNo, 09014087  Phlceof cRegistrationl AJmlicatioll Malaysia  V1lIidity Pe’riod 19082009-19082019  JMK ~'” <~ ,1MK> ~ _/ .~  Solid Corporation  12  09014088  Malaysia  19082009-19.082019  HANSAPARTS  Solid Corporation  9  96012773  Malaysia  21101996 ­21102023  rn!~  HANSA PARTS !~  Solid Corporation  11  96012771  Malaysia  21101996 ­21102023  HANSA PARTS  Solid Corporation  7  1214/25  Saudi Arabia  30 122009 -09.092019  ..~  SOUD ~SOLiD iJ’Ji(  Solid COTDoration Solid Corporation Solid Corporation Solid Corporation Solid Corporation Solid Cornoration Solid Corporation  1 4 7 9 11 12 9  90007344 90007342 90007432 90007343 90007341 90007345 05012836  Malavsia Malavsia Malaysia Malaysia Malaysia Malavsia Malaysia  13.111990-13112017 13111990-13112021 15111990-15112017 13111990-13112017 13111990-13112017 13111990-13112021 02082005 02082015  ANJlE IANJIEI  Solid Corporation  7  2011002934  Malaysia  17022011-17022021
ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d)
By virtue of As,~t’gnment Agreement dated 3 May 2()J2 hettrcen Sohd Corporatiun and Tampoi Auto Supply Sdn Bhd for the c()n-~ideralion sum of RM2JJ22,5(} Tampo[ Auto Supply Sdn Bhd as the proprietor and beneficial owner of Ihe trade mark has assigned and tran}jerred all the property, righrr, title and interest in and to the trade mark, including all ,watutory and common law right attaching thereto and right to sue for the past infringements and to retain the proceeds relating to tho,~e infn’ngements, to Solid Corporation absolutely Shearn Delamore & Co (acting (L\’ the trademark agent in charge of this assignment, hereinafter “the Trademark Agent”) has on 11 May 2012 filed the necesmryforms with the Trademark Attorneys in Malaysia However, as at the LPD, So[£d Corporation has yet to recn’ve the letter ofconfirmation issued by the Registrar, As informed by the Trademllrk Agent-l’t usually takes about one to two years for the feller ofconfirmation to be issued As the validity period o{ the trademark will be expiring on 20 November 2013, Twinco had on 27 May 2013 instructed the trademark wJlicitor to proceed with the renewal ofthe trademark ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Conl’d) As at the LPD, we have the following trademarks submitted for registration:
Place of  Class  Registrationl  Reglstrationl  Trademark  ReltistrantiComoanv  No.*  ADolicatiotiN();  Application  Rel!isttar’s Remarks  HANSAPARTS ..~”ij?k,:,;’;~, ‘ , ,,;,?i;~if!t  Solid Corporation  7  09018725  Malaysia  Accepted by Registrar on condition that registration of this mark shall give no right to the exclusive use of the word “Parts” Pre·publication requirements complied on 31 May 2013  Currently awaiting for publication in the Government gazette  HANSAPARTS  Solid Corporation  12  96012772  Malaysia  Objection maintained  Objection maintained by Registrar due to  cited mark 96000854 ,lln6’&1%1′, in  =~  Class 12 filed in the name of Sun Yuen Rubber Manufacturing Co. Sdn Bhd (“Sun Yuen”).  The Registrar has on 15 April 2013 allowed the registration of no. 96000854 filed by Sun Yuen and dismissed the application filed by Solid Corporation to oppose Sun Yuen’s application (“Decision”)  Solid Corporation has filed an appeal against the Registrar (as First Defendant) and Sun Yuen (as Second Defendant) (“Appeal”).  A striking-out application was served by the First Defendant on 27 June 2013. Solid Corporation has subsequently filed its affidavit-in-reply on 12 July 2013

ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) >  <  .’.  PlaCe of Registratioli/ AnnHcation  Repistrar’s R-eri1a.rks Trademark  RellistriuWComminv··  . No.’  Aunlication No.  Case managements to hear the Appeal was held on 16 July 2013 and 31 July 2013. Another case management is to be held on 23 August 2013. Sun Yuen is required to file their affidavit-in-reply by 19 August 2013 Notification was issued by Registrar on 5 July 2013 informing that this application will be held in abeyance until the Appeal has an outcome.  MAXPART  Solid Corporation  7  2011017076  Malaysia  Full examination not OK ­Appeal  IiI!iErPART  Objected by Registrar. Submission filed on 23 May 2012 First reminder sent on 29 November 2012 and second reminder on 30 May 2013. Pending Registrar’s decision  ORME  Twineo  7  2012000472  Malaysia  Accepted by Registrar. List of goods different from Class 7 application filed  I~jill  previously. Registrar issued official action to i) remove item ‘surgical pump’, and; ii) synchronise addresses of applicant for this trademark and prior mark (96014025) Pre-publication requirements complied on31 May 2013 Currently awaiting for publication in the Government gazette.
ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) Trademark  Rel!istnlntlCom nanv  Class No.*  RegistratioN An[jiicatian No.  Pface·of ~eglstrfltionj f\lllllicaii(m  HANSA PARTS t’~  Solid Corporation  12  182824  Saudi Arabia  KX IL\  rwinco  6  2011014791  Malaysia  MANDY ~  Auto Empire  6  2012015613  Malaysia  MANDY ~  Auto Empire  7  2012015612  Malaysia  MANDY ~  Auto Empire  12  2012015611  Malaysia
•.• ·.Rel!J~trar’s.Remark.s Accepted by Registrar and published in the Government gazette with opposition period ended on 6 April 2013. Currently awaiting issuance of Registration Certificate. Accepted by Registrar. Appeal against disclaimer filed on 14 June 2012. Reminder sent on 1 March 2013 Pending Registrar’s decision. Pre-publication requirements complied on 16 May 2013 Published in the Government gazette on 11 July 2013 Pre-publication requirements complied on 16 May 2013. Pending publication in the Government gazette Pre-publication requirements complied on 16 May 2013 Published in the Government gazette on 11 Julv 2013 Note: , Descriptions on the class headings oftrademark are as follows: Class  Description  1  Chemicals used in industry science and photography, as well as in agriculture, horticulture andforestry,’ unprocessed artificial resins, unprocessed pfastics; manures,’ fire extlngm’shing compositions,’ tempering and soldering preparations; chemical substances for preserving foodstuffS-‘ tanning substances,’ adhesives used in industry  4  Industrial oas and greases,’ lubricants,’ dust absorbing wetting and binding compositions,’ fuels (including motor spirit) and lIluminants,’ candles and wicks for lil!htiwz
ICompany No. IOI6725-P I 6. BUSINESS OVERVIEW (Cont’d) Class  Description  6  Common metals and their alloys: metal building materials, transportable buildings ofmetal: materials afmetalfor railway tracks; non-electric cables and wires ofcommon metal: ironmongery. small items of metal hardware: pipes and tubes ojmetal: safes: goods of common metal not included in other classes: ores  7  Machines and machine tools: motors and engines (except jar land vehicles): machine coupling and transmission components (except for land vehicles): aericultural imvlements other than hand-overa/ed: incubators for eflf!S.  9  Scientific. nautical. surveying. photographic, cinematographic. optical. weighing. measuring. signalling, checking (supervision). life-saving and teaching apparatus and instruments; apparatus and instruments for conducting. switching. transforming, accumulating, regulating or controlling electricity: apparatus for recording, transmission or reproduction afsound or images: magnetic data carriers, recording discs: automatic vending machines and mechanisms for coin-operated apparatus: cash registers. calculating machines. data processing equipment and computers: fire­extinguishinK apparatus.  II  Apvaratus or lighting, heatiwz. steam generating, cooking. refrigerating, drying, ventilating, water supply and sanitary purposes.  12  Vehicles: apparatus/or locomotion by land. air or water.
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d) 6.14  DEPENDENCY ON INTELLECTUAL PROPERTY COMMERCIAL OR FINANOAL CONTRACTS  RIGHTS,  LICENCES,  INDUSTRIAL,  6.14.1  Dependency on Intellectual Property Rights  Save for the trademarks disclosed in Section 6.13 of this Prospectus, our Group is not dependent on any other intellectual property rights for our business operations.  6.14.2  Dependency on Major Licences  Save for the licences disclosed in Section 6.12 of this Prospectus, our Group is not dependent on any other major licences.  6.14.3  Dependency on Industrial, Commercial and Financial Contracts  There are no material agreements or contracts including industrial, commercial and financial contracts, which are material to our business or profitability.
THE REST OF THIS PAGE HAS BEENINTENTIONALLY LEFTBLANK ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) 6.15  PROPERTY, PLANT AND EQUIPMENT  6.15.1  Own Properties  As at the LPD, we own the following properties as set out below:
Date of Audited Certificate of NBVas at Fitness for Registered Descripti()R
30 April Occupation Owner Title/Address EXisting lJse Tenure Encumbrances .2013 (“CFO”) RM’OOO Solid I-I.S.(D) 160852. Single storey detached Freehold Charged to Industrial Express Conditions 43.559.00 41,360.00 2,591 1992 Corporation PTD 28180 factory with an Ambank (M) Mukim ofTebrau annexed double storey Berhad via (i) This land shall be used District of Johor office. Used as: presentation for factory tor the 13ahru number pUll10se of light State of Johor I (i) Ground floor 52804/2009 on industry and other No.5, Jalan (front) of the 24.07.2009 usage or purposes Dataran 5 Taman double storey connected thereto, Kempas office is used as build in accordance to 81200 lahar Bahru Twineo’s office; plans approved by Johor Darul Takzim relevant local (ii) First floor ofthe authority. double storey office is used as (ii) All wastage 1 litter Solid and contamination I Corporation’s and toxic waste emitted JBS’s office; and from the activities abovementioned shall (iii) Ground floor be disposed to I (back) of the passed to places as double storey fixed I arranged byoffice and single the relevant state storey detached authority.factory are used as Solid Corporation’s and Twineo’s warehouse. ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Dafe·of’  Audited  Certiflcate·of  Express  A,pproxitnate  NBVas at  Fitness for  Registered  J:)esctip:tional1~  Category of  Condition/Restriction in  Appr(}xhn~te  Built-Up  30 April  Occupation  OWrier  Title/Address  Existing Use  laIH.:t:s  Land Use  Interest  LahdArea  Area  2013  (“CFO”)  SCI•• ft.  sq. ft.  RM’OOO  (iii)All terms and  conditions imposed  and enforced by the  relevant local authority  from time to time must  be complied with.  Restrictions in Interest  This land shall not be  transferred in any  event via any means  unless the construction  of the factory  mentioned at item (i)  above has commenced  in accordance to the  plans as approved by  the relevant local  authority  2 Once this land has been  transferred to the  ownership of a  Bumiputera, it shall  not be sold, charged or  transferred to non­ Bumiputera by any  means, without the  consent of the State  Authority.
