Business Overview

5. INFORMAnON ON OUR GROUP 5. INFORMAnON ON OUR GROUP 5.1 History of Our Group Our Company was incorporated in Malaysia under the Act on 18 January 2013 as a private limited company under the name of Xin Hwa Holdings Sdn Shd and was subsequently converted to a public limited company on 26 June 2013. We are an investment holding company and are engaged in the provision of management services. Through our Subsidiaries, we are an integrated logistics service provider involved in land transport operations, warehousing and distribution operations and other services. Our land transpol1 operations incorporate cargo transp0l1ation services and container haulage services whereas other services incorporate freight forwarding and customs brokerage services as well as manufacturing and fabrication of trailers. The history of our business can be traced back to 1965 with the establishment of a small scale land transport operation by one of our Promoters, Eng Peng Lam @ Ng Peng Lam. In 1992, our Promoters expanded the land transport operations through the incorporation of Sinwah Trading & Transport Agency, a partnership entity which was a transport and customs forwarding agency mainly involved in the provision of cargo transportation services for manufactured products such as cOlTugated boards, plastic resins and home electrical appliances. In 2002, the entire business operations of Sinwah Trading & Transport Agency were taken over by XHTT which was established by our Promoters in 1997. In 2003, we ventured into the provision of container haulage services to our customers throughout Peninsular Malaysia. Further, we established a project cargo team to handle the transportation services for over­dimensional and heavy cargo in the same year. In 2003, we have also constructed an in-house repair and maintenance centre on our three (3) acres land in lohor Bahru, lohor Darul Takzim in order to undel1ake repair and maintenance works for am own l1eet of vehicles. Subsequently in 2005, we havc expanded the repair and maintenance centre as a manufacturing, fabrication and maintenance centre with the commencement of the business operations of XHAE. The manufacturing, fabrication and maintenance centre was relocated to a new plant in Senai, lohor Daml Takzim in 2014 to carry out all repair and maintenance works for our own fleet of vehicles as well as manufacturing and fabrication oftrailers. In 2005, our Group managed to secure a non-exclusive contract from a subsidiary of Johor Port Berhad which allowed us to offer internal POlt haulage transp0l1ation services in Johor Port, lohor Daml Takzim. Our Group also managed to secure contracts for the provision of internal pOl1 haulage transportation services in the P011 of Tanjung Pelepas, JaIlOr Darul Takzim and Penang POIi, Pulau Pinang in 2010 and 2014, respectively. As at the LPD, we provide internal port haulage transportation services in Johor Port, Johor Daml Takzim, Port ofTanjung PeJepas, Johor Darul Takzim and Penang POIt, Pulau Pinang. In 2008, our Group expanded our presence to the central region of Peninsular Malaysia by setting up an office in POtt Klang, Selangor Darul Ehsan. We had also expanded our presence to the nOlthern region of Peninsular Malaysia with the opening of an office in Bukit Mertajam, Pulau Pinang in 2010. In 2009, our business operations were relocated to our current premises located in Kempas Baru, Johor Bahru, Johor Daml Takzim from Taman Perling, Johor Bahru, Johor Daml Takzim. Our Group had constructed a warehouse in the current premises and this has allowed us to venture into the warehousing and distribution services sector in the same year. In 2011, XHUF was established to provide ii’eight forwarding and custOIllS brokerage services as part of our Group’s continuing efforts towards becoming an integrated logistics service provider. 5. INFORM AnON ON OUR GROUP (Colll’d) In view of the rising demand for our warehousing services, we expanded QUI’ warehouse located in Johor Bahru, lohor Darul Takzim to a total warehouse space of approximately 184,000 sq. ft. in 2012. In 2013, we further expanded the capacity of am warehousing services by leasing a single-storey detached building with a total warehouse space of approximately 60,600 sq. ft. as our warehouse in Skudai, Johor Daml Takzim. As at the LPD, our Group has a head office, three (3) branch offices, four (4) site offices, 814 employees, 1.173 vehicles and two (2) warehouses to support our business operations. As at the LPD, our Group’s corporate structure is as follows:
Note: XHUF is deemed as a snbsiditll)’ or XH1-l pursuant to Scction 5 or the Act as XHH controls thc composition of the board ofdireetors ofXHUF throUgh the XHUF Shnreholders’ Agreement. 5.2 Share Capital and Changes in Shue Capital As at the LPD, the authorised share capital of our Company is RM500,000,000 comprising 1,000,000,000 ordinary shares of RMO.50 each, of which RM71,109,000 comprising 142,218,000 ordinary shares of RMO.50 each have been issued and fully paid-up. Upon completion of our IPO, the issued and paid-up share capilal will be increased to RM90,000,000 comprising 180,000,000 Shares. The changes in our Company’s issued and paid-up share capital since our incorporation are as follows: No. of  ~ Dllte of  Shlll'”es  allotmcnt  allottcd  vaIn€’  RM  18.01.2013  2  1.00  09.10.2013  – 0.50  01.04.2014  2  0.50  01.04.2015  142,217,994  0.50
Considcnltion Ca::-h Subdivision of two ordinary shares oj’ RM 1.00 each imo four (4) ordill31y shares ofRMO.50 each Cash Otherwise than cash(a)
(2) Notc: (a) Jssuat1~~ of new Shares as consideration for the Acquisitions. There were no discounts, special terms or instalment payment terms applicable to the payment of consideration for the above allotments. As at the LPD, there are no outstanding warrants, options, convet1ible securities or uncalled capital in XHH. 5. INFORMATION ON OUR GROUP (Col1t’d) 5.3 Principal Activities of Our Subsidiaries As at the LPD, our Group has no associated company. The principal activities of our Subsidiaries are as follows: Snbsidiaries  Date Il)h,ce of incorporation  Year of business commencement  Issued and paid-up share capital RM  Effective equity interest %  XHTr XHAE Canggih XHUF*  19.09.1997/ Malaysia 19.07.2004/ Malaysia 28.08.2003/ Malaysia 22.08.2011 / Malaysia  2002 2005 2004 2012  1.000.000 100.000 1,000,000 100.000  100.00 100.00 100.00 30.00
Principal activities Provision of cargo transportation services, container haulage scrvices as well as warehousing and distribution services Mauufacturing and fabrication of trailers Provision of eargo transportation services and rental of fJrime movers, trailers and trucks Provision of freight forwarding and eustoms brokerage services Note: * XHUF is deemed as a suhsidimy of XHH pursuant to Section 5 lIt’ the Act as XI-IH controls the composition ofth-: board of directors of Xl-JUF through thc XHUr: Shareholders’ Agreement 5.4 Information on Our Subsidiaries 5.4.1 XHTT (al History and Business XHTT was incorporated in Malaysia under the Act on 19 September] 997 as a private limited comprmy under the name of Xin Hwu Trading & TranspOJi Agency Sdn Bhd. XHTT assumed its present name on t March 2000 and commenced its business operations in 2002. XHTT is principally involved in the provision of cargo transportation services, container haulage services as well as warehousing and distribution services. (bl Substantial Shareholders As a result of the Acqtlisition of XHTT which was completed on I April 2015, XHTT is a wholly-owned subsidiary of our Company. 5. INFORMATION ON OUR GROUl’ (CoIII’d) (c) Sharc Capital As at the LPD, XHTT has an anthorised share capital of RM I,000,000 comprising 1,000,000 XHTT Shares, Ti,e issned and paid-up share capital of XHTT is RMl,OOO,OOO comprising 1,000,000 XHTT Shares, The change in the issued and paid-up share capital of XHTT in the past three (3) years preceding the LPD is as follows: IDate of allotment  No. of shares allotted  Par value RM  Consideration  Cumulative issued and paid-lip share capital RM  24,06.2013  2S0,OOO  1.00  Bonus issue  1,000,000
As at the LPD, XHTT does not have any outstanding warrants, options,  convertible securities or uncalled capital.  (d)  Subsidiary and Associated Company  As at the LPD, XHTT does not have any subsidiary or associated company.  5.4.2  XHAE  (a)  Hislory and Bnsiness  XHAE was incorporated in Malaysia nnder the Act on 19 July 2004 as a  private limited company and commenced its business operations in 2005.  XHAE is principally involved in the manufacturing and fabrication of  trailers.  (b)  SulJstantial Shareholders  As a result of the Acquisition of XHAE which was completed on 1 April  20 15, XHAE is a wholly-owned slllJsidiary of our Company.  (c)  Share Capilal  As at the LPD, XHAE has an authorised share capital of RMJ 00,000  comprising 100,000 XHAE Shares. The issued and paid-np share capital of  XHAE is RIv!l 00,000 comprising J00,000 XHAE Shares.  There are no changes in the issued and paid-up share capital of XHAE for  the past three (3) years preceding the LPD.  As at the LPD, XHAE does not have any outstanding warrants, options,  converlible securities or uncalled capital.  (d)  Subsidiary and Associated Company  As at the LPD, XHAE does not have any subsidiary or associated company.
5. INFORMATION ON OUR GROUP (Collt”d) 5.4.3 Canggih (a) History and Business Cauggih was incorporated in Malaysia under the Act on 28 August 2003 as a private limited company and commenced its business operations in 2004. Canggih is principally involved in the provision of cargo transportation services and rental of prime movers, trailers and trucks. (b) Suhstantial Shareholders
As a result of the Acquisition of Canggih which was completed on 1 April 2015, Canggih is a wholly-owned subsidiary of our Company.
(c) Share capital

As at the LPD, Canggih has an authorised share capital of RMI,OOO,OOO comprising 1,000,000 Canggih Shares. The issued and paid-up share capital ofCanggih is RMJ ,000,000 comprising J,000,000 Canggih Shares. There are no changes in the issued and paid-up share capital of Canggih for the past three (3) years preceding the LPD. As at the LPD, Canggih does not have any outstanding warrants, options, convel1ible securities or uncalled capitaL (d) Suhsidiary and Associated Company As at the LPD, Cangglh does not have any subsidiary or associated company, 5.4.4 XHUF (a) History and Business XHUF was incorporated in Malaysia under the Act on 22 August 20 II as a private limited company and commenced its business operations in 2012, XHUF is principally involved in the provision of freight forwarding and customs brokerage services, (b) Substantial Shareholders As a result of the Acquisition of XHUF which was completed on I April 2015, the substantial shareholders of XI-IUF are as follows: Name  I  Direct No. of shares held  ~  XtlH Md Zaliszan Bin Ahmad Kusaini Mohd Johari Bin Mohamed Ripin  30.000 35,000 35.000  30.00 35.00 35.00
5. INFORMATION ON OUR GROUP (CollI”’) Notwithstanding that, XHUF is deemed as a subsidiary of XHH pursuant to Section 5 of the Act as XHH controls the composition of the board of directors of XHUF through the XHUF Shareholders’ Agreement which states that the maximum number of directors of XHUF shall not exceed three (3) directors and shall consist of two (2) directors appointed by XHH and one (I) person appointed by the majority shareholders ofXHUF. The salient terms ofthe XHUF Shareholders’ Agreement are as follows: Conditional Agreement The provisions of the agreement are conditional upon the completion of the sale and purchase of 30,000 XHUF Shares under the SPA dated 30 Apri] 2014 between Ng Aik Chuan and XHH (“XHUF SPA”). Board of Directors (i) Unless otherwise agreed, during the currency of the agreement, the number of directors of the board shall not exceed three (3) and each of the shareholders will exercise its voting rights for the time being in the company and take such other steps as lie within its powers to procure that the maximum number of directors of the company shall not exceed three (3). (ii) The board shall consist of: (a) the managing director, who shall be an individual elected byXHH;
(b) one (J) person to be appointed by XHH for the time being as director ofthe company; and
(c) one (1) person to be appointed by the maJonty

shareholders for the time being as a director of the company. The chairman of the board (and the chairman of any shareholders’ meeting) will be the managing director. (iii) At each meeting of the board, each director shall have the right to one (I) vote. The directors present at such meeting must exercise their voting rights and cannot abstain from voting, except where required by law or by the agreement or the articles of association. A resolution will be deemed to have been adopted by a simple majority vote in favour of the resolution by all the directors present at the meeting, in person, or by his alternate. 5. INFORMATION ON OUR GROUP (Col1/’d) Management oftile Company (il The company shall be managed ultimately by the board but the day-to-day administration and management of the company shall be vested in the managing director of the company who shall be an individual elected by XHH. The chief financial officer and the chief marketing officer shall be appointed by the board provided that XHH shall have the right to nominate the chief financial officer and the chief marketing officer. The shareholders hereby agree thst thcy shall cause their respective nominated directors to exercise their voting rights so as to ensure the election of the chief financial officer and the chief marketing office nominated by XHH pursuant to this clause. (iii XHH shall be entitled to nominate such person to aet as the managing director of the company and be responsible for the day­to-day management and operations of the company. The company and thc managing director shall enter into a contract for services on mutually acceptable terms setting out the remuneration and benefits of the managing director together with the scope of his duties. Such a contract must be consistent with the agreement. Pre-Emption Rights Over Issues ofNew Securities All unissued securities shall before issue be first offered for subscription to the shareholders. Any remaining unsubscribed securities shaJJ be offered to the shareholders to subscribe for any number thereof provided always that if the number of securities subscribed for exceeds that available for subscription, then the remaining securities shall be aHocated to the subscribing shareholders according to their propOitionate shareholding immediately prior to the proposed issue of securities. Thereafter, all unissued securities remaining unsubscribed for may be offered to any third party as may be approved by the board. Pre~Emptlon Rights Over Transfers of Shares (il Any shareholder desirous of selling or disposing of all or any part of its shares or any interest therein (the “Seller”) may only sell or dispose of such shares or such interest therein (“Total Offered Shares”) after first offering the same to the other shareholders (“Offeree”) in the proportion oftheir shareholding inter-se and the Seller must serve a notice (“Notice of Sale”) on the Offeree. (ii) The Offeree lTlay exercise its choice to purchase all the Offered Shares by giving notice to the company and the Seller within twenty onc (21) days after the date of the Notice of Sale. If the Offeree exercises its choice to purchase all the Offered Shares then subject to clauses 8.4 and 8.2.6 of the XHUF Shareholders’ Agreement, the Seller must sell to the Offeree all the Offered Shares and the Offeree must purchase them 011 the terms as set out in the Notice of Sale or such other terms as the Seller and the Offeree may agree. (iii) If the number of secmities accepted for purchase exceeds that on offer, the shares shall be allocated to the purchasing shareholders according to their propOitionate shareholding immediately prior to the proposed sale or disposal. -51 ­5. INFORMATION ON OUR GROUP (ColIl’d) (iv) In the event there are remaining Offered Shares not accepted by any of the Offerees, the Offer to the Offerees shall be deemed nullified and the Total Offered Shares may be sold to the Proposed Buyer at the same or higher price as that initially offered to the Offeree as may be approved by the board within thirty (30) days after the expiry of the Notice of Sale. The Sel]er shall then procure the third party to enter into a Deed of Adherence with the shareholders including the Seller, if the Seller only disposed of pal1 of his shares in the company. Duration and Termination The agreement shall take effect from 4 June 20]4 and shall continue until terminated in accordance with the provision hereof or on the date of the listing of the company (if any) or if an effective resolution is passed to wind up the company or if a liquidator is otherwise appointed~ but without prejudice to, and without derogating from, the provision of this clause, provided always that the parties may unanimously agree at any time to tellninate the agreement upon terms and conditions acceptable to them. (c) Share capital As at the LPD, XHUF has an authorised share capita] of IUvllOO,OOO comprising 100,000 XHUF Shares. The issued and paid-up share capital of XHUF is RMIOO,OOO comprising ]00,000 XHUF Shares. There are no changes in the issued and paid-up share capital of XHUF for the past three (3) years preceding the LPD. As at the LPD, XHUF does not have any outstanding watTants, options, convel1ible securities or uncalled capital. (d) Subsidiary and Associated Company As at the LPD, XHUF does not have any subsidiary or associated company. [fHE REST OF THIS PAGE HAS BEEN INTENTION ALLY LEFT BL@ 5. INFORMATION ON OUR GROUP (Coll/’d) 5.5 Listing Exercise In conjunction with and as an integral part of the Listing, we undertook the following corporate exercises: (i) Acquisitions;
(ii) lPO:

(iii) Share Transfer; and (iv) Listing. 5.5.1 Acquisitions On 30 April 2014, we entered into fonr (4) conditional SPAs in relation to the Acquisitions, to acquire the equity interest of our Subsidiaries for a total purchase consideration of RM71,108,997, satisfied by the issuance of 142,217,994 new Shares. 5.5.1.1 Acquisition of XHTT The Acquisition of XHTT entails the acquisition of the entire issued and paid-up share capital of XHTT comprising 1,000,000 XHTT Shares for a plll’Chase consideration of RM65,216,997 satisfied by the issuance of 130,433,994 new Shares. The vendors of XHTT, the lllunber of XHTT Shares that were acquired by XHH and the number of new Shares that were issued to them pursuant to the Acquisition ofXHTT are disclosed as follows: Vendors  No. of XHTT Shares acquired byXHH  % of issued and paid-up sha.-e capital  Purchase consideration RM  No. of Shal”es issued  Ng Aik Chuan  3UO,000  30.00  19,565,099  39,130,198  Ng Yam Pin  30U,000  30.00  19,565,099  39,130,198  Eng Peng Lam @ Ng Pcng Lam  400.00U  4U.00  26,086.799  52,173,598
1.000.UUO  1UO.00  65,216,997  130.433.994
The purchase consideration of RM65,216,997 for the Acquisition of XHTT was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited NA of XHTT as at 31 December 2013 of RM65,216,435. The Acquisition ofXHTT was completed on 1 April 2015. 5. INFORMATION ON OUR GROUP (Cont’d) 5.5.1.2 Acquisition of XHAE The Acquisition of XHAE entails the acquisition of the entire issued and paid-up share capital of XHAE comprising 100,000 XHAE Shares for a purchase consideration of RM2,364,000 satisfied by the issuance of 4,728,000 new Shares. The vendors of XHAE, the number of XHAE Shares that were acquired by XHH and the number of new Shares that were issued to them pursuant to the Acquisition ofXHAE are disclosed as follows: Vendors  No. of XHAE Shares acquired byXHH  % of issued and paid-uIJ share capital  I Purchase considel’atioll RM  No. of Shares issued  Ng AikChuan  30,000  30.00  709,200  1.418.400  Ng Yam Pin  30,000  30.00  709,200  1,418.400  Eng Peng Lcun @ NgPengLam  40.000  40.00  945,600  1,891,200  100,000  10000  2.364,000  4,728.000  ~­
The purchase consideration of RM2,364,000 for the Acquisition of XHAE was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited NA of XHAE as at 3 I December 2013 of RM2,363,246. The Acquisition of XHAE was completed on 1 April 2015. 5.5.1.3 Acquisition of Canggih The Acquisition of Canggih entails the acquisition of the entire issued and paid-up share capital ofCanggih comprising 1,000,000 Canggih Shares for a purchase consideration of RM3,409,000 satisfied by the issuance of 6,818,000 new Shares. The vendors of Canggih, the number of Canggih Shares that were acquired by XHH and the number of new Shares that were issued to them pursuant to the Acquisition of Canggih are disclosed as follows: Vendors  No. of Canggih Shares acquired byXHH  % of issued and paid-IIIJ share capital  Purch:lse consideration RM  No. of Shares issued  NgAikChuan  300.000  30.00  1,022,700  2,045.400  Ng Yam Pin  300,000  30.00  1,022,700  2,045,400  Eng Peng Lam @ Ng Peng Lam  400,000  40.00  1,363.600  2,727,200  1,000,000  100.00  3.409,000  6,818,000
5. INFORM AnON ON OUR GROUP (Co//I’rI) The purchase consideration of RM3.409,000 for the Acquisition of Canggih was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the audited NA of Canggih as at 31 December 2013 of RM3,408,443. The Acquisition ofCanggih was completed on I April 2015. 5.5.1.4 Acquisition ofXHUF The Acquisition of XHUF entails the acquisition of 30.00% of the issued and paid-up share capital of XHUF comprising 30,000 XHUF Shares for a purchase consideration of RM119,000 satisfied by the issuance of 238,000 new Shares. The vendor of XHUF, the number of XHUF Shares that were acquired by XHH and the number of new Shares that were issued to him pursuant to the Acquisition of XHUF are disclosed as follows: Vendor  No. of XHUF Shares acquired byXHH  % of I issued and paid-up share Purchase capibtl considenltion RM  No. of Shares issued  NgAikChuan  30,000  30.00  119,000  238,000  30,000  30.00  119.000  238,000
The purchase consideration of RM119,000 for the Acquisitiou of XHUF was arrived at on a “willing-buyer willing-seller” basis after taking into consideration 30.00% of the audited NA of XHUF as at 31 December 2013, which amounted to RMI18,004. The total audited NA of XHUF as at 31 December 2013 is RM393,347. The Acquisition ofXHUF was completed on 1 April 2015. 5,5,2 IPO The IPO involves the Public Issue of37,782,000 new Shares by XHH and the Offer for Sale 0 f 16,218,000 existing Shares held by the Offerors, the details of which are set out below. 5.5.2.1 Public Issue The 37,782,000 new Shares to be issued at the IPO Price pursuant to the Public Issue, representing approximately 20.99% of our enlarged issued and paid-up share capital will be allocated in the following manner: (i) Malaysian Public 9,000,000 Public Issue Shares, representing 5.00% of our enlarged issued and paid-up share capital will be made available for application by the Malaysian Public to be allocated via balloting, of which 50.00% will be set aside for Bumiputera Public. 5. INFORMATION ON OUR GROUP (Col/I’tI) (ii) Eligible Directors, Employees and Other Persons who have Contributed to the Success of Our Group 3,000,000 Public Issue Shares, representing 1.67% of our enlarged issued and paid-up share capital will be made available for application by the eligible Directors, employees and other persons who have contributed to the success of our Group. (iii) Bumiputera Investors Approved by MITI 2,000,000 Public Issue Shares, representing 1.11 % of our enlarged issued and paid-up share capital will be made available for application by way of private placement to Bumiputera Investors approved by the MIT!. (Iv) Selected Investors by way of Private Placement 23,782,000 Puhlic Issue Shares, representing approximately 13.21% of our enlarged issued and paid-up share capital will be made available for application by way of private placement to selected investors. 5.5.2.2 Offer for Sale The 16,218,000 Offer Shares, representing approximately 9.01% of our enlarged issued and paid-up share capital will be made available by way of placement to Bumiputera Investors approved by MIT!. 5.5.3 Share Transfer Upon completion of our lPG, the Promoters, namely Ng Aik Chuan, Ng Yam Pin and Eng Peng Lam @ Ng Peng Lam will hold an aggregate of 125,999,998 Shares. During the prescription period. the Promoters will transfer 125,999,998 Shares to a private holding company, namely NF Capital at a consideration of RM62,999,999, to be satisfied pm1ly by the issuance of 99,899 new NF Capital Shares to be issued at par and the remaining balance consideration of RM62,900, 100 will remain as an amount owing from NF Capital to the Promoters. Fut1her details ofthe Share Transfer are set out below: Before the Share Transfer  After the Share Transfer  Shareholders  No. of Shares held after our IPO  No. of Sh~lfes to be transferred  No. of Shares held after the Share Transfer  % of the enlarged share capital  NgAik Chuan  37,947,602  37,947,602  – – Ng Yam Pin  37,736,742  37,736,742  – – Eng Peng Lam @ Ng Pcng Lam  50,315,654  50,315,654  – – NF Capital  – – 125,999,998  70,00
125,999,998  125,999,998  125,999,998  70.00

5. INFORMATION ON OUR GROUP (Com’d) The existing shareholders’ shareholdings in NF Capital and the indirect interest ofNg Aik Chuan, Ng Vam Pin and Eng Peng Lam @ Ng Peng Lam in XHH after thc Share Transfer will be as follows: Direct interest in NF Capital  Indirect interest in XHH  Shareholders  No. of Shares  %  No. of Shares  %  NgAik Chuan  30,000  30.00  125,999,998′  70.00  Ng Yllm Pin  30,000  30.00  125,999,998′  70.00  Eng Peng Lam @ Ng Peng Lam Abdul Rahman Bin Omae  39,999 1  40.00 #  125,999,998′ , – 70.00 – Total  100,000  100.00  N/A  N/A
Noles:  #  Negligible.  ,  Deemed interested by vil1uc of his direct interest in NF Capital pursuant to Section 6A of the  Act.  Pursuant to Section 6A of the Act, Abdul Rahman Bin Omar is not deemed 10 have an interest
in XHH as his shareholdings in NF Capital will be less than 15,00% after the Share Transfer. NF Capital was incorporated in Malaysia under the Act on 7 August 2013 as a private limited company. As at the LPD, NF Capital has an authorised share capital ofRM400,000 comprising 400,000 NF Capital Shares. The present issued and paid-up share capital of NF Capital is RMIOI comprising 101 NF Capital Sharcs. NF Capital is an investment holding company. The elment dircctors of NF Capital are Ng Aik Chuan, Ng Vam Pin and Eng Peng Lam @ Ng Pcng Lam. As at the LPD, NF Capital docs not have any subsidiary or associated company. The existing shareholders’ shareholdings in NF Capital are as follows: Existing shareholders  Direct interest in NF Capital No. of shares held in NF Capital  %  NgAik Chuan Ng Yam Pin  30 30  29.70 29.70  Eng Peng Lam @NgPengLam Abdul Rahman Bin Omar  40 I  39.60 0.99  Total  101  JOO.OO·
Note: Discrepancy bchveen the amoullts listed and the total are due to rounding 5. INFORM AnON ON OUR GROUP (Conl’d) 5.5.4 Listing Upon completion of the abovementioned exercises. we shall seek the listing of and quotation for our enlarged issued and paid-up share capital of RM90,000,000 comprising 180,000,000 Shares on the Main Market. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW 6.1  Business Model, Competitive Advantages and Key Strengths  6.1.1  Business Model  Our business model is depicted in the figure below:  {  Land Tn.u,~port OpcI’ation5  W.!t.rt’housing ItmJ Di~lribUljon 0pcl’ntion~  l>nn’i~ion of Other Servin’s
L-R’_”_.u_,s_’,re_••_,,—” { Providing CllJ1!.0 Transport.1lion SetYice~  Providing Container lfuulage Services  Providing Warehousing and Distribution Services  Providing Othe-!’ SetYices

6.1.2 Business Foeus Our Group is primarily an integrated logistics service provider focused on land transpOlt operations and warehousing and distribution operations. Our land transport operations incorporate cargo transportation services and container haulage services. In addition, we also provide other services such as freight forwarding and customs brokerage services as well as manufacturing and fabrication of trailers. We were granted an investment tax allowanc~ by MIDA for providing integrated logistics services with the following conditions: (i) at least sixty percent (60%) of the company’s equity is held hy Malaysialls;
(ii) tbe company must undcl1ake transportation, freight forwarding and warehousing activities. In addition, the company must undeliake one (1) of the value added activities sucb as distribution or other value added services in an integrated basis;

(iii) the company n1t1st have the minimum infrastructure as follows: (a) at least 5,000m’ of warehousing facilities; and
(h) at least twenty (20) units of commercial vehicles; and

(iv) the company must obtain relevant approvals and licences for the transpOltation, freight forwarding and warehousing operations. We have fulfilled all the conditions above in providing integrated logistics services. As slIch, we are eligible for an allov..’ance of sixty percent (60%) on the qualifying capital expenditure incurred within five (5) years from 18 March 201 I, heing the date the first qualifying capital expenditure is incurred and expiring on 17 March 2016. Tbe investment tax allowance can be offset against seventy percent (70%) of XHTT’s statutory income for tax purposes. -59­6. BUSINESS OVERVIEW (Collt’d) 6.1.3 6.1.4 Revenue Streams Om revenue is derived mainly from land transport operations which comprise cargo transportation services and container haulage services. For the FYE 31 December 2014, revenue derived from the provision of cargo transportation services and container haulage services accounted for approximately 53.24% and 36.50% of our Group’s total revenue, respectively. In addition, the warehousing and distribution services that we offer in Skudai, Johor Daml Takzim and Johor Bahru, Johor Daml Takzim accounted for approximately 9.97% of our total revenue for the FYE 31 December 20 14. Revenue from other services, namely freight forwarding and customs brokerage services and manufacturing and fabrication of trailers accounted for approximately 0.29% of our Group’s total revenue for the FYE 31 December 2014. Competitive Advantages and Key Strengths Our competitive advantages and key strengths are important in sustaining our business and providing our Group with future growth opp0l1unities. (i) Integrated Operations We are an integrated logistics service provider that is able to provide multiple services across the logistics industry value chain. Such services include cargo transportation services, container haulage services and warehousing and distribution services as well as freight forwarding and customs brokerage services. Our Group which stal1ed with the provision of cargo transportation services has undel1aken several business expansion plans over the years towards developing into an integrated logistics service provider. The business expansion plans that we have undertaken, amongst others, included the following: • provision of container haulage services;
• expansion of our warehousing and distribution facilities;
• continuously increasing our fleet of vehicles; and
• provision of fi’eight forwarding and custom brokerage services.

