6. BUSINESS OVERVIEW 6. BUSINESS OVERVIEW 6.1. Market Opportunity and Industry Overview The following industl)’ overview was quoted hom a number of sources as indicated herein. 6.1.1 Overview of the Economy and leT Industry For the year 2000, the Malaysian economy expanded by 8.5%, significantly higher than the earlier forecast of 7.5%. The stronger-than-expected growth was the result of strong demand from both the domestic and external sectors. The services sector, given its strong linkages with the other sectors in the economy, grew at a faster rate of 4.7% in 2000 (1999: 3.3%), in line with the overall strong expansion of the economy. Growth was broad-based. with both the final and intermediate services groups increasing at a faster pace than in 1999. The increase in investment in the services sector from an estimated value of RM5.2 billion In 1999 to RM10.4 billion in 2000 was due mainly 10 h’gher capital outlay by an increasing number of companies in the telecommunications sector, the banking and finance industry as well as the business services sector in leT activi1ies. Investment in lhese areas rose in response to rising capacity ulilisalion, especially in the export-oriented manufacturing sector. The performance of lhe Malaysian economy in 200 1 has been adversely atlecled by the greater·than-expected slowdown in tho world economy, particularly in the United States of America, as well as the continuing weak performance of the Japanese economy. Nevertheless, the prompt policy response across the globe in the aftermath of the 11 Septomber 2001 terrorist anacks and the resolution of the West Asian conflict have aided in the recovery of consumer and business confidence. The stock markets have also recovered to contain loss in wealth. This revival in confidence has abaled fears of further weakness in the external environment. The global electronics industry has also beg.un the recovery cycle as seen in lhe stronger pick-up in demand In the fourth quarter of 2001. These improvements in exlernal conditions have been reinforced by positive developments on the domestic front. The cumulative effects of the series of liseal measures announced both before and after 11 September 2001 as well as the accelerated disbursement process ot Government expendilure have had a positive impact on both the corporate and household seclars. In the lighl of tho above, real Gross Domestic Product growth for 2001 has remained positive. expanding by 0.4%. Indications going forward are that the economy is in the ear1y stages of recovel)’. The economy is expected to strengthen during the course of 2002 In tandem with sustained domestic demand and the Improved global economic conditions. (Sources of statistics: Bank Negara Malaysia Annual Report 2000 and Bank Negara MalaysiaQuarterlyBulletinfortheFourth Quarter of2001) The period under the Seventh Malaysia Plan (1996-2000) saw a rapid growth in ICT utilisation. Investments In leT expanded al a rate of 9.2% per annum from AM3.8 billion In 1995 to AM5.9 billion in 2000. This was largety due 10 increasing awareness of the imparlance of the production, diffusion and utilisation of knowledge and information lor improving competitiveness and overall economic performance. Special incentives such as the abolition of sales tax on compulers and components, and the granting of accelerated capital allowance for expenses on computers and other ICT equipment also assisled in increasing the usage 01 leT. The SCADA industry, being a sub,sector of the broad ICT industry, is closely linked to the sectors that make active use of the system in general. These would include, but may not be limited to, sectors such as government, oil and gas, utilities, telecommunications and transportation. The breakdown of ICT expenditure by the major industrial sectors. which can be used to gauge the level of activity in the SCADA Industry, Is as follows: ICT Expenditure by Sector, 1996-2000 Sector 1996-2000 (RM million) Banking & Finance 3.723 15.0 Manufacturing 4,041 16.3 Government· 2,062 8.3 Te1ecommlllicalions’ 2,323 9.3 Distribution 2,586 10.4 au & Gas’ 1,623 6.5 utilities· 1,253 5.0 ProlessioflallCT & Other Services 236 1.0 Heallhcafe 59 0.2 Educal:on & Research 1,008 4.0 TransponaOOo· 1,147 4.6 Home 2,004 8.0 P1antalion & Mining 100 0.4 2,736 11,0″”‘.” TDtal 24,901 100.0 • SCADA Relilled Industries To~1 8,408 33.8 Of those sectors that make use of SCADA, the telecommunications sector had recorded the highest investments In ICT amounting to AM2.3 billion or 9.3% of totallCT expenditure from 1996 to 2000, followed by the government sector with 8.3%. Collectively, the government. 011 and gas, utilities, telecommunications and transportation sectors had leT expenditures totaling RM8.4 billion, or 33.8% of the total 5-year leT expenditure, Indicating the potential In the SCADA market. The thrust of the Government from 2001 onwards to 2005 will be to shift the groW1h strategy from one that is input-driven to one that is knowledge·driven in order to enhance potential output growth and accelerate structural transformation within the manufacturing and services sectors. leT Itself will be used as a key enabler to facilita1e local companies 10 compete globally, especially in sectors such as banking and finance. logistics, manufacturing and kay services. Inveslments will also be made to upgrade communications networks in line with technological advancements. For the same period, a total of RM5.2 billion will be allocated lor leT related programmes and projoets. (Source of statistics: The Eighth Malaysia Plan 2001-2005) 6. f.2 SCADA Industry SCADA systems are IndustrIal measurement and control systems that permit users to monitor and control remote facilities from one or several control centres. The benefits conferred by SCADA systems on users include the following:(a) Increase in operational efficiency;
(b) Enhancement 01 system reliability;
(c) Enhancement of operational safety and security;
(d) Cenlralised control;
(e) Reduced manpower requirements;
(f) Provision ot inlormation vital for operations and planning; and
(g) Reduction in operating and maintenance costs.