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Registered Owner Solid Corporation  Title/Address H.S.(D) 160851, PTD28179 Mukim of Tebrau District of Jahar Bahru State of Johor / No.7, Jalan Dataran 5, Taman Kernpas, 81200 lohor Bahru, Jahar Daru1 Takzirn **  Description and ExIsting Use Single storey detached factory wilh an annexed douhle storey office. Used as: (i) Single storey factory building is used as Solid Corporation’s warehouse; (ii) Ground floor of the double storey office is used as Uni Point’s office; and (iii) First floor of the double storey office is used as Solid Corporation’s office.  Tenure Freehold  EnCi.1mbrances Charged to Hong Leong Bank Berhad via presentation number 89298/2004 and 8929912004 on 16.12.2004 #  Category of EalldUse Industrial Express Conti ition/Restriction Interest Express Conditions (i) this land shall be used for Factory for the purpose of light industry and other usage or purposes connected thereto, build in accordance to plans approved by relevant local authority. (ii) all wastage flitter and contamination / toxic waste emitted from the activities abovementioned shall be disposed to f channelled to places as fixed f arranged by the relevant local authority. (iii) All terms and conditions imposed and enforced by the relevant local authority from time to time must be complied with. Restrictions in Interest Once this land has been transferred to the ownership of a Bumiputera, it shall not  Approximate Land Area saAt. 43,560.00  Approximate Built-Up Area sa.ft. 23,025.00  Audited NBVas at 30 April 2013 RM’OOO 4,279  HaMor Certificate of Fitliessfor Q¢¢upation (“CFO”) 3L10.1994
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Dafe of  Audited  Certificate of  Express  Approximate  NBVas at  Fitriessfor  Registered  DescriptionaIid  Category of  Gon ditionlResttittioIi  Approximate  Built-Up  30 April  Occupation  Owner  Title/Address  ExisfillgUse  Erlcllrjibrances  “LaiidUse  Interest  Land Area  Area  2013  (“CFO”)  sa. ft.  sa. ft.  RM’OOO  be  sold,  charged  or  transferred  to  non~  Bumiputera  by  any  means,  without  the  consent  of  the  State  Authority  SoiJd  1-1.S.(D) 11901, PTB  0) Double storey  60 years  Registered  Industrial  Express Conditions  115,432.16  43,527.00  1,883  30.08.1984  Corporation  4970 Bandar of  detached factory  leasehold  lease in favour  (10724  lahar Bahru,  with basement is  expirmg on  of Lembaga  (i) This land must be used  hectare)  District of lahar  used as office,  06.10.2034  Letrik Negara,  as area of heavy industry  Bahru,  factory and  Tanah Melayu  for  manufacturing  of  State of lahar /  warehouse of  Via presentatIOn  stationary  and  other  No. 17. Jalan Kukuh  JBS(I); and  number  utilisation  connected  Otf .Jalan Tampoi,  18674/1988 on  thereto(l),  build  10  Kawasan  (ii) Vacant land at rear  25.07.1988 for  accordance  to  the  plans  Perusahaan Tampoi,  of property with  30 years from  approved  by  local  Larkin  temporary structure  0108.1983 to  authority.  80350 Johor Bahrll, lahar Daru! Takzim J  (1)  31072013 for all that part of the land  Or) All wastage and  effluence/ pollution I  mcasunng  contamination  produced  approximately 375 sq. 1\ together with  as a result of the activities above mentioned shall be channelled I disposed of  the substation  to  places  as  fixed  I  building&  arranged by  the  relevant  local authority.  (rll)  All  terms  and  conditions  imposed  and  enforced  by  the  relevant  local authority from time  to time must be complied  with
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d)

 

Restrictions in Interest This land shall not, be sold, charged, leased or transferred in any event via any means including by way of agreement for the purpose of disposal! trading this land, without the approval from the relevant state authority. Solid  PN 30973,  A single storey  99 years  (i) charged to  Industrial  Express Conditions  11,197.63  6,068.00  1,439  08.06.1974  Corporation  Lot 16493  detached factory with  leasehold  Hong Leong  Mukim of Batu,  an annexed double  expiring on  Islamic Bank  1. The lessee shall within  District of Kuala  storey office.  16.06.2067  Berhad via  two years from the date of  Lumpur, State of  presentation  issue of this title or within  Wilayah  Used as:  number  such further term as may  Pcrsekutuan/  27703/2004  be approve by the State  No. 30, Persiaran  (i) Single storey  and  Authority build upon the  Scgarnbut Tengah  factory is used as  27704/2004 on  land hereby leased  51200 Kuala  warehouse of  20.12.2004*  factories! workshops and  Lumpurco  Solid  building appurtenant  Corporation’s  thereto not being dwelling  Kuala Lumpur  house for artisans of a  branch office; and  type and to a plan to be  approved by the  (ii) Double storey  Commissioner of the  office is used as  Federal Capital, Kuala  office of Solid  Lumpur and the said land  Corporation’s  shall not except with the  Kuala Lumpur  consent of the State  branch office.  Authority be used for any  other purpose.
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Dilfeof Audited Certificate of NBVasat Fitnessfor Registered Des’c.riptionand
30 April Occupation Owner Title/Address Existing·Use Tenure Encumbrances
2013 (“CFO”) RM’OOO 2. The lessee shall not use or permit the use of any building erected on the land for any purpose other than that stated in (i) above.
