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Possesses

ONE OF THE BIGGEST


GCC-GRADE CALCIUM
CARBONATE RESERVES
AND RESOURCES
GCCP Resources Limited

in Malaysia

(Company Registration Number: OI-282405)


(Incorporated in the Cayman Islands on 1 November 2013)

OFFER DOCUMENT DATED 20 APRIL 2015


(Registered by the Singapore Exchange Securities Trading Limited
(the SGX-ST) acting as agent on behalf of the Monetary Authority
of Singapore (the Authority) on 20 April 2015)
This offer is made in or accompanied by an Offer Document (the Offer Document)
that has been registered by the SGX-ST, acting as agent on behalf of the Authority on
20 April 2015. The registration of this Offer Document by the SGX-ST, acting as agent
on behalf of the Authority, does not imply that the Securities and Futures Act (Chapter
289) of Singapore, or any other legal or regulatory requirements, or requirements under
the SGX-STs listing rules, have been complied with.
This document is important. If you are in any doubt as to the action you should take, you
should consult your legal, financial, tax or other professional adviser(s).
PrimePartners Corporate Finance Pte. Ltd. (the Sponsor) has made an application
to the SGX-ST for permission to deal in, and for quotation of, all the ordinary shares
(the Shares) in the capital of the Company already issued and the new Shares which
are the subject of this Placement (the Placement Shares), the Option Shares (as
defined herein) and the Award Shares (as defined herein) on Catalist. The Sponsor
has submitted this Offer Document to the SGX-ST. Acceptance of applications will
be conditional upon, inter alia, issue of the Placement Shares and permission being
granted by the SGX-ST for the listing and quotation of all our existing issued Shares,
the Placement Shares, the Option Shares and the Award Shares on Catalist. Monies
paid in respect of any application accepted will be returned if the admission and listing
do not proceed. The dealing in and quotation of the Shares, Placement Shares, Option
Shares and Award Shares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment risk when compared
with larger or more established companies listed on the SGX-ST Main Board.
In particular, companies may list on Catalist without a track record of profitability
and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing
in such companies and should make the decision to invest only after careful
consideration and, if appropriate, consultation with your professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this
Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for
the contents of this Offer Document, including the correctness of any of the statements
or opinions made or reports contained in this Offer Document. The SGX-ST does not
normally review the application for admission but relies on the Sponsor confirming
that the Company is suitable to be listed and complies with the Catalist Rules (as defined
herein). Neither the Authority nor the SGX-ST has in any way considered the merits of
the Shares or units of Shares being offered for investment.

Placement of 122,000,000 Placement Shares


at S$0.23 for each Placement Share,
payable in full on application
INVESTING IN OUR SHARES INVOLVES RISKS WHICH ARE DESCRIBED IN THE
SECTION ENTITLED RISK FACTORS OF THIS OFFER DOCUMENT. IN
PARTICULAR, YOU SHOULD NOTE THAT BASED ON THE PLANNED PRODUCTION
SCHEDULE FOR OUR QUARRYING OPERATIONS, IT IS EXPECTED THAT
WHILE WE HAVE COMMENCED PRODUCTION IN THE SECOND HALF OF 2014,
WE MAY NOT PROGRESS TO THE NEXT STAGE OF DEVELOPMENT. PLEASE
REFER TO THE FOLLOWING RISKS FURTHER DESCRIBED IN THIS OFFER
DOCUMENT: (1) WE HAVE A LIMITED OPERATING HISTORY AND TRACK
RECORD OF CARRYING OUT OUR BUSINESS ACTIVITIES. OUR PAST FINANCIAL
PERFORMANCE AS AN AD-HOC TRADER OF IRON ORE AND COAL IS ALSO NOT AN
INDICATION OF OUR FUTURE PERFORMANCE IN THE BUSINESS OF THE QUARRYING
AND PROCESSING OF LIMESTONE; (2) WE HAVE YET TO ESTABLISH A STRONG
SALES RECORD; (3) WE MAY NOT BE ABLE TO DISCOVER NEW LIMESTONE
RESERVES TO MAINTAIN A COMMERCIALLY VIABLE QUARRYING OPERATION; (4)
OUR BUSINESS, REVENUES AND PROFITS ARE AFFECTED BY THE VOLATILITY OF
PRICES FOR LIMESTONE AND THE GLOBAL ECONOMY; AND (5) WE MAY NOT BE
ABLE TO OBTAIN, MAINTAIN OR RENEW GOVERNMENTAL PERMITS NECESSARY FOR
EXPLORATION, QUARRYING OR PRODUCTION AT OUR LIMESTONE QUARRIES.
After the expiration of six (6) months from the date of registration of this Offer Document,
no person shall make an offer of securities, or allot, issue or sell any securities, on the
basis of this Offer Document; and no officer or equivalent person or promoter of the
Company will authorise or permit the offer of any securities or the allotment, issue or
sale of any securities, on the basis of this Offer Document.

Issue Manager, Sponsor and Placement Agent

PRIMEPARTNERS CORPORATE FINANCE PTE. LTD.


(Company Registration No.: 200207389D)
(Incorporated in the Republic of Singapore)

CORPORATE PROFILE
GCCP Resources Limited is principally engaged in
the quarrying and processing of limestone (calcium
carbonate) by crushing the quarried calcium carbonate
into varying particle sizes as required by our customers.
We have one of the biggest GCC-grade calcium
carbonate reserves and resources in Malaysia.

OUR QUARRIES
GRIDLAND QUARRY
Site area: approx. 25.0 acres
Facility:
up to 40,000 tons/month current crushing capacity
produced 111,148 tons of crushed calcium carbonate
as at Latest Practicable Date
Total measured & indicated mineral resource:
~26 million tons*
Mining elevation: 50.0 - 240.0 metres
Products: PCC-grade crushed calcium carbonate
up to 90.0mm
HYPER ACT QUARRY
Site area: approx. 60.0 acres
Total measured & indicated mineral resource:
~160 million tons*
Mining elevation: 100.0 - 400.0 metres
Planned facilities:
crushing plant by 2H2015 (up to 1,000 tons/hour)
powder production plant by 1Q2016
(initial capacity of 20,000 tons/month)
Planned products: GCC-grade crushed calcium carbonate
up to 100.0mm and calcium carbonate powder
*as at 30 September 2014

RESOURCES & RESERVES(1)


MEASURED
RESOURCES
(MT)

INDICATED
RESOURCES
(MT)

TOTAL
MEASURED AND
INDICATED (MT)

INFERRED
RESOURCES
(MT)

1.4

24

26

20

160

10

47

120
HYPER ACT QUARRY

(1)
(2)

GRIDLAND QUARRY

RESERVES

HYPER ACT (MT)

GRIDLAND (MT)

TOTAL (MT)

PROVED

2.2

n.a.

2.2

PROBABLE

19.7

4.3

24.0

TOTAL

22.0(3)

4.3

26.3

(2)

Based on the Independent Qualified Persons Report.


insufficient studies conducted to determine
The total figure is an aggregate of the Proved and Probable Ore Reserves and may appear to be
inconsistent due to appropriate rounding

(3) 

The Fair Market Value of the quarries, based on the


aforesaid categorisation, is in the range of US$170
million - US$580 million, with a preferred value of
US$310 million, as at 30 September 2014

Our Gridland Quarry has already commenced operations


and currently produces up to 40,000 tons of crushed
calcium carbonate per month. We are presently undertaking
preparatory work for the construction of a crushing plant
and a calcium carbonate powder production plant at our
Hyper Act Quarry. The crushing plant is anticipated to be
operational in 2H2015 and the powder production plant is
anticipated to be ready in 1Q2016.

COMPETITIVE STRENGTHS
WE HAVE ONE OF THE BIGGEST GCC-GRADE CALCIUM
CARBONATE RESERVES AND RESOURCES IN MALAYSIA
Based on the Independent Qualified Persons Report, we
have calcium carbonate reserves of ~26.3 million tons and
total measured & indicated resources of ~186 million tons
QUALITY OF CALCIUM CARBONATE IS OF GCC-GRADE
AND PCC-GRADE
Calcium carbonate content of the calcium carbonate
reserves is higher than 96.0% at both quarries
Average ISO brightness value of 94.7 for calcium carbonate
samples analysed from Hyper Act Quarry
OUR QUARRIES ARE EASILY ACCESSIBLE AND
CONVENIENTLY LOCATED
Situated close to ports, airports, highways and rail systems
Close to potential customers
expedient delivery of products and transport
cost-savings
WE HAVE AN EXPERIENCED AND COMPETENT
MANAGEMENT TEAM
Executive Chairman and CEO, Alex Loo, is a seasoned
entrepreneur with experience in the minerals industry
Experienced senior management in their respective fields
STRONG WORKING RELATIONSHIPS WITH
CONTRACTORS/CONSULTANTS
Established relationships with leading industry players
in respective niche markets in Malaysia
achieve cost efficiencies in crushed
calcium carbonate production

EXTRACTION &
PRODUCTION PROCESS

CALCIUM CARBONATE
AND ITS USES
2 TYPES OF CALCIUM CARBONATE, BASED ON
THEIR COMMERCIAL PRODUCTION METHODS

QUARRYING
Calcium carbonate
blocks are extracted

1) Ground Calcium Carbonate (GCC):


produced by crushing and grinding
calcium carbonate rocks
2) Precipitated Calcium Carbonate (PCC):
made by subjecting quarried calcium
carbonate rocks to a carbonisation process

TRANSPORTED
TO CRUSHER
Calcium carbonate
blocks transported to
primary crusher

GCC and PCC are used in, or in the manufacturing


processes for, many products, such as:

PAPER

PRIMARY CRUSHER
Calcium carbonate
blocks are crushed
into smaller rocks

PAINTS

PLASTICS

RUBBER

Other product applications:


adhesives and sealants, elastomers, fertilisers,
animal feed, foodstuff, toiletries, cleaning products,
carriers for insecticides and herbicides,
pharmaceuticals, glass and ceramics

CONVEYED
TO SECONDARY
CRUSHER
Conveyer belt
transports calcium
carbonate rocks to
secondary crusher

SECONDARY CRUSHER
Crushed into finer
calcium carbonate
particles

CRUSHED
CALCIUM
CARBONATE
FOR SALE

DEVELOPMENT PLAN
(HYPER ACT QUARRY)
1Q2015
Commence the acquisition of a plot of land in
quarry vicinity
2Q2015
Complete acquisition of the plot of land
Commence construction of crushing plant
Commence construction of powder production plant
2H2015
Crushing plant expected to be operational
1Q2016
Powder production plant expected to be operational

PROSPECTS
EXPECTED INCREASE IN WORLD CALCIUM CARBONATE CONSUMPTION
Projected increase in the world demand forecast1
(2011 vs. 2016)
MILLION
TONS

65
60
55
50

.5%.
E 3 P.A

8
71.9

10

38

36

14

11

29

2016

2011

PCC

.1%

14
12

14.0
2011

27

4 A.
GE H P.
A
T
ER W
AV GRO

10

10

60.4

18
16

AG H
ER WT
AV GRO

MILLION
TONS

PCC

GCC

GCC

75
70

World demand forecast - by market1


(% share in 2016)

PAPER

PAINT

RUBBER

PLASTICS

ADHESIVES / SEALANTS

OTHERS

GROWTH OF CALCIUM CARBONATE POWDER


BUSINESS IN MALAYSIA
Anticipated increase in demand for GCC-grade
crushed calcium carbonate (raw material for calcium
carbonate powder) driven by expected increase in
production of calcium carbonate powder

17.1

2016

PRICE OUTLOOK IS POSITIVE

PRICE TREND FROM 2007 TO 20132 (US$/MT)

US$/MT
160.0
140.0
120.0

102.4

100.0
80.0

130.9

126.4

124.7

102.0

103.7

107.9

136.9

138.0

115.4

116.0

107.2

84.6

89.9

8.58

9.36

9.73

9.58

9.65

9.73

9.75

2007

2008

2009

2010

2011

2012

2013

60.0
40.0
20.0
0

HYDRATED LIME

QUICK LIME

CRUSHED LIME

Sources:
1
Roskill Information Services, as extracted from the Independent Qualified Persons Report
2
Quicklime, Hydrate-Mineral Commodity Summaries 2012 and 2014; Crush Stone-Mineral Commodity Summaries 2012 and 2014, as extracted from the Independent Qualified Persons Report

STRATEGY AND PLANS


INCREASE CALCIUM CARBONATE RESOURCES AND OUTPUT
Carry out further exploration activities within permitted
areas
Engage professional geological company to survey
these areas
Leverage survey results for business planning to increase
efficiency and Groups resources
ESTABLISH A BROAD CUSTOMER BASE
Develop relationships with customers and distributors
Increase market exposure through industry forums,
trade fairs and exhibitions
Expand customer base to China and India

VENTURE INTO PRODUCTION OF PCC


Possibility of greater cost control and higher
profit margins
MAINTAIN SAFE AND ENVIRONMENTALLY
FRIENDLY OPERATIONS
Established procedures relating to health,
safety and environment issues
Organise relevant training and workshops
Formulate manuals and policies
Monitor safety and environmental standards
ACQUIRE ADDITIONAL CALCIUM CARBONATE QUARRIES
Evaluate strategic acquisition opportunities as they arise

TABLE OF CONTENTS
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . .

20

SELLING RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

DETAILS OF THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

OFFER DOCUMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32

THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

EXCHANGE RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37

RISKS RELATING TO OUR BUSINESS OR THE INDUSTRY . . . . . . . . . . . . . . . . . . . . .

37

RISKS RELATING TO OUR OPERATIONS IN MALAYSIA . . . . . . . . . . . . . . . . . . . . . . . .

49

RISKS RELATING TO AN INVESTMENT IN OUR SHARES . . . . . . . . . . . . . . . . . . . . . .

50

PLACEMENT STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53

USE OF PROCEEDS AND LISTING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69

RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

71

GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76

SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .

77

TABLE OF CONTENTS
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP . . . . . . . . . . . . . . .

99

HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99

BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

OUR QUARRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101

RESOURCE AND RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103

INDEPENDENT VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104

LIMESTONE AND ITS USES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105

WORK PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106

PRODUCTION CAPACITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107

QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

OUR MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

OUR MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

CREDIT MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110

INVENTORY MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111

SALES AND MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111

INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111

INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112

LICENCES, PERMITS AND APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112

GOVERNMENT REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113

KEY CONTRACTORS AND CONSULTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

LEGAL OPINION FROM JEFF LEONG, POON & WONG . . . . . . . . . . . . . . . . . . . . . . . .

117

STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

ENVIRONMENTAL PROTECTION AND COMMUNITY DEVELOPMENT . . . . . . . . . . . . .

118

SAFETY POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118

RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118

COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118

COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121

INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123

PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126

BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127

ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129

TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130

TABLE OF CONTENTS
DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131

DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131

EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135

MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATED


EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

139

SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140

GCCP PERFORMANCE SHARE PLAN AND GCCP EMPLOYEE SHARE OPTION


SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

143

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161

NOMINATING COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161

REMUNERATION COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161

AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162

BOARD PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165

INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

166

PAST INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

166

PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . .

169

GUIDELINES AND REVIEW PROCEDURES FOR ONGOING AND FUTURE


INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

171

POTENTIAL CONFLICT OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173

INTERESTS OF DIRECTORS, THE CHIEF EXECUTIVE OFFICER, CONTROLLING


SHAREHOLDERS OR THEIR ASSOCIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173

INTERESTS OF EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175

INTERESTS OF ISSUE MANAGER, SPONSOR AND PLACEMENT AGENT . . . . . . . . .

175

DESCRIPTION OF ORDINARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183

SINGAPORE TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183

CAYMAN ISLANDS TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187

MALAYSIAN TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187

CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

189

GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

191

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . .

191

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193

TABLE OF CONTENTS
MEMORANDUM AND ARTICLES OF ASSOCIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193

MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194

MATERIAL LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

196

MANAGEMENT AND PLACEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .

197

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199

CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

201

RESPONSIBILITY STATEMENT BY OUR DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . .

202

DOCUMENTS FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

202

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE


FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 . . . . . . . . . . . . . . . .

A-1

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR


THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014 . . . . . . . . . . . . . . . . . . . . . .

B-1

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION FOR THE


FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND THE NINE-MONTH PERIOD
ENDED 30 SEPTEMBER 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C-1

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION . . . . .

D-1

APPENDIX E LEGAL OPINION FROM JEFF LEONG, POON & WONG . . . . . . . . . . .

E-1

APPENDIX F INDEPENDENT QUALIFIED PERSONS REPORT . . . . . . . . . . . . . . . .

F-1

APPENDIX G INDEPENDENT VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . .

G-1

APPENDIX H SUMMARY OF CERTAIN PROVISIONS OF THE CAYMAN ISLANDS


COMPANIES LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

H-1

APPENDIX I RULES OF THE GCCP PERFORMANCE SHARE PLAN . . . . . . . . . . . .

I-1

APPENDIX J RULES OF THE GCCP EMPLOYEE SHARE OPTION SCHEME . . . . . .

J-1

APPENDIX K TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND


ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

K-1

CORPORATE INFORMATION
BOARD OF DIRECTORS

Loo An Swee (Executive Chairman and CEO)


Pang Kim Chon (Executive Director and COO)
Tan Eng Ann (Lead Independent Director)
Dato Koh Boon Thye (Independent Director)
Denys Collin Munang (Independent Director)

COMPANY SECRETARY

Yoo Loo Ping, ACIS

REGISTERED OFFICE

Offshore Incorporations (Cayman) Limited


Floor 4, Willow House, Cricket Square
PO Box 2804
Grand Cayman KY1-1112
Cayman Islands

ISSUE MANAGER,
SPONSOR AND
PLACEMENT AGENT

PrimePartners Corporate Finance Pte. Ltd.


16 Collyer Quay
#10-00 Income at Raffles
Singapore 049318

INDEPENDENT
AUDITORS AND
REPORTING
ACCOUNTANTS

Ernst & Young LLP


One Raffles Quay
North Tower Level 18
Singapore 048583
Partner-in-charge: Adrian Koh (a member of the Institute of
Singapore Chartered Accountants)

SOLICITORS TO THE
PLACEMENT AND LEGAL
ADVISER TO OUR
COMPANY ON
SINGAPORE LAW

Rodyk & Davidson LLP


80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624

LEGAL ADVISER TO OUR


COMPANY ON CAYMAN
ISLANDS LAW

Conyers Dill & Pearman Pte. Ltd.


9 Battery Road
#20-01 Straits Trading Building
Singapore 049910

LEGAL ADVISER TO OUR


COMPANY ON MALAYSIA
LAW

Jeff Leong, Poon & Wong


B-11-8, Level 11
Megan Avenue II
Jalan Yap Kwan Seng
50450 Kuala Lumpur
Malaysia

INDEPENDENT
GEOLOGIST

Greater China Mineral & Energy Consultants Limited


Room 2703-08
Shui On Centre
6-8 Harbour Road
Wanchai, Hong Kong

CORPORATE INFORMATION
INDEPENDENT VALUER

Greater China Appraisal Limited


Room 2703-08
Shui On Centre
6-8 Harbour Road
Wanchai, Hong Kong

SHARE REGISTRAR FOR


THE PLACEMENT AND
SINGAPORE TRANSFER
AGENT

Boardroom Corporate & Advisory Services Pte. Ltd.


50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623

PRINCIPAL BANKER

United Overseas Bank (Malaysia) Bhd


Commercial Banking Division
Level 9 Menara UOB
Jalan Raja Laut
50350 Kuala Lumpur

RECEIVING BANKER

The Bank of East Asia, Limited


BEA Building
60 Robinson Road
Singapore 068892

DEFINITIONS
In this Offer Document and the accompanying Application Forms, unless the context otherwise
requires, the following definitions apply throughout where the context so admits:
Companies within our Group
Company

GCCP Resources Limited, a company incorporated in


the Cayman Islands on 1 November 2013

Gridland

Gridland Sdn Bhd, a company incorporated in Malaysia


on 3 February 2009

Group or Group Companies

Our Company and our subsidiaries as at the date of this


Offer Document

Hyper Act

Hyper Act Marketing Sdn Bhd, a company incorporated


in Malaysia on 19 October 2009

Other Companies, Organisations and Agencies


Accion

Accion Capital Management Pte. Ltd.

Authority

Monetary Authority of Singapore

CDP or Depository

The Central Depository (Pte) Limited

CPF

Central Provident Fund

GPF

Griffin Prive Fund SPC

GPF (Delta)

GPF for and on behalf of Delta Segregated Portfolio

GPF (Falcon)

GPF for and on behalf of Falcon Segregated Portfolio

Independent Geologist

Greater China Mineral & Energy Consultants Limited

Independent Valuer

Greater China Appraisal Limited

IRAS

Inland Revenue Authority of Singapore

Issue Manager, Sponsor,


Placement Agent or PPCF

PrimePartners Corporate Finance Pte. Ltd.

Receiving Banker

The Bank of East Asia, Limited

SGX-ST

Singapore Exchange Securities Trading Limited

Share Registrar

Boardroom Corporate & Advisory Services Pte. Ltd.

DEFINITIONS
Solicitors to the Placement

Rodyk & Davidson LLP

Wilma Global

Wilma Global Investments Limited

Woodburn

Woodburn Holdings Limited

9M

Financial period commenced 1 January and ended


30 September

Application Forms

The official printed application forms to be used for the


purpose of the Placement and which form part of this
Offer Document

Application List

The list of applications for the subscription of the


Placement Shares

Articles or Articles of
Association

The articles of association of our Company, as amended,


supplemented or modified from time to time

Associate

(a)

General

in relation to an entity, means:


(i)

in a case where the entity is a substantial


shareholder,
controlling
shareholder,
substantial interest-holder or controlling
interest-holder, its related corporation, related
entity, associated company or associated
entity; or

(ii)

in any other case, (A) a director or an


equivalent person, (B) where the entity is a
corporation, a controlling shareholder of the
entity, (C) where the entity is not a corporation,
a controlling interest-holder of the entity, (D) a
subsidiary, a subsidiary entity, an associated
company, or an associated entity, or (E) a
subsidiary, a subsidiary entity, an associated
company, or an associated entity, of the
controlling shareholder or controlling interestholder, as the case may be,

of the entity; and

DEFINITIONS
(b)

in relation to an individual, means:


(i)

his immediate family (being spouse, child,


adopted child, step-child, sibling and parent);

(ii)

a trustee of any trust of which the individual or


any member of the individuals immediate
family is (A) a beneficiary; or (B) where the
trust is a discretionary trust, a discretionary
object; when the trustee acts in that capacity;
or

(iii) any corporation in which he and his immediate


family (whether directly or indirectly) have
interests in voting shares of an aggregate of
not less than 30.0% of the total votes attached
to all voting shares
Unless otherwise defined, the terms associated
company,
associated
entity,
controlling
interest-holder, controlling shareholder, related
corporation, related entity, subsidiary, subsidiary
entity and substantial interest-holder shall have the
same meanings ascribed to them respectively in the SFR
Audit Committee

The audit committee of our Company as at the date of


this Offer Document, unless otherwise stated

Award Shares

The Shares which are the subject of the Awards under


the GCCP Performance Share Plan

Awards

The contingent awards of Shares granted or which may


be granted pursuant to the GCCP Performance Share
Plan

Board or Board of Directors

The board of Directors as at the date of this Offer


Document, unless otherwise stated

Catalist

The sponsor-supervised listing platform of the SGX-ST

Catalist Rules

Any or all of the rules in the SGX-ST Listing Manual


Section B: Rules of Catalist, as the case may be

Cayman Companies Law

The Companies Law, Cap. 22 (Law 3 of 1961, as


consolidated and revised) of the Cayman Islands

CEO

Chief Executive Officer

CFO

Chief Financial Officer

Companies Act

Companies Act (Chapter 50) of Singapore

DEFINITIONS
Controlling Shareholder

A person who:
(a)

holds directly or indirectly 15.0% or more of the


nominal amount of all voting shares in our
Company. The SGX-ST may determine that a
person who satisfies this paragraph is not a
controlling shareholder; or

(b)

in fact exercises control over our Company

Conversion

The conversion of the then outstanding amount of


convertible loans granted by the Pre-Placement
Investors pursuant to the Convertible Loan Agreements
into the Conversion Shares

Conversion Shares

127,612,933 Shares, issued and allotted to the PrePlacement Investors on the terms and conditions set out
in the Convertible Loan Agreements

Convertible Loan Agreements

The convertible loan agreements entered into between


the Company and Pre-Placement Investors, details of
which are set out in the section entitled General and
Statutory Information Material Contracts of this Offer
Document