The SCAOA industry is a niche market. It grows with energy production (oil and gas, electricity etc.) and population (waterworks, sewerage, communications, transport, atc.) and also with the rapidly Increasing capabilities of computer and telecommunications technology. World demand as at 2001 is estimated at approximately US$3.10 billion per year and the global market is expected to grow at a compound annual rate of 5.7% from 1996 through 2006 and reach USS4.02 billion in revenues in 2006. The industry is expected to experience strong growth in Asia in 2001 and 2002 as investments pour steadily into infrastructure and ulility projects. However, growth rates are expected to dip in 2003 and 2004 before resuming an upward 1rend. The dip lor the two (2) years is mainly due to the expected decrease in the demand lor WOrkstation-based systems. The following table sets oul the revenue estimates and forecasts for the SCADA industry in Asia:YN’ 2000 2001 2002 2003 2004 2005 2006 Revenue Growth Rate (US$ Million) (‘”I.) 607.17 3.3 650.85 7.2 715.51 99 748,87 4.7 757.89 1.2 821.51 8.4 929.27 13.1 The drivers of growth in the SCADA market are:(I) Trend towards Process Automatlon The global trend lowards process aU1omalion is opening up new markets for SCADA systems. Factories have not historically required the supervisory control offered by SCADA systems, but some industries are now finding the prospects of uniform quality control and resource allocation decisions across multiple production facilities to be very attractive. In Asia, the lack of automation in both the Infrastructure and industrial base is perceived to be a limiting factor for continued economic growth. Furthermore, the growing cost of labour should increase expenditures on SCADA and other industrial automation. (il) Commitment to Infrastructure Development The developing countries are commitling to infrastructure development as they strive to achieve economic independence and to entice international investment. As they invest in and upgrade their infrastructure. the need lor SCADA systems will continue to grow. Highlighted below are the pending and awarded infrastructure development projects in a few selected countries in Asia in 1999:Country Other W&WW Power Oil & Gas Malaysia 11 Singapore 1 Ph~ippioes Indotlesia China 2•5 2 I B 13 34 Taiwan B 1 8 ‘”,sa 5 8 Janan 3 2
Key:Other W&WW Power Oil & Gas = = = = Transit and Telecommunications Water and Wastewator Energy and Electrical Utilities Oil and Gas Pipelines alc. (iii) Energy Ceiling in Asia In Asia, rapid economic growth has put tremendous pressure on current infrastructures. The lack 01 additional &nergy production capacity is seen to be a limiting factor in contInued economic growth. Thus, electric power production is attha lOp of all government priority lists throughoulthe region. Motivations for SCAOA systems are various and may Include any of the following: to decrease power costs, reduce manpower requirements, increase operational efflCiQncy, improve the level of service. avoid environmental Incidents or havo a fUlly integrated generation, transmission, distribution and billing system. The table below briefly highlights the industrial electrical generation capacity for countries around Asia with a forecast through to 2002:- EJectrlcal Generation Capacity in Billion KW (Asia), ‘996–2002 I Counlry MalaySia SIngapore Philippines Indonesia China Taiwan South Korea Ja ” ””48.1 22.5 27.3 68.’ t,004.4 124.9 220.0 1,030.1 ’99’51.7 23.9 29.0 72.4 1,135.0 133.6 224.4 1,035.3 1998 55,8 25,0 30.8 78.7 1,239.4 141.6 215.2 1,046.4 1999 60.4 26.2 32.7 81.5 1,357.2 151.2 227.2 1,043.2 2000 65.6 27.5 35.• 86.8 1,4902 161.8 243.1 1,089.1 2001 71.3 28.9 37.4 92.8 1,639.2 173.3 261.3 1,141.4 2002 77.5 3O.S 40.’ 99.’ 1,885.1 186.0 281.7 1,198.4 CAGR% 8.5 5.••••8.• 11.1 ‘.0 ‘.0 3.’ ~ CAGA = Compound Annual Growth Rate
(Iv) PerIanal Computer Based Systems The developmenl of robusl, reliab$e personal compuler based systems is expected 10 slgnificanUy expand potential markets. Historically, SCADA systems have used minicomputers or workstations and cost millions to install. Cost-driven industries and developing nations cannot afford such investments. Today, personal computers are sufficiently powerful to handle most small applications, at a fraction of the price. The demand for such systems is also driven by the strong customer preference for Windows operating systems. (v) The MIddle Class in Developing Countries
The emerging middle classes in developing countries are demanding various amenities, including p01able water, wastewater Irealmenl, reliable e1ec1ricity and cenlraJ healing.
(vi) expansion of Natural Gas
Natural gas companies are expanding into the worldwide electricity generation market. Clean, relatively cheap and abundant, natural gas is playing an increasingly larger role In the world energy market as gas companies are looking to enter the electricity generation market as a competitive fuel to petroleum and coal. This requires pipelines to reach end-usars, and pipelines need SCADA monitoring for leaks, flow and routing. (vii) Environmental Regulations In the waler and waslewaler industries, increasingly stringent environmental regulations in developed nations and more effective governmental bodies in developing countries are projected to accelerate new SCADA system demand. (viii) Urbanisation The expansion of urbanisation and transportation in developing countries, coupled with the clogging of commuter arteries in metropolitan areas of developed coun1ries, is expected to drive the demand for traffic flow control systems. As the number of proieels in lhis area continues to increase, demand for SCADA systems thai control power line slatus, Iraelion power and Iratlie flow is anlicipated 10 increase over the tuture years. (ix) China Open for Busine•• The people of China will need energy for industrial growth, gas pipelines for hOme heating, water and wastewater facilities, telecommunications, and transit systems all across dozens of provinces with varying lerraln. (Source: Frost & Sullivan -World SCADA Systems and Software Markets #7248-12) The SCADA industry has steadily evolved towards open standards, Le. Open Database Connectivity databases, Windows-Intel personal computers, standard graphics systems and interconnectivity to mainstream computer systems. The critical needs of this market are for automated and remotecontrolled systems that provide high reliability 24 hours a day throughout the year. System performance must provide timely reporting of remote problems, secure activatioo of selected controls, and fleXibility and accuracy of operating reports. In recent times, there has been an increasing need for video monitoring 01 remote sHes In addition to the monHoring of electrical signals which simulate physical events. This need is addressed by 1he Group, which aims 10 create a leading edge $CADA product with advanced leatures 10 meet the needs of discerning users. This is evident from SysLink II, which incorporates full motion vtdeo into the SCAnA package to allow the customer to actually “see and believe”. 6.2. Group Vision The Group’s vision is to be a wond class SCAOA solutions provider In Asia. To this end, the Group has undertaken significant amounts of design and development over the years, resulting in the development of its own SCADA software packages and hardware products. The Group is now an Integrated solu1ions provider with capabilities In master station and systems soltware, ATUs, remote video sUNeillance systems, communications systems, cuslom engineering, training. and maintenance and after-sales support. The Group believes that the best performers In thIs industry will be the ones who develop their own software and hardware and offer a one-stop-centre, providing technology, software and hardware in conjunction with customer care services.
6.3. Markets (a) Singapore and Malaysia The Group has es1ablished itself as a major SCAQA solU1ions provider to 1he government and statutory bodies in Singapore and Malaysia. lis activities In these markets are primarily in the supply of systems 10 various utilities and niche appliCations such as tift monitoring, non·revenue-waler monitoring and cable oil pressure monitoring. These markets aro an important source of revenue for the Group through expansions and upgrades of existing systems and maintenance contracts. (b) Asia The Group has also ventured Into regional markets in South East Asia and East Asia over the last fifteen (15) years, through the appointment of agents or partners in the various countries. The Group has successfully implemented SCADA solutions in various applications in Taiwan, Thailand, Indonesia, Hong Kong and the Philippines. (c) Europe and Middle East The Group has also recently pursued projects in the European and Middle Eastern markets. The Group’s marketing efforts in Europa are undertaken in conjunction with its business partner Lee Dickens Ltd. of the United Kingdom. The percentages of the Group’s revenue derived from export markets (other than Singapore) for the financial period ended 31 December 2000 and the leo (10) months ended 31 October 2001, are as follows:Country % Contrlbullon 10 Group Revenue Financial Period Ended 31.12.2000 10 Monlhs EndecI31.10.2OD1 Hong Kong Taiwan Thailand Indonesia 1 Philippines 2 The WMSC Group Intends 10 continue to pursue projects in the above-mentioned markets. As at the date 01 this Prospectus, the Group is unable to project with accuracy the amount of revenue which wi11 be derived from these markets or the time frame within wt1!ch such revenue will be achieved, as this will depend on the prevall1ng conditions in these markels.
6.4. Growth Strategy The Group’s growth strategy as embodied in its Five-Year Business Development Plan has the following objectives:(a) Widening of Existing Customer Base
The Group plans to expand its marketing efforts to achieve a mOle balanced portfolio of clients. This is to ensure that its business aclivities are not too dependent on any particular market segments. Furthennore, the commercial potential of technologies developed by the Group’s R&D has not been fUlly developed due to Its hitherto limited resources in business development.
(b) Achievement of Growth Targets
The Group has set challenging groWlh targets lor the next five (5) years, and Identified thO areas with growth potential as well as the steps required to be taken to achieve the targets. The Group will take a four·pronged approach in achieving the above objectives. ThiS approach will ensure that the Group capilalises on its eXisting strengths in its core business of SCADA solutions, as well as any businesses with good growth potential that are synergistic with 1he Group’s core business. The follOWing outlines the Group’s approaCh:(i) Image and Brand Enhancement In the last three (3) years, the Group has achieved significanl milestones which ha….e raised its profile:· (A) Accorded MSC status on 31 March 1998 by the MDC;
(B) Awarded a grant of RM2.873 million under the Multimedia Super Corridor Research & Development Grant Scheme on 20 April 2000; and
(C) Garnered the financial and management support of OSKVE, the venture capital arm of aSK Holdings Berhad, a company listed on the Main Board of the KLSE.