3. The lessee shall pay and discharge all taxes, rates, assessments and charges whatsoever which may be payable for the time being in respect of the land hereby leased or any part thereof or any building thereon whether levied by the Municipality or any other authority

4, Except in jobs which require special knowledge or qualification for which anyone may be engaged, the lessee shall ensure that 25% of the employees engaged in the business for which the land is hereby leased shall be Malays and the rest of Federal Citizens ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d) Date of  Audited  Certificate of  Express  Approximate  NBVas at  : Fitness·for  Registered  Description and  Category of  Condition/RestriCtion in  Approximate  Built-Up  30 April  Occupation  Owner  TitlelAddress  Existihgl)se  Tenure  Ericurii’brances  Land Use  Interest  L~indArea  Area  2013  (“CFO”)  sq. ft.  Sq. ft.  RM’OOO  5. No  buildings  or  other  structures  shall  be  permitted  within  66  feet  of the  existing  banks  of  Sungei  Batu  until  such  time the proposed “River  Diversion is completed.”  Restrictions in Interest
Solid  PN 197652,  A single storey semi~  99 years  (i) Remission  Industrial  Express Conditions  7,20106  5,400  297  17.08.2005  Corporation  Lot 318007 Mukim  detached factory with  leasehold  registered via  Industrial  of Hulu Kinta,  an annexed double  expIring on  presentation  District of Kinta,  storey office. Used as:  18.06.2098  number  Restrictions in Interest  State of Perak I  1439/2010 on  This land can be  No. 10, Laluan  (i) Single storey  28.05.2010  transferred or charged I  Perusahaan  factory building is  (ii) Remission  leased provided written  Menglembu 6,  used as  registered via  consent from State  Kawasan  warehouse for  presentation  Authority Perak is  Perusahaan  Solid  number  obtained This restriction  Meng1cmbu,  Corporation’s  1840/2012 on 5  shall not apply so long as  31450 Menglembu  Ipoh branch  May 2012  this land is owned by  Perak Darul  office; and  Perbadanan Kemajuan  Ridzuan ~  Negeri Perak  (ii) Ground and first  floor of double  storey office are  used as office of  Solid  Corporation’s  Ipoh branch  office
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Date of  Audited  Certificate of  Registered Owner  Title/Address  Description and ExIstini! Use  Tenure  Encumbrances  Category of LaridUse  ConditionlRestridjon in Interest  Appto:{itrtate LandA-fea q  Approximate Built”Up Area sq. ft.  NBV as at 30 April 2013 RM’OOO  Fitness for Occl,lpation (“CEO”)  Solid  OM 3636, Lot 4740  Single storey building  Freehold  NIl  Agriculture  Express Conditions  6,264.60  7,470.00  732  Corporation  Place ofPayar Makbar, Mukim of  with three (3) spht level platforms. As at  This used  land for  shall only be paddy and  Kuala Kuantan,  LPD, the property was  coconut  cultivation/  District of Kuantan  used as follows:  plantation.  State of Pahang I Lot 4740, lalan Wong Ah lang, 25100 Kuantan Pahang Darul Makmurl\l\  (I)  Ground floor (front) as Solid Corporation’s Kuantan branch office; and  Restrictions in Interest  (ii)  Ground floor  (back), first,  second and third  split level floors  as warehouse for  Solid  Corporation’s  Kuantan branch  office.  Solid  B.S.M 72578,  Three (3)-storey  Freehold  Nil  Building  Express Conditions  1,345.49  3,886.53  813  06.122011  Corporation  PT 104549 Place ofPayar Makbar, Mukim of  intermediate terrace shop office. As at the LPD, the property Wd~  This used  land shall only for commercial  be I  (Form F)  Kuala Kuantan,  under renovation and  trading building.  District of Kuantan  earmarked for use as  State of Pahang I  follows:  Restrictions in Interest  A249, lalan Wong  Ah lang, 25100  (I)  Ground floor  Kuantan  (tront) as Solid  Pahang Darul  Corporation’s  Makmur  Kuantan branch  office; and  97
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Date of Audited Certificate of Approximate NBV as at Fitness for Built-Up 30 April Occupation Area 2013

{“~lU'” so. ft. RM’OOO (ii) Ground floor (back), first and second floors as warehouse for Solid Corporation’s Kuantan branch office.