COO

Chief Operating Officer

Director

A director of our Company as at the date of this Offer


Document

Entity at Risk

(a) The Company; (b) a subsidiary of the Company that


is not listed on the SGX-ST or an approved exchange; or
(c) an Associated Company that is not listed on the
SGX-ST or an approved exchange, provided that our
Group or our Group and our Interested Person(s), has
control over the Associated Company

EPS

Earnings per Share

Executive Directors

The executive Directors as at the date of this Offer


Document, unless otherwise stated

Executive Officers

The executive officers of our Company as at the date of


this Offer Document, who are also key executives as
defined under the Securities and Futures (Offers of
Investments) (Shares and Debentures) Regulations
2005, unless otherwise stated

FY

Financial year ended or, as the case may be, ending 31


December

10

DEFINITIONS
GCCP Employee Share Option
Scheme or ESOS

The share option scheme of our Company known as


GCCP Employee Share Option Scheme which was
approved on 26 February 2015, particulars of which are
set out in the section entitled GCCP Employee Share
Option Scheme of this Offer Document

GCCP Performance Share


Plan or Performance Share
Plan

The share plan of our Company known as GCCP


Performance Share Plan which was approved on 26
February 2015, particulars of which are set out in the
section entitled GCCP Performance Share Plan of this
Offer Document

Gridland Quarry

The limestone quarry of approximately 25 acres acquired


in October 2009 by Gridland which is located in Perak,
Malaysia

Hyper Act Quarry

The limestone quarry of approximately 60 acres acquired


in June 2014 by Hyper Act which is located in Perak,
Malaysia

Independent Directors

The independent Directors as at the date of this Offer


Document, unless otherwise stated

Independent Qualified Persons


Report

The report dated 2 February 2015 prepared by the


Independent Geologist in accordance with the Catalist
Rules as set out in Appendix F of this Offer Document

Independent Valuation Report

The valuation report dated 3 February 2015 prepared by


the Independent Valuer relating to the independent
valuation of the fair market value of the Gridland Quarry
and Hyper Act Quarry, as set out in Appendix G of this
Offer Document

Interested Person

(a)

a director, chief executive officer or Controlling


Shareholder of the Company; or

(b)

an Associate of any such director, chief executive


officer or Controlling Shareholder of the Company

Interested Person Transaction

Means a transaction between an Entity at Risk and an


Interested Person

Latest Practicable Date

23 February 2015, being the latest practicable date


before the lodgement of this Offer Document with the
SGX-ST

Listing

The listing of the Shares on Catalist

LPS

Loss per Share

11

DEFINITIONS
Management Agreement

The full sponsorship and management agreement dated


20 April 2015 entered into between our Company and
PPCF pursuant to which PPCF shall sponsor and
manage the Listing, details as described in the sections
entitled Plan of Distribution and General and Statutory
Information

Management
and
Placement
Arrangements of this Offer Document

Market Day

A day on which the SGX-ST is open for trading in


securities

Memorandum

The memorandum of association of our Company, as


may be amended, varied or supplemented from time to
time

NAV

Net asset value

Nominating Committee

The nominating committee of our Company as at the


date of this Offer Document, unless otherwise stated

NTA

Net tangible assets

Offer Document

This Offer Document dated 20 April 2015 issued by our


Company in respect of the Placement

Options

The share options which may be granted pursuant to the


GCCP Employee Share Option Scheme

Option Shares

The new Shares which may be allotted and issued upon


the exercise of the Options

PER

Price earnings ratio

Period Under Review

The period which comprises FY2011, FY2012, FY2013


and 9M2014

Placement

The placement of the Placement Shares by the


Placement Agent on behalf of our Company for
subscription at the Placement Price subject to and on the
terms and conditions as set out in this Offer Document

Placement Agreement

The placement agreement dated 20 April 2015 entered


into between our Company and the Placement Agent
pursuant to which the Placement Agent agreed to
procure subscribers for the Placement Shares at the
Placement Price as described in the sections entitled
Plan of Distribution and General and Statutory
Information

Management
and
Placement
Arrangements of this Offer Document

12

DEFINITIONS
Placement Price

S$0.23 for each Placement Share

Placement Shares

The 122,000,000 new Shares for which our Company


invites applications to subscribe for pursuant to the
Placement, subject to and on the terms and conditions
set out in this Offer Document

Pre-Placement Investors

GPF (Delta), Woodburn, GPF (Falcon), Soo Kee Wee,


Ng Han Meng, Ciliandra Fangiono, Fong Kim Chit, Lee
Chun Fun, Wang Yu Huei, Teo Khiam Chong and Chang
Wei Chian Benjamin

Remuneration Committee

The remuneration committee of our Company as at the


date of this Offer Document, unless otherwise stated

Restructuring Exercise

The corporate restructuring exercise implemented in


connection with the Placement, more fully described in
the section entitled Restructuring Exercise of this Offer
Document

Securities Account

The securities account maintained by a Depositor with


CDP but does not include a securities sub-account

Securities and Futures Act or


SFA

The Securities and Futures Act (Chapter 289) of


Singapore

Service Agreements

The service agreements dated 26 February 2015


entered into between our Company and our Executive
Directors, as described in the section entitled Directors,
Management and Staff Service Agreements of this
Offer Document

SFR

The Securities and Futures (Offers of Investments)


(Shares and Debentures) Regulations 2005 of
Singapore

Share(s)

Ordinary share(s) of par value US$0.00000023 each in


the capital of our Company

Share Split

the sub-division of each ordinary share of par value


US$0.021 each in the capital of our Company into
94,382 Shares

Shareholder(s)

Registered holders of Shares

Singapore

The Republic of Singapore

13

DEFINITIONS
Substantial Shareholder(s)

Persons who have an interest in one or more voting


shares, and the total votes attaching to that share or
those shares, represent not less than 5.0% of the total
votes attaching to all the voting shares in our Company

ft

feet

grams

kg

Kilograms

km

Kilometres

Metres

m 3

Cubic metres

mm

Millimetres

Mt

Megaton, being one (1) million tons

MYR

Malaysian ringgit

sq ft

Square feet

sq km

Square kilometres

sq m

Square metres

S$ and cents

Singapore dollars and cents, respectively

Tons

US$

USA dollars

% or per cent.

Per centum or percentage

Micrometres

Currencies, Units and Others

All references to Alex Loo, Dato Thomas Koh and Ian Lim in this Offer Document shall be a
reference to Loo An Swee, Dato Koh Boon Thye and Lim Koh Huat respectively.
Any capitalised terms relating to the GCCP Performance Share Plan and the GCCP Employee
Share Option Scheme which are not defined in this section of this Offer Document shall have the
meanings ascribed to them as stated in Appendix I and Appendix J of this Offer Document
respectively.

14

DEFINITIONS
The expression business trust has the same meaning ascribed to it in Section 2 of the Business
Trusts Act (Chapter 31A) of Singapore.
The expression Entity includes a corporation, an unincorporated association, a partnership and
the government of any state, but does not include a trust.
The expressions Depositor, Depository Agent and Depository Register shall have the
meanings ascribed to them respectively in Section 130A of the Companies Act.
References in this Offer Document to Appendix or Appendices are references to an appendix or
appendices respectively in this Offer Document.
Any discrepancies in tables included herein between the total sum of amounts listed and the totals
shown thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not
be an arithmetic aggregation of the figures which precede them.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders
and vice versa. References to persons shall include corporations.
Any reference in this Offer Document and the Application Forms to any statue or enactment is a
reference to that statue or enactment as for the time being amended or re-enacted.
Any word defined under the Companies Act, the Cayman Companies Law, the SFA, SFR or any
statutory modification thereof and used in this Offer Document and the Application Forms shall,
where applicable, have the meaning ascribed to it under the Companies Act, the Cayman
Companies Law, the SFA, SFR or any statutory modification thereto, as the case may be.
Any reference in this Offer Document and the Application Forms to any statute or enactment is a
reference to that statute or enactment as for the time being amended or re-enacted.
Any reference in this Offer Document and the Application Forms to Shares being allotted to an
applicant includes allotment to CDP for the account of that applicant.
Any reference to a time of day in this Offer Document and the Application Forms is a reference to
Singapore time unless otherwise stated.
Any reference in this Offer Document to the Group, we, our, us or their other grammatical
variations is a reference to our Company, or Group, or any member of our Group, as the context
requires.

15

GLOSSARY OF TECHNICAL TERMS


To facilitate a better understanding of the business of our Group, the following glossary provides
a description of some of the technical terms and abbreviations commonly used in our industry. The
terms and abbreviations and their assigned meanings should not be treated as being definitive of
their meanings, and may not correspond to standard industry or common meanings or usage of
these terms:
aggregates

A granular rock product obtained by processing of natural


materials through crushing and screening

Competent Person

A minerals industry professional who is a Member or Fellow


of The Australasian Institute of Mining and Metallurgy, or of
the Australian Institute of Geoscientists, or of a
Recognised Professional Organisation (RPO), as included
in a list available on the JORC and Australian Securities
Exchange (ASX) websites. These organisations have
enforceable disciplinary processes including the powers to
suspend or expel a member
A Competent Person must have a minimum of five (5) years
relevant experience in the style of mineralisation or type of
deposit under consideration and in the activity which that
person is undertaking

Feasibility Study

A comprehensive technical and economic study of the


selected development option for a mineral project that
includes appropriately detailed assessments of applicable
Modifying Factors together with other relevant operational
factors and detailed financial analysis that are necessary to
demonstrate at the time of reporting that extraction is
reasonably justified (economically mineable). The results of
the study may reasonably serve as the basis for a final
decision by a proponent or financial institution to proceed
with, or finance, the development of the project. The
confidence level of the study will be higher than that of a
Pre-Feasibility Study

GCC

Ground calcium carbonate, which is produced through


mechanical grinding of naturally occurring calcium
carbonate rocks and is a most commonly used mineral in
the paper, plastic, paints and coating industries as a filler
and also as a coating pigment

16

GLOSSARY OF TECHNICAL TERMS


Indicated Mineral Resource
or Indicated Resource

That part of a Mineral Resource for which quantity, grade


(or quality), densities, shape and physical characteristics
are estimated with sufficient confidence to allow the
application of Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic
viability of the deposit
Geological evidence is derived from adequately detailed
and reliable exploration, sampling and testing gathered
through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes, and is
sufficient to assume geological and grade (or quality)
continuity between points of observation where data and
samples are gathered
An Indicated Mineral Resource has a lower level of
confidence than that applying to a Measured Mineral
Resource and may only be converted to a Probable Ore
Reserve

Inferred Mineral Resource


or Inferred Resource

That part of a Mineral Resource for which quantity and


grade (or quality) is estimated on the basis of limited
geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade (or
quality) continuity
An Inferred Mineral Resource has a lower level of
confidence than that applying to an Indicated Mineral
Resource and must not be converted to an Ore Reserve. It
is reasonably expected that the majority of Inferred Mineral
Resources could be upgraded to Indicated Mineral
Resources with continued exploration

ISO

International Organisation of Standardisation

JORC

Joint Ore Reserves Committee

JORC Code

The Australasian Code for Reporting of Exploration


Results, Mineral Resources and Ore Reserves (2012
Edition), as published by the Joint Ore Reserves
Committee

limestone

Sedimentary rock composed largely of calcium carbonate


(CaCO3)

17

GLOSSARY OF TECHNICAL TERMS


Measured Mineral Resource

That part of a Mineral Resource for which quantity, grade


(or quality), densities, shape and physical characteristics
are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine
planning and final evaluation of the economic viability of the
deposit
Geological evidence is derived from detailed and reliable
exploration, sampling and testing gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes, and is sufficient to
confirm geological and grade (or quality) continuity
between points of observation where data and samples are
gathered
A Measured Mineral Resource has a higher level of
confidence than that applying to either an Indicated Mineral
Resource or an Inferred Mineral Resource. It may be
converted to a Proved Ore Reserve or under certain
circumstances to a Probable Ore Reserve

Mineral Resource

A concentration or occurrence of solid material of economic


interest in or on the Earths crust in such form, grade (or
quality), and quantity that there are reasonable prospects
for eventual economic extraction. The location, quantity,
grade (or quality), continuity and other geological
characteristics of a Mineral Resource are known, estimated
or interpreted from specific geological evidence and
knowledge, including sampling. Mineral Resources are sub
divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories

Modifying Factors

The considerations used to convert Mineral Resources to


Ore Reserves. These include, but are not restricted to,
mining, processing, metallurgical, infrastructure, economic,
marketing, legal, environment, social and governmental
factors