As an integrated logistics service provider, we are able to provide an aJTay of logistics services to cater to a diversified pool of customers with a variety of logistical needs and special requirements such as transportation of over­dimensional and heavy cargo which may require road survey and site planning. In addition, our Group has the ability to customise our logistics services which range from pick-up, storage and delivery based on the requirements of each customer. Our integrated operations also increase cost effectiveness, provide convenience to customers and ensure faster turnaround whilst meeting customers’ requirements. In addition, we are able to leverage on the economies of scale of our integrated operations by minimising our reliance on outsourcing services. This provides us with cost savings which will subsequently improve our profitability. -60­6. nUSINESS OVERVIEW (Colll’d) (ii) (iii) Further, XHTT was granted an investment tax allowance by MIDA for providing integrated logistics services. As such, XHTT is eligible for an allowance of sixty percent (60%) on the qualifYing capital expenditure incurred within five (5) years from 18 March 2011, being the date the first qualifYing capital expenditure is incurred and expiring on 17 March 2016. The investment tax allowance can be offset against seventy percent (70%) of XHTT’s statutory income for tax purposes. III-Honse Manufacturing, Fabrication and Maintenance Centre We have an in-house manufacturing, fabrication and maintenance centre located in Senai, Johor Darul Takzim which is operated by seventy eight (78) personnel as at the LPD. This enables our Group to carry out in-house refurbishment, fabrication, modification and component extension work on our vehicles. Our manufacturing, fabrication and maintenance centre also provides us with the flexibility to customise our logistics services for specialised cargo and large-scale projects as we are able to manufacture and fabricate our trailers to cater to customers’ requirements. Further, we are able to undertake repair and maintenance works for our vehicles at our manufacturing, fabrication and maintenance centre, This allows us to minimise our cost of maintenance while at the same time achieving a faster servicing turnaround time for the vehicles as we are less susceptible to external factors such as unavailability of mechanics, long queue times or limited servicing hours. In addition, by carrying out regular maintenance based on maintenance schedule and service intervals that are specific to our vehicles according to the number of trips and distance travelled, the useful life of our vehicles would be prolonged. This in tum minimises the need to replace our vehicles frequently and thus, reduces our capital expenditure. Our Group predominantly relies on our in-house manufacturing, fabrication and maintenance centre to carry out manufacturing, fabrication and maintenance works for our vehicles. This is an advantage to our Group as it allows us to respond faster to customers’ requirements and to address oppOitunities targeting various end-user markets as well as to operate more cost effectively. Sizeable Fleet of Vehicles As at the LPD, our Group operates a sizeable fleet of vehicles comprising 435 prime movers, 703 trailers and thirty five (35) trucks, which allows our Group to provide a diverse range of transportation services to our customers. Our fleet of prime movers comprise solely of used prime movers which are purchased from third parties and refurbished inRhouse whereas approximately sixty percent (60%) of our trailers are manufactured in-house and the remaining forty percent (40%) of our trailers are purchased from third patties. Further, all our trucks with maximum loaded weight ranging fl’om one (I) tonne to ten (10) tonnes are purchased from third pmties. Our fleet of trailers also includes five (5) multi axle trailers which are used mainly for project cargo. The acquisition of the multi axle trailers reduces our reliance on third patties and improve the profit margin of project cargo as such multi axle trailers were leased from third parties previously. 6. BUSINESS OVERVIEW (Co/1f’II) (iv)
(v)
(vi)

With a fleet of over 1,000 vehicles, our Group is ahle to undertake small­scale projects such as transpOllation services for small quantity of cargo using a truck to large-scale projects such as transportation services for over­dimensional and heavy cargo using a prime mover with multi axle trailer to meet our customers’ demands. In addition, we are able to provide land transpOltation services to various end-user markets and to fulfil our customers’ requirements by operating a diversified fleet of vehicles. Ability to Carry Out In-House Refurhishment of Used Prime Movers One of our major capital investments Wllich recurs annually relates to the purchase of prime movers where the capital expenditure and operating expenditure required to maintain such assets may have a substantial impact on our earnings and cash flow position. Our Group seeks to minimise our cost structure by managing the capital investments in relation to the purchase of prime movers. As part of our Group’s management of capital expenditure, we acquire used prime movers and cany out in-house refurbishment of these vehicles. This allows our Group to increase our fleet of vehicles at a lower cost and achieve cost savings of approximately fifty percent (50%) to sixty five percent (65%) as compared to acquiring a new prime mover. Further, our Group also has the capability to carry out in-house maintenance for the refurbished prime movers which in turn reduces operating expenses. Geographical Presence Across Peninsular Malaysia Our Group has established site offices in several major pOllS in Peninsular Malaysia namely, Johor Port, Johor Daml Takzim, Port of Tanjung Pelepas, Johor Daml Takzim and Penang Port, Pulau Pinang. Further, in addition to our head office in Johor Bahru, Johor Daml Takzim, we have also set up branch offices in Pasir Gudang, Johor Daml Takzim. Pulau Indah, Selangor Daml Ehsan and Bukit Mertajam, Pulau Pinang. The presence of our Group in these major pOlls and branch offices in various regions allows us to respond promptly to our customers’ requests at different locations. In addition, it also enables us to consolidate the cargo of our customers from multiple locations to maximise the utilisation of our vehicles and thus, achieving greater cost savings which would improve the profit margin of our Group. Established Relatiouship with Customers We have been in the logistics industry for more than ten (10) years since the commencement of the business operations of XHTT in 2002. Throughout the years, our Group has managed to establish and maintain good business relationships with our customers. For the FYE 31 Decemhcr 2014, approximately 12.20% of our customers have been dealing with us for more than ten (10) years which is a testament to the quality of our Group’s services. Our Group emphasises on customer service as we believe that continuous communication with our customers will enable us to develop a good understanding of our customers’ requirements and expectations. We ensure that customers’ feedback and requests are attended to promptly in order to build and maintain a sustainable relationship with our customers. -62­6. BUSINESS OVERVIEW (ColiI’d) (vii) Experienced Management Team Our Group is led by an experienced management team. Our Managing Director, Ng Aik Chuan and our Executive Director, Ng Yam Pin, have led our Group since the commencement of the business operations of XHTT in 2002. Their knowledge. experience, drive and passion for our business have been instrumental to our Group’s success and they have played an impOltant role in the growth and development of our Group. They have conceptualised and executed the strategies that have led our Group to be an integrated logistics service provider. Our Managing Director and Executive Director are supported by our key management team, comprising individuals with relevant experience in providing integrated logistics services and accounting and finance related functions. Our experienced management team has been a key strength that has contributed towards the development and success of our Group. The continuous effOlt of aUf management team will provide the basis for the business growth of our Group moving forward. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
6. BUSINESS OVERVIEW (COliI’d) 6.2 Business Activities Principal Business Activities of rhe Group  I  I I  I  Land Transport Operations  Warehousing and Distribution Operations  Provision of Olher Services  I  I  I  Cargo Transportatioll Serviees  Container Haulage Serviees
Our Group is principally an integrated logistics service provider involved in land transport operations, warehousing and distribution operations and other services. Our land transp0l1 operations incorporate cargo transportation services and container haulage services. For the FYE 31 December 2014, our cargo transp0l1ation services accounted for 53.24% of our Group’s total revenue, followed by container haulage services of 36.50%, warehousing and distribution services of9.97% and other services of 0.29%. 6.2.1 Land Transport Operations (a) Cargo Transportation Services Our Group’s cargo transp011ation services entail the transportation of cargo from a designated pick-up point to a designated drop-off point based on our customers’ requirements. Our Group is able to provide one-stop cargo transportation services throughout Peninsular Malaysia and between Malaysia and Singapore. The range of our cargo transpol1ation services includes the following: (i) consolidation and distribution of less than truck load cargo throughout Peninsular Malaysia;
(ii) inter-state cargo transp0l1ation services within Peninsular Malaysia;

(iii) cross-border cargo transportation services from Peninsular Malaysia to Singapore or vice versa; and (iv) transp0l1atioil services for over-dimensional and heavy cargo for large-scale projects, which commonly known as project cargo within Peninsular Malaysia and between :MaJaysia and Singapore. In relation to project cargo, we also offer supporting services involving road survey, site planning and submission of application to the relevant authorities for road traffic control. Some of the project cargo that we have previously completed involved transportation services for boilers, cement plant structure and machinely, generators, tower cranes and railway equipment. -64 ­6. BUSINESS OVERVIEW (Cont’d) As at the LPD, we operate with a fleet of approximately thirty one (31) trucks, 210 prime movers and 206 trailers for our cargo transportation services. Certain trucks and prime movers are equipped with GPS which allowed us to track and monitor the movements of our vehicles. We are able to constantly monitor the location of our vehicles and minimise the travelling time by deploying the vehicle nearest to the required destination via GPS. The following images illustrate some of the cargo transportation services that are provided to our customers.
Cargo transportation services (b) Container Haulage Services We commenced the operations of our container haulage services in 2003 in order to provide a more comprehensive range of logistics services to our customers. The range of our container haulage services includes the following: (i) inter-state haulage transportation services within Peninsular Malaysia; and
(ii) internal port haulage transportation services which involve transfer of container from a ship to quay and vice versa as well as from berth to storage yard and vice versa.

As at the LPD, we operate with a fleet of approximately 225 prime movers and 497 trailers for our container haulage services. All the prime movers used at the ports are fully equipped with two-way telecommunication equipment together with a computerised haulage system and online port system. Such equipment allows our Group to track and monitor the movements of the containers at any time within the port. As at the LPD, we provide internal port haulage transportation services in three (3) major ports in Peninsular Malaysia namely, Johor Port, Johor Darul Takzim, Port of Tanjung Pelepas, Johor Darul Takzim and Penang Port, Pulau Pinang.
6. BUSINESS OVERVIEW (Cont’d)
Container haulage services 6.2.2 Warehousing and Distribution Operations We offer warehousing and distribution services to meet the storage needs of our customers and to enhance supply chain efficiency. The range of our warehousing and distribution services includes the following: (i) general storage;
(ii) cargo consolidation for distribution purpose; and

(iii) inventory management services. In addition, we also provide other value added services which include the following: (i) picking -selecting and collecting cargo from the warehouse in a specified quantity based on customer’s order; (ii) packing / unitising -packaging cargo based on customer’s order; (iii) labelling -attaching label on the cargo to indicate its owner, origin and destination; and (iv) palletising -storing or moving cargo by using pallet.
Our warehousing and distribution operations are fully integrated with our land transport operations. As at the LPD, our Group provides warehousing facilities at two
(2) locations, namely Skudai, Johor Darul Takzim and Johor Bahru, Johor Darul Takzim with a total covered warehouse space of approximately 244,600 sq. ft. In addition, we operate with four (4) trucks for pick-up and delivery service to facilitate our warehousing and distribution operations.

Our warehouses are equipped with handling equipment such as cargo lift, forklift, pallet jack, weighing machine, wrapping machine and dock leveller. We have the capability to handle all kinds of products including, amongst others, fast-moving consumer goods, raw materials for the food and beverage industry and finished goods. Further, our warehouses are guarded twenty four (24) hours daily and all inbound and outbound movements are checked by our warehouse security team. 6. BUSINESS OVERVIEW (Cont’d) The following images illustrate the warehousing and distribution services that are provided to our customers.
Warehousing and distribution services 6.2.3 Provision of Other Services (a) Freight Forwarding and Customs Brokerage We are a customs broker licensed under the Customs Act 1967 to carry out customs brokerage activities in Malaysia. The main services that are provided by our Group include the following: (i) preparation and submission of customs clearance documents such as goods and services tax permit and transhipment permit for both import and export activities;
(ii) arrangement of transportation for the movement of cargo to its intended destination;

(iii) coordinate with port operators, shipping liners, airliners, customs and other relevant authorities on matters pertaining to port arrangement, shipping and airliner schedules, vessel and airliner booking and customs procedures to ensure smooth and timely delivery of the cargo; and (iv) advisory services in relation to customs tariff codes, tax rates, tax exemption, duty drawback and other matters relating to freight forwarding. In addition, we are linked to Dagang Net which allows us to submit electronic application and reduce the processing time of our customers’ requests. Further, we are able to access real-time information such as customs exchange rates, shipping schedules and status of customs declaration via Dagang Net and provide our customers with the latest and updated information. 6. BUSINESS OVERVIEW (Cont’d) (b) Manufacturing and Fabrication of Trailers We manufacture and fabricate trailers in our in-house manufacturing, fabrication and maintenance centre located in Senai, Johor Darul Takzim. This activity provides vital support to our land transport operations as we are able to manufacture, fabricate and modify our trailers to customise our logistics services for specialised cargo based on customers’ requirements. The following images illustrate some of the trailers that are manufactured and fabricated by our Group.
Box trailer Cargo trailer
Container trailer Side curtain trailer
Low loader trailer Pole trailer As at the LPD, approximately sixty percent (60%) or 400 units of our trailers are manufactured in-house. In addition, we predominantly rely on our in-house manufacturing, fabrication and maintenance centre to carry out repair and maintenance works for our own fleet of vehicles which will minimise repair and maintenance costs of our vehicles. 6. BUSINESS OVERVIEW (Coll/’d) 6.3 Output, Capacity and Utilisation 6.3.1 Land Transport Operations The capacity of our land transport operations for the past four (4) financial years up to the FYE 31 December 2014 are as follows: Vehicles(~) FYE 31 Decem ber 2011  2012  2013  2014  units  units  units  units  Cargo tnmSpOltatloll services  · Trueks(d)  26  26  35  35  · Prime movers  142  164  186  206  Container haulage services  · Prime movers  -Within port  73  lOS  110  124  -External haulnge  72  87  89  91
I Maximum capacity Operating hours pel” day No. of honrs(b)  Operating days per year No. of days(C)
8  300  8  300

 

24  329  8  300
Noles: (a) Based on the numher of vehicles as at the end of the respeelive tinaneial years.
(b) Based on the maximum working hours of drivers of eight (8) hours per day in ilCCl)nlanee to our Company’s practiee.
(e) Based on the estimated numher of days that our fleet of vehieles are operational after taking into consideration 365 days a year and subtracting three (3) days per month (totalling thirly six
(36) days per year) for rcpair and maintenanee work, ten (l0) days for non·operation of land lransport operations due to festive periods and nineteen (19) days for bad weather. The deduetions for festive periods and bad weather me nOl applicable tor intcmal port Iwulage transportation serviees.
(d) Include trucks used for piek-up and delivcry services fOl’ our warehousing and distrihution operatious.