The Group’s listing on the MESOAQ Market will further enhance its prestige. The Group plans to use Its listed status as a platform to further build up the ‘WiIlowglen” brand name which is currently used on its SCAOA systems, and its image as a reputable and dependable supplier of SCADA technology. (i1) Development of New Merkete The Group plans to penetrate regional markets by setting up representative offices to spearhead its business development activities. Having a local representative office will increase the ability of the Group to identify business opportunities, have enhanced contact with potential clients, and provide support to clients. These attributes will increase the effectiveness of Ihe Group’s marketing efforts in regional markets as compared wilh working through an agent or partner. The Group plans 10 locus initially on lhe more developed counlries where there is a larger markel lor SCADA applications. The Group plans to open its first represenlative oltire in Hong Kong within six (6) months of its listing, following which similar offices will be opened in Taiwan, Thailand and Indonesia. (III) Marketing of New Products and Solutions The Group is targeting the following SCADA applicatlons:(A) Electrical Power Distribution Systems
The management believes that the electrical power sector Is one of the largest markets for SCADA systems globally. The management further believes that SCADA systems for eleClrical power distribution hold a huge potential for growth. These systems are used to monitor and control electrical power transmission and distribution sub-stations and are becoming essential to the daily operations of electrical utility companies as they strive to improve their level of efficiency and seNice.
(B) Oil and Gas Production, TransmissIon and Distribution
The oil and gas industry is anolher signilicanl user 01 SCAOA systems. Solulions in this area include pipeline managoment systems, multi-producl pipelines and lank-larm managemenl systems. Mulli-product piJ)EMines are used 10 deliver refined petrOleum products such as pelrol, dieset and jet fuel from relineries to main consumption cenlres. They are becoming very popular in repfaclng road tankers as they are much more eHicient and cost eHective in the long term. This has led to the need for more tank-farms to store the refined products prior to delivery. All these infrastructures require SCADA systems and provide a potential area of growth for fhe Group. (C) Building Management Systems As bUilding management systems are installed in most commercial buildings, they represent a significant potential market fOr the Group. Within building management systems, there are various sub-systems such as building automation, services and security. The Group will specialise in building services and security, which encompass applications such as video monitoring, lift monitoring and alarm systems, as such applications would utilise the Group’s core expertise. (0) Streetlight Monhorlng Systems Sireellighl monitoring applications are a very recent innovation in the SCADA industry. The system monitors and controls streetlights over a large geogrolphical area from a single control centre. This applicatIon has a lot 01 potential in the more developed countries such as Singapore, Hong Kong and Malaysia where a higher level of service is expected lrom lighting utility companies. (iv) Development of New Bu.ine•••• In Synergistic: Areas The Group is lOOking into developing new businesses with strong growth potential in industries that It is familiar with. The Group has developed indepth knowledge in some industries where It has been supplying systems over a number of years. These industries are water and sewerage treatmenl, oil and gas, electrical distribution, building managemont and bulk material handling. 6.5. Products and Services The Group normally provides SCADA systems on a turnkey basis. The Group’s existing products and services are as follows:6.5.1. SoNware The Group markets its SCADA software under the SysLink brand name. The initial version, SysLink I, was developed in 1993. It was developed tor the Windows 3.1 and later the Windows NT systems running on personal computer technology. It closely integrates with commercially available databases and spreadsheet applications, hence providing a flexible and costeffective solution for users. The development of the enhanced version, SysLink II. began in 1995. SysUnk /I is currently the Group’s primary SCADA package. SysLink I/Is a more powerful package than SysUnk I and includes remote video monitoring features. It runs on both UNIX workstations and Windows based personal computer systems. Its architecture is capable of monitoring and controlling a very large number of remote devices, hence making it a highly scalable solution for projects of any size. SysUnk 1and If were fUlly and independently developed by the Group without any external input. The development of the next generation version, SysLink III, is currently nearing completion. SysLink //I has been actively marketed from early 2002 onwards. It provides further enhanced features to meelloday’s demanding specifications. 6.5.2. Hardware The Group has a wide range 01 modem,:, RTUs and communication controllers for different kinds of applications. Its hardware products, developed by its engineers, Include the latest video compression, transmission and decompression capabilities. The Group’s RTUs have been designed to be fully compatible with one another. This means that a Willowglen SCADA system can be implemented or upgraded with a combination of RTUs. giving customers a wide range of performance and cost possibilities. 6.5.3. Services As an Integrated solutions provider, the Group also provides its customers with services for custom engineering design (both hardware and software), training, maintenance and after-sales support. The Group is committed towards Quality as shown by its ISO 9001 accreditation. WG Spore was awarded the ISO 9001 accreditation on 9 June 1995.
6.6. CompeUtlon The SCADA industry is a niche market which differentiates vendors by product innovations, experience in successful implementations, quality of service, and pricing. The Group therelore faces competmon from different sources in different kinds of projects. Four (4) types of SCAOA compethors have been identified: traditional SCAOA companies, large process control companies that occasionally consider SCADA projacts, small syStems SUppliers that provide basic systems based on personal computers and/or programmable logic controllers, and systems integrators using offthe-shelf SCADA packages. Direct competitlon comes from companies that have a complete SCADA system prOduct line. The most effective competition comes from competitors who are of approximately the same size as the Group and who. like the Group, have both the financial and human resource flexibility to make quick and specific decisions about investment and sales strategies. Indirect competition comes from suppliers in the process control industry who attempt to broaden their market by extending their product sales to SCADA applications. This has been sporadic and not soon as a significant threat to the Group. In large tenders, competition comes from multinational companies such as Honeywell and ABB. An advantage that the Group has over lhese competitors is that the Group is focused on delivering SCAQA solutions, whilst the large competitors are usually diversified groups with only a division providing SCADA solutions as a complement to their other businesses. In small tenders, the Group faces competition from small local engineering companies. These companies usually import SCADA related software and hardware, and then repackage and sell them as solutions. The Group has a price/cost advantage over these competitors as It designs and prOduces its own SCADA software and hardware. The directors believe that the Group’s competitors include but are not limited to the following:(a) Honeywell of the United Stales of America;
(b) ABB of Switzerland;
(c) Siemens of Germany;
(d) Invensys of the United Kingdom;
(e) Yokogawa of Japan;
(f) Valmet Systems ot Canada;
(g) Dectra of Malaysia;
(h) CSE Systems & Engineering of Singapore; 0) Johnson CoolrOis of the Uniled Slales of America; and
(j) Cisco Technologies of Singapore.
The above-named compeli1ors are also serving lhe Malaysian market, amongst others. The Group’s competitive strategy involves the following:(i) Lower Hardware Costs The ability to control the cost of products through direct design and production is significant in comparison to buying or licensing foreign technology. It also allows direcf control of the production schedule ensuring that customer schedules are met. (ii) Localised Design Being able to design hardware and software to meet the challenges of the local tropical climate is critical in being able to meet local customer demands. Examples include lightning protection and high humidity and temperature conditions. (iii) Customisation The ability to design special software or hardware for the customers’ specifications is key in acquiring jobs. (iv) Strong R&D Presence
The fact that the Group is strong in its R&D efforts plus the Group’s long track record gives customers added security that the Group will endure for the long term with continued enhancements to its products.