Solid PM 3775/MIIIII Four (4) adjoining 99 years Charged to Building Express Conditions: NlA 1,206.00 each 709 16.10.2000 Corporation (Lot 4360), units of commercial leasehold Public Bank Limited to building for PM3776/MIIIII shop lot located on expiring on Berhad via trading. (Lot 4361), ground floor ofa block 12.04.2081 presentation PM3777/MIIIII ofthree (3)-storey number Restrictions in Interest (Lot 4362) & shop offices (with 1707/2009 and This land shall not be PM3778/MIIIII individual strata titles 1710/2009 transferred or leased (Lot 4363), for each floor) / Used respectively unless consent from State Bangunan M1, as: Authority is obtained. Tingkat i, Petak I, Mukim ofBachang (i) Front portion of District of Melaka PM3777/Mi/111 Tengah (Lot 4362) is State of Melaka / used as Solid G4, G5, G6 & G7, Corporation’s Blok B4 Melaka branch .lIn Rahmat 3 office; and Taman Malim Jaya 75250 Melaka (ii) Back portion of
PM3777/Mi/111 (Lot 4362), all of PM 3775/M11111 (Lot 4360),

ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Date  Audited  Certificate of  Express  Approximate  NBVas at  Fitness for  Registered  ··.tp’  Category of  ConditionlRestdction  in  Approximate  Built-Up  30 April  O¢c.upaJioJi  Owner  Title/Address  T¢i1u’r¢  Encum’bralices  .·······:LaridUse  hrtere:st  LaodArea  Area  2013  (“CFO”)  sq. ft.  sq. ft.  RM’OOO  PM3776/M1!1!1  (Lot 4361) and  PM37781M1!1!1  (Lot 4363) are  used as  warehouse for  SolId  Corporation’s  Melaka branch  SolId  H.S.(D) 27733 &  Two (2) units of three  Freebold  NIl  Nil  Express Conditions  1,432.00 each  3.89400 eacb  1.690  26.02.2011  Corporation  27734. PT 533 &  (3 )-storey intermediate  unit  unit  (Fonn F)  534 Seksyen 4  shop offices j Used as:  This  land  shall  be  used  respectively  respectively  Bandar Butterworth  only for the commercial I  District of Seberang  (i)  Ground floor of  trading purposes.  Perai Utara, State of  No.5 (front) is  Pulau Pinang I  used as Solid  Restrictions in Interest  No.3 & 5 Lorong  Corporation’s  Limbungan Indah I  Butterworth  Taman Limbungan  branch office; and  Indah 12100  Butterworth  (ii)  Ground floor of  Pulau Pinang  No.5 (back). first  and second floor  of NO.5 as well  as the entire No.3  are used as  warehouse for  Solid  Corporation’s  Butterworth  branch office.

 

ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d)
Solid H.S.(M) 44365, PT Three (3)-storey Freehold Nil Building Express Conditions 4,750.00 10.12.2009 Corporation 3663 (29, 29A, intermediate terrace ThIS land shall be used (Form F) 29B) shop office! Used as: only for the commercial I Place of Telok trading purposes Gadong Besar (i) Ground floor Bandar ofKlang (front) is used as Restrictions in Interest District of Klang Solid State of Selangor I Corporation’s No29, Jalan Jelai Klang branch 10/KSI Taman office; and Teluk Gadong Besar 41200 Port Klang (ii) Ground floor (back), first and second floor are used as warehouse for Solid Corporation’s Klang branch office.
In addition to the above, Solid Corporation had on 29 November 2012 entered into a sale and purchase agreement to acquire an open-side single storey detached warehouse with integral office building located at No. 28, Persiaran Segambut Tengah, 51200 Kuala Lumpur Details of the sale and purchase agreement is disclosed in Section 16.3(xi) of this Prospectus. As at the LPD, the sale and purchase agreement is pending completion. Notes: (1) Theexpressconditions ofthelandisthatitshallonly beusedasheavyindustrialjormanufacturingofstationeryandotherrelatedusage, On 9 July 2012 Solid COlporation has submttted an application to Land Office ofJohor Bahru for the change ofexpress conditton from “heavy industry for manufacturing of stationery” to “heavy industry for warehouse, manufacturing of automotivespareparts andworkersquarters” Inview ofthefactthattheexistingleaseholdperiodofthesaidlandwillbeexpiringon 6 October 2034 (re. within the next 21 years), Solid had on 10 June 2013 submitted an application to the said Land Office for the extension ofthe leasehold period to 99 years (re, to expire in 2073/ The approval process for the change ofexpress conditions,includingtheextension oftheleaseholdperiod, isexpectedtotakeupto10monthsfromthedate ofthelastapplicationsubmissiontocomplete (i.e,from10June2013) # The property was charged by Tampoi Auto Supply Sdn Bhd, being the previous registered owner ofthe property, as security for bankfacilities granted by Hong Leong Bank Berhad in 2004 to Solid Corporation. Subsequently, the property was acquired by Solid Corporationfrom Tampoi Auto Supply Sdn Bhd. ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conl’d) , ” (5 p The property was charged by Tampoi Enterprise Sdn Bhd, being the previous registered owner ofthe property, as securityfor bankfacilities granted by Hong Leong Islamic Bank Berhad in 2004 to Solid Corporation. Subsequently. the property was acquired by Solid Corporation from Tampai Enterprise Sdn Bhd. WehaveobtainedCFOfortheproperty in J992.However,theexactmonthafissuance oftheCFOisnotlegible Prior to the acquisition afthese properties by our Group, both properties had an existing roofextensiOn which connected the two (2) properties and there were no provision ofsetback at the rear of the building. However, the said extension is currently not within the building plans ofthe respective property. Our Group had engaged a licensed land surveyor to advise and submit an applicationtothelandofficeon behalfofSolidfortheamalgamation ofbothpropertiesintoasingle lot. ThesaidapplicationhavebeensubmittedinOctober2012 andtheamalgamationprocess is expected to take up to 18 months to complete. Upon completion ofthe land amalgamation process, we will submit a revised building plan to the Majlis Bandaraya Johor Bahru (“MBJB ‘J to regularise the roofextension, which is expected to take up to six (6) months. In the event our Group is unable to amalgamate both properties, our Group will dismantle the said roofextension. With regard to the extension at the setback area of the property, our Group is expected to comply with the uniform building by-laws and related regulations on the setback requirement by February 2014. Our Group is in the midst ofidentifying a suitable warehouse in the vicinity ofour existing lvarehouse and head office. Pursuant to a letter dated 28 December 2009 from the Kuantan City Council to Solid Corporation, a temporary building permit which is renewable yearly up to a maximum period offive (5) yearsfrom