Ore Reserves

The economically mineable part of a Measured and/or


Indicated Mineral Resource. It includes diluting materials
and allowances for losses, which may occur when the
material is mined or extracted and is defined by studies at
Pre-Feasibility Study or Feasibility Study level as
appropriate that include the application of Modifying
Factors. Such studies demonstrate that, at the time of
reporting, extraction could reasonably be justified. Ore
Reserves are sub-divided in order of increasing confidence
into Probable Ore Reserves and Proved Ore Reserves

18

GLOSSARY OF TECHNICAL TERMS


PCC

Precipitated calcium carbonate, which is produced through


a chemical reaction process that utilises calcium oxide,
which is quicklime, water and carbon dioxide and has many
industrial applications such as paper industry, polymer and
healthcare applications

Pre-Feasibility Study

A comprehensive study of a range of options for the


technical and economic viability of a mineral project that
has advanced to a stage where a preferred mining method,
in the case of underground mining, or the pit configuration,
in the case of an open pit, is established and an effective
method of mineral processing is determined. It includes a
financial analysis based on reasonable assumptions on the
Modifying Factors and the evaluation of any other relevant
factors which are sufficient for a Competent Person, acting
reasonably, to determine if all or part of the Mineral
Resources may be converted to an Ore Reserve at the time
of reporting. A Pre-Feasibility Study is at a lower confidence
level than a Feasibility Study

Probable Ore Reserve or


Probable Reserve

The economically mineable part of an Indicated, and in


some circumstances, a Measured Mineral Resource

Proved Ore Reserve or


Proved Reserve

The economically mineable part of a Measured Mineral


Resource

PVC

Polyvinyl Chloride

quarrying

The extraction of stone or other materials from a quarry

VALMIN Code

The Code for the Technical Assessment and Valuation of


Mineral and Petroleum Assets and Securities for
Independent Expert Reports (2005 Edition), as prepared by
the VALMIN Committee, a joint committee of The
Australasian Institute of Mining and Metallurgy, the
Australian Institute of Geoscientists and the Mineral
Industry Consultants Association as amended from time to
time

wheel loader

A self-propelled heavy equipment used in many industries


for pushing, lifting, and loading earth, sand, snow and other
heavy material or object

19

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS


All statements contained in this Offer Document, statements made in press releases and oral
statements that may be made by our Company, or our Directors, Executive Officers or employees
acting on our behalf, that are not statements of historical fact, constitute forward-looking
statements. You can identify some of these forward-looking statements by terms such as
expects, believes, plans, intends, estimates, anticipates, may, will, would and
could or similar words. However, you should note that these words are not the exclusive means
of identifying forward-looking statements. All statements regarding our expected financial
position, business strategies, plans and prospects are forward-looking statements.
These forward-looking statements, including without limitation, statements as to the following:
(a)

our revenue and profitability;

(b)

expected growth in demand;

(c)

expected industry trends;

(d)

anticipated expansion plans; and

(e)

other matters discussed in this Offer Document regarding matters that are not historical fact,

are only predictions. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expected,
expressed or implied by these forward-looking statements. These risks, uncertainties and other
factors include, among others:
(a)

changes in political, social and economic conditions and the regulatory environment in which
we conduct business;

(b)

our anticipated growth strategies and expected internal growth;

(c)

changes in the availability and prices of utilities and supplies which we require for the
operation of our business;

(d)

changes in competitive conditions and our ability to compete under such conditions;

(e)

changes in our future capital needs and the availability of financing and capital to fund such
needs;

(f)

changes in currency exchange rates;

(g)

in respect of our quarrying licences, estimates of reserves and resources, our ability to
convert limestone resources into limestone reserves and to replace limestone reserves with
additional limestone resources and statements regarding anticipated future exploitation and
feasibility study results; and

(h)

other factors beyond our control.

20

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS


Some of these risk factors are discussed in more detail under the section entitled Risk Factors
of this Offer Document. All forward-looking statements made by or attributable to us or persons
acting on our behalf, contained in this Offer Document are expressly qualified in their entirety by
such factors.
Given the risks and uncertainties that may cause our actual future results, performance or
achievements to be materially different from that expected, expressed or implied by the
forward-looking statements in this Offer Document, undue reliance must not be placed on these
statements which apply only as at the date of this Offer Document. Neither our Company, the
Issue Manager, Sponsor and Placement Agent, nor any other person represents or warrants that
our Groups actual future results, performance or achievements will be as discussed in those
statements.
Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of the risks faced by us. We and the Issue Manager, Sponsor and Placement Agent,
disclaim any responsibility to update any of those forward-looking statements or publicly
announce any revisions to those forward-looking statements to reflect future developments,
events or circumstances. We are, however, subject to the provisions of the SFA and the Catalist
Rules regarding corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after the
registration of the Offer Document but before the close of the Placement, our Company becomes
aware of (a) a false or misleading statement or matter in the Offer Document; (b) an omission from
the Offer Document of any information that should have been included in it under Section 243 of
the SFA; or (c) a new circumstance that has arisen since the Offer Document was lodged with the
SGX-ST, acting as agent on behalf of the Authority and would have been required by Section 243
of the SFA to be included in the Offer Document if it had arisen before the Offer Document was
lodged and that is materially adverse from the point of view of an investor, our Company may
lodge a supplementary or replacement offer document with the SGX-ST, acting as agent on behalf
of the Authority.
Market and Industry Information
Certain market data, industry forecasts and data relating to Malaysia used throughout this Offer
Document have been obtained from internal surveys, market research, publicly available
information and industry publications. Industry publications generally state that the information
contained therein has been obtained from sources believed to be reliable, but that the accuracy
and completeness of the information is not guaranteed. Similarly, while we believe these industry
forecasts and market research to be reliable, we have not independently verified this information
and do not make any representation as to its accuracy.

21

SELLING RESTRICTIONS
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for our
Placement Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is
not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation.
No action has been or will be taken under the requirements of the legislation or regulations of, or
of the legal or regulatory requirements of any jurisdiction, except as disclosed below and for the
filing and/or registration of this Offer Document in Singapore in order to permit a public offering
of our Placement Shares and the public distribution of this Offer Document in Singapore. The
distribution of this Offer Document and the offering of our Placement Shares in certain
jurisdictions may be restricted by the relevant laws in such jurisdictions. Persons who may come
into possession of this Offer Document are required by our Company and the Issue Manager,
Sponsor and Placement Agent to inform themselves about, and to observe and comply with, any
such restrictions at their own expense and without liability to us and the Issue Manager, Sponsor
and Placement Agent.
Malaysia
The Offer Document has not been reviewed and approved by the Securities Commission of
Malaysia (the Commission) and will not be registered as a prospectus with the Commission but
a copy of this Offer Document will be deposited with the Commission in accordance with section
229(4) of the Capital Markets and Services Act, 2007 (CMSA).
Accordingly, this Offer Document or any amendment or supplement to it may not be distributed in
Malaysia directly or indirectly for the purpose of making available, offering or subscription, or
issuing an invitation to subscribe for, the Placement Shares in Malaysia except to a Qualified
Person (as defined below).
Any investment to which this Offer Document relates in Malaysia is available only through a holder
of Capital Markets Services License granted pursuant to the CMSA who carries on the business
of dealing in securities to the following persons (Qualified Person):
(i)

a closed end fund approved by the Commission;

(ii)

a holder of a Capital Markets Services Licence under the CMSA;

(iii) a person who, if they acquire the Placement Shares, does so only pursuant to a private
placement, and as principal on terms that the Placement Shares are acquired at a
consideration of no less than MYR250,000 or its equivalent in foreign currencies for each
transaction whether such amount is paid for in cash or otherwise;
(iv) an individual whose total net personal assets, or total net joint assets with his or her spouse,
exceeds MYR3,000,000 or its equivalent in foreign currencies, excluding the value of the
primary residence of the individual;
(v)

an individual who has a gross annual income exceeding MYR300,000 or its equivalent in
foreign currencies per annum in the preceding 12 months;

(vi) an individual who, jointly with his or her spouse, has a gross annual income of MYR400,000
or its equivalent in foreign currencies per annum in the preceding 12 months;
(vii) a corporation with total net assets exceeding MYR10,000,000 or its equivalent in foreign
currencies based on the last audited accounts;

22

SELLING RESTRICTIONS
(viii) a partnership with total net assets exceeding MYR10,000,000 or its equivalent in foreign
currencies;
(ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and
Securities Act 2010 (Act 704); and
(x)

an Islamic bank licensee or takaful licensee as defined in the Labuan Islamic Financial
Services and Securities Act 2010 (Act 705).

23

DETAILS OF THE PLACEMENT


LISTING ON CATALIST
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as
agent on behalf of the Authority. The registration of this Offer Document by the SGX-ST, acting as
agent on behalf of the Authority does not imply that the SFA, the Catalist Rules or any other legal
or regulatory requirements, have been complied with. The SGX-ST has not, in any way,
considered the merits of our existing issued Shares, the Placement Shares, the Option Shares
and the Award Shares, as the case may be, being offered or in respect of which an invitation is
made, for investment.
The Issue Manager, Sponsor and Placement Agent has made an application to the SGX-ST for
permission to deal in, and for quotation of, all our Shares already issued, the Placement Shares
which are the subject of the Placement on Catalist, the Option Shares and the Award Shares.
Such permission will be granted when we have been admitted to Catalist. Acceptance of
applications will be conditional upon, inter alia, the issue of the Placement Shares, the Option
Shares and the Award Shares and permission being granted by the SGX-ST for the listing and
quotation of all our existing issued Shares, the Placement Shares, the Option Shares and the
Award Shares on Catalist. If the admission, listing and trading of our Shares already issued and
the Placement Shares do not proceed or the said permission is not granted for any reason, monies
paid in respect of any application accepted will be returned, without interest or any share of
revenue or other benefit arising therefrom and at the applicants own risk, and the applicant will
not have any claim against us and the Issue Manager, Sponsor and Placement Agent. No Shares
will be allotted on the basis of this Offer Document later than six (6) months after the date of
registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the Main Board of the SGX-ST. In particular, companies may list
on Catalist without a track record of profitability and there is no assurance that there will be a liquid
market in the shares or units of shares traded on Catalist. You should be aware of the risks of
investing in such companies and should make the decision to invest only after careful
consideration and, if appropriate, consultation with your professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer
Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of
this Offer Document, including the correctness of any of the statements or opinions made or
reports contained in this Offer Document. The SGX-ST does not normally review the application
for admission to Catalist but relies on the Issue Manager and Sponsor confirming that our
Company is suitable to be listed and complies with the Catalist Rules. Neither the Authority nor
the SGX-ST has in any way considered the merits of the Shares or units of Shares being offered
for investment.
Admission to Catalist is not to be taken as an indication of the merits of the Placement, our
Company, our subsidiaries, our existing issued Shares, the Placement Shares, the Option Shares
or the Award Shares.

24

DETAILS OF THE PLACEMENT


We are subject to the provisions of the SFA, SFR and the Catalist Rules regarding corporate
disclosure. In particular, pursuant to Section 241 of the SFA, if after the registration of this Offer
Document but before the close of the Placement, we become aware of:
(a)

a false or misleading statement or matter in the Offer Document;

(b)

an omission from the Offer Document of any information that should have been included in
it under Section 243 of the SFA; or

(c)

a new circumstance that has arisen since the Offer Document was lodged with the SGX-ST,
acting on behalf of the Authority, and would have been required by Section 243 of the SFA
to be included in the Offer Document if it had arisen before this Offer Document was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement offer document with the SGX-ST, acting on behalf of the Authority.
In the event that a supplementary or replacement offer document is lodged with the SGX-ST,
acting as agent on behalf of the Authority, the Placement shall be kept open for at least 14 days
after the lodgement of such supplementary or replacement offer document.
Where prior to the lodgement of the supplementary or replacement offer document, applications
have been made under this Offer Document to subscribe for the Placement Shares and:
(a)

where the Placement Shares have not been issued to the applicants, our Company shall:
(i)

within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants
notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or
replacement offer document, and provide the applicants with an option to withdraw their
applications and take all reasonable steps to make available within a reasonable period
the supplementary or replacement offer document to the applicants who have indicated
that they wish to obtain, or have arranged to receive, a copy of the supplementary or
replacement offer document;

(ii)

within seven (7) days from the date of lodgement of the supplementary or replacement
offer document, give the applicants the supplementary or replacement offer document,
as the case may be, and provide the applicants with an option to withdraw their
applications; or

(iii) treat the applications as withdrawn and cancelled, in which case the applications shall
be deemed to have been withdrawn and cancelled, and our Company shall within seven
(7) days from the date of lodgement of the supplementary or replacement offer
document, return all monies paid in respect of any application, without interest or any
share of revenue or other benefit arising therefrom and at the applicants own risk; or

25

DETAILS OF THE PLACEMENT


(b)

where the Placement Shares have been issued to the applicants, our Company shall:
(i)

within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants
notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or
replacement offer document, and provide the applicants with an option to return to our
Company the Placement Shares which they do not wish to retain title in, and take all
reasonable steps to make available within a reasonable period the supplementary or
replacement offer document to the applicants who have indicated that they wish to
obtain, or have arranged to receive, a copy of the supplementary or replacement offer
document; or

(ii)

within seven (7) days from the date of lodgement of the supplementary or replacement
offer document, give the applicants the supplementary or replacement offer document,
as the case may be, and provide the applicants with an option to return to our Company
the Placement Shares, which they do not wish to retain title in.