(v) Local Market Presence and Support
The Group has a large local presence in Malaysia and Singapore to address the market. Whereas large foreign companies may only have a local sales office, the Group can give a high level of direct technical support rather than awaiting answers from a foreign head office many time zones away.
The Group employs a judicious mixture of competition and cooperation with suppliers, customers and firms producing complementary and related products, which leads to new business relationships and market expansion. As the world market for SCADA is relatively small, there is a lack of industry statistics. As SUCh, the Group is unable to provide its market share in Malaysia due to lack of information.
6.7. Premises The Group currently operates from two (2) business premises. WG Spore occupies 13,300 square feet of office space in New Tech Park, Singapore. WG Msia and WMSC conduct their operations from Enterprise 4, Technology Park Malaysia, which forms part of the MSC, in premises of 12,438 square feet which are rented from Technology Park Malaysia.
6.3. Research lind Oevelopment The Group’s policy on R&D is to innovate and create products which will give the Group a competitive advantage In the market. The Group’s R&D programs have produced advanced yet competitive solutions that provide many value-added features to customers. The Group conducts In-houso R&D to ensure continuous product development and presently employs 30 professionals who are fUlly engaged in R&D in Technology Park Malaysia. WMSC Is responsible for R&D within the Group and received a grant of RM2.873 million under the Multimedia Super Corridor Research & Development Grant Scheme. The Group’s current R&D program Is divided into two (2) main parts which together make up the third generation SCADA system, SysLink 111:(a) Development of the third generation SCADA software package with multisystem and internet connectivity. The Group is at the view tha1 the tuture of the industry lies in a highly integrated and open environment between many utilities and tasks which tho customer may use. The Group inlends 10 use the advancements in multimedia. network and internel technology in the development 01 SysLink III so as to be able to meet the requirements 01 the 21 II century; and
(b) Development 01 a series of highly advanced and modular field eqUipment products for capturing and processlng field Information as well as for video capture and storage. With the advancements in processor technology and miniaturisation. the units developod will be compact, powerful, reliable, versatile, intelligent and user-friendly. Additional work includes the development of interfacing products to allow the units to communicate with various protocols as well as graphical devices.
Existing customers of the Group can be upgraded to SysLink 1/1, although this is much easier with SysLink /I due to the similarity of the products. The Group is developing a tool which will enable the older system database and graphics to be converted to SysLink III. The cost of upgrading largely depends on the amount of customisation which was required for the original project i.e. interfacing to third party equipment, and how the customised portions can be converted across. In conjunction with the development of the SysLink III SCADA package, an additional series of related software packages is being developed. Although some 01 these packages can be marketed directly on their own, several 01 these packages provide clients with additional functions for their SCAOA systems as needed on a project basis. The packages being developed include:(i) Interconnections to Geographic Iniormation Syslems and Management Information Systems;
(ii) Inlernel connectivity; (Iii) Maintenance managemenl package;
(iv) SCADA lraining simulator;
(v) Video and audio capture and playback; and
(vi) Graphical programming interface.
The develoPment of internet connectivity will allow users of SysLink III to Interact with the system from any location via a standard internet browser such as Microsoft Explorer or NetScape. This will enable system users to remotely access the system Irom any personal computer. Internet connectivity therefore provides SCADA users with an alternative channel for monitoring and controlling their operations. In addition, customers may wish to have selected information to be made available for public access over tho internet. In respect of field equipment, a highly complex processing section and input/output sections, as well as video-related features such as buill-!n motion detection, improved capturing, compression, enhancement and recording, will be developed, The Group’s hardware development is moving towards high perlormance technologies which are industry-wide standards. SCADA systems based on open platforms and industry standards will be pre1erred as customers continue to look lor highly scalable solutions which also allow them to in:egrale easily with the latest hardware. The development of SysUnk 111 is expected to be completed in the first hall of 2002, with subsequent enhancements being developed thereafter. The Group has been continuously developing new SCADA products since t993 and is aware of the importance of continuous A & D in order to stay ahead of the competition. As such, the Group is looking into diversifying the application of its technology fO( developments of a non-SCADA nature as a way to broaden its scope and capab’lities. Possible areas of application include building automation and instrumentation.
6.9. Major Customers The Group’s major customers are mainly from the following sectors:(a) Electrical power transmission and distribution;
(b) Oil and gas production and distribution;
(c) Water and sewerage treatment;
(d) Urban control applications; and
(e) Bulk material handling systems.
FO( the financial period ended 31 December 2000 and the ten (10) months ended 31 October 2001, there was only one (1) customer who contributed 100k or mo.-e to the Group’s total revenue, namely the Housing Development Board of Singapore. This customer contributed approximately 64% and 68% to Ihe Group’s tolal revenue for the financial period ended 31 December 2000 and the ten (10) months ended 31 October z001 respectively. The Group has built up its relationship with this customer over the last 15 years. All the other customers contributed less than 10% each to the Group’s lotal revenue. The contribution of the Housing Development Board’s contracts to the Group’s turnover for the financial years ended 30 June 1997 to 2000, the financial period ended 31 December 2000 and the ten (10) months ended 31 October 2001 is set out in the table below. Financial Year I Period Ended Contribution to Group Turnover RM’OOO -;. 30 June 1997 7,735 40 30 JtIle t 99B t4,333 52 30 JISl& t 999 13,632 56 30 June 2000 12.468 54 31 December 2000 8.396 54 31 October 2001 16,086 68
6.10. Major Suppliers For the linancial period ended 31 December 2000, there was no supplier who individually supplied 10% or more of the Group’s total purchases. For the ten (10) months ended 31 October 2001, there were no suppliers who individually supplied 10% or more of the Group’s total purchases, save as disclosed below:
WG Spore was incorporated in 1986 as a marketing and technical support base in Singapore for Wlilowgien Systems LId. In 1992, Willowglen Syslems LId. was sold 10 another company, which subsequently changed hs name 10 WUlowglon Systems Inc. In 1995. WiHowglen Syslems Inc. disposed of WG Spore 10 Crimson Land 8erhad (fonnerly known as Mea Holdings Berhad). Currently, WiI10wglen Systems Inc. is one of the suppliers of the Group as the RTUs lor two (2) existing projects, being the Philippines Metropolitan Waterworks & Sewerage Services project and the Singapore PowerGas project (“Pow.rOas”) are supplied by Willowglen Systems Inc. who will also support the PowerGas Master Software through the Group. Presently, the Group has no contractual obligation to Willowgien Systems Inc. However, as mentioned above. Willowglen Systems Inc. will support their Installed systems through the Group. Willowglen Systems Inc. has had a presence in Asia since 1997, but has abstained from competing with the WMSC Group in Singapore and Malaysia because the company knows of the Group’s strong presence in these countries.
6.11. Employees The Group has a 1lal organisational slructure lhat keeps all levels of the organisation aC1ively involved in projects in meeting the dynamic needs of the industry. As at 11 March 2002, the Group had 146 full-time employees In the follOWing categOfies:Category No. of % Average Lenglh of Service Employees (Years) R&D 30 20 • 2.1 Business development 11 8 2.8 Engineering Total knowledge workers Technicians Administrative workers Tolal “92 42 12 146 35 63 29 8 100 ‘.2 ,.• •••
WMSC was incorporali1d in May 1998 and commenced aCtively recruiting R&D personnel in June 1999. These persanneJ were recl1,Jited in several batches. The Group recognises the importance of its employees and updates them on the latest developments in the industry as well as increases their technical know-how by sending them to various courses throughout the year. The Group also intends to offer an Employees’ Share Option Scheme subsequent 10 being listed on the MESDAQ Market. The Group has ambitious plans for growth and with Ihe higher profile achieved through the listing exercise, the ability of the Group to attract qualified knowledge workers in the future to cater for the anticipated growth will be enhanced. The Group does not have any information of employees being members of labour unions and the employees enjoy cordial relationships with the management. There have not been any industrial disputes in the past between the employees and the management.