December2009to2014hasbeengrantedinaccordancetoSectionII5(4)(g) oftheNational LandCode 1965. This temporary building permit has been renewedfor year 2013. In view that the category of land use provided in the issue document of title is ·’agriculture “, our Group had on 30 January 2013 submitted an application to change the category of land use from ‘·agriculture·· to “building”. Kuantan City Council had on 8 March 2013 notified our Group that the application can only be considered subject to our Group addressing certain requirements, amongst others. on the setback requirement, obtaining consent from the neighbouring property/land owner on the proposed conversion and development of Lot 4740 from agriculture to commercia! as well as the requirements set by the relevant technical department ofthe local council by 25 March 20/3. As our Group is unable to fulfill the conditions imposed within the stipulated timeline, our Group had enquiredfrom the Kuantan City Council for an extension oftime. However, the Kuantan City Council had indicated that the extension oftime could not be granted. On 19 April 2013. the Kuantan City Council had issued a letter informing its decision to close file (i.e. application in relation to land conversion) as Our Group could not submit/meet the conditions within the timeframe given. However, the Kuantan City Council had indicated that our Group can resubmit a new application to them after addressing the conditions/requirements as set out in its letter dated 8 March 20/3. In this regard, our Group had on 31 July 2013 instructed the appointed land surveyor and consultant to prepare a new application for the city council”s consideration. Solid expects to take up to nine (9) months to meet the conditions stipulated and the application is expected to take afurther 15 monthsfor the city council’s approval. Upon obtaining the approval, our Group intends to demolish the building and rebuild it into afour (4) storey shop office. Notwithstanding the above, our Group has on 26 July 2013 relocated the office and warehouse ofKuantan branch to the adjacent property which is owned by Solid Corporation i.e. No. A249, Jalan Wong Ah Jang, 25100 Kuantan, Pahang. In the event the approval is not obtained, the said Lot 4740 will be left vacant and as it is i.e. for agricultural use and Solid Corporation’s Kuantan branch will then continue to operate from the said property No A249. As the Group is no longer occupying the said Lot 4740 for its business operation, therefore the previous non-compliance with the usage ofthe land is no longer applicable. No building plan were available when the property was acquired in 2009 and there is a temporary structure on the vacant land at the back offactory. There is also a sub-basement building extensionatthe backofthefactorywhichiscurrently usedasproduction andmaterialsstoreareaforJBS, whichwasnotinthedescription ofthepropertyinthe CFO Solid has appointed a building consultancy firm to prepare and draw up afresh set of building plan for submission to MBJB and other relevant authorities. MBJB is expected to take a further three (3) to four (4) months to approve the said building plans. With regards to the temporary structure on the vacant land at the back offactory. the appointed building consultancyfirm will applyfor a temporary building permitfrom MBJB. lfthe application is not approved by MBJB, Solid will remove the said structures. For the sub-basement extension, in the event Solid is unable to obtain approvalfrom MBJB, Solid will dismantle the existing extension and apply to build a new building extension for the production and materials store area. During the construction stage. JBS will move its production and materials store area to the vacant groundfloor ofthe main building. The draft building plan incorporating the sub-basement and the temporary structure was submitted to MBJB on 11 July 2013 for their preliminary review and comments. Nobuildingplanwasavailablewhenthepropertywasacquired inMay2004.However,thebuildingplanisprovidedinthesale andpurchaseagreementforthepurchase ofthesaidproperty. There was a building extension at the side and rear ofthe building which was not within the building plans. Solid has on 31 July 20/3 removed the building extension. 101 ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) co No building plan was available when the property was acquired in May 200S. Solid has appointed an interior design and consultancyfirm to liaise and coordinate with a registered draughtsman to prepare and draw up a fresh set of building plan for submission to Dewan Bandaraya Kuala Lumpur (“DBKL ”). DBKL is expected to take a further three (3) months to approve the said building plan. The draft building plan was submitted to DBKL on 5 July 2013for review and comments. & Weareinthemidst ofnegotiatingwithTNB fortherenewal ofthelease. Inanyevent, theexpiry oftheleasewillnothave anysignificantimpacttotheoperations oftheGroup. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Conf’d) 6. I 5.2 Rented Properties We are currently renting the following properties in which our Group operates in, details ofwhich are as follows:
Solid Corporation  IP Logistics Sdn Bhd  JPL 1 Jalan Wisma Kontena .lohor Port Berhad 81750 Pasir Gudang Johor Darnl Takzirn  Double storey detached warehouse. Our Group is only renting a portion of the first floor warehouse.  01.05.2013 ­31.12.2013  172,000  . ft. 9,422 (Storage) 578 (office)  Wong Kwong Tai  517-D, Jalan Kesidang 1117 Tarnan Kenanga, Seksyen 1 Karnpung Lapan 75200 Melaka  One and a half(l \12) storey terrace house for use as hostel for Melaka branch’s staff  15.07.2013 ­14.07.2014 with option to renew for one (1) year subject to written request of 60 days prior to the expiry of the tenn  7,200  1,600  APM Auto Parts Marketing Sdn Bhd  Lotl3&14 Lorang Durian 3 Kian Yap Light Industrial Estate Jalan Kolombong 88450 Sabah  Two (2) units of double storey intermediate and end lot shop office units for usage as office and warehouse of Solid Corporation’s new Kota Kinabalu branch office.  01.07.2012 ­30.06.2015 with option to renew for a period ofthree (3) years subject to written request three (3) months prior to the expiry of the tenn  99,600  8,400  Auto Empire  Ker Boon Kee, Ker Mong Keng, Ker Min Choo  10 Admiralty Street #01-64 Singapore 757695  One (1) unit offlatted warehouse (Type G) on the first storey ofa six (6)-storey multi-user industrial development building I Pennitted for usage as office and warehouse of Auto Empire  01.05.2013 ­30.04.2014 with option to renew for a period ofone (I) year subject to written request three (3) months prior to the expiry ofthe tenn  SGD68,400  3,584