Any applicant who wishes to exercise his option under paragraph (a)(i) or (a)(ii) to withdraw his
application shall, within 14 days from the date of lodgement of the supplementary or replacement
offer document, notify our Company of this, whereupon our Company shall, within seven (7) days
from the receipt of such notification, return the application monies without interest or any share of
revenue or other benefit arising therefrom and at his own risk, and he will not have any claim
against our Company and the Issue Manager, Sponsor and Placement Agent.
An applicant who wishes to exercise his option under paragraph (b)(i) or (b)(ii) to return the
Placement Shares issued to him shall, within 14 days from the date of lodgement of the
supplementary or replacement offer document, notify our Company of this and return all
documents, if any, purporting to be evidence of title to those Placement Shares to our Company,
whereupon our Company shall, within seven (7) days from the receipt of such notification and
documents, subject to compliance with the Cayman Companies Law, purchase the applicants
Placement Shares at the Placement Price and pay to him all monies paid by him for those
Placement Shares, without interest or any share of revenue or other benefit arising therefrom and
at his own risk, and he will not have any claim against our Company or the Issue Manager,
Sponsor and Placement Agent.
Pursuant to Section 242 of the SFA, the Authority may, in certain circumstances issue a stop order
(the Stop Order) to our Company, directing that no Shares or no further Shares to which this
Offer Document relates, be allotted and issued. Such circumstances will include a situation where
this Offer Document (i) contains any statement or matter which, in the Authoritys opinion, is false
or misleading, (ii) omits any information that should have been included in it under the SFA, or (iii)
does not, in the Authoritys opinion, comply with the requirements of the SFA.
In the event that the Authority issues a Stop Order and applications to subscribe for the Placement
Shares have been made prior to the Stop Order, then:
(a)

where the Placement Shares have not been issued to the applicants, the applications for the
Placement Shares shall be deemed to have been withdrawn and cancelled and our Company
shall, within 14 days from the date of the Stop Order, pay to the applicants all monies the
applicants have paid on account of their applications for the Placement Shares; or

(b)

where the Placement Shares have been issued to the applicants, the SFA provides that the
issue of the Placement Shares shall be deemed to be void and our Company is required to,
26

DETAILS OF THE PLACEMENT


within 14 days from the date of the Stop Order, subject to compliance with the Cayman
Companies Law, purchase the applicants Placement Shares at the Placement Price and pay
to the applicants all monies paid by them for the Placement Shares.
Such monies paid in respect of an application will be returned to the applicants at their own risk,
without interest or any share of revenue or other benefit arising therefrom, and they will not have
any claims against our Company or the Issue Manager, Sponsor and Placement Agent.
If our Company is required by applicable Singapore laws to cancel issued Placement Shares and
repay application monies to applicants (including instances where a Stop Order under the SFA is
issued), subject to compliance with the Cayman Companies Law, our Company will purchase the
Placement Shares at the Placement Price.
This Offer Document has been seen and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this Offer
Document and confirm, having made all reasonable enquiries, that to the best of their knowledge
and belief, the facts stated and all expressions of opinion, intention and expectation in this Offer
Document are fair and accurate in all material respects as at the date of this Offer Document and
that there are no material facts the omission of which would make any statements in the Offer
Document misleading, and that this Offer Document constitutes full and true disclosure of all
material facts about the Placement and our Group.
Neither our Company and the Issue Manager, Sponsor and Placement Agent nor any other parties
involved in the Placement is making any representation to any person regarding the legality of an
investment by such person under any investment or other laws or regulations. No information in
this Offer Document should be considered as being business, legal or tax advice regarding an
investment in our Shares. Each prospective investor should consult his own professional or other
advisers for business, legal or tax advice regarding an investment in our Shares.
No person has been or is authorised to give any information or to make any representation not
contained in this Offer Document in connection with the Placement and, if given or made, such
information or representation must not be relied upon as having been authorised by us or the
Issue Manager, Sponsor and Placement Agent. Neither the delivery of this Offer Document and
the Application Forms nor any documents relating to the Placement, nor the Placement shall,
under any circumstances, constitute a continuing representation or create any suggestion or
implication that there has been no change in our affairs or in the statements of fact or information
contained in this Offer Document since the date of this Offer Document. Where such changes
occur and are material or are required to be disclosed by law, the SGX-ST and/or any other
regulatory or supervisory body or agency, we may make an announcement of the same to the
SGX-ST and/or the Authority and/or the public and if required, we may lodge a supplementary or
replacement offer document with the SGX-ST, acting as agent on behalf of the Authority and will
comply with the requirements of the SFA and/or any other requirements of the SGX-ST and/or
Authority. All applicants should take note of any such announcements and, upon the release of
such an announcement, shall be deemed to have notice of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a
promise or representation as to our future performance or policies. The Placement Shares are
offered for subscription solely on the basis of the information contained and representations made
in this Offer Document.

27

DETAILS OF THE PLACEMENT


This Offer Document has been prepared solely for the purpose of the Placement and may not be
relied upon by any other persons other than the applicants in connection with their application for
the Placement Shares or for any other purpose.
This Offer Document does not constitute an offer, solicitation or invitation of the Placement
Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or
unauthorised nor does it constitute an offer, solicitation or invitation to any person to
whom it is unlawful to make such offer, solicitation or invitation.
Copies of this Offer Document and the Application Forms may be obtained on request, subject to
availability during office hours, from:
PrimePartners Corporate Finance Pte. Ltd.
16 Collyer Quay
#10-00 Income at Raffles
Singapore 049318
A copy of this Offer Document is also available on the SGX-ST website http://www.sgx.com.
The Application List will open immediately upon the registration of the Offer Document by
the SGX-ST, acting as agent on behalf of the Authority and will remain open until 12.00 noon
on 28 April 2015 or for such further period or periods as our Directors may, in consultation
with the Issue Manager, Sponsor and Placement Agent, in their absolute discretion decide,
subject to any limitation under all applicable laws and regulations. In the event a
supplementary offer document or replacement offer document is lodged with the SGX-ST,
acting as agent on behalf of the Authority, the Application List will remain open for at least
14 days after the lodgement of the supplementary or replacement offer document.
Details of the procedures for application of the Placement Shares are set out in Appendix
K of this Offer Document.

28

INDICATIVE TIMETABLE FOR LISTING


An indicative timetable for the Placement and the trading of our Shares is set out below:
Indicative date/time

Event

28 April 2015 at 12.00 noon

Close of Application List

30 April 2015 at 9.00 a.m.

Commence trading on a ready basis

6 May 2015

Settlement date for all trades done on a ready basis

The above timetable is only indicative as it assumes that the date of closing of the Application List
will be on 28 April 2015, the date of admission of our Shares to Catalist will be 30 April 2015, the
SGX-STs shareholding spread requirement will be complied with and the Placement Shares will
be issued and fully paid-up prior to 30 April 2015.
The above timetable and procedures may be subject to such modification(s) as the SGX-ST may,
in its absolute discretion, decide, including the commencement of trading on a ready basis and
the commencement date of such trading.
In the event of any changes in the closure of the Application List or the time period during which
the Placement is open, we will publicly announce the same:
(i)

through a SGXNET announcement to be posted on the internet at the SGX-ST website


http://www.sgx.com; and

(ii)

in a local English language newspaper(s).

We will publicly announce the level of subscription and the results of the distribution of the
Placement Shares pursuant to the Placement, as soon as it is practicable after the close of the
Application List through channels in (i) and (ii) above.
You should consult the SGX-STs announcement on the ready trading date released on
the internet (at the SGX-ST website http://www.sgx.com) or the newspapers, or check with
your brokers on the date on which trading on a ready basis will commence.

29

PLAN OF DISTRIBUTION
THE PLACEMENT
The Placement is for 122,000,000 Placement Shares offered in Singapore and the Listing is
managed and sponsored by PPCF.
Prior to the Placement, there has been no public market for our Shares. The Placement Price is
determined by us in consultation with the Issue Manager, Sponsor and Placement Agent, taking
into account, inter alia, prevailing market conditions and the estimated market demand for the
Placement Shares, determined through a book-building process. The Placement Price is the same
for all Placement Shares and is payable in full on application.
Pursuant to the Management Agreement entered into between us and PPCF as set out in the
section entitled General and Statutory Information Management and Placement Arrangements
of this Offer Document, we have appointed PPCF and PPCF has agreed to manage and to be the
full Sponsor of the Listing. The Issue Manager and Sponsor will receive a management fee from
our Company for its services rendered in connection with the Listing.
PLACEMENT SHARES
The Placement Shares are made available to retail and institutional
may apply through their brokers or financial institutions by way
Application for the Placement Shares may only be made by way of
terms, conditions and procedures for application and acceptance
entitled Terms, Conditions and Procedures for Application and
Document.

investors in Singapore who


of the Application Forms.
the Application Forms. The
are set out in Appendix K
Acceptance of this Offer

Pursuant to the Placement Agreement, we have appointed PPCF as the Placement Agent and
PPCF has agreed to procure subscribers for the Placement Shares for a placement commission
of 3.5% of the aggregate Placement Price for each Placement Share, payable by our Company.
Subject to any applicable laws and regulations, our Company agrees that the Placement Agent
may, at their absolute discretion, appoint one or more sub-placement agents for the Placement
Shares.
Subscribers of the Placement Shares may be required to pay brokerage or selling commission of
up to 1.0% of the Placement Price (and the prevailing goods and services tax thereon, if
applicable) to the Placement Agent or any sub-placement agent that may be appointed by the
Placement Agent.
SUBSCRIPTION FOR PLACEMENT SHARES
None of our Executive Directors or Substantial Shareholders intends to subscribe for the
Placement Shares. As far as we are aware, none of our Independent Directors, the members of
our Companys management or employees intends to subscribe for more than 5.0% of the
Placement Shares in the Placement.
To the best of our knowledge and belief, as at the date of this Offer Document, we are not aware
of any person who intends to subscribe for more than 5.0% of the Placement Shares. However,
through a book-building process to assess market demand for our Shares, there may be person(s)
who may indicate an interest to subscribe for Shares amounting to more than 5.0% of the
Placement Shares. If such person(s) were to make an application for more than 5.0% of the
Placement Shares pursuant to the Placement and are subsequently allotted such number of

30

PLAN OF DISTRIBUTION
Shares, we will make the necessary announcements at an appropriate time. The final allotment of
Shares will be in accordance with the shareholding spread and distribution guidelines as set out
in Rule 406 of the Catalist Rules.
No Shares shall be issued and allotted on the basis of this Offer Document later than six (6)
months after the date of registration of this Offer Document.
INTERESTS OF ISSUE MANAGER, SPONSOR AND PLACEMENT AGENT
In the reasonable opinion of our Directors, save as disclosed below and in the section entitled
General and Statutory Information Management and Placement Arrangements of this Offer
Document, our Company does not have any material relationship with the Issue Manager,
Sponsor and Placement Agent, PPCF, in relation to the Placement:
(a)

PPCF is the Issue Manager, Sponsor and Placement Agent in relation to the Listing; and

(b)

PPCF will be the continuing sponsor of our Company for a period of at least three (3) years
from the date our Company is admitted and listed on Catalist.