6.12. Technology, Intellec1ual Property and Licences The Group does not have any registered intellectual property rights in the form of patents, trademarks, copyright or designs. It is also not a party to any licensing agreements.
6.13. Operating Licences The Group’s business activities do not presently require any special permit or licence from any authorities.
6.14. Approvals and Conditions WMSC’s proposed listing is subject to the approval of the following authorities:• KLSE (approval obtained on 14 March 2002)
• SC (approval obtained on 20 June 2001)
7. SHAREHOLDERS, DIRECTORS, KEY MANAGEMENT AND TECHNiCAL PERSONNEL 7.1. Substantial Shareholders and Promoters 7.1.1. SluJreholdlngs in WMSC Based on the Register of Substantial Shareholders of WMSC as at lhe dale of this Prospectus, lhe direcl and Indirec1 lnleresls of lhe substantial shareMlders and Promoters in the issued share capilal 01 the Company before and after the lssUlt are as follows:· tutionallty I Sh.ronoklllf” Place 01 Before Issue After Issue Incorpor.tion Direct Indlroct Dlre<::t IndIrect No. of Shues % No. 01 Shares % No. or SharCl, % No.otShal”M Now Advent· Maillysia 124,900.237 67.15 124,900.237 50.36 D1ndfngti It Malaysia 124,900,237 67.15 124.900,237 WongAhChiew C Malaysian 124,900.237 67.16 1,500.000 0.60 124.900.237 QSl(VE Malaysia 20,000.000 10.75 20,000,000 ‘.06 Michael Wayne Price • Canai:Jian 14,847,337 7.96 14.847,337 5.89 olong King Ewu • Malaysian 8.939,879 4.81 9,114.879 3.68
% 50.36 50.36 ~ Promoters of WMSC , Deemed Subs/8ntlal int8f6s1 through New Advent II Doomsd subs/antial interest through Dindings 50 7.1.2. 7.1.3. 7.1.4. Background on Substantial Shareholders and Promoters The Promoters of WMSC are New Advent, Michael Wayne Price and Diong King Ewu. Mr. Price and Mr. Diong are directors of WMSC and lheir profiles are set out in the section on “Board at Directors·. A brief background of the substantial sharehOlders of WMSC, apart from those who are also directors 01lhe Company, is sel oUI below. New Advent was incorporaled in Malaysia on 30 December 1996 under the Companies Acl, 1965 as a private limited company with the name of Rittal (M) Sdn. Bhd. 11 assumed its present name on 16 July 1999. It is an investment holding company, its sale asset being its shareholdlng In WMSC. Its issued and paid-up capital is RM20 comprising 20 ordinary shares of RM1.00 each. The directors of New Advent are Mr. Wong Ah Chlew and Ms. Ong Yee Ching. New Advent is a wholly owned subsidiary of Dindings. Dindings was Incorporated In Malaysia on 2 December 1968 under the Companies Act, 1965 as a private limited company with the name of Dindings Development & Finance $dn. Bhd_ It changed its name to Dindings Realty Development Sdn. Bhd. on 23 November 1979 and subsequently to Dindings Consolidated Sdn. Bhd. on 25 May 1984. Its principal activitJes are investment holding and property development. lis issued and paid-up capital is AM11 ,399.990 composing 11,399,990 ordinary shares of AMt.OO each. Mr. Wong Ah Chiew end Mdm. Khor Chai Mol, who are directors of WMSC, are also directors and substantial shareholders of Oindings. The profiles of Mr. Wong and Mdm. Khor are set out in the section on ~Bo.ard 01 Directors~. OSKVE is the venture capital arm of aSK Holdings Berhad. a company listed on the Main Board of the KLSE. It is a wholly owned subsidiary of aSK Holdings Berhad. lis directors are Mr. Ong Leong Hual @ Wong Joo Hwa (the husband of Mdm. KhOr Chai Moi) and Data’ Nik Mohamed bin Nik Yahya. Mr. Ong Leong Hual @ Wong Joo Hwa is also the Group Managing Director and Chief Executive Onicer of OSK Holdings Bertlad. Data’ Nik Mohamed bin Nik Yahya is an Executive Director of aSK Holdings Berhad. Directorships in Other Public Corporations None of the substantial shareholders or Promoters of WMSC has held directorships in any other public corporations for the paSI two (2) years ended ‘1 March 2002, save for Mr. Wong Ah Chiew whose directorships are shown 1n the section on “Directorships of Directors in Other Public Corporations”. Substantial Shareholdings in Other Public Corporations None of the substantial shareholders or Promoters of WMSC has had substantial shareholdings, whether directly or indirectly, in any other public corporattons for the past two (2) years ended 11 March 2002, save for Mr. Wong Ah Chiew whose substantial shareholdings are shown in the section on “Substantial Shareholdings of Directors in Other Public Corporations”. 7.2. Chal’lges In Substantial Shareholders The changes in the registered substantial shareholders at WMSC and their shareholdings since iocorpol’ation up 10 Ihe dale of this Prospeclus are as lollows:·AsM20.5.1998 -14813.8.1998 -Aa 81 14.8.1998 -…..17.8.2000 -As .19.10,2000 Name No. of Sh.ares % No. of Shares % No. 01 ShW’1lS % No. of sn”” % No, of Sn.r. % Wong Ah Chiew 50.00 KhorCMI Mol 50.00 WG Msia 2 100.00 100,000 100.00 If 1,000,000 100.00 Yuen Kai Mun 23,281,245 5000 Snllmah bi’lll Mohamad 23,281,245 50.00 OSKVE Michael Wayne Price New Advoot –Aa at 24,1D.2000..- -As at 27.10.2000– –As at 3Q.1Q.~ -As at 1.11.2000 Name No. ot Shares % No. of Shares % No. 01 Shartlll % No. of Shun % Wong AM Chiew Khar Chal Moi WG Milia Yuen Kal Mun 2’3,281.245 • 34.93 23,281,245 • 27.86 23.281,245 • 1271 Salimah binll Mohamod QSKVE 23,281,245 20,000,000 ‘ 34.98 ,0.0′ 23,281,245 20,000,000 • 27.86 • 23.93 23,281,245 20,000,000 • 12.71 • 10.92 20,000,000 • 10.75 Mlchaol Wayne Price 10,200,000 12.21 14,847,337 8.11 14,847,337 • 7.98 Now AdV()l11 75,486,169 41.22 124.900,237 8715
(I SubdMsIon of shares of RMf.OO each into shares 01 RMO.10 each. Shar9holding diluted due to increase In Issued and paid-up capitar. 52
7.3. Moratorium on Promoters’ Shares Pursuant to the Listing Requirements, Shares held by the Promoters amounting to 45% of Ihe nominal issued and paid-up capital of the Company at the date 01 admission of the Company to the Official List of the MESDAQ Market. are to be placed under moratorium. The Promoters whose Shares are subject to moratorium are as follows:Promoter After Issue No. 0′ Shares % Under MoralOfium No. 01 Shares % New Advent Mr. Michael Wayne Price Mr. Diong King Ewu 124,900,237 14,847,337 9,114,819 148,862,453 50.36 5.99 3.68 60.03 97.803,413 8,611,456 5,1B5,131 111 600.000 39.44 3.47 2.09 45.00
The moratorium has been fully accepted by the Promoters. They will not be allowed to sell, Iransfer or otherwise dispose of any part of their Interost In the Shares under the moratorium within one (1) year from the date of admission of the Company to the Olficial Ust of the MESDAQ Market, and thereafter, they are permitted to seH, transfer or otherwise dispose of up to a maximum of one third per annum of their respective shareholdings under moratorium on a straight-line basis. This restriction is specifically endorsed on the Share certificates of WMSC representing the respective shareholdings of the Promoters which are under moratorium to ensure that the Company’s Registrars shall not register any transfer not In compliance with the moratorium restrictions. In addition, Dindings and its controlling shareholders, who all have indirect interests in WMSC, have given undertakings that they will not sell, transfer or otherwise dispose of any part of their interest In New Advent and Dindings respectively until the expiry of three (3) years from the date altha Company’s admission to the MESDAQ Market.