Based on the table above, the capacity of our Group’s land transport operations is determined based on the number of vehicles, operating hours and operating days of our vehicles. Our Group’s land transp0l1 operations predominantly operate eight (8) hams per day and 300 days a year. It should be noted that the capaeity of our Group’s land transport operations does not take into consideration the number of trips made by each vehicle pel’ day, distance per trip, types of cargo to be delivered and availability of drivers. These factors would vary fi’om time to time depending on eustomers’ orders. As such, only the m(lximum working hours of drivers and the number of days that each vehicle is operational as explained in the notes above are taken into consideration for the purpose of determining the capacity ofour Group’s land transp0l1 operations. Based on the above, we are unable to asce11ain the utilisation rate of our land transport operations based on our Group’s fleet of vehicles due to the nature of our business, which vary from one order to another. Nonetheless, the utilisation rate of our land transport operations predominantly dependent on the availability of drivers and the orders received from customers. -70­6. BUSINESS OVERVIEW (COil/’ll) As illustrated in the table above, our fleet of vehicles has been increasing throughout the past four (4) financial years up to the FYE 31 December 2014. In terms of drivers, we would require a total of 580 drivers to operate at maximum capacity as set out in the table below. As at 31 December 2014, our Group has a total of 462 drivers which transl,te to a utilisation rate of 79.66% for our Group’s land transport operations. Number of Number of Total number drivers requiloed vehicles as at of drivers required perper vehicle per 31 December day Cargo transportation services dlly 2014 35 35• Trucks
• Prime movers

1 I 206 206 Container haulage services • Prime movers -Within port 2 124 248 -External haulage I 91 Totlll 91 580 6.3.2 Warehousing and Distribution Operations The capacity and utilisation rate of our warehousing and distribution operations for the past four (4) financial years up to the FY E 31 December 20 14 are as follows: As at 31 December  2011  2012  2013  2014  Capacity(a) (pallets)  3.750  I I,sOO  15,280  17.530  Actual utilisation(bl (pallets)  3,695  11,411  13,668  I 1.998  Utilisation rate (%)  98.53  99.23  89.45  68.44
NoLes:  (a)  Basell on lhe size of the warehouse divided by the average .~ize oCtile pallets of 16 sq. ll. per  palleL fitter taking into consideration storage racks, goods Slacking aud the non-useable areas for  wflrehou.~illg purposes.  (b)  Actual uLilisation is calculated based on Ihe number of pallets stored in our warehouses as at the
end of the respt:etive finaneial years. The utilisation rate of our \Io,’arehouse as at 31 December 2012 had increased as compared to 31 December 2011 despite the significant increase in our warehouse space of approximately 124,000 sq. ft. which was due to our warehouse expansion project which was completed in the first quarter of2012. This is attributed mainly to the increase in demand and take-up rate of our warehouse space. The utilisation rate of our warehouse for the FYE 31 December 2013 had decreased as compared to the FYE 31 December 2012 due mainly to the increase in our warehouse space of approximately 60,600 sq. ft. pursuant to the leasing of a new warehouse in Skud,i, Johor Darul Takzim. 6. BUSINESS OVERVIEW (Con/’d) The utilisation rate of our warehouse for the FYE 31 December 2014 had decreased as compared to the FYE 31 December 2013 due mainly to a decrease in the warehouse space rented by one of our customer as at the end of the FYE 31 December 2014 as compared to the FYE 31 December 2013. 6.3.3 Other Services The output, capacity and utilisation rate of our manufacturing and fabrication facility for trailers, which is solely operated by XHAE, for the four (4) financial years up to the FYE 31 December 2014 are as follows: FYE31 August 2011  Sixteen (16) months FPE 31 December 2012  rYE 31 December 2013  FYE31 December 2014  Average output capacity(a) (units)  56  73(h)  56  56  Actual output(c) (units)  36  69  31  8  Utilisation rate (%)  64.29  94.52  5536  14.29
Noles: (a) Capacity is calculated based on fifteen (15) workers working eight (8) hours per day, six (6) days per week and fitly two (52) weeks per year. The averagc output capacity is calculated bascd on the average of667 man hours requitcd to manufacture onc (1) unit oftl’ailcr according to our eurrent manufhcturing and fabrication capacity for different typcs of trailers as follows: (i) approxim1’llely 200 man hours for caeh container trailer;
(ii) approximately 600 man hours for each cargo Irniler; and

tiii) approximately 1,200 man hours fol’ cach low 101’ldcr lrailer. (b) Capacity is calculated based on a period ofsixtcen (16) months Or sixt}’ eight (68) weeks.
(e) Actual output refers to the actual nnmber of trailers manufactured.

The utilisation rate of our Group’s manufacturiug and fabrication facility has been fluctuating during the financial periods under review. For the sixteen (16) months FPE 31 December 2012, the utilisation rate of 94.52% was due mainly to the increase in orders for trailers fi:om XHTT. The decrease in the utilisation rate of our manufacturing and fabrication facility from 55.36% for the FYE 31 December 2013 to 14.29% for the FYE 31 December 2014 was due mainly to a decrease in the demand of trailers by XHTT as XHTT has sufficient trailers to facilitate its land transportation services for the FYE 31 December 2014. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I ,I 6. BUSINESS OVERVIEW (Colll’d) 6.4 Business Process 6.4.1 Cargo Transportation Services (i) Normal Cargo The general process flow for cargo transportation services of normal cargo which includes local cargo and intemational cargo are as follows: Normal Cargo I II IutemationalLocal I I Import Export II I Receiving Order findReceiving Order Invoice and Packing List ~ ~ Crcl’l1ing Job Order Creating Job Order ~ ~ Generating Delivery Order Generating Delivery Order 1 1 Delivery and Monitoring Delivel)’ and Moniloling Based on the diagram above, the general process flow for local and international cargo are similar save for the additional invoice and packing list which has to be provided by customers for international cargo. (a) Receiving Order or Receiving Order and Invoice and Packing List A delivery or collection order is received from our customers via telephone (for regular customers only), fax or email which will be handled by our Group’s customer service personnel. The order is then assessed and segregated between local and international cargo. Subsequently, a confirmation on the acceptance of the delivery or collection order together with the confirmed quotation will then be sent to our customer via fax or email. For international cargo, our customers are required to provide us with the invoice and packing list which contain details of the items to be delivered. For local and intemational export cargo, the goods are either collected by our Group or delivered to us by our customers. -73 ­6. BUSINESS OVERVIEW (Conl’d) (b) Creating Job Order The customer service personnel will then enter the details of the order into our system to create ajob order. Thereafter, a copy of the job order will be handed over to the Operations Department. For international cargo, tIle invoice and packing list which is received from our customers will be stamped for forwarding request and thereafter, copies of the invoice and packing list will be made and handed over to the Forwarding Depaltment for the preparation of the relevant customs forms. Subsequently, the relevant customs forms will be handed over to the Operations Department. (c) Generating Delivery Order Upon receiving the job order and relevant customs forms (for international cargo), the Operations Department will assign the driver for the job while the customer service persOJmel generate a delivery order from the system. After gelleration of the delivery order: • for local cargo, the delivery order will be handed over to the driver assigned for the delivery.
• for international cargo, the delively order will be handed over to the driver assigned for the delivery whilst the customs forms together with copy of the delively order will be delivered to the customs checkpoint for clearance purpose.

All drivers will also be briefed on the planned route, customer’s requirements and destination for cargo collection or delivery. (d) Delivery and Monitoring The details of the vehicle used for the delivery will be provided to our customer. During the delivery period, a follow-up may be initiated with the driver if and when necessary. In the event of unforeseen circumstances that may affect the delivery process, our Operations Department will work closely with the driver and perform the necessary troubleshooting. The delivery is considered to be completed when the cargo is safely delivered to the assigned destination and delivery order is signed accordingly as proof of delivery. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I 6. BUSINESS OVERVIEW (Coll/’d) (ii) Pro,ject Cargo The general process flow for cargo transportation services of DYer­dimensional and heavy cargo is as follows: I Receiving Order 1 Checkjng Infonnation 1 CustomerConfinnation 1 Creating Job Order 1 Road Survey 1 Submission oLApplication to Relevant Authorities
1 Meeting and Briefing 1 GeneraLing Delivery Order 1 Delivery and Monitoring (a) Receiving Order
A delivery or collection order is received from our customers via telephone, fax or email which will be handled by our Group’s customer service personnel. We would also request our customer to fax or email to us information regarding cargo dimension and type of cargo attached with drawings or photos,
(b) Checking Information

Our Operations Manager will assess the delivery or collection order based on the information provided. If required, our Operations Manager will anange for a site visit at the customers’ premises to confirm the types of eqnipment reqnired to facilitate the delivery process. 6. BUSINESS OVERVIEW (Colll’d) (c) (d)
(e)

(I) (g) Thereafter, the Operations Manager will hand over the details of work to be performed and equipment required to execute the delivery to our Business Development Department for cost calculation. The detal Is of work to be performed, equipment required and costing for the delivery will then be sent to the customer service personnel. Customer Confirmation Our customer service persOlmel will then send our customer a quotation together with information on the types of equipment to be used for our customers’ confirmation and acknowledgement. We will also inform Our customers on the number of days required for road survey. Creating Job Order Upon receipt of the confirmation and acknowledgement fi’om our customer, our customer service persOlmel will then enter the details of the order into our system to create a job order. Thereafter, a copy of the job order will be handed over to the Operations Department and subsequently forwarded to the project cargo team. Road Survey Our project cargo team will perform a road survey and select the most suitable route to deliver the cargo. The criteria used for the route selection predominantly relate to road stability and maximum vehicle height. Submission of Application to Relevant Authorities Upon completion oftbe road survey and tbe mark up of the desired route by the project cargo team, an application letter detailing the route to deliver the cargo will be sent to the relevant authorities for approval. If required, our project cargo team will also engage traffic police to request for escOlt services on the day of cargo delivery. In respect of intemational cargo, the relevant customs form wilJ be prepared by the Forwarding Department. Meeting aud Briefiug Prior to the delivery of the cargo, our project cargo team will conduct a meeting with the customers to brief them on the delivery process, which amongst others, include lasbing plans (fastening of tbe cargo to the trailer), route to be undertaken and manpower requirements to ensure that our customer is aware of the delivery process. 6. BUSINESS OVERVIEW (Conl’d) (h) Generating Delivery Order Subsequently, the Operations Department will generate a delivery order from the system. After generation of the delivery order: • for loca] cargo, the delivery order will be handed over to the driver assigned for the delivery”
• for international cargo, the delivery order will be handed over to the driver assigned for the delivery whilst the customs forms together with copy of the delivery order will be delivered to the customs checkpoint for clearance purposes.

All drivers will also be briefed on the planned route, customer’s requirements and destination for cargo collection or delivery. (i) Delivery and Monitoring The details of the vehicle used for the delivery will be provided to our customer. During the delivery process, the project cargo team will escort the cargo from the pick-up point up to the assigned destination. The delivery is considered to be completed when the cargo is safely delivered to the assigned destination and the delivery order is signed accordingly as proof of delivery. 6.4.2 Container Haulage Services (i) Within Port Our Group enters into contracts with the respective port authorities for the provision of container haulage services within the relevant ports. The general process flow for container haulage services within port is as follows: Understanding tile Reqllirernents of Port Authority
!
Tl<illsportation Arrangetuellt 1
Monitoring Movement of Container within lhe Porl !
Invoicing (a) Understanding the Requirements of Port Authority A meeting will be conducted between our Port Operations Executive and the representatives of the port authority on a daily basis to discuss on vessel schedules, number of cranes to be supported and number of vehicles that needs to be allocated for the container haulage services within the port. -77­6. BUSINESS OVERVIEW (Conl’d) (b) Transportalion Arrangement
After the daily meeting, our P0l1 Operations Executive will assign our drivers and deploy the prime movers according to the number of cranes allocated by the p0l1 authority. Our assigned drivers will also be briefed on the daily vessel schedules and targeted volume of containers to be delivered. Additional prime movers are also placed on a standby basis in the pOl1 as emergency back-up.
(c) Monitoring Movement of Container within the Port
The port operations will be coordinated and supervised by our Port Operations Supervisor. Our drivers will be closely monitored to ensure that they transfer the required volume of containers as per the daily targeted volume for the port and record the movements of the containers.
(d) Invoieing

The daily record of container movement will be checked and verificd by our POI1 Operations Supervisor and thereafter will be recorded into our system by our POlt Operations Executive. The total number of containers delivered for the month will be printed and submitted to our Billing Departtnent to facilitate the preparation and issuance of invoices to the port authority every month end. (ii) Exlernal Haulage The general process flow for external container haulage services IS as follows: EJL1:crnal Haulage T I Import Export II Receiving Order, Dill of Receiving OrdE’f andLading, Noticc ofAnival arid Booking ConfinnaLioll Invoicc and Packing List I Gcncrating Consignmcnt Note
! DelivelY and Monitoring 1 Collection ofContniner 6. BUSINESS OVERVIEW (Coot’d) Based on the diagram above, the general process for impOlt and export container haulage are similar save for the initial stage of receiving the order, (a) Receiving Order, Bill of Lading, Notice of Arrival and Invoice and Packing List or Receiving Order and Bool<illg Confirmation A delivery or collection order is received from our customers via telephone, fax or email which will be handled by our Group’s customer service personnel. The order is then assessed and segregated between import and expOli cargo. For import container haulage services, our customers are required to provide us with the bill of lading, notice of anival and the invoice and packing list. Thereafter, our customer service personnel will present the bill of lading for exchange and copies of the invoice and packing list will be made and handed over to the Forwarding Department for the preparation of the relevant customs fOlms. The customs forms will then be handed over to the Operations Department. For export container haulage services, our customers are required to provide us with the booking confirmation. Our customer service personnel will confirm the vessel schedules and the time slot available to empty the containers based on the booking confirmation. A confirmation on the acceptance of the delivery or collection order together with the confirmed quotation will then be sent to our customer via fax or emaiL The customer service personnel will then enter the details of the order into our system. (b) Generating Consignment Note The customer service personnel will create a consignment note for both import and expOli container haulage services. For imporl container haulage services, the consignment note together with the container delivery note and cListoms form will be handed over to the Operations Depattment whereas for expoli container haulage services, the consignment note and booking confirmation will be handed over to the Operations Depaliment. Thereafter, the Operations Department will hand over the consignment note together with the relevant documents to the driver assigned for the delivery. All drivers will also be briefed on the planned route, customer’s requirements and destination for container collection or delivery. 6. BUSINESS OVERVIEW (Coll/’d) (c) Delivery and Monitoring The details of the vehicle used for the delivery will be provided to our customer. During the delivery period, a follow-up may be initiated with the driver if and when necessary. In the event of unforeseen circumstances that may affect the delivery process, our Operations DepaI1rnent will work closely with the driver and perform the necessary troubleshooting. The delivery is considered to be completed when the container is safely delivered to the assigned destination and consignment note is signed accordingly as proof of delivery. Upon delivery of the container for both impol1 and expOll container haulage services, our customer service personnel will inform our customer the number of days that the container is allowed to be placed at their premises for loading and unloading purposes. Our Operations Depallment will then monitor the timeline. For export container haulage services, our customer service personnel will also request for the invoice and packing list from our customers which would then be handed over to the Forwarding Depallment for the preparation of the customs fOlms. (d) Collection of Container Our customer will contact our customer service personnel for the collection of the container after the unloading (for import) or loading (for expOlt) is completed. Our customer service personnel witt then inform the Operations Department and thereafter assign a driver for the pick-up of the container. 6.4.3 \Varehol1sing and Distribution Services The general process flow for warehousing and distribution services is as follows: Pre~Sales COllsullaliou \’.-ith Potential Customers
1
Receiving Order 1
Jnward IIandling ofConsignmen1. Goods
!
Consignment Goods Storing and InVClItolY Updating
1
Outward Handling of Consignment Goods
6. BUSINESS OVERVIEW (Co11/’d) (a)
(b)
(c)
(d)
(e)