31

OFFER DOCUMENT SUMMARY


The following summary is qualified in its entirety by, and is subject to, the more detailed
information (including the notes thereto) appearing elsewhere in this Offer Document. Terms
defined elsewhere in this Offer Document have the same meaning when used herein. You should
carefully consider all the information presented in this Offer Document, particularly the matters set
out in the section entitled Risk Factors of this Offer Document before deciding to invest in our
Shares.
OUR COMPANY
Our Company was incorporated as an exempted company limited by shares in Cayman Islands on
1 November 2013. On 10 July 2014, we changed our name to GCCP Resources Limited. Our
Company registration number is OI-282405.
Pursuant to the Restructuring Exercise as described in the section entitled Restructuring
Exercise of this Offer Document, our Company became the holding company of our Group.
OUR BUSINESS
Our Group is principally engaged in the business of quarrying and the processing of limestone by
crushing the quarried limestone into varying particle sizes as required by our customers. Our
business operations are principally located in Simpang Pulai, Ipoh, Perak, Malaysia.
A detailed discussion of our business and the products we provide is set out in the section entitled
General Information on our Company and our Group Business Overview of this Offer
Document.
SUMMARY OF OUR FINANCIAL INFORMATION
The following summary of financial information should be read in conjunction with the full text of
this Offer Document, including the Appendix A entitled Audited Consolidated Financial
Statements for the financial years ended 31 December 2011, 2012 and 2013, Appendix B entitled
Audited Interim Consolidated Financial Statements for the nine-month period ended
30 September 2014, Appendix C entitled Unaudited Pro Forma Financial Information for the
financial year ended 31 December 2013 and the nine-month period ended 30 September 2014
and the section entitled Managements Discussion and Analysis of Results of Operations and
Financial Position of this Offer Document.
Selected items from the consolidated statements of comprehensive income of our Group
(MYR)
Revenue
Gross profit

FY2011

FY2012

FY2013

9M2014

2,294,356

7,668,290

432,990

703,222

550,118

88,578

Loss before tax

(352,441)

(1,569,153)

(2,341,724)

(10,705,786)

Loss after tax

(389,689)

(1,574,589)

(2,341,724)

(10,705,786)

(0.04)

(0.1)

(0.2)

(1.0)

(0.03)

(0.1)

(0.2)

(0.9)

Pre-Placement LPS (cents) (1)


Post-Placement LPS (cents)

(2)

32

OFFER DOCUMENT SUMMARY


Selected items from the consolidated statements of financial position of our Group

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

Non-current assets

4,890,955

5,162,808

12,786,960

27,096,756

Current assets

5,140,403

2,983,114

1,053,095

22,117,583

10,031,358

8,145,922

13,840,055

49,214,339

79,590

352,347

1,435,796

20,722,402

Current liabilities

4,917,028

4,333,424

16,285,189

27,059,639

Total liabilities

4,996,618

4,685,771

17,720,985

47,782,041

NAV (3)

5,034,740

3,460,151

(3,880,930)

1,432,298

0.5

0.3

(0.4)

0.1

(MYR)

Total assets
Non-current liabilities

NAV per Share (cents) (4)(5)


Notes:
(1)

For comparative purposes, the pre-Placement LPS for the Period Under Review has been computed based on the
loss for the year attributable to owners of our Company and our pre-Placement share capital of 1,071,432,933
Shares.

(2)

For comparative purposes, the post-Placement LPS for the Period Under Review has been computed based on the
loss for the year attributable to owners of our Company and our post-Placement share capital of 1,193,432,933
Shares.

(3)

The pro forma NAV based on the unaudited pro forma financial information would be MYR49.9 million and MYR41.3
million as at 31 December 2013 and 30 September 2014 respectively.

(4)

The NAV per Share has been computed based on our pre-Placement share capital of 1,071,432,933 Shares.

(5)

The pro forma NAV per Share based on the unaudited pro forma financial information would be MYR4.7 cents and
MYR3.9 cents as at 31 December 2013 and 30 September 2014 respectively.

OUR COMPETITIVE STRENGTHS


We believe that our competitive strengths are as follows:
(a)

We have one of the biggest GCC-grade limestone reserves and resources in Malaysia;

(b)

Our limestone is of PCC-grade and GCC-grade;

(c)

We have an experienced and competent management team;

(d)

Our Gridland Quarry and Hyper Act Quarry are easily accessible and conveniently located;
and

(e)

We have strong working relationships with contractors and/or consultants.

33

OFFER DOCUMENT SUMMARY


A detailed discussion of our competitive strengths is set out in the section entitled General
Information on our Company and our Group Competitive Strengths of this Offer Document.
PROSPECTS
The following discussion about limestone quarryings prospects includes forward-looking
statements that involve risks and uncertainties. Actual results could differ from those that may be
projected or implied in these forward-looking statements. Please refer to the section entitled
Cautionary Note on Forward-Looking Statements of this Offer Document.
Our Directors believe that the prospects of the limestone industry are good due to the following
factors:
(a)

Limestone consumption is projected to increase;

(b)

Price outlook is positive; and

(c)

Growth of the limestone powder business in Malaysia.

OUR BUSINESS STRATEGIES AND FUTURE PLANS


Our business strategies and future plans for the continued growth of our business are as follows:
(a)

Development of the Hyper Act Quarry;

(b)

Further exploration activities to increase limestone resources and output;

(c)

Acquisition of additional limestone quarries;

(d)

Venture into the business of PCC production;

(e)

Establishing a broad customer base with strong customer relationships; and

(f)

Maintaining safe and environmentally friendly quarrying operations.

OUR CONTACT DETAILS


Our Companys registered office is located at Floor 4, Willow House, Cricket Square, PO Box
2804, Grand Cayman KY1-1112, Cayman Islands. Our principal place of business is located at No
56-2, Jalan PJU 5/21, The Strand Kota Damansara 47810 Petaling Jaya, Selangor, Malaysia. Our
Companys telephone number is +603 6142 6822 and our facsimile number is +603 6142 6826.
Our Companys website is http://www.gccpresources.com. Information contained in our website
does not constitute part of this Offer Document.

34

THE PLACEMENT
Placement Price

S$0.23 for each Placement Share, payable in full on


application.

Placement Size

122,000,000 Placement Shares.


The Placement Shares, upon issue and allotment, will rank
pari passu in all respects with the existing issued Shares.

The Placement

The Placement comprises a placement of 122,000,000


Placement Shares at the Placement Price, subject to and
on the terms and conditions of this Offer Document.

Purpose of the Placement

The purpose of the Placement is to secure the admission of


our Company to Catalist. Our Directors consider that the
listing and quotation of our Shares on Catalist will enhance
our public image locally and overseas and enable us to tap
the capital markets for the expansion of our business
operations.
The Placement will also provide the members of the public,
our management, employees and business associates who
have contributed to our success with an opportunity to
participate in the equity of our Company. In addition, the
proceeds of the issue of the Placement Shares will also
provide us with, inter alia, additional working capital to
finance our business expansion.

Listing Status

Prior to the Listing, there had been no public market for our
Shares. Our Shares will be quoted on Catalist, subject to
admission of our Company to Catalist and permission for
dealing in, and for quotation of, our Shares being granted
by the SGX-ST.

Risk Factors

Investing in our Shares involves risks which are described


in the section entitled Risk Factors of this Offer
Document.

Use of Proceeds

Please refer to the section entitled Use of Proceeds and


Listing Expenses of this Offer Document for more details.

35

EXCHANGE RATES
The following table sets out, for each of the financial years or periods indicated, the average and
closing exchange rates for MYR/S$. Where applicable, the exchange rates in the below table are
used for the translation of our Groups financial statements disclosed elsewhere in this Offer
Document.
MYR/S$1
Average
Closing
FY2011

2.4334

2.4441

FY2012

2.4713

2.4932

FY2013

2.5173

2.5963

9M2014

2.5775

2.5712

Source: OANDA Corporation

The table below sets forth the highest and lowest exchange rates between MYR and S$ for each
of the past six (6) months prior to the Latest Practicable Date and for the period from 1 February
2015 up to the Latest Practicable Date, and how much MYR can be bought with one S$.
MYR/S$1
Month

High

Low

August 2014

2.5799

2.5219

September 2014

2.5712

2.5297

October 2014

2.5798

2.5405

November 2014

2.5959

2.5596

December 2014

2.6803

2.6047

January 2015

2.7058

2.6413

1 February 2015 to the Latest Practicable Date

2.6846

2.6186

Source: OANDA Corporation

As at the Latest Practicable Date, the exchange rate between MYR and S$ was MYR2.6827 to
S$1.0000.
Notes:
(1)

The above exchange rates have been calculated with reference to exchange rates quoted from OANDA Corporation
and should not be construed as representation that the MYR amounts actually represent such amounts or could be
converted into the S$ at the rate indicated, or at any other rate, or at all.

(2)

OANDA Corporation has not consented to the inclusion of the above information in this Offer Document for the
purpose of Section 249 of the SFA and is therefore not liable for the relevant information under Sections 253 and
254 of the SFA. While our Directors and the Issue Manager, Sponsor and Placement Agent have taken reasonable
action to ensure that the information is extracted accurately and fairly, and has been included in this Offer Document
in its proper form and context, they have not independently verified the accuracy of the relevant information.

36

RISK FACTORS
You should evaluate carefully each of the following risk factors and all of the other information set
forth in this Offer Document before deciding to invest in our Shares. Some of the following
considerations relate principally to the industry in which we operate and our business in general.
Other considerations relate principally to general social, economic, political and regulatory
conditions, the securities market and ownership of our Shares, including possible future dilution
in the value of our Shares.
You should also note that certain of the statements set forth below constitute forward-looking
statements that involve risks and uncertainties. If any of the following risk factors and
uncertainties develops into actual events, our business, financial condition or results of operations
or cash flows could be materially and adversely affected. In such circumstances, the trading price
of our Shares could decline due to any of these risk factors, and you may lose all or part of your
investment. To the best of our Directors belief and knowledge, all the risk factors that are material
to investors in making an informed judgement have been set out below.
RISKS RELATING TO OUR BUSINESS OR THE INDUSTRY
We have a limited operating history and track record of carrying out our business activities.
Our past financial performance as an ad-hoc trader of iron ore and coal is also not an
indication of our future performance in the business of the quarrying and processing of
limestone.
Our Group was only established in 2009 and has a limited history upon which to assess its future
expected performance. Prior to the commencement of the quarrying of limestone from the
Gridland Quarry in January 2013, we derived all of our revenue from the ad-hoc trading of iron ore
and coal, from which we recorded revenues of MYR2.3 million and MYR7.7 million in FY2011 and
FY2012 respectively. Subsequently, our Group ceased the trading of iron ore and coal to focus on
our limestone quarrying and processing business. As such, our past financial performance
attributable to the ad-hoc trading of iron ore and coal bears no relation to, and provides no
indication as to our future financial performance in the business of quarrying and processing of
limestone.
As production only commenced in June 2014, we did not derive any revenue from the quarrying
and processing of limestone in FY2011, FY2012 and FY2013, and recorded revenue of MYR0.4
million from our Groups limestone quarrying activities in 9M2014. During the Period Under
Review, our Group recorded losses of MYR0.4 million, MYR1.6 million, MYR2.3 million and
MYR10.7 million in FY2011, FY2012, FY2013 and 9M2014 respectively. The failure of our Group
to generate profits from its limestone quarrying activities could have an adverse impact on the
development of and future production from our Groups concession areas, which in turn could
have an adverse effect on the financial condition and results of operations of our Group.
We have yet to establish a strong sales track record
We are in the initial stage of production of our crushed limestone and have been actively
marketing our crushed limestone and seeking to establish our domestic sales channels and
networks. As we are a new player in the market, the orders which we have received to date are
relatively modest in number and size. In the event we are unable to secure a stable or regular
source of sales or revenue through entry into and fulfilment of off-take agreements and/or are
unable to establish our domestic sales channels and networks, our revenue and cash flow will be
adversely affected. This will in turn have an adverse effect on our financial position or results,
prospects and future growth.