7.4. Board of Directors Mr. Diong King Ewu, a Malaysian aged 52, is the Managing Director of WMSC. He holds a Bachelor’s degree in Electrical Engineering from the University of Singapore. Mr. Olong began his career in 1975 in the Public Utilities Board of Singapore. He started as an engineer in the Bec1ricity Department, where he was responsible for the installation, operation and maintenance of power distribution networks. In 1978, he was transferred to the Waler Department, where he was responsible for the instalJalion, operation and maintenance of large pumpng plants and standby generator sets. In 1981, Mr. Dlong moved to Colosseum Corporation Pte. ltd. of Singapore as manager of the industrial control division, where he was responsible lor the marketing, sales and technical support of Willowglen SCADA systems and industrial process control systems. in 1985, Mr. Diong joined Willowglen Systems ltd. as its regional marketing manager, responsible for the marketing and technical sales support of Wiltowgten SCADA systems in ASEAN countries. In 1986, Mr. Diong was appointed a director of WG Spore and In 1995, he was appointed Managing Director of WG Spore. In 2000. he was appointed Managing Director 01 WMSC. He is well-placed to lead the Group, with 20 years of experience in SCADA systems. Mr. Michael Wayne Price, a Canadian citizen aged 36, is an Executive Director of WMSC and the General Manager of WMSC. He has been with the Group since 1989. Mr. Price holds a Bachelor’s degree in Computer Science from the University of Calgary, Canada. He started his career In the Group as a software engineer, progressing to senior software engineer, project manager, R&D manager and subsequently to his current position. He is responsible for the design and delivery 01 new $CADA systems, the design and impiementation of video capture and monitoring systems, the design of high pertormance embedded SCADA hardware, as well as the porting of real·time operating systems to lhe platforms. Mr. Wong Ah Chiew, a Malaysian aged 54, is a Non-Executive Director 01 WMSC. He represenls the interests of New Advent. Mr. Wong holds a Bachelor of Science in Electrical and Electronic Engineering from $tralhclyde University of Scolland. He started his career in 1973 as Assistant District Engineer with Perak River Hydro Electric Power Company Scm. Bhd., where he worked untI11982. In 1982, Mr. Wong left the public service to join the Dindings Consolidated Group of Companies as a director where he mana~ the marketing and administrative aspects of the housing and commorcial property projects undertaken by the group. Some of these projects included Taman Dindings, Ayer Tawar; Taman Desa Aman, Teluk Intan; Taman Sri Setapak, Kuala Lumpur; Taman Damai Jaya, Johor and Taman Sri Endah, Kuala Lumpur. Dlndlngs represents the private investment vehicle of Mr. Wong and his family members. Mr. Wong has about 21 years of experience in property development. In 1992, Mr. Wong was appointed the Managing Director of Crimson Land Berhad (formerly known as MCB Holdings Berhad), a company listed on the KLSE, and subsequently resigned in November 1997. He is currently the Managing Director of PJ Development Holdings Berhad, another company listed on the Main Board of the KLSE. Mdm. Khor Chai Moi, a Malaysian aged 50, Is a Non-Executive Director of WMSC. She also represents the interests of New Advenl. Mdm. Khor holds a Bachelor 01 Business (major in Accounting) from the University of South Queensland, Australia, as well as a Master of Business Administration from the University 01 Hull, United Kingdom. Mdm. Khor has been the Managing Director of Dindings since 1992. She is also a director of several private limited companies. Mdm. Khor is currently an executive director of PJ Development Holdings Berhad. Dr. Kamaruddin bin Mohd Said, a Malaysian aged 50, is an Independent Director of WMSC. He is currently the Head of the AnthropOlogy and Sociology Program at Unlversiti Kebangsaan Malaysia. He received his Master of Arts and Ph.D. from the University of California at Berkeley. Prior to that, he gainOd his Bachelor of Arts with honours in anthropology and sociology and his Master of Arts in sociology from the University of Malaya. Dr. Kamaruddin is an Associate Professor and teaches anthropology and sociology at Universiti Kebangsaan Malaysia. He specialises in the socIology of industrial relations and economic anthropology and sociology, which place emphasis on and attention to economic behaviour In prOduction, distribution, consumption, saVings and investment. Dr. Yap Chee Sing, a Malaysian aged 44, Is an Independent Director of WMSC. He holds a First Class Honours degree in Mechanical Engineering from the Imperial College of Science and Technology, London, and a Ph.D, In Management Studies from the University of Cambridge. He currently holds the post of Chief Executive Officer of KDU College Sdn Bhd. Dr. Yap has previously worked as an engineer with the National Electricity Board, an Associate Professor at the National University of Singapore, a Visiting Scholar at the Hong Kong University of Science and Technology, and a Senior Manager at MOe. Dr. Yap is wetl known internationally in the lIeld of information systems and sits on the editorial board 01 several internalional journals. Shareholdings in WMSC Based on the Register of Directors’ Shareholdings of WMSC as at the date of this Prospectus, the direct and indirect interests of the directors in the issued and paid-up capital of the Company before and after the Issue are as follows:-IName of Director After Issue i Direct No. of Shares % Indirect No, of Shares % Diong King Ewu 9,114,879 3.68 Michael Wayne Price 14,847,337 5.99 Wong Ah Chiew 1.500.000 0.60 • 124,900.237 50.36 Khor Chai Mol 750.000 0.30 Dr, Kamaruddin bin Mohd Said Dr. Yap Chee Sing 100,000 0,04
Deemed substantial interest through Dindings and New Advent Directorships of Directors in Other Public Corporations None of the directors of WMSC has held directorships in other public corporations during the lastlwo (2) years except for the following:Name of Director Name of Company Date of Appointment Wong Ah Chiew PJ Development Holdings Berhad 19.09.2000 Khar Chai Moi PJ Development Holdings Berhad 19.09.2000 Dr. Kamaruddin bin Mohd OSK-UOB Unit Trust Management 26.09.2001 Said Barhad
Substantial Shareholdings of Directors in Other Public Corporations Save as disclosed below, none of the directors of WMSC has had substantial shareholdings (5% or more), whether direct or indirect, in other public corporations during the last two (2) years up to 11 March 2002. .. _.._—Name of Dlrec10r Name of Company Principal Activities Shareholding Direct Indirect No. of Shares % No. of Shares % Wong Ah Chiew PJ Development Investment holding and 1,608,000 0.35 • 76,820,787 16.84 Holdings Berhad property investment Wong Ah Chiew OSK Holdings Stockbroking 852,085 0.17 # 35,369,483 6.89 , Berhad I j Khor Chai Moi PJ Development Investment holding and 14,787,521 3.24 @ 25,254,005 5.54 I,, Holdings Berhad property investment
Deemed substantial inter9st through Dindings and nominee # Deemed substantial interest through Dindings and PJ Development Holdings Berhad @ Deemed substantial interest through Ladang Setia Sdn. Bhd., family members and nominees Directors’ Remuneration For the financial period ended 31 December 2000, a total sum of RM440,996 (based on an exchange rale 01 $$1.00 = RM2.19, being the average exchange rate for the period) was paid to the directors of WMSC as remuneration for their service In alt capacities 10 the Company and ils SUbsidiaries. For the ten (10) months ended 31 October 2001, a lolal sum 01 RM811,512 (based on an exchange rate of 5$1.00 = RM2.13, being the a….erage exchange rate lor the period) was paid to the directors of WMSC. The directors fall within the jojlowing remuneration bands:Remuneration B8nd (RM) Number of Directors Period Ended 31.12.2000 10 Months Ended 31.10.2001 0-100,000 100,001 -200,000 200,001 -300,000 300,001 -400,000 400,001 -500,000 500,001 -600,000
No remuneration was paid or is payable to lour (4) of the directors 01 WMSC who are non-executive directors.