Pre-Sales Consnltation with Potential Customers Our Business Development Manager will meet with our potential customers to understand their requirements and determine the space required for the storage of their goods. Once an agreement is obtained and the quotation is successfully negotiated, our Warehouse Manager will be notified accordingly. Receiving Order Our customer will inform our customer service executive prior to the commencement of storage of their goods at our warehouse via email. The customer service executive will then notify the Warehouse Manager accordingly. The goods are either collected by our Group or delivered to us by our customers. For goods collected by our Group, the driver will match the goods with the delivery order provided by our customer and acknowledge receipt of the goods. Inward Handling of Consignment Goods All goods will be unloaded and arranged at the transit area of our warehouse. Our Storekeeper will match the goods against the delivery order provided by our customers. Once the matching is completed, our Storekeeper will acknowledge receipt of the consignment goods by stamping on the delivery order. Consignment Goods Storing and Inventory Updating Tbe details of the goods will be updated in our warehouse information system and lot identification codes will be generated to ideutify and allocate the required warehouse space for the goods. Our Storekeeper will store the goods at the allocated warehouse space and thereafter monitor and update the inventory list on a daily basis. A monthly report will be generated to provide all relevant warehouse information to the management. Outward Handling of Consignment Goods Upon receiving a release order or collection order from customers, our Warehouse Officer will retrieve the goods from our warehouse information system. Thereafter, a goods issue note will be generated and issued to the Storekeeper to pick-up the goods. We will also undertake the kitting, repacking, labelling and palletising of the goods ifrequired. The goods generally will be picked for delivery on first in first out basis or unless as specified by our customer. Our Storekeeper will counter-check all outgoing goods picked up for delivery or collection by customers with the goods issue note to ensure that the correct goods are retrieved. Thereafter, the goods issue note will be handed over to our Warehouse Officer. The warehouse information system will then be updated and the warehouse delivery note will be issued to our drivers to deliver the consignment goods or to be verified and acknowledge receipt by our customers during the collection of the goods. We will monitor the movement of the outbound goods until the goods have reached the intended destination. Our customers will acknowledge receipt on tbe warehouse delivery note upon successful delivery. 6. BUSINESS OVERVIEW (Colll’d) 6.4.4 Freight Forwardiug and Customs Brokerage Services The general process flow for freight forwarding and custom brokerage services is as follows: Receiving Order Freight FOf\vardiTJg Arrangement 1 Cnstoms BrokiTJg (a) Receiving Order
Customers will contact us via telephone, fax or email to inform us that they would require inward customs clearance at the customs points. The request will be assessed by our forwarding personnel. Thereafter, we will provide a quotation to our customers via fax or email and inform them on imp0l1 duties and tax levy (for inbound goods) or customs tariff codes, duty exemption, duty drawback and tax rates (for outbound goods), if any.
(b) Freight Forwarding Arrangement
Upon receiving confirmation from our customers, the forwarding personnel will prepare the documentation required for the purpose of customs clearance.
(c) Cllstoms Broking

For inward bound goods, an electronic customs declaration will be submitted via Dagang Net. We will also assist our customers in settling all customs related charges such as import duties and tax levy to ensure that the cargo is released on time. For outward bound goods, bills of lading, delivery orders, invoices and other documents relating to the cargo movement are prepared. Thereafter, an electronic customs declaration wjIJ be submitted via Dagang Net. [TIlE REST OF THIS PAGE HAS BEEN INTENTION ALLY LEFT BLANK I
6. BUSINESS OVERVIEW (CoIII’tI) 6.4.5 Manufacturing and Fabrication of Trailers The general process flow for manufacturing and fabrication of trailers is as follows: Design Plat11ling ~
Obtaining Approval from Authority 1
Procurement ofRaw Materials ~
Manufacturing 1
In.spection by PUSPAKOM ~
Official Registration The trailers that are currently manufactured and fabricated by XHAE are based on the designs which have been approved by RTD and PUSPAKOM previously. Therefore, the general process flow for the manufacturing and fabrication of trailers will commence from the procurement of raw materials. (a) Design Planning A detailed drawing of the design will be provided by external consulting engineers engaged by XHAE based on our requirements. The drawing will then be submitted to RTD and PUSPAKOM for their approval. (b) Obtaining Approval from Authority
The design is submitted to the RTD and PUSPAKOM for approval.
(c) Procurement of Raw Materials

Once the approvals are obtained, a material planning is conducted to determine the raw materials required for the manufacture of the trailer. Subsequently, XHAE will source for all the required raw materials and obtain the quotations from our list of approved suppliers. Once the pricing is agreed, we will proceed to purchase the materials. (d) Manufacturing The body structure of the trailer is firstly fabricated by welding all the steel structures to shape. Palis and components of the trailers are then assembled onto the body structure. Finally, metal coatings and paint are applied to the surface of the trailer. 6. BUSINESS OVERVIEW (COlli ‘d) (e) Inspection by PUSPAKOM
Upon completion of the manufacturing process, XHAE will prepare the necessary documentation and send the trailer to PUSPAKOM for inspection.
(I) Official Registration

After inspection by PUSPAKOM, the trailer will be registered with RTD via e-Daftar portal, an online system for the registration of vehicles. The new registration number for the trailer will also be obtained. 6.5 Location of Operations Our Group’s head office is currently located at No.2, Jalan Pennatang 2, Kempas Baru, 81200 Johor BahlU, Johor Daml Takzim. Details ofthe other locations of operations as at the LPD are set out below:
ILoclltion  Address  Gross floor area I Built-up area sq. ft.  Main fnnctions  Jahor Bahru,  No.2, Jalan Permatang 2  220,483  Hefld office and  .lahar Daml  Kempas BanI  warehouse  Takzim  81200 Johor Bahru .lahar Darul Takzim  Sklldai, Jahar  No.8, JaJan Gemilang 1  60,600  Warehouse  DflfUI Takzim  Taman Perindllstrian Majll .laya 81300 Skudai .lahar DaruJ Takzim  Pasir GlIdrmg,  PLO 818, .lalall Keluli 9  2,400  Branch office  Johor Daml  Kawasan Perindustrian Pasir Gudang  and parking yard  Tnkzim  81700 Pasir Gudang .1 ohor Darul Takzim  lahar Bahru,  .Johor P0l1  5.538  Site office and  .lohor Darul  81700 lahar Bahru  workshop  Takzim  lahar Daml Takzim  Gelang Patah,  Block 1RL, Pelabuhan Tanjung PeJepas  3,200  Sile oftiee and  lohar Daru!  81560 Gelang Patah  workshop  Tahim  Johor DaruJ Takzim  Pulau Illdah,  No. 47-47A .Jalan Perigi Nanas 8/3  1,648  Branch office  Selangor  Taman PerindlLstrian Pulau lndah  Darul Ehsan  42920 Pulau Indah Selangor Darul Ehsan  Bukit  No. 10, Jalan Perda Timur  3,600  Branch office  Mert,dam,  Bandar Pen1a  Pulau Pinang  14000 Bukil Mcrtajam Pulau Pinang  Butterworlh,  49521, Jalan Data Haji Ahmad Said  3,800  Site office and  Pulau Pinang  12000 Butterworth Pulau Pinang  workshop
6. BUSINESS OVERVIEW (Col/I’d) Location  Address  Gross floor area / Built-up  Main functions  area sq. ft.  Scrcmban, Negeri Sembilan Darul Khusus  PN 45839, Lot 2 Kawasan Perindllstrian Sungai Gadut Scnawang 71450 Scremban Negcri Sembilan Darul KhuSllS  960  Site onicc  Senai, Jahar Daru1 Takzim  I  PID 107511, Jalan Scclollg Jaya 13 81400 Senai Jahar Daru I Takzim  50,494  Manufacturing, fabrication and maintenance centre
I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I I Company No.: 1032102-P I 6. BUSINESS OVERVIEW (Collt’d) 6.6 Types, Sources and Availability of Inputs 6.6.1 Purchases and Sources of Inputs Our purchases of inputs for the past four (4) financial years up to the FYE 3] December 2014 are as follows: <————————————————–FYE 31 December ————————————————>  2011  2012  2013  2014  Percentage  Percentage  Percentage  Percentage  of total  of total  of total  of total  Value of  Group  Value of  Group  Value of  Group  Value of  Group  Inputs  purehases  purchases I  purchases  purchases  purchases  purchases  purehases  purchases  RM’OOO  %  RM’OOO  %  RM’OOO  %  RM’OOO  %  Land transport operations  -Fuel  11,494  64.31  13,723  6653  14,491  63.29  15,676  62.71  -Spare parts  6,2jl  34.97  6,407  31.06  8,041  35.12  8,752  35.02  Warehousing and  distribution operations  -Fuel  – – 59  0.29  124  0.54  116  0.46  -Spare parts  – – 56  0.27  117  0.51  277  1.11  Provision of other services  -Manufacturing and  fabrication of trailers  -Steel  128  0.72  378  1.83  87  0.38  175  0.70  -Spare parts  – – 4  0.02  36  0.16  – – Total  17,873  100.00  20,627  100.00  22,896  100.00  24,996  100.00
-86 ­6. BUSINESS OVERVIEW (Collt’d) Our total purchases of input for the past four (4) financial years up to the FYE 31 December 2014 were predominantly sourced locally. OUf main purchases comprised mainly of fuel for our land transport operations .md warehousing and distribution operations and the remaining purchases comprised of steel and spare parts utilised for the manufacturing and fabrication of trailers as well as repair and maintenance of vehicles. For the past four (4) financial years up to the FYE 31 December 2014, fuel represented the largest proportion of our total purchases, followed by spare parts and steel. The increase in the purchases of fuel fi’om RMl1.49 million for the FYE 31 December 2011 to RM13.78 million for the FYE 31 December 2012 and a further increase of approximately RMO.84 million to RM14.62 million for the FYE 31 December 2013 and subsequent increase of approximately RM1.17 million to RM15.79 million for the FYE 31 December 2014 were due mainly to an increase in fuel consumption for land transport operations and warehousing and distribution operations. This was resulted by an increase in our fleet of vehicles to cater for increasing demand of our services. The increase in our fleet of vehicles over the years had also resulted in the subsequent increase in the purchases of spare parts from RM6.25 million for the FYE 31 December 20 II to RM6.47 million for the FYE 31 December 2012 and thereafter, had increased to RM8.19 milliou for the FYE 31 December 2013 and a further increase by approximately RMO.84 million to RM9.03 million for the FYE 31 December 2014 as the spare pm1s were predominantly utilised to carry out repair and maintenance works for our vehicles. Purchases of steel had increased from RMO.13 million for the FYE 31 December 2011 to RMO.38 million for the FYE 31 December 2012. This was due to an increase in the number of trailers manufactured fi’oll1 thirty six (36) units for the FYE 31 December 2011 to sixty nine (69) units for the FYE 31 December 2012. For the FYE 31 December 2013, the purchases of steel decreased by approximately RMO.29 million as compared to the FYE 31 December 2012 due to a decrease in the number of trailers manufactured from sixty nine (69) units for the FYE 3 I December 2012 to thirty one (31) units for the FYE 3\ December 2013. The purchases of steel increased by approximately RMO.09 million to RMO.18 million for the FYE 31 December 20 14 as compared to the FYE 31 December 2013 due mainly to steel utilised to manufacture low loader trailers. 6.6.2 Availability oflnputs We have not faced any shortages in the availability of inputs required by our Group over the last twelve (12) months. 6.7 Principal Markets For the past four (4) finaucial years up to the FYE 31 December 2014, all our Group’s revenue was derived £l·om Malaysia and Singapore as illustrated in the table below. <__________________••_____________R___________ FY E 31 December ____________________________________RR _______>  2011 RM’OOO  %  2012 RM’OOO  %  2013 RM’OOO  %  2014 RM’OOO  %  Malaysia Singapore  70,433 4,002  94.62 5.38  85.553 5.664  93.79 6.21  91,021 6,874  92.98 7.02  99,579 11,054  90.01 9.99  I  Tot~1  74,435  100.00  91,217  100.00  97,895  100.00  110,633  100.00

6. BUSINESS OVERVIEW (Colll’d) (iii) periodically updating our cOlporate website to provide information on our Group as well as our range of services: (iv) advertising through various mediums including trade journals, pamphlets and brochures; and
(v) paliicipate in exhibitions and conventions in Malaysia with the aim of expanding our market presence and creating awareness for our services.