37

RISK FACTORS
We may not be able to discover new limestone reserves to maintain a commercially viable
quarrying operation
As indicated in the Independent Qualified Persons Report, our current Ore Reserves of the
Gridland Quarry and the Hyper Act Quarry amounted to approximately 26.3Mt. Based on the
planned production schedule for our quarrying operations, it is expected that the quarrying of
these Ore Reserves will be completed by us in 2021. While we are continuously conducting
exploration activities, there is no assurance that these exploration activities will result in the
discovery of new reserves as quarrying exploration is unpredictable in nature. The success of any
quarrying exploration depends on various factors including, among other things, (i) whether
limestone bodies can be located; (ii) whether the location of limestone bodies are economically
viable to the quarry; (iii) whether appropriate quarrying and processing facilities can be
economically constructed; and (iv) whether necessary governmental permits, licences and
consents can be obtained. In order to maintain limestone production beyond the life of the current
proved and probable reserves, we must identify further reserves capable of economic exploitation.
However, due to the unpredictable and speculative nature of the quarrying industry, there is no
assurance that any exploration program will result in the discovery of valuable resources.
In addition, even if a viable deposit is discovered, it may require substantial capital expenditure
and time from the initial phases of exploration until production commences during which the
capital cost and economic feasibility may change. There is also no assurance that reported
resources can be converted into reserves. Furthermore, actual results upon production may differ
from those anticipated at the time of the discovery. In addition, there are a number of uncertainties
inherent in the development and construction of any new quarry or an extension to an existing
quarry, including: (a) the availability and timing of necessary governmental approvals; (b) the
timing and cost necessary to construct quarrying and processing facilities; (c) the availability and
cost of labour, utilities, auxiliary materials and other supplies and the accessibility of
transportation and other infrastructure; and (d) the availability of funds to finance construction and
production activities.
In order to maintain limestone production beyond the life of our Ore Reserves, other than through
acquisitions, additional limestone reserves must be identified either to extend the life of the
existing quarries or justify the development of new projects. In the event that our exploration
programs do not result in the replacement of such limestone reserves or result in new
commercially viable quarrying operation beyond the Ore Reserves identified, this could have an
adverse impact on the future operations, results and growth of our Group.
Our business, revenues and profits are affected by the volatility of prices for limestone and
the global economy
Our financial results will be highly sensitive to changes in the prices of limestone. Limestone
prices may be affected by numerous factors, including supply and demand conditions,
expectations with respect to the rate of inflation, global and regional political and economic crises.
The demand for and supply of limestone affect limestone prices but not necessarily in the same
manner as demand and supply affect the prices of other commodities.

38

RISK FACTORS
Our business, financial condition and results are dependent upon the prices of, and demand for,
limestone, and also the global economy. Declines in limestone prices and any economic downturn
may adversely affect our business, revenue and profit. Our profitability is, and will largely be
determined by the difference between the prices received for crushed limestone that our Group
produces and the costs of developing, producing and selling the crushed limestone produced. Our
Group does not and will not have control over the factors affecting international prices for
limestone. These factors include:
(a)

political, economic, financial and social developments in limestone producing regions and in
the global economy;

(b)

the ability of the limestone producing nations to set and maintain limestone production levels
and prices;

(c)

other actions taken by major limestone producing or consuming countries;

(d)

global and regional supply and demand for limestone; and

(e)

domestic and foreign government regulations.

We expect that there may be volatility and uncertainty in international prices for limestone in the
future, and accordingly, our revenue and profit in any financial reporting period may be subject to
such volatility.
Our actual operating costs may differ significantly from estimates
The operating costs of our Group are based on certain estimates and assumptions with respect
to the method and timing of quarrying activities. By their nature, these estimates and assumptions
are subject to significant uncertainties and the actual costs may materially differ from these
estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and
the underlying assumptions will be realised in practice and in the event that our Group has
underestimated our operating costs, our financial condition and results of operations will be
adversely affected.
Our actual limestone processing capacity may differ significantly from managements
expectations of the processing capacity
The limestone processing capacity of our Group is based on certain estimates and assumptions,
which include, inter alia, the construction of the crusher plant facility in the Hyper Act Quarry on
the second quarter of FY2015, the processing capacity of each crusher plant, the time taken for
each limestone processing cycle. These estimates and assumptions are subject to significant
uncertainties and the actual limestone processing capacity may materially differ from
managements expectations and assumptions. Accordingly, no assurance can be given that the
expected limestone processing capacity and the underlying assumptions will be realised in
practice and in the event that our Group has overestimated our limestone processing capacity, we
will not be able to achieve the managements anticipated level of production and profitability.

39

RISK FACTORS
We may not be able to obtain, maintain or renew governmental permits necessary for
exploration, quarrying or production at our limestone quarries
In the ordinary course of business, quarrying companies are required to seek governmental
permits and approvals for exploration and quarrying, expansion and renewal of existing
operations or for the commencement of new operations. Obtaining or renewing the necessary
licences for the purpose of quarrying from the Department of Lands and Mines of Perak and the
Minerals and Geoscience Department of Perak can be a complex and time-consuming process
and often involves costly undertakings on our part. The duration and success of obtaining such
approvals are contingent upon many variables and are dependent on the decisions of the
Department of Lands and Mines of Perak and the Minerals and Geoscience Department of Perak.
Environmental protection and rehabilitation requirements, including the approvals of
environmental assessment reports, environmental management plans, rehabilitation plans and
compliance with the environmental monitoring requirements, may increase our costs and cause
delays depending on the nature of the activity to be permitted and the interpretation of applicable
requirements implemented by the permitting authority. In addition, the Minerals and Geoscience
Department of Perak and the Department of Lands and Mines of Perak may vary, modify or impose
further conditions upon renewal of the our existing licences and approvals or application of new
licences and approvals.
There can be no assurance that all necessary permits and approvals for our activities will be
obtained and, if obtained, that the costs involved will not exceed those estimated by us. It is
possible that the costs and delays associated with the compliance with such standards and
regulations could affect our ability to proceed with the development or operation of a quarry or
quarries. In the event that Gridland is unable to renew its licences and Hyper Act is not able to
procure and renew the relevant licences, our Group will not be able to carry out the activities of
quarrying and processing limestone and our operations, financial condition and future growth will
be adversely affected.
Since the commencement of our operations till the Latest Practicable Date, there has been no
incident of our Group being unable to obtain, maintain or renew governmental permits necessary
for exploration, quarrying or production at our limestone quarries.
We may need to obtain further financing for our existing business and future growth
We will have to fund the investment costs for capital expenditure and operating costs required for
our limestone quarrying project. We may also require additional funding for our growth plans. We
have estimated our funding requirements in order to implement our growth plans as set out in the
section entitled General Information on our Company and our Group Business Strategies and
Future Plans of this Offer Document.
In the event that the costs of implementing our growth plans should exceed our funding estimates
significantly or that we come across opportunities to grow through expansion plans which cannot
be predicted at this juncture, and our funds generated from our operations prove insufficient for
such purposes, we may need to raise additional funds to meet these funding requirements. We will
consider obtaining such funding from new issuance of equity, debt instruments and/or external
bank borrowings, as appropriate. In addition, we may need to obtain additional equity or debt
financing for other business opportunities that our Group deems favourable to our future growth
and prospects. Funding through the new issuance of equity will lead to a dilution in the interests
of the Shareholders. An increase in debt financing may be accompanied by conditions that restrict
our ability to pay dividends or require us to seek lenders consent for payment of dividends, or
restrict our freedom to operate our business by requiring lenders consent for certain corporate
actions.
40

RISK FACTORS
In addition, there is no assurance that we will be able to obtain additional financing on terms that
are favourable and acceptable. If we are not able to secure adequate financing, our business and
growth may be negatively affected.
Uncertainties inherent in the assumptions made in arriving at the valuation of our Mineral
Resource estimates may affect the value of our Shares
The valuation of our Mineral Resource estimates requires consideration of all relevant factors
affecting the operation of our business and our ability to generate future investment returns.
Please refer to Appendix G entitled Independent Valuation Report of this Offer Document for
further details.
The conclusion of the value is based on accepted valuation procedures and practices promulgated
in the VALMIN Code that rely substantially on the use of numerous assumptions and the
consideration of many uncertainties, not all of which can be easily quantified or ascertained.
Furthermore, while the assumptions and consideration of such matters are considered by us to be
reasonable, they are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the control of our Group.
Our future cash flow, results of operations and financial condition will be affected if we fail
to achieve our production estimates
Estimates of future production for the quarrying operations of our Group are subject to change and
based on various assumptions. The production estimates are based on, among other things,
resource and reserve estimates, estimated production rates, progress of quarry and plant
development, prices of products and costs of production. The production schedules for Gridland
Quarry and the Hyper Act Quarry are considered preliminary and several assumptions that are
made by our Group including the assumptions made for the production estimates, are as set out
in the Independent Qualified Persons Report.
Due to the above reasons, there is no assurance that we will be able to achieve its production
estimates and in such event, the future cash flow, results of operations and financial condition of
our Group could be adversely affected. Actual production may also vary from the estimates for a
variety of other reasons as set out below:
(a)

actual limestone quarried varying from estimates in grade, tonnage, and other
characteristics;

(b)

lower than estimated recovery rate;

(c)

pit wall failures or cave-ins;

(d)

industrial accidents;

(e)

equipment failures;

(f)

natural phenomena such as inclement weather conditions, floods, blizzards, droughts, rock
slides and earthquakes;

(g)

encountering of unusual or unexpected geological conditions;

41

RISK FACTORS
(h)

changes in power costs and potential power shortages;

(i)

shortages of principal supplies needed for operation, including explosives, fuels, equipment
parts and lubricating oil;

(j)

litigation; and

(k)

restrictions imposed by government authorities.

The occurrences of any of the above events could result in damage to mineral properties,
interruptions in production, injury or death to persons, damage to the properties of our Group or
others, monetary losses and legal liabilities. These factors may cause a mineral deposit that has
been quarried profitably in the past to become unprofitable. Quarrying operations frequently
experience unexpected problems during the initial development phase. Delays or interruptions
can often occur in the initial stage of production.
As our Group is in the preliminary stage of production, it is possible that actual cash operating
costs and economic returns will differ significantly from those that are estimated. There is no
assurance that we will be able to realise the estimated recovery rate at the Gridland Quarry, Hyper
Act Quarry or any other quarries operated by us in the future and in such event, the future growth
prospects and results of operations of our Group may be adversely affected.
We rely on our contractors and/or consultants for certain services
We work closely with our contractors and/or consultants to carry out our business operations.
Such contractors and/or consultants have offered their services and provided their support to our
Group at prices which are more favourable than those offered by other contractors and/or
consultants. The quarrying operations of our Group, in particular Hyper Act, rely on the services
provided by the contractors and/or consultants and our ability to maintain our relationships with
the contractors and/or consultants whom our Group does not enter into any long term contract
with.
Any failure by our Group to retain the services of the contractors and/or consultants on the current
favourable terms, or obtain replacements on favourable terms or at all may affect our Groups
business and results of operations. Details of the contractors and/or consultants of our Group are
set out in the section entitled General Information on our Company and our Group Key
Contractors and Consultants of this Offer Document.
In addition, as we may outsource substantially our quarrying activities pursuant to service
contracts with third party contractors, our operations will be affected by the performance of such
third party contractors. Although we monitor the work of such third party contractors to ensure that
the work is carried out on time, on budget and to specification, we may not be able to control the
quality, safety and environmental standards of the work done by the third party contractors to the
same extent as when the work is performed by our own employees. Any failure by the third party
contractors to meet our Groups quality, safety and environmental standards could affect our
Groups compliance with government rules and regulations relating to exploration, quarrying and
workers safety and may also result in liabilities to third parties, which in turn could have a material
adverse effect on our Groups business, reputation, financial condition and results of operations.