7.5. Audi1 Committee WMSC has sel up an Audil Committee which comprises the following Board members:Designation Directorship Dr. Yap Chee Sing Chailman Independent Director Dr. Kamarucldn bin MOOd Said Independent Director Khor Chai Mol Member NOll-Executive Director
The main functions of the Audit Committee Include the review of audit plans and audit reports with the Group’s auditors, review of the auditors’ evaluation of internal accounting controls and management Inlormatlon systems, review of the scope of internal audit procedures, review of the balance sheet and profit and loss accounts, and nomination of the auditors.
7.6. Key Management and Technical Personnel Ms. Ng Hui Lan, a Singaporean citizen aged 43, Is the General Manager 01 WG Spore. She holds a Master’s Degree in Business Administration from the Universily of Brunei, United Kingdom. Ms. Ng graduated wllh a Bachelor’s Degree in Electrical Engineering from the National Universily of Singapore in 1982. She began her career as a Design and Development Engineer with the Microprocessor Applications Centre of Applied Research Corporation. During her 6 years with the Centre, she was responsible lor the design and development of many microprocessor-based products and systems. She Ieh in 1988 to join the Systems and Computer Organisation of the Minlslry of Defence (“MINDEP’). She was in a team responsible tor the design and implementation of systems and networt<:s for the MINDEF complex in Bukit Gombak, Singapore. In 1989, Ms. Ng jOined IC Equipment Pte. Ltd. as an Electronics Engineering Manager. Her responsibilities included managing a team of engineers in the design and development of control systems (both hardware and software) for equipment and machines used in the production (assembly, testing and packaging) of integrated circuits. She left IC Equipment Pte. Ltd. in 1995 to join Benevision Pte. Ltd., a company dealing with personal computer-based video systems for security appllcations. Her responsibilities included engineering and sales and marketing of the company’s products. In 1997, she was invited back to IC Equipment Pte. Ltd. as the Operations Director. During her 3 years with IC Equipment Pte. Ltd. as Operations Director, she managed the Engineering Design and Development Department, the Product Engineering Department, the Documentation Department, the Purchasing Department, the Manufacturing Department and the Customer Service and Support Department. Ms. Ng joined WG Spore in September 2000. Mr. Lee Kok Hoang, a Malaysian citizen aged 32, is the Accountant of the WMSC Group. He is a member of the Malaysian Institute of Accountants, and a provisional member of the Malaysian Association of Certified Public Accountants. He graduated from Universiti Malaya in 1994 with a Bachelor of Accounting (Hons.) Mr. Lee began his career in 1994 as a Trainee Accountant with Angkasa Marketing Berhad, a member of the Lion Group of Companies. In mid-1996, he was transferred to Amsteel Securities (M) Sdn. Bhd., also a member of the Lion Group of Companies, as an Assistant Accountant. In 1999, he left to join WG Msia and since then, he has been actively involved in the financial and accounting matters of the Group. Mr. Cheong Fang Hoon, a Singaporean citizen aged 49, is a Business Development Manager of WG Spore. He holds diplomas in electronic engineering and marketing management from Ngee Ann Technical Coilege, Singapore, as well as a Diploma in Marketing from the Institute of Marketing in the United Kingdom. Mr. Cheong’s career began with Singapore Telecom where he served as a Technical Officer from 1976 to 1982. He then moved to Anderson Digital Equipment in Singapore, where he served as a Customer Service Engineer from 1982 to 1983. In 1983, he moved again to Colosseum Corporation Pte. Ltd. as an Assistant Manager in the telecommunications division. Mr. Cheong joined WG Spore in 1988 as Manager of the Special Projects Division. His duties were to oversee the implementation and maintenance of SCADA systems for PowerGrid Ltd., PowerGas Ltd. and the Ministry of Environment, Singapore. In 2000, Mr. Cheong was promoted to his present position, in which he is responsible for developing and managing WG Spore’s clientele base. Mr. Stephen Fielding, a British citizen aged 44, is a Business Development Manager of WG Spore. He graduated from Lancashire University, England in 1981 with a degree in Electrical and Electronic Engineering. Mr. Fielding began his career as a Project Engineer with Transmitton Ltd., a company based in Leicestershire, England specialising in SCADA systems for the mining industry, water utilities and railways. He was promoted to Senior Project Engineer before he left Transmitton Ltd. in 1987 to join Spectra-Tek Ltd. as a Project Manager. Spectra-Tek Ltd., a company based in North Yorkshire, England, specialises in custody metering, terminal automation and pipeline control in the oil and gas Industry. He was responsible for the development and execution of projects, and support and negotiation of maintenance contracts. He was subsequently promoted to Engineering Manager. In 1997, he left to join WG Spore as Project Manager with overail responsibility for the execution of SCADA projects. As part of WG Spore’s ongoing expansion plan, Mr. Fielding was made a Business Development Manager in 2000 to promote the Group’s products and services in the ASEAN reglan. Mr. Ronald Too Boon Haw. a Singaporean citizen aged 35, is Manager of the Projects Division of WG Spore. Mr. Toh holds a Diptoma in Mechanical Engineering from Ngee Ann Polylechnic, Singapore and a Bachelor’s degree in Mechanical Engineering (Computer Integration) from the University of Glasgow. upon completing his degree. he joined IC Equipment Pte. Ltd. in Singapore as a Mechanical Engineer in 1995. Between 1995 and 2000. he was promoted several times within the company, eventually attaining the position of Section Manager where he was responsible for project management. Mr. Toh Joined WG Spore in December 2000 as Manager of the Projects Division. He Is responsible for managing all projects and ensuring that all projects are on schedule and within bUdget. Mr. Koh Beng Boon, a Singaporean citizen aged 44, is the Hardware Support Manager of WG Spore. He holds a Dipk)ma In Electronics Engineering Irom Ngee Ann Technical College 01 Singapore. Mr. Koh began his career in t981 as a Technical Assistant with General Electric Consumer Pte. ltd. He lett in 1983 to join Inlernational Cornrol System Pie. ltd. as a Senior Customer Engineer, where he was responsible for the servicing and lesting 01 a wide range 01 computer systems. In 1988. Mr. Koh joined WG Spore. As Hardware Support Manager, he Is responsible for all hardware support related functions on projects undertaken by WG Spore. This includes planning, directing and controlling the entire procurement function of the company. Mr Koh Is also responsible for the operations of WG Spore’s in-house workshop. Mr. Lee Beng Hong, a Singaporean citizen aged 43, is the Maintenance Manager of WG Spore. He holds a Diploma in Electronics and Telecommunications Engineering from the Singapore Polytechnic. Mr. Lee started his career in 1982 as a lechnlcian with Fairchild Ptc. Ltd. in Singapore. responsible for the mainlenance 01 computers and integrated circuit tesling machines. He progressed to become a Technical Officer at the Public Works Department of Singapore. where he was responsible for fire a1armll1alon systems and other electronics control systems. From there, In 1964 Mr. lee moved on to Indeco Engineers Pte. Ltd. as an engineer supervising about 20 people in the maintenance of building automation systems and security systems In Changl Airport and various other