ICompany No. 1016725-P I 6. BUSINESS OVERVIEW (Cont’d) Description and  Tenant  Landlord  Address  ExistillgUse  RentaJPe:ririd  AnnualRelitaJ  Bvilt-URi\.tea  RM  sq. ft.  Auto Empire  Ker Boon Kee  J0 Admiralty Street  One (1) unit offlatted warehouse  01.05.2013 ­ SGD80.400  4,003  #01-86  (Type E) on the first storey of a  30.04.2014 with  Smgapore 757695  six (6)-storcy multi-user  option to renew for a  industrial development building I  period ofone (1) year  Permitted for usage as office and  subject to written  warehouse of Auto Empire  request Ihree (3)  months prior to the  expiry ofthe term
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6. BUSINESS OVERVIEW (Cont’d) 6.15.3 Machinery Our manufacturing plant which is located at No. 17, Jalan Kukuh, Off Jalan Tampoi, Kawasan Perusahaan Tampoi, Larkin, 80350 Johor Bahru are equipped with the followmg machinery:
JBS  remover  Steel brush cleaning machine for cleaning metal components Model: RW 435 (DC 600­28)  20,000 rotors! starter coils  Manual blaster machine  Cleaning ofalternator coils Model: SB-800-k  2  6,000 alternator coils  Alternator tester  Self-developed machine for testing finished alternators  21,600  5  5,000 alternators  Starter tester  Self-developed machine for testing finished starters  7,000 starters  Turbo washer machine (new)  Chemical cleaning ofparts and components Brand name: ERS Model:TW2  33,833’  60,000 starter coils/ alternator coils  Turbo washer machine (old)  Chemical cleaning of parts and components Brand name: ERS Turbo Washer Model: 179  ,  50,000 starter coils! alternator coils  Tumble belt cleaning machine  Sand blasting cleaning of parts and components Brand name: Tochu Model: TC-120-RB Brand name: RosIer Model: RBMC 1.1  ,  2  50,000 sets of alternator hOllsing I starter housing  350-1itre vibratory parts cleaning machine  Cleaning of parts and components using ceramic stones Model: Vibratory machine VA350  2,875  62,500 housings  ISO-litre tumbling machine  Cleaning of parts and components using ceramic stones Model: PU-150L  11,025  12,500 small components  Semi auto blaster machine  Cleaning of small parts using sand blasting  8,875  56,000 small components
6. BUSINESS OVERVIEW (Cont’d) Notes: # These machineries and equipment have beenfully depreciated.
, The machine was replaced with the new machine purchased in 2013 as above, due to its poor condition. 1t is no longer used in production process and after rejUrbishment is currently retainedfor standbypurpose. 6.15.4 Regulatory Requirement and Environmental Issue As at the LPD, our Group is in compliance with all the regulatory requirements and environmental issues which may materially affect our Group’s operations and utilisation of own assets and machinery and also with respect to the land and buildings leased by our Group, as disclosed in Sections 6.15.1 to 6. J5.3 of this Prospectus, save for as disclosed in Section 6.15.1 of this Prospectus. 6.15.5 Interruptions to Business and Operations We have not experienced any material interruption in business which had a significant effect on our operations during the past 12 months preceding the LPD.

 

6.16 FUTURE PLANS, STRATEGIES AND PROSPECTS 6.16.1 Future Plans and Strategies Moving forward, our aim is to become one of the leading players in the automotive aftennarket for parts and components in Malaysia. In order to achieve that, we have the following plans and strategies which we intend to implement within three (3) years from the date of our Listing: (i) Expansion of our Principal Activities We intend to leverage on our knowledge in remanufacturing of alternators and starters by venturing into the manufacturing/assembly of new alternators and starters as the technical knowledge is similar for both business activities. Compared to the remanufacturing of alternators and starters, the difference in the manufacturing/assembly of new alternators and starters is the use of new parts and components. In addition, there is no disassembly of cores, cleaning or repair of used parts and components under the manufacturing/assembly of new alternators and starters process. The parts and components to be used in the manufacturing/assembly of new alternators and starters are widely available. The new alternators and starters will be packed under our in-house brand name, Hansa Parts. Our initial investment for this new principal activity will include the cost of production machinery and equipment for QC testing. We are aiming for an initial production capacity of approximately 36,000 units of alternators and starters per annum. Approximately 80.00% of our newly manufactured alternators and starters are expected to be exported to our Group’s major export markets, such as Middle East and Africa, while the rest will be sold in the domestic market. The cost of investment is estimated to be RMO.600 million and will be financed from internally generated funds. The said expansion plan is expected to commence in the fourth quarter of 2014. The introduction of the newly manufactured alternators and starters is expected to provide our Group with flexibility in meeting smaller volume orders with better margin, hence contribute positively to our Group. 6. BUSINESS OVERVIEW (Conl’d) (Ii) Centralisation of our Group’s Operatious We plan to acquire a piece of land of approximately 5-10 acres in Johor Bahru, to construct an integrated operations complex that will house our Group’s corporate office, warehouse as well as current and future production (including our Group’s future plan on “Expansion of our Principal Activities” as disclosed in Section 6.16.1 (i) of this Prospectus), repacking and packaging facilities. The proposed complex is part of our centralisation strategy to streamline our entire operations and improve efficiency as well as accommodate future expansion plan. The new complex will provide a warehousing space of approximately 60,000 sq. ft. as well as approximately 25,000 sq. ft. for repacking and product testing facility. As at the LPD, we are still in the midst of identifYing a suitable piece of land to construct our proposed complex. The proposed acquisition of land and construction of the complex are expected to be completed in 2016. The estimated cost for the purchase of the land and construction