In addition, we are also a member of the Association of Malaysian Hauliers and lohor Freight Forwarders Association since 2011 and 2012, respectively. Association of Malaysian Hauliers was established in 2002 with the objective to safeguard the common interest of the members, comprise solely of the container haulier companies and to act as the bridge between the members and the government agencies and / or authorities. Johor Freight Forwarders Association was established in 1977 which aims to, amongst others, promote and protect the common interest of the members and exchange and disseminate latest information to all members. The memberships in these associations help to increase the visibility of our Group in the logistics industry and allow us to keep abreast ofnew technological or industrial developments. 6.8.2 Distribution Network We primarily market our services through the following: (i) direct marketing, including directly approach existing or potential customers via our in-house sales and marketing team;
(d) internet and corporate website to provide information on our services; and

(iii) exhibitions and conventions in Malaysia to create awareness of our services. Currently, majority of our sales are executed via direct distribution channels. This enables us to work closely with our customers in order to attain a better understanding of their requirements and market needs. Further, it also serves as a feedback mechanism for continuous improvement and development of new range of services to enhance our Group’s competitive edge. 6.9 Key Achievements, Awards and Recognition The following are some of our Group’s key achievements, awards and recognition: Year  Milestones  1992  Establishment of Sinwah Trading & Transport Agency, a partnership entity which W<lS involved in the provision ofcargo transportation services. XHTT commenced operations hy taking over all the business of Sin”mh Trading & Transport Agency. XHn-ventured into the business ofcontainer haulage services. XHAE commenced operations by operating the manllfactnring, fubrieaLion and maintenance centre which is located in lohor Bahru, .lahar Darul Takzim. XI-ITT entered into a contract with a subsidiary of lohor P0I1 Berhad to provide internal port haulage transportation services in .lahar Port, lahor Darnl Takzim. XHIT received the 4lh Asia Pacific International Honesty Enterprise -Keris Award 2005.  2002  2003  200S  200S  2006
6. BUSINESS OVERVIEW (COIlI”’) Year  Milestones  2009  Ventured into the business of warehousing and di~tribution services pursuant to tbe completion of a newly construcled warebouse in the same location as our eorporatc headquarters. XHUF commenced operations and ventnred into the business of freight forwarding and customs brokerage. XHTT obtained ISO 900 1:2008 Qual ity Management Syslem eet1ifieation from DQS Malaysia. XHTT entered into a three (3 )Myear contract witb SPC Industries Sdn Bhd for the transportation of precast segmental box girders for the MRT project in Klang Valley. XHTT obtained BS OHSAS 18001:2007 Occupational Health and Safety Management System cel1ification from DQS Malaysia.  2012  2012  2013  2014
6.10 Quality Control We place strong emphasis on the quality of the services that we offered. Stringent quality control and measures are implemented in every aspect of our business operations. Our Group has obtained ISO 900 I:2008 Quality Management System certification from DQS Malaysia for the provision of logistics and transportation services on 30 March 2012. DQS Malaysia is one of the celtification bodies in Malaysia that is responsible for the assessment and certification of management systems as \vell as providing public training activities within Malaysia. Indonesia, Singapore and Vietnam. It is a member of the DQS-UL Group based in Frankfurt, Germany offering value-adding assessment services. As part of the requirements of the ISO 9001 :2008 Quality Management System certification, our Group has established a quality management system in order to ensure the provision of quality services to our customers. A quality manual is also prepared and our Group’s management is committed to the execution ofthe procedures established in the quality manual. The quality mission of our Group is to exceed our customers’ expectations by continuously improving our services. Our Group adopts the following approaches ill order to achieve our quality mission: (i) organise quality awareness training regularly to promote quality awareness and service excellence amongst our employees;
(ii) establishment of a set of quality objectives and ensure that our business operations meet the objectives and goals;

(iii) obtain feedback from our customers pertaining to the quality of our services; and (iv) conduct periodic internal review meeting to identify non-conformance of service requirements and provide recommendation to improve the effectiveness of our quality management system. As at the LPD, our Group has sixteen (16) personnel in our quality management team to ensure proper implementation of our quality management system. In addition, our quality management team is responsible for identifying the resources required for the implementation of the quality management system within our Group. 6. BUSINESS OVERVIEW (COlii’d) 6.11 Technology Used We rely on information technology system sourced from a third party to sustain our business operations. Our Group is using an integrated logistics management system that is customised to our needs. The system provides an end-to-end information technology solution to support our operations including but not limited to fleet management, quotation, billiug and disbursement. In addition, our Group utilises GPS for our land trausport operations which alJows us to track and monitor the movement of cel1ain of our vehicles constantly. 6.12 R&D Policy Due to the nature of our business, our Group does not have any R&D policies in the past four (4) financial years up to the FYE 31 December 201 4. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I [:<=impany No.: 1032102-P ] 6. BUSINESS OVERVIEW (Collt’d) 6.13 Approvals, Major Licences and Permits As at the LPD, save as disclosed below, there are no other approvals, major licences and permits obtained by our Group.
No. XHTT 1.
2.
3.
4.
5.
6.

Licence no. / Reference DO.
447397X(LA) 08500222009 16500802013 16500192014 37666/2014 PBS(7) 24/2014 MPPG:.1BGN/RKB/3-3 Issuing authority Suruhanjaya Pengangkutan Awam Df.lrat  Maj lis Bandaraya .lahar Bahru  Majlis Bandaraya Johor Bahru  Majlis Bandaraya lohor Bahru  Majlis Perbandaran Pasir Gudang  Majlis Perbandaran Pasir Gudang
Subject matter I Purpose Operator licence to provide goods vehicle services in Peninsular Malaysia Business licence to operate as transportation and shipping agency at No.2, 1alan Pennatang 2, Kempas Baru, 81200 .lahar Bahru, .lahar Darul Takzim Business licenee to operate a warehouse at No.2, .1alan Permatang 2, Kempas Baru, 81200 lohor Bahru, Johor Darul Takzim Business licence to operate a warehouse at No.8, Jalan Gemilang 1, Taman Perindustrian Maju .1aya, 81300 Skudai, Johor Darul Takzim Business licence to operate a transportation business office at PLO 818, Jalan Keluli 9. Kawasan Perindustrian Pasir Gudang, 81700 Pasir Gudang, Johor Darul Takzim Temporary permit for occupation for a single~storey detached cabin office and a guard house located at PLO 818. lalan Keluli 9, Kawasan Perindustrian Pasir Gudang, 81700 Pasir Gudang, .lahar Darul Takzim Issue / Renewal date  Expiry date / Validity period  Major conditions imposed  Status of compliance  Note  17.07.2012  21.06.2016  – Not applicable  – 20.11.2014  01.01.2015 to 31.12.2015  – Not applicable  – 20.11.2014  01.01.2015 to 31.12.2015  – Not applicable  – 20.11.2014  01.01.2015 to 31.12.2015  – Not applicable  – 10.09.2014  11.10.2014 to 10.10.2015  – Not applicable  – 02.09.2014  24.09.2014 to 23.09.2015  I  – Not applicable  a
-92­I Company No.: I03210iiJ 6. BUSINESS OVERVIEW (Collt’dj Licence no.! No. Reference no. Issuing authority 7. 6/53-24115 SNI Majlis Perbandaral1 Kulai Majlis Perbandaran 8. 01011112579820130 Klang Majlis Perbandaran Seberang Ferai 9. 35/220110/22482 XHAE 10. 6/212/909-01 SNI Majlis Pcrbandaran KuJai 11. (2)dlm. Jabatan JPJ.122/11/l(8)J1d.126 Pengangkutan J()I()n Malaysia Subject matter / Purpose Business licence to operate as transportation and shipping agency and an otflce at PTD 107511, Jalan Seelong Jaya 13, 81400 Senai, lohor Darul Takzim Business licence to operate a transportation company at 47A & 478, Tingkat 1 & 2, Jalan Perigi Nanas 8/3. Taman Pcrindustrian Pulau Indah, 42920 Pelabuhan Klang Business licence to operate an office for logistics services at No.1 0, Jalan Perda Timur, Bandar Pcrda. 14000 Bukit Merrajam, PuJau Pinang Business licence to operate 10 machinery components industry at PTD 107511, Jalan Seelong Jaya 13, 81400 Senai. Johor Darul Takzim Certificate for Registration of Engineering Workshop (Category A) to manufacture new body structure, repair and modify all types of trucks, box I luton van and to manufacture all types of new trailers, repair and modify all types of trailers at PTD 107511, Jalan Seelong Jaya 13, 81400 Senai, Johor Darul Takzim Issue I Renewal date 26.02.2015  Expiry date I Validity period 31.12.2015  Major conditions imposed – Status of compliance Not applicable  Note – 30.12.2014  31.12.2015  – Not applicable  b  03.04.2015  06.06.2016  – Not applicable  – 26.02.2015  31.12.2015  – Not applicable  – 05.08.2014  04.08.2016  – Not applicable  –
-93 ­I Company No.: l032102:i::] 6. BUSINESS OVERVIEW (Conl’d) Licence no. I No.
Reference no. Issuing authority Canggih 12. 626528V(LA) Suruhanjaya Pengangkutan Awam Darat
0850002201413. Maj lis Bandaraya lahar Bahru XHUF 14. 01605002012 Majlis Bandaraya lahar Bahru KEJB(80.05)001l01­IS. Jabatan Kastam 1029 JLD.3(I6) Diraja Malaysia Subject matter I Purpose Operator licence to provide goods vehicle services in Peninsular Malaysia Business licence to operate a logistics ot1ice at No. 2. lalan Permatang 2, Kempas Baru, 81200 lahar Bahru, lohor Darul Takzim Business licence to operate an ot1ice at No.2, lalan Permatang 2, Kempas BanI, 81200 .lahar Bahru, .rohor Daru! Takzim Approval to operate as forwarding and shipping agent at the following locations: (i) Forwarding agent: -Bangunan Sultan Iskandar, lahar Darul Takzim -Kompleks Sultan Abu Bakar, lahar DaTUI Takzim -Pelabuhan Pasir Gudang. lohor Daml Takzim -Pelabuhan Tanjung Pelepas, lahar Darul Takzim -Lapangan Terbang :\ntarabangsa Sultan Ismail, .lahar Darul Takzirn – Zan Bebas Cukai, Stulang Laut. .lahar Darul Takzim
06.09.2012  14.08.2015  20.11.2014  01.01.201510  31.12.2015

20.11.2014  01.01.20 I5 to  31.12.2015  20.03.2014  30.04.2016
Major conditions imposed –L -(I) For companies registered as a forwarding and shipping agent, the Bumiputera participation in the company involving shareholdings, board of directors, management staff and support staff shall not be less than 51 %. Status of compliance
Note -applicable Not Not -applicable -I:Not applicable Complied –94 ­I Company No.: l03210Z-P I 6. BUSINESS OVERVIEW (Con/’d) Expiry date /  Licence no./  Issue /  Validity  Status of  No.  Reference no.  Issuing authority  Subject matter / Purpose  Renewal date  period  Major conditions imposed  compliance  Note  -Stesen  Batu  Pahat,  Johor  (ii)  The  company  shall  not  Complied  – Darul Takzim  ehange its name or address,  _  Stesen  MuaL  Jahor  Darul  ~ell,  transfer or. hand  over  I  Takzim  Its shares or busmess to any  panies  without  the  (ii) Shipping agent:  pennission of the Customs.  _ Pelabuhan  Pasir  Gudang,  Any ehanges involving the  Johor Darul Takzim  shareholdings,  board  of  -Pelabuhan  . TanJ~ng  Pelapas,  directors or employees of the company and other  Johor Darul TakzIm  matters  related  to  the  -Zan  Bebas  Cukai,  Stulang  Customs must be approved  Laut, Johor Darul Takzim  by Jabatan  Kastam  Diraja,  _  Stesen  Batu  Pahat,  Johor  Johor Bahru.  Darul Takzim  (iii)  If the  company  is  locally  Complied  – _  Stesen  MuaL  Johor  Darul  owned  and with  a  paid-up  Takzim  .  capital  of  more  than  RM50.000.00, the company  shall  offer  not  less  than  30%  of  its  shares  to  Bumiputera  or  offer  a  Bumjputera  panicipation  sehcme  approved  by  the  Treasury.  This  eondition  shall  be  complied  with  within one (1) year from the  date of the approval.  Notes:  (a)  Tbe temporal)! permit for occupation is granted as the single-storey detached cabin offiee and guard bouse are deemed temporary buildings. The temporary permit for occupation is  subject to annual renewal and XHTT will continue to renew the temporary permit for occupation upon its expiry. In the event that XHTT is unable to obtain approval for the renewal of  the temporary permit for occupation, our branch office at this location may be elosed for operation. However, this will not result in a material adverse impact on the operational and  flnaneial performance of our Group as XHTT intends to relocate the braneb office to the new warehouse located in Pasir Gudang, lohor Darul Takzim upon obtaining Certificate of  Completion and Compliance for the new warehouse.  (b)  XHTT has submitted an application to Jabatan Pelesenan dan Penjaja Majlis Perbandaran Klang for the change of its business address to 47 & 47A, Jalan Perigi Nanas 8/3. Taman  Pcrindustrian Pulau lndah, 42920 Pclabuhan Klang.  -95 –
6. BUSINESS OVERVIEW (Cont’d) 6.14 Brand Names, Registrations and Trademarks We regard our brand names as important to our continued success and have taken steps to protect our proprietary rights over such brand names by registering our currently marketed brands and brands reserved for future expansion as trademarks. Our Group has registered the following trademarks as at the LPD: No.  Trademark  Registered owner  Country of registration  Class  Description  Trademark no.  Validity period  1.   XHTT  Singapore  16  Bookbinding material; booklets; books; calendars; cardboards; paper cards; stationery; handbooks; maps; newsletter; newspaper; magazine; note books; writing pads; papers; pictures; photographs; printed matter; post cards; poster; invoice pads; wrapping paper; instructions materials for writing, and writing materials  T1220098E  31.12.2012 to 31.12.2022  2.   XHTT  Singapore  25  Clothing, headgear and footwear  T1220099C  31.12.2012 to 31.12.2022  3.   XHTT  Singapore  35  Advertising and marketing; business advice relating to franchising; business management and consultancy services; demonstration of goods for promotional purposes; distribution of samples, organisation of exhibitions or trade fairs for commercial or advertising purpose and sales promotion  T1220100J  31.12.2012 to 31.12.2022  4.   XHTT  Singapore  39  Transport and transportation logistics services; packaging and storage of goods; travel arrangement  T1220191I  31.12.2012 to 31.12.2022  – 96 ­

6. BUSINESS OVERVIEW (Cont’d) 6. BUSINESS OVERVIEW (Cont’d) 6. BUSINESS OVERVIEW (Cont’d) No.  Trademark  Registered owner  Country of registration  Class  Description  Trademark no.  Validity period  5.   XHTT  Singapore  16  Bookbinding material; booklets; books; calendars; cardboards; paper cards; stationery; handbooks; maps; newsletter; newspaper; magazine; note books; writing pads; papers; pictures; photographs; printed matter; post cards; poster; invoice pads; wrapping paper; instructions materials for writing, and writing materials  T1220102G  31.12.2012 to 31.12.2022  6.   XHTT  Singapore  25  Clothing, headgear and footwear  T1220103E  31.12.2012 to 31.12.2022  7.   XHTT  Singapore  35  The bringing together, for the benefit of others, of a variety of goods, enabling customers to conveniently view and purchase those goods in a retail store or a warehouse, and via the global communication network; advertising and marketing; business advice relating to franchising; business management and consultancy services; demonstration of goods for promotional purposes; distribution of samples; organisation of exhibitions or trade fairs for commercial or advertising purpose and sales promotion  T1220104C  31.12.2012 to 31.12.2022  8.   XHTT  Singapore  39  Transport and transportation logistics services; packaging and storage of goods; travel arrangement  T1220105A  31.12.2012 to 31.12.2022  – 97 ­

No.  Trademark  Registered owner  Country of registration  Class  Description  Trademark no.  Validity period  9.   XHTT  Malaysia  16  Bookbinding material; booklets; books; calendars; cardboards; paper cards; stationery; handbooks; maps; newsletter; newspaper; magazine; note books; pads; papers; pictures; photographs; printed matter; post cards; poster; invoice; wrapping paper; writing instructions and writing materials; all included in class 16  2012059876  08.12.2012 to 08.12.2022  10.   XHTT  Malaysia  25  Clothing, headgear and footwear; all included in class 25  2012059877  08.12.2012 to 08.12.2022  11.   XHTT  Malaysia  35  The bringing together, for the benefit of others, of a variety of goods, enabling customers to conveniently view and purchase those goods in a retail furniture store or a warehouse, and via the global communications network; advertising and marketing; business advice relating to franchising; business management and consultancy services; demonstration of goods; distribution of samples; organisation of exhibitions or trade fairs for commercial or advertising purposes; sales promotion; all included in class 35  2012059878  08.12.2012 to 08.12.2022  12.   XHTT  Malaysia  39  Transport and logistics; packaging and storage of goods; travel arrangement; all included in class 39  2012059879  08.12.2012 to 08.12.2022  – 98 ­