large buildings. Mr. Lee joined WG Spore in 1989. In his current position, he Is responsible for the entire maintenance operation of WG Spore and has about 30 people working under him. Mr. Ong Choong Hwee, a Singaporean citizen aged 40, is a Software Manager at WG Spore. He holds a Bachelor’s degree in Computer $cience from the University College of Swansea, United Kingdom. Mr. Ong has about 13 years of experience in software design. development and implementalion. He began his career in 1987 as a Syslems Engineer with Singapore Computer Syslems Pte. ltd. After he joined WG Spore in 1989, Mr. Ong was sent to WG Spore’s then parent company, Wiilowglen Systems Ltd. in Canada, for 18 months for software training. After retuming to Singapore, he was responsible for the installation and maintenance of the SCADA master software. He is the key personnel in the implementation of Housing Development Board of Singapore expansion projects. Mr. Long Tin JUi, a Malays!an citizen aged 36, is the Project Manager of WG Msia. He graduated from Tunku Abdul Rahman College in t 989 with a Diploma in Electronics Engineering. Mr. Long began his career in 1989 as a technician with HoneYNell Engineering Malaysia in the company’s Service Department, initially responsible for servicing HoneYNell’s range 01 mainframes and minicomputers. and later moving on to servicing building automa1ion system products. His final move was 10 conlrol systems products where. as a Service Engineer, he was involved in servicing, installing and commissioning control systems. He left the company in 1993 to join Foxboro (M) Sdn. Bhd. as a System Engineer. At Foxboro, he was involved in the design, programming and implementation of various projects, where he was also a team leader. After 2 years, he left to join Yokogawa Electric (Malaysia) Sdn. Bhd. in 1995 as a System Engineer, whore he was subsequently promoted 10 Senior Project Engineer in 1998. During his 4 years with Yokogawa Electric. he was Involved in various aspects of project lifecycle such as project management, designing, engineering and liaison. He jolnod WG Msia in 1999 as Project Manager. In his current position, he has overall responsibility for the execution of all SCADA projects implemented by WG Msia and has to people working under him. The WMSC Group’s management team comprises hfgh calibre people who have vast experience and expertise In the SCADA industry. The team has an average of more than 10 yeats’ experience In the industry. They are made up of two (2) distinct groups Le. one who joined the Group in the late 1980s and the other in the 1990s. The former group has been loyal to the Group for the past 10 years and has also been associated with the Managing Director in their undertakings prior to joining the Group. The latter group was recruited for their expertise and experience in advanced technology. Barring any significant turnover, the management team is expected to competently meet the challengos of the future expansion. Shareholdlngs In WMSC Amongst the key management and technical personnel, the following persons hold Shares in WMSC:N.~ Belore “sue After lnue Direct Indlrect Dire<:t Indirect No.ot.~_s % No.oISI\M.. % No. of Shares % No.ofS,-“1M % Cheong Foon Hong 995.858 0.54 1,195,858 0.48 Lee Kok Hoong 1,800,000 0.97 2.037,000 0.112 S1ephen FlOkting 531, t24 0.29 531.124 0.21 lee Beng Hong 995.858 0.54 995.BS8 0.40 Ilong Tin Jill, 250,000 0.10
None of the key managemont end technical personnel holds any options in respect of any Shares in WMSC. Directorships in Other Public Corporations None of the key management and technical personnel of the WMSC Group has held directorships in other public corporations during the last two (2) years. Substantial Shareholdlngs in Other Public Corporations None of the key management and technical personnel 01 the WMSC Group has had substantial shareholdings (5% at mote), whether direct or indirect, in other public corporations during the last two (2) years. 7.7. Relationships and Associates There are no lamily or business relalionships amongst the substantial shareholders, Promolers, directors, key management and technical personnel 01 the Group save for the following retalionships amongst the controlling shareholders of New Advent and Dindings:· (a) Mr. Wong Ah Chiew is the brother-in·law ot Mdm. Khor Chai Moi who is married 10 his brother Mr. Ong Leong Huat @ Wong Joo Hwa; and
(b) Mdm. Khor ChaJ Mol Is the mother of Ms. Ong Yee Ching who is one of the directors 01 New Advent.
See ~Statu10ry Information -Related-Party Transactions and Conflict of Interest” for details on any related-party transactions.
7.8. Service Agreements Mr. Diong King Ewu and Mr. Michael Wayne Price are employed under ordinary letters of appointment with no special terms. All employees of the Group have standard employment contracts. 59 8. SUMMARY OF FIVE-YEAR BUSINESS DEVELOPMENT PLAN The following is a summary of the Five-Year Business Development ptan dated 30 November 2000 prepared by WMSC for the purpose of inclusion in this Prospectus. 8.1. Background of the Group The Group is an integrated provider of customised SCADA systems, being involved in all stages of the design, development, production, supply, installation and maintenance of such systems. It has a 1S-year track record as a turnkey solutions provider in SCADA systems. There are three (3) companies in the Group i,e. WMSC, WG Spore and WG Msia. 8.2. Plans and Strategy The Group plans to grow by widening its customer base and achieving the growth targets which it has set. It will take a four-pronged approach in achieving these objectives. Firstly, the Group plans to use its listed status as a platform to further build up the “Willowglen” brand name and its image as a reputable and dependable supplier of SCADA technology. Secondly, the Group plans to penetrate regional markets by setting up representative offices to spearhead its business development activities. Thirdly, the Group will target specific segments of the SCADA market with significant potential, namely electrical power distribution systems, oil and gas production, transmission and distribution, building management systems and streetlight monitoring systems. Fourthly, the Group will look into developing new businesses with strong growth potential in industries that it is familiar with. In terms of product development, the Group’s R&D program is focused on two (2) main areas which together make up the third generation SCADA system, SysLink III. The two (2) areas comprise the development of the third generation SCADA software package with mUlti-system and internet connectivity, and the development of a series of highly advanced and modular field equipment products for capturing and processing field information as well as for video capture and storage.
8.3. Human Resource Policy The Group has a strong emphasis on hiring qualified technical and management personnel in view that its competitive edge will depend on the knowledge capital of its people. As a MSC status company, WMSC Is also able to hire foreign knowledge workers. In recognition of the crucial importance of employees to its success, the Group plans to implement various incentives including a performance-oriented salary scheme and an employees’ share option scheme. The employees’ share option scheme will be implemented after the Group’s listing on the MESDAQ Market, subject to shareholders’ approval.
8.4. Conclusion The Group is well positioned to take advantage of the anticipated growth of the Asian SCADA market with its technological know-how and past experience. The above represents the strategies and policies of the Group to achieve its vision of being a world class SCADA solutions provider in Asia.