of the complex is approximately RM22.000 million, of which RM9.000 million will be financed from the IPO proceeds and the balance from internally generated funds and/or bank borrowings. (iii) Euhauciug Iu-House Product Testing Capability We plan to enhance our in-house product testing capability by setting up a dedicated product testing laboratory at our factory in Johor Bahru. This is expected to be completed by end 2013 and the cost involved is estimated to be RM1.000 million which will be fmanced by internally generated funds and/or bank borrowings. (iv) Expausion of Distribution Network We intend to increase Twinco’s market coverage to central and northern region of West Malaysia through the establishment ofTwinco’s sales office and warehouse in Kuala Lumpur. We believe that this will help Twinco to penetrate into the central and northern regions, and at the same time better serve Twineo’s customers in these regions. OUf Group’s acquisition of a factory warehouse adjacent to our Kuala Lumpur branch for RM3.807 million is pending completion. Our Group is expected to incur approximately RM3.000 million for the construction of the new Twineo’s sales office and warehouse. The acquisition of the site has been fmanced by internally generated funds and bank borrowings whilst the construction cost will be financed by our IPO proceeds. Our Group expects to complete the setting up ofthe said sales office and warehouse by 2015. (v) New Distributorship of Lucas Brauded Products We have signed a Trademark Licence Agreement with Lucas Ltd for the exclusive use but not the ownership of the Lucas trademark to distribute our automotive electrical parts and components under the brand name Lucas from I January 2013. Lucas is a well known brand which was established in 1872 in the UK. Lucas product range covers amongst other, automotive bulbs, batteries, wiper blades, starters and alternators. Our Group intends to promote the Lucas branded automotive electrical parts and components in designated countries in Asia as a third party brand. We are confident that the Lucas branded products will enhance our Group’s reputation and business performance. In February 2013, our Group commenced the sale of automotive electrical parts and components under the Lucas brand which were manufactured by our contract manufacturers. 6. BUSINESS OVERVIEW (Cont’d) (vi) Enhancement on Supply Chain Management We aim to enhance our supply chain management by establishing a direct presence in China which is our biggest source for the supply of automotive parts and components. Our Group intends to establish a procurement and export cum sales representative office in Shanghai, China. The proposed office will enable us to actively manage and better monitor our supply chain, product quality and specifications. Besides that, this procurement and export office will also help to facilitate the sourcing for automotive parts and components and suppliers. The proposed office is expected to commence its operations by 2014. The estimated cost for setting up the office is in the region of RM0.500 million and will be financed from internally generated funds. (vii) Enhancement of Quality System JBS obtained the ISO 9001 :2008 certification from SGS (Malaysia) Sdn Bhd for the remanufacturing and assembly of alternators and starters in November 2012. As part of our Group’s commitment towards upholding the quality of our products and services, Solid Corporation has targeted to apply for ISO 9001 :2008 certification under the scope of wholesaling and trading of automotive spare parts by end 2013. We firmly believe that this is the right step to take in order to further enhance the confidence of our customers in our products and services. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 6. BUSINESS OVERVIEW (Cont’d)

The automotive aftennarket for parts and components in Malaysia is projected to continue growing during the 2013-2017 period albeit at a more moderate pace as depicted in the chart below< The Forecast Size of the Automotive Aftermarket for Parts and Components in Malaysia, 2013­2017 4<60 2013 2014 2015 2016 2017 Year The positive outlook on the demand for parts and components in the automotive aftennarket in Malaysia stems mainly from a growing motor vehicle population and a higher average motor vehicle age, the growing prominence of motor vehicles in modern living, the absence of end-of-life vehicle policy, increasing demand for electronics content in motor vehicles and the continuing expansion in the local economy, Nevertheless, market players in the automotive aftennarket for parts and components need to be mindful of the growth restraining factor posed by the stricter hire purchase financing environment and intensifying efforts in developing the local urban public transportation system” On the supply side, although the market is expected to be boosted by the encouraging support from the Malaysian Government and participation in both domestic and international automotive related trade fairs, it faces various challenges ahead” The prohibition on imports of used automotive parts and components may pose a tough procurement challenge for existing importers as well as remanufacturers of automotive parts and components” 1n addition, market players are also expected to cope with shortage of testing facilities, upward inflationary pressure from persistent high oil prices and challenging environment for the hiring of relatively low-skilled workers during the forecast period from 2013 t02017< Moving forward, the size of the automotive aftermarket for parts and components in Malaysia is expected to reach RM439 billion in 2017< Its CAGR for the 2012-2017 period is projected to be 4<0 percent (Source« IMR Report) Our Group’s future plans and strategies will provide a platfonn for our aim to become one of the leading player in the automotive aftennarket for parts and components in Malaysia< Based on the positive outlook in the automotive aftermarket industry, our future plans and strategies and our competitive strengths as outlined in Section 6″6 of this Prospectus, our Board is of the view that we are well positioned to achieve sustainable growth” Whilst we recognise the market challenges in the industry and the risk factors as outlined in Section 4 of this Prospectus, we are committed to implement our future plans and strategies to achieve our business goals and objectives” 109

 

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