No.  Trademark  Registered owner  Country of registration  Class  Description  Trademark no.  Validity period  13.   XHTT  Malaysia  16  Bookbinding material; booklets; books; calendars; cardboards; paper cards; stationery; handbooks; maps; newsletter; newspaper; magazine; note books; pads; papers; pictures; photographs; printed matter; post cards; poster; invoice; wrapping paper; writing instructions and writing materials; all included in class 16  2012059872  08.12.2012 to 08.12.2022  14.   XHTT  Malaysia  25  Clothing, headgear and footwear; all included in class 25  2012059873  08.12.2012 to 08.12.2022  15.   XHTT  Malaysia  35  The bringing together, for the benefit of others, of a variety of goods, enabling customers to conveniently view and purchase those goods in a retail furniture store or a warehouse, and via the global communications network; advertising and marketing; business advice relating to franchising; business management and consultancy services; demonstration of goods; distribution of samples; organisation of exhibitions or trade fairs for commercial or advertising purposes; sales promotion; all included in class 35  2012059874  08.12.2012 to 08.12.2022  16.   XHTT  Malaysia  39  Transport and logistics; packaging and storage of goods; travel arrangement; all included in class 39  2012059875  08.12.2012 to 08.12.2022
Save for the proprietary trademarks and intellectual property rights as disclosed in Section 6.14 above, our Group is not dependent on any other intellectual property rights in our business operations. – 99 ­Company No.: I032102-P~ 6. BUSINESS OVERVIEW (Conl’d) 6.15 Dependency on Contracts I Arrangements I Documents I Other Matters Save for the major licences and trademarks as disclosed in Sections 6.13 and 6.14 of this Prospectus, our Group is not dependent on any other patents, licences, industrial, commercial or financial contracts that could materially affect our business. 6.16 Major Customers Our Group does not have any’ individual customer that accounted for ten percent (I O~;O) or more of our total Group’s revenue for the past four (4) financial years up to the FYE 31 December 20 14. The table below lists our top tive (5) customers for each respective financial years up to the FYE 31 December 20 14.
I <———————————–FY E 31 Decem be r ———————————–> Length of 2013 201420122011relationship 0/0* 0/0*0/0* RM’OOORM’OOOI Customers Years RM’OOO RM’OOOIndustry %* 5.73 4.497.78 5A88 6.02 5,609 4.97010 5,789Johor Port Berhad Port operator 5,325 5.44 5.034,169 4.57 5.568Port operator 5 1.583 2.13Pelabuhan Tan.iung Pelepas Sdn Bhd 4,5184,127 4.074 4.16 4.084.69 -t.52Favourite Design Sdn Bhd Furniture 6 3A90 2,593 2.16 2.309 2.093.080 338 2.113Lii Hen Furniture Sdn Bhd Furniture 6 3.48 4,2632,402 2.45 3.87NOV FGS Singapore (Pte) Ltd Marine equipment and 4 2.047 2.75 2.523 I 2.77 supplies 4,040 3.671,991 3.13 2.66HL-Manuraeturing Industri~s Sdn Bhd Building materials 2.67 2,854 2.6039 9.244,243 10.217901 1.21 2.80 433SPC Industries Sdn Bhd Building materials 2.5525 -4.94—-5,460Penang Port Sdn Bhd Port operator I –4.50–4,982Flextronics Technology Wenang) Sdn Electrical and electronic I —Bhd Note  ,  Computed based on the Group’s total revenue for the respective financial years.  -100 ­
I Compan)’ No.: 1032102~P I 6. BUSINESS OVERVIEW (Cont’d) 6.I7 Major Suppliers The table below lists the suppliers that accounted for ten percent (10%) or more of our total Group’s purchases for the past four (4) financial years up to the FYE 31 December 2014. The purchases comprised mainly of fuel and spare parts. Suppliers  Type of supplies  Length of relationship Years  <———————————–~­FYE 31 Decembe r -.—————————-~——>  2011  2012  2013 2014  RM’OOO  %  RM’OOO  %  RM’OOO  % RM’OOO %  Ch.::vron Malaysia Limited Shell Malaysia Trading Sdn Bhd Transformer Heavy Link Auto Sdn Bhd Petron Fuel International Sdn Bhd (formerly known as Exxonmobil (M) Sdn Bhd) Visi One Trading  Fuel Fuel Spare parts Fuel Fuel  8 9 3 13 6  3,625 312 -3,239 2,168  20.28 1.75 -18.12 12.13  7.024 2,263 909 3,083 565  34.05 10.97 4.41 14.95 2.74  6,462 5.572 3,433 1,676 378  28.22 6,535 26.14 24.34 6,296 25.19 14.99 4,092 16.37 7.32 1,870 7.48 ~o 1.12
The increase in the purchases from Chevron Malaysia Limited from RM3.63 million for the FYE 31 December 2011 to RM7.02 million for the FYE 31 December 1012 was due mainly to an increase in fuel consumption for our land transport operations. The decrease in the purchases from Chevron Malaysia Limited and Petron Fuel International Sdn Bhd (formerly known as Exxonmobil (M) Sdn Bhd) of approximately RM0,48 million and RM1.21 million, respectively for the FYE 31 December 2014 as compared to the FYE 31 December 20 12 was due mainly to the switch of supplier Purchases from Shell Malaysia Trading Sdn Bhd had increased from RMO.31 million for the FYE 31 December 20 II to RM6.30 million for the FYE 31 December 2014 due mainly to the switch of supplier due to better pricing and payment lemlS offered by Shell Malaysia Trading Sdn Bhd. This had subsequently resulted in a decrease in purchases from Visi One Trading for the financial years under review. The increase in the purchases of spare parts from Transformer Heavy Link Auto Sdn Bhd for the FYE 31 December 2014 of approximately RM3. 18 million as compared to the FYE 31 December 2012 was due mainly to bulk discount given by the supplier and hence, higher purchases were made from Transformer Heavy Link Auto Sdn Bhd. We are not dependent on any single supplier due to the availability of a large pool of local and overseas supplier for fuel and spare parts. In addition, \ve have maintained good business relationships with our suppliers and we have not experienced any difficulty in obtaining supplies of fuel or spare parts from our suppliers. -10 I­I Company No.: l03210~ 6. BUSINESS OVERVIEW (Conl’d) 6.18 Property, Plant and Equipment 6.18.1 Properties Owned by Our Group The summary of the information on properties owned by our Group as at the LPD are set out below: Registered  No.  owner  I.  XHTT  2.  XHTT
Title I Location Title no. HSI\1 3747, Lot PTD ]52513. Mukim of Tebrau, District of lahar Bahru, State of Johor Darul Takzim No.2. .Talan Permatang 2, Kempas Baru, 81200 .lahar Bahru, lahar Darul Takzim Title no. HSD 473187, Lot PTD 2025 [4, Mukim of Plentong, District of .lahar Bahru, State of .lahar Daru! Takzim Sited along Jalan Keluli 9, Ka\\’asan Perindustrian Pasir Gudang, 8]700 Pasir Gudang, lahar Darul Takzim Description I Existing use A piece of commercial land erected with a singlewstorey warehouse with two-storey office and store and three-storey offiee annexes, a double-storey warehouse and other ancillary buildings used as the head office of our Group and warehouse A pieee of industrial land ereeted with a singlew:::torey detached cabin office and a guard house used as branch office and parking yard ofXHTT’b) Encumbrances Tenure  Land area I Gross floor area sq. ft.  Audited NBV as at31 December 2014 RM’OOO  Market value as at 16 March 2015/\ RM’OOO  Revaluation surplus* RM’OOO  Date of issuance of certificate of fitness I certificate of completion and compliance  Freehold  245,007 I 220,483  4] .564  46.000  4,436″)  26 November 2009  Leasehold expiring on 31 May 2069  ] 30,680  3,337  3,920  583(a)  Not applicable
Charged to United Overseas Bank (Malaysia) Berhad Charged to CIMB Islamic Bank Berhad -102­I Company No.: 1032102-P ! 6. BUSINESS OVERVIEW (Cont’d) No. 3.  Registered owner XHTT  Title I Location Title no. HSM 3731, Lot PTD 107511, Mukim of Senai, District of Kulaijaya, State of lahar Darul Takzim PTD 107511, .falan Seelong Jaya 13, Karnpung Seelong Jaya, 81400 Senai, lahar Darul Takzim  Description / Existing use A piece of industrial land erected \viih a single-store); detached factory with a double­storey aftice annex, a single-starey open-sided detached factory and other ancillary buildings used as manufacturing and fabrication yard  Tenure Freehold  Land area I Gross floor area sq. ft. 348,480/ 50,494  Audited NBV as at 31 December 2014 RM’OOO 13,809  Market value as at 16 March 2015/\ RM’OOO 14.000  Revaluation surplus'” RM’OOO 191 (a)  Date of issuance of certificate or fitness / certificate of completion and compliance 29 April 2014  Encumbrances Charged Public Berhad«;’ to Bank  4.  XHTT  Title no GM 586, Lot 1823, i\1ukim of Tebrau, District of lohar Bahru, State of lohor Darul Takzim  A piece of agricultural land  vacant  Freehold  137,780  3,300  3.300  (0)  Not applicable  Charged to CIMB Islamic Bank Berhad  Sited along Jalan Permatang 1, otT the Pasir Gudang Highway, Kempas Baru, 8t2.00 lahar Bahru, lohor Darul Takzim
-103 ­[C;ompany No.: 1032102·P I 6. BUSINESS OVERVIEW (Cont’d) Registered  No.  owner  5.  XHTI
Title I Location PLO 823, Zone 12C, Pasir Gudang Industrial Area, Mukim of Plentong, District of lahar Bahru, State of lahar Darul Takzim Description / Existing use
A piece of vacant to industrial land Bank
Notes:  The Independent Valuer had condueted valuations and updated valuations on the properties on J t Deeember 2013 and 16 Mareh 20 IS respectively.  The revaluation surplus hased on the market value of the properties as appraised by the Independent Valuer on 31 December 2013 has been incorporated in the financial statements of the Group for the F)’E 31 Deeember 2013 whereas the revaluation surplus based on the market value of the properties as appraised by the Independent Valuer on 16 March 2015 has not been incorporated in the finaneial statements of the Group for the FYE 31 December 2014.  (a)  Computed based on the market value as at 16 Mareh 2015 minus the net book value as at 31 Deeember 2014.  (bl  It should be noted thal a single-storey detaehed cabin oftiee and a guard house whieh is granted with a temporary permit for oeeupa[ion is ereeted on the industrial land and currently used as branch office and parking yard. XHTT wilJ continue to renew the temporary permit for occupation upon its expiry. However, the Independent Valuer had disregarded the values ofthe cabin offiee and guard house for valuation purpose.  (c)  It should be noted that PIVB is a wholly~owned subsidiary of Publie Bank Berhad. Public Bank Berhad, has in its ordinary eourse of business, granted eredit facilities to our Group. Notwithstanding that, PIVB is of the view that the aforementioned extension of credit facilities does not result in a conflict of interest situation as the total credit facilities granted to our Group are not material when compared to the net assets of Public Bank Berhad as at 31 Deecmber 2014.  (d)  No valuation was conducted on the industrial land a.~ the purehase of the land at the purchase price ofRMI0,908,556 was eompleted on 22 May 2014.
None ofthe existing use ofthe abovementioned properties breached any laws, regulations, rules and requirements in relation to land and buildings. • 104· i Company No.: 103210~ 6. BUSINESS OVERVIEW (Colll’d) 6.18.2 Properties Rented by Our Group The summary of the information on properties rented by our Group as at the LPD are set out below:
No.  Tenant  Landlord  Location  Description / Existing use  Approximate Rental payable I rented area per annum sq. ft. RM  Tenure of tenancy  I.  XHTT  Damai Estate Sdn Bhd  No.8, lalan GemiJang I, Taman Perindustrian Maju Jay”, 81300 Skud,i, Johor Darul Takzim  A singleMstorey detached building used a5 \varehouse  60,600 618,120  1606.2013 to 15.06.2015  2.  XHTT  lahar Port Berhad  Internal Haulage Yard, lahar Port, 81700 Johor  A space for the placement of a 40′ double decker  1,200 10,800  01.07.2014 to 30,06,2016  Bahru, lahar Darul Takzim  container cabin used as site office   3,  XHTT  .lahar Port Berhad  Internal Haulage Yard,  A space for the placement  600 10,800  01.06,2014 to  lahar Port, 81700 Jahor  of a 40′ container cabin   31.05.2016  Bahru, lahar Daml Takzim  used as site office   4.  XHTT  lahar Port Berhad  CTE Workshop, .lahar Port, 81700 Johor Bahru, lahar Darul Takzim  A space for the placement of a 30′ container cabin used as site office and workshop  3,738 24,000  01.06.2014 to 31.05.2016  5.  XHTT  Hashim Bin Sibelik  No, 47A7A, lalan Perigi Nana5 8/3, Taman Perindustrian Pulau Indah, 42920 PuJau 1ndah, Selangor Darul Ehsan  A two-storey shop lot used as office and workshop  1,648 24,000  01.04.2015 to 31.03.2016  6.  XHTT  TC Boy Marketing Sdn Bhd  No. 10, lalan Perda Timur, Bandar Perda, 14000 Bukit  A two~storey shop lot used as office  3,600 38,400  01.11.2014 to 31.10.2016  Mertajam, Pulau Pinang  ~
-105 ­I Company No.: l032102-P I 6. BUSINESS OVERVIEW (Collt’d) No.  Tenant  7.  XI-ITT  8.  XI-ITT  9  XI-ITT  10.  XI-ITT  11.  XI-ITT  11.  XI-ITT
Landlord I Muhammad Zahran Bin Hassan Norhayati Binti Abdul Rahman Majujaya Wira Sdn Bhd M~jujaya Wira Sdn Bhd Majlis Perbandaran Pasir Gudang Laai Kok So Location No. 10, Lot 531-9. Kampung Pekajang, lalan Tanjung Kupang. 81550 GeJang Patah. lahar Darul Takzim No. 99. Kampung Pok. Paya Mengkuang. 81560 Gelang Patah, lahar Darul Takzim 02-03 Block C3. Pangsapuri Seri rVkngkuang, Taman Paya Mengkuang, 81560 Nusajaya, lohor Daru] Takzim 02-04 Block C3, Pangsapuri Seri Mengkuang, Taman Paya Mengkuang, 81560 Nusajaya, lahor Darul Takzjm No. 28, Block 13. Rumah Pangsa Taman Cendana, 81700 Pasir Gudang, lohar Darul Takzim j Description I Existing use  Approximate rented area sq. ft.  Rental payable per annum RM  Tenure of tenancy  A single-storey terrace house used as hostel  1,200  8,400  01.02.2015 to 31.01.2016  A single-storey terrace house used as hostel  2,520  11,400  01.02.2015 to 31.01.2016  Apartment used as hostel  2,100  13.200  -­01.05.2015 to 30.04.2016  Apartment used as hostel  2.100  13,200  0105.2015 to 3004.2016  Apartment used as hostel  960  5,400  15.09.2014 to J4.09.2016  Apartment used as hostel  850  9,600  10.11.2014to 09.11.2015
No. 505, Capri Park. lalan Capri, 12000 Butterworth, Pulau Pinang -106­I Company No.: l032102-P J 6. BUSINESS OVERVIEW (Collt’d) No.  Tenant  Landlord  Location  Description / Existing use  Approximate rented area sq. ft.  Rental payable per annum RM  Tenure of tenancy  13.  XHTT  Tan Hiang Boey and Cheah Seok Hua  31. Lorang Limbungan Indah 3, Taman Limbungan Indah, Otl’ Jalan Chain Ferry, 12100 Buttenvorth, Pulau Pinang  A double-storey terrace house used as hostel  3,000  14,400  15.022015 to 14.02.2016  14.  XHTT  Ong Boon Choon  41, Lorang Limbungan Indah 3, Taman Limbungan lndah, 12100 Butterworth, Pulau Pinang  A double-storey terrace house used as hostel  3,000  14.400  01.03.2015 to 28.02.2016  15.  XHTT  Nordin Bin Zainal  No. 15, Jalan Desa Dahlia 2/6, Taman Desa Dahlia, 70450 Seremban, Negeri Sembi Ian Daru( Khusus  A single-storey terrace house used as hostel  1,400  7,200  21.08.2014 to 20.08.2015  16.  XHTT  Husin Bin Ibrahim  K-3108, Tingkat Atas, Taman Geliga Sakti, Jalan Kuantan-Kemaman, 24000 Kemaman, Terengganu Damllman  A two-storey shop lot used as office  3,790  18,000  01.04.2015 to 31.03.2016
None ofthe existing use ofthe abovementioned properties breached any laws, regulations, rules and requirements in relation to land and buildings. -107 ­6. BUSINESS OVERVIEW (Coflt’d) 6.18.3 Plant and Equipment As at 31 December 2014, the material plant and equipment used and owned by our Group are as follows: Plant and equipment  No. of units  NBV as at 31 December 2014 RM’OOO  Trucks  35  518  Prime movers  421  10,060  Trailers  680  10,987  Total  1,136  21,565
Save as disclosed above, all other plant and equipment of our Group are individually immaterial to the operations of our Group to be disclosed separately. Our Directors are of the opinion that our Group has sufficient capacity to carry our operations, the details of which (Ire set out in Section 6.3 of this Prospectus. 6.18.4 Material Capital Expenditures and Divestitures SClve as disclosed below, there is no other material capital expenditure incurred by our Group for the past four (4) financial years up to the FYE 31 December 2014 and up to the LPD: Freehold land Leasehold land Building and warehouse Fixtures and ftltings and office equipment Trueks, prime movers and trailers Motor vehicles Renovation Assets under construction Total <—————–FYE 31 Deccmbe.——————->  As :1t the LPD 2011 RM’OOO  2012  2013  2014  RM’OOO  RM’OOO  RM’OOO  RM’OOO  1.882 -7,022 229 4,724 1.581 –15.438  4,901 -2,416 548 7,514 430 49 – 344 -46 654 7,150 625 99 5,829  265 10,957 7,299 1,524 6,491 430 297 6,428  –101 182 1,764 –8,184  15,858  14,747  33,691  10,231
The material capital expenditures were primarily financed by a combination of bank borrowings and internally generated funds. Capital expenditure incun’ed for fi’eehold land for the FYE 31 December 201 1 mainly related to the acquisition of a piece of land located in Kota Tinggi, .lohor Daml Takzim which was disposed in 2012. Capital expenditure incurred for freehold land for the rYE 31 December 2012 and assets under construction for the FYE 31 December 2013 mainly related to the acquisition of the land and construction costs for our manufacturing, fabrication and maintenance centre located in SenCli, .lohor Darul Takzim. 6. BUSINESS OVERVIEW (Collf’d) Capital expenditure incuITed for leasehold land for the FYE 31 December 2014 and assets under construction for the FYE 31 December 2014 and as at the LPD mainly related to the acquisition of the land and construction costs for our new warehouse located in Pasir Gudang, Johor Darld Takzim. Capital expenditure incurred for building and warehouse for the FYE 31 December 2011, FYE 31 December 2012 and FYE 31 December 2013 mainly related to the construction costs for the expansion of Our warehouse located in .lohar Bahru, .lohor Daml Takzim whereas capital expenditure incurred for building and warehouse for the FYE 31 December 2014 mainly related to the construction costs for our manufacturing, fabrication and maintenance centre located in Senai, .lohor Daml Takzim which was completed in 2014. Capita] expenditure incurred for trucks, prime movers and trailers mainly related to acquisition of additional vehicles for our business operations. Save as disclosed below, there are no other material capital divestitures made by our Group for the past four (4) financial years up to the FYE 31 December 2014 and up to the LPD: Fixtures and fittings and office equipment Trucks, prime movers and trailers Machinery I Motor vehicles Total <——————FYE 31 December ——————->  As at the LPD 2011 RM’OOO  2012  2013  2014  RM’OOO  RM’OOO  RM’OOO  RM’OOO  -494 -43 537  -1,033 50 75  -107 — 4 — 109 17 — 1,158  107  4  126
Capital divestitures for trucks, prime movers and trailers for the FYE 31 December 2011 mainly related to the disposal of two (2) units of prime movers and eleven (11) units of trailers. Capital divestitures for b’ucks, prime movers and trailers for the FYE 31 December 2012 mainly related to the disposal of twenty one (21) units of trucks, four (4) units of prime movers and twenty two (22) units of trailers. Capital divestitures for trucks, prime movers and trailers for the FYE 31 December 2013 mainly related to the disposal of one (1) unit of !nIck and four (4) units of trailers. 6. BUSINESS OVERVIEW (Coll/’il) 6.18.5 Material Plans to Construct, Expand or Improve Facilities As at the LPD, our Group has no immediate plans to construct, expand or improve on existing facilities, save for the following: I Desniptio”  Estimated expenditure amount RM’OOO  Amount already paid as at the LPD RM’OOO  Method of financing  Estimate timeframe for completion from the LPD  Estimated increase in capacity after completion  Construction of a new warehouse  19,000  12,356  Utilisation ofIPO proceeds and bank bOITowings  Within three (3) months  Approximately 220,000 sq. ft. of warehouse space
6.19 Regulatory Rt’quirements and Environmental Issues The main laws and regulations governing our Group’s business are summarised below. The summary does not purport to be an exhaustive description of all the relevant laws and regulations of which our Group’s business operations are subject to. 6.19.1 Land Transport Operations The operation of our trucks, prime movers and trailers are governed by the Road Transport Act 1987 (“RTA”) and Land Public Transport Act 2010 (“LPTA”). Under the RTA, our Group is required to register our motor vehicles including trucks, prime movers and trailers in order for the motor vehicles to be used on public roads. The Land Public Transport Commission, via the authority granted by the LPTA, controls the issuance of licences for operation of trucks, prime movers and trailers in Peninsular Malaysia. Under the LPTA, our Group will be required to apply for an operator’s licence to operate or provide a goods vehicles service using a class of goods vehicles for the carriage of goods for hire or reward or for or in connection with any trade or business. 6.19.2 Freight Forwarding and Customs Brokt’rage Servict’s The Customs Act 1967 governs freight forwarding and customs brokerage services carried on by the agents of our Group. Pursuant to Section 90 of the Customs Act 1967, our Group is required to submit application for our agents to the Royal Malaysian Customs for permission to act as an agent for transacting business relating to the imp0l1 or exp0l1 of any goods or which shall be considered by a senior officer of customs who may give such pennission subject to such tenus and conditions as he may deem fit to impose. In order to qualify for the forwarding agent licence as mentioned above, the applicant must satisfy an equity requirement of at least fifty one percent (51%) bumiputera paliicipation on sI1are capital, management and employees within the company. I 6. BUSINESS OVERVIEW (Colll’d) 6.19.3 Environmental Regulations Our Group’s business is subject to Malaysian environmental regulations, in particular, the Environmental Quality Act 1974 (“EQA”). The Department of Environment is responsible for implementing and monitoring compliance with the provisions of the EQA. Our Group is required to adhere to Environmental Quality (Control of Emission fi”om Diesel Engines) Regulations 1996 as a fleet operator operating vehicles powered by diesel. 6.19.4 Occupalional Safely and Health The Occupational Safety and Health Act 1994 (“OSHA”) provides a legislative framework to promote standards for safety and health at work. Pursuant to the provisions contained in the OSHA, our Group has a duty to ensure, so far as is practicable, the safety, health and welfare at work of our employees. The matters to which the duty extends include the making of al1’angements for ensuring, so far as is practicable, safety and absence of risks to health in connection with the use or operation, handling, storage and transport of plant and substances as well as the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is practicable, the safety and health at work of our employees. As at the LPD, our Group has complied with all material regulatory requirements and environmental issues which may materially affect our Group’s operations and / or utilisation of assets. In addition, there are no environmental proceedings or investigations to which we are or might become a party to as at the LPD. 6.20 Seasonality Generally, our Group’s business is not affected by seasonal factors. However, we do experience lower sales during festive seasons due to regulations which limit the transportation of non-necessity gOOds during the festive seasons. 6.21 Interruptions in Business Our Group has not experienced any interruption in our business activities which had a significant effect on our operations during the past twelve (12) months up to the LPD. 6.22 Future Plans, Stralegies and Prospects 6.22.1 Fulure Plans and Strategies (i) Construction of a New Warehouse Currently, we provide warehousing facilities at two (2) locations, namely Skudai, lohor Darul Takzim and lohor Bahru, Johor Darul Takzim with a total covered warehouse space of approximately 244,600 sq. ft. In view of the increasing demand for our warehousing services, we intend to construct a new warehouse in Pasir Gudang, Johor Daml Takzim. Our Group had on II February 2014, entered into a sale and purchase agreement with Johor Corporation to acquire a piece of land identified as PLO 823, Zone l2C, Pasir Gudang Industrial Area in the Mukim of Plentong, District of lohor Bahtu, State of lohor Darul Takzim with a total purchase consideration ofRM10.91 million. In accordance with the terms of the sale and purchase agreement, the said land which has a land area of approximately 362,898 sq. ft. shall be nsed as the site for logistics and warehousing. This tt’ansaction was completed on 22 May 20 14. 6. BUSINESS OVERVIEW (CoIlI’d) Subsequent to the completion of the acquisition of land, the constmction of the new warehouse with a total estimated gross floor area of approximately 220,000 sq. ft. has commenced on 18 July 2014. As at the LPD, the stage of completion for the construction of the new warehouse is apgroximately 93.53% and it is estimated to be completed in the second (2″ ) qUaI1er of 2015. We expect to obtain the Certificate of Completion and Compliance for the warehouse and commence operations in the third (3″) qum1er of 2015. We intend to utilise RM8.50 million of our proceeds from the Public Issue to fund the estimated cost of construction of approximately RM19.00 million1 including the repayment of tenn loan obtained to pan finance the construction of the warehouse. (ii) Expansion of Our Fleet of Vehicles As part of our future plans, we intend to expand our land transport operations by increasing our fleet of vehicles. This is in line with the expected increase in our business volume from both existing and new customers. We intend to acquire approximately 101 units of vehicles in the next twenty four (24) months as follows: No. of  Average  Type of vehicles  units  unit cost  Total cost  RM  RM  Trucks  10  80.000  800,000  Used prime movcrs  -For trailers  44  100,000  4,400,000  -For \TIU Iti axle trailers  I  200,000  200,000  Traih::rs  -Trailers  43  GO,OOO  2,580,000  -Multi axle trailers  3  1.125,000  3,375,000  Tot:lI  101  N/A  11,355,000
We intend to utilise approximately RM 11.36 million of our proceeds fi’om the Public Issue to fund the acquisition of vehicles.  (iii)  Selling-Up Malaysia  a  New  Branch  Office  in  the  East  Coast  of Peuins ular  As at the LPD, our following locations:  Group has three (3)  branch  offices  located  at  the  Pasir Gudang, Johor Darul Takzim;  Pulau Indah, Selangor Darul Ehsan; and  Bukit Mertajam, Pulau Pinang.
As part of our future plans, we intend to set-up a new branch office in Kemaman, Terengganu Dam! Iman. 6. BUSINESS OVERVIEW (Coll/’d) Currently) we have secured a tenancy in Kemaman, Terengganu Darul Iman and are in the midst of applying for the business licence. We expect to commence our operations at this location in the fourth (4 111 ) qmuter of 20 15. We aim to finance the setting up of the new branch office through our internally generated funds. 6.22.2 Prospects of our Group We are an integrated logistics service provider that is able to provide multiple services across the logistics industry chain. Further, our business operation is suppOlted by our in-house manufacturing, fabrication and maintenance centre and sizeable fleet of vehicles which provide us with the flexibility to customise our logistics services and to undertake small-scale to large-scale projects to cater to our customers’ requirements and demands. Our ability to refurbish used prime movers has also enabled us to minimise our cost structure. In addition, oUl’ geographical presence in several major ports in Peninsular Malaysia and branch offices in various regions allows us to respond promptly to our customers’ requests at different locations. With our Group’s emphasis on customer service, we have managed to establish and maintain good business relationships with our customers. Further, our Group is led by an experienced management team that will provide the basis for our Group’s continuing growth and success. Further details on our competitive advantages aud key strengths are set out in Section 6.1.4 of this Prospectus. Moving forward, our Group’s future plans and strategies will focus on the expansion of our warehousing and distribution operations by constructing and operating a new warehouse in Pasir Gudang, Johor Darnl Takzim which will increase our total warehouse space by approximately 220,000 sq. ft. In addition, we will also focus on the expansion of our fleet of vehicles by acquiring approximately 101 llnits of vehicles to accommodate the increase in our business volume for land transport operations and opening of our fourth (4 th) branch office in the east cost of Peninsular Malaysia to expand our market presence. Futther details on our future plans and strategies are set out in Section 6.22.1 of this Prospectus. According to the IMR RepOlt, the road transport market within the logistics industry in Malaysia is valued at RM29.93 billion in2014 and is expected to grow at a CAGR of4.52% for the 2014 to 2019 period. The market size of the road transport market within the logistics industry in Malaysia is expected to reach RM37.33 billion in 2019. Fmther details on the industry prospects and outlook are set out in Section 7 of this Prospectus. Our Directors believe that the prospects of our Group are favourable given the competitive advantages and key strengths of oUl’ Group as well as the continued expansion of our Group’s capacity through our future plans which would provide us with the platform to grow and sustain our business amidst the favourable outlook of the logistics industry in Malaysia. I THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK I

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