42

RISK FACTORS
Our business is exposed to uncertainties in relation to its expansion plans
As described in the section entitled General Information on our Company and our Group
Business Strategies and Future Plans of this Offer Document, the growth strategies of our Group
include the execution of our development plan for the Hyper Act Quarry and engaging in further
exploration activities to increase limestone resources and output. There is no guarantee that the
implementation and execution of such business strategies and future plans will be successful as
this involves a number of risks and uncertainties and it is dependent on approvals from the
governmental and regulatory authorities and requires substantial capital expenditure, financial
and management resources. In the event that we are not able to achieve a sufficient level of
revenue or manage our costs effectively or the commencement of these planned expansions is
delayed or aborted, our future financial performance and position will be adversely affected.
Our operations are exposed to regulations and risks in relation to production safety and the
occurrence of accidents
As a limestone quarrying company, we are subject to extensive laws, rules and regulations
imposed by the Malaysian government regarding occupational safety and health. In particular, our
quarrying operations involve the handling and storage of chemicals and other dangerous articles
and the usage of various heavy machineries. We may experience in the future increased costs of
production arising from compliance with occupational safety and health laws and regulations.
There can be no assurance that more stringent laws, regulations or policies regarding
occupational safety and health will not be implemented or that the existing laws, regulations and
policies will not be more stringently enforced. We may not be able to comply with all existing or
future laws, regulations and policies in relation to occupational safety and health issues
economically or at all. Should we fail to comply with any occupational safety and health laws or
regulations, we would be required to rectify the occupational safety and health problems within a
period prescribed under the laws and regulations or as prescribed by the regulatory authorities.
Failure to rectify any problem could lead to suspension of our operations and offences committed
against the laws and regulations could lead to penalties involving mandatory fines and/or
imprisonment. In addition, there can be no assurance that accidents arising from the mishandling
of dangerous articles will not occur in the future. Should we fail to comply with any relevant laws,
regulations or policies or should any accident occur as a result of the mishandling of dangerous
articles, our business, reputation, financial condition and results of operations may be adversely
affected, and we may be subject to penalties, civil liabilities or criminal liabilities.
We and/or our third party contractors may encounter accidents, technical difficulties, mechanical
failure or breakdown in the exploration, quarrying and production processes, as well as possible
localised mud-slides, instability of the slopes, and subsidence of the working areas due to natural
disasters. The occurrence of accidents may disrupt or result in a suspension of our operations,
increase production costs, result in liabilities incurred by our Group and harm our Groups
reputation. Such incidents may also result in a breach of the conditions of the quarrying rights, or
any other consents, approvals or authorisations, which may result in fines and penalties or even
possible revocation of our quarrying rights. In any of such events, our business and financial
performance will be adversely affected. In the event of accidents which are not covered by the
insurance or workmens compensation policies taken by our Group, or if claims arising from such
accidents are in excess of our insurance coverage, and/or any of our insurance claims are
contested by the insurance companies, we will be required to pay such compensation. Under such
circumstances, the business and financial performance of our Group will be adversely affected.

43

RISK FACTORS
Since the commencement of our operations till the Latest Practicable Date, no accidents,
technical difficulties, mechanical failure or breakdown in the exploration, quarrying and production
processes, as well as possible localised mud-slides, instability of the slopes, and subsidence of
the working areas due to natural disasters have occurred at the quarrying site operated by our
Group.
Our operations are exposed to risks in relation to environmental protection and
rehabilitation
Operations of limestone quarries are subject to environmental risks and hazards. Our production
and operations are subject to laws, rules and regulations imposed by the Malaysian government
regarding environmental matters, such as prevention of pollution of the air, noise and earth, the
treatment and discharge of hazardous wastes and materials and environmental rehabilitation.
Environmental hazards may occur in connection with our operations as a result of human
negligence, force majeure or otherwise. The occurrence of any environmental hazards may delay
production, increase production costs, cause personal injuries or property damage, result in
liabilities incurred by our Group and/or damage our Groups reputation. Such incidents may also
result in a breach of the conditions of our Groups environmental approvals and/or approvals to
conduct quarry operations or other consents, approvals or authorisations, which may result in
fines, penalties, or even possible revocation of the quarrying rights. In any of such events, our
business and financial performance will be adversely affected.
In the future, we may experience increased costs of production arising from compliance with
environmental laws and regulations. Moreover, the development of the Malaysian economy and
the improvements in the living standards of the population may lead to a heightened awareness
of environmental protection. As a result, it is possible that more stringent environmental laws,
regulations and policies may be implemented in the future, or the existing environmental laws,
regulations and policies may be more strictly enforced. We may not always be able to comply with
existing or future laws, regulations or policies in relation to environmental protection and
rehabilitation economically or at all. Should we fail to comply with any such existing or future laws,
regulations or policies, we may be subject to penalties and liabilities under Malaysian laws and
regulations, including but not limited to warnings, fines, prosecution, suspension of production and
closure of the facility that fails to comply with the relevant environmental standards. In addition,
we may also be subject to actions by environment protection groups or other interested persons
who object to the actual or perceived environmental impact of our quarrying operation or other
actual or perceived condition at our mines. These actions may delay or halt production or may
create negative publicity related to our mines. Accordingly, our operations and financial condition
will be adversely affected.
Our quarrying operations have a finite life and eventual closure of these operations will
entail costs and risks regarding ongoing monitoring, rehabilitation and compliance with
environmental standards
Our quarrying operations have a finite life and will eventually be closed. The key costs and risks
for quarry closures are as follow:
(a)

long-term management of permanent engineered structures and acid rock drainage;

(b)

achievement of environmental closure standards;

(c)

orderly retrenchment of employees and third party contractors; and


44

RISK FACTORS
(d)

relinquishment of the site with associated permanent structures and community development
infrastructure and programs to new owners.

The successful completion of these tasks is dependent on our ability to successfully implement
negotiated agreements with the relevant government, community and employees. The
consequences of a difficult closure range from increased closure costs and handover delays to
ongoing environmental rehabilitation costs and damage to the reputation of our Group if desired
outcomes cannot be achieved, which could materially and adversely affect our business and
results of operations.
We may not be able to maintain the provision of adequate and uninterrupted supplies of
electricity, water, diesel, auxiliary materials, equipment and spare parts
Electricity and water are the main utilities used in our quarrying activities. There can be no
assurance that supplies of electricity, water, diesel, auxiliary materials, equipment or spare parts
will not be interrupted or that their prices will not increase in the future. In the event that our
existing suppliers cease to supply us with electricity, water, diesel, auxiliary materials, equipment
or spare parts at existing or lower prices or at all, and we are not able to procure alternative
sources of such supply, our financial condition and results of operations will be adversely affected.
In addition, although we currently generate electricity in-house, an interruption in electricity supply
due to a breakdown of our generators or for any other reasons will materially and adversely affect
our Groups production by disrupting operations such as water pumping.
Since the commencement of our operations till the Latest Practicable Date, there has been no
disruption of supply of electricity, water, diesel, auxiliary materials, equipment or spare parts to our
Group.
Severe weather conditions, natural disasters and other events beyond our control could
materially and adversely affect our business and results of operations
Severe weather conditions such as heavy rainfall and natural disasters such as landslides,
earthquakes, fire hazards, floods and other events beyond our control may require us to evacuate
personnel or curtail operations and may result in damage to our quarries, equipment or facilities,
which could result in the temporary suspension of operations or a reduction in our productivity.
During periods of curtailed activity due to adverse weather conditions, natural disasters or other
events beyond our control, we may continue to incur operating expenses while production has
slowed down or ceased altogether. Any damages to our projects or delays in our operations
caused by severe weather conditions, natural disasters or other events beyond our control could
materially and adversely affect our business and results of operations.
We are dependent on certain key personnel for our continued success
Our success to date is attributable to the contributions and expertise of the executive officers of
our Group who have built the business of our Group under the guidance and leadership of our
Executive Chairman and CEO, Alex Loo, and our Executive Director and COO, Pang Kim Chon.
Our Groups continued success and growth will depend, to a large extent, on our ability to retain
the services of the Executive Directors and the Executive Officers. The loss of services of our
Executive Chairman and CEO, our Executive Director and CEO or any of the Executive Officers
without suitable and timely replacement, or the inability to attract and retain other qualified
personnel would have an adverse impact on our operations and financial performance.

45

RISK FACTORS
Our operations are dependent on our ability to retain and recruit skilled personnel and
professional staff
The business of our Group requires skilled personnel and professional staff in the areas of
quarrying and production of limestone, operations, engineering, finance and accounting.
Competition for such skilled personnel and professional staff is intense and comes primarily from
similar businesses active in the industry, many of which possess greater resources. Limitations on
our ability to hire, train and retain the required number of skilled personnel and professional staff
would reduce our capacity to undertake further projects and may have an adverse impact on the
operations, results and growth of our Group.
We may be exposed to risk of loss and potential liabilities that may not be covered or
adequately covered by insurance
Certain liabilities and risks in respect of the business, operations and assets of our Group may not
be covered or adequately covered by insurance for a variety of reasons such as acts of God, theft
and robbery. In the event that we are not insured or are inadequately insured against losses,
damage or liabilities, the financial performance our Group will be adversely affected. Please refer
to the section entitled General Information on our Company and our Group Insurance of this
Offer Document for further details on our existing insurance coverage.
We are exposed to the creditworthiness of our customers
Our performance is dependent on the creditworthiness of our customers. Material default in
payment by our major customers may adversely affect our financial performance and cash flow.
We are unable to assure that there will be no risk of default by our customers in the future, or that
we will not experience cash flow problems as a result of such default. If these events occur, our
business may be adversely affected.
Since the commencement of our operations till the Latest Practicable Date, there has been no
incident of default by our customers in their payments.
We face intense competition from our competitors
We face competition from both domestic and foreign competitors who are also engaged in similar
businesses. Certain competitors may have access to more resources, be better-positioned to
pursue new expansion and development opportunities and/or possess competitive advantages,
including control over or access to low-cost raw materials, access to low-cost credit, geographical
proximity to suppliers or customers and relationships with global market participants. These
competitors may also compete with us for skilled labour required for our limestone quarrying
operations.
In the event that we may not be able to compete effectively against our competitors, both the sales
and the pricing of our products may be adversely affected, which in turn may have an adverse
effect on our business and financial performance.

46

RISK FACTORS
We will record further losses from fair value adjustments to the derivative financial
instruments relating to the Convertible Loan Agreements and we have negative working
capital and negative cash flow from operating activities for the Period Under Review
In January, April & August 2014, our Company had entered into the Convertible Loan Agreements
with the Pre-Placement Investors for an aggregate amount of S$18.8 million (the Convertible
Loan). Subsequently on 2 May 2014, GPF (Delta) had converted a portion of the Convertible
Loan amounting to S$4.0 million into shares. As at 30 September 2014, our Group recorded
MYR29.5 million in derivative financial instruments which represent the initial recognition of the
derivative component of the Convertible Loan that relates to the Pre-Placement Investors right to
convert the Convertible Loan into Shares. No fair value adjustments were made as at 30
September 2014, as the fair value of the derivative financial instruments approximates its values
at initial recognition. In compliance with International Financial Reporting Standards, subsequent
to the initial recognition, the derivative financial instruments are to be measured at fair value with
changes in fair value recorded through profit or loss which are non-cash in nature. Pursuant to our
Companys Listing on the SGX-ST, it is likely that the changes in fair value will be recorded as a
loss and as a result, our Group will record further losses due to the fair value adjustments on the
derivative financial instruments.
Please refer to the section entitled Capitalisation and Indebtedness of this Offer Document for
further details on the Convertible Loan, Appendix B entitled Audited Interim Consolidated
Financial Statements for the Nine-month Period Ended 30 September 2014 of this Offer
Document for further details in respect of the fair value of the derivative financial instruments and
Appendix C entitled Unaudited pro forma Financial Information for the Financial Year Ended 31
December 2013 and the Nine-month Period ended 30 September 2014 of this Offer Document for
details on the pro forma loss on conversion of the Convertible Loan.
Our Company had negative working capital as at the end of the Period Under Review. Our
negative working capital was due mainly to the use of short term financing to fund our capital
expenditures. As such, we are subject to the risk that our current assets will be insufficient to meet
our obligations under the current liabilities. In such event, additional capital, debt or other forms
of financing may be required for our working capital. If any of the aforesaid events occur and we
do not have sufficient internal resources and are unable for any reason, to raise additional capital,
debt or other financing for our working capital requirements, our business, operating results,
liquidity and financial position will be adversely affected.
Furthermore, our Company had negative cash flow from operations as at the end of the Period
Under Review. Our negative cash flow from operations was due mainly to loss before tax recorded
as we had only commenced production in June 2014 and revenue generated was not large
enough to cover our expenses.
Please refer to the section entitled Managements Discussion and Analysis of Results of
Operations and Financial Position of this Offer Document for further details.
Terrorist attacks, armed conflicts, and/or outbreak of Severe Acute Respiratory Syndrome
(SARS), avian influenza, H1N1, H7N9, Middle East Respiratory Syndrome Coronavirus
(MERS-CoV), Ebola virus disease (EVD) and/or other communicable diseases, may
affect the markets in which we operate and our business and operations
The effects of terrorist attacks or armed conflicts may materially and adversely affect our business
or those of our suppliers or customers. Such terrorist attacks or armed conflicts could have an
adverse effect on our limestone business. Political and economic instability in some regions of the
47

RISK FACTORS
world may also result from such terrorist attacks and armed conflicts, and could negatively impact
our business. The consequences of any of these terrorist attacks or armed conflicts are
unpredictable, and we are not able to foresee such events that could have an adverse impact on
our limestone business. An outbreak of contagious disease may have an adverse effect on the
economies of certain Asian countries and may materially and adversely affect our limestone
business.
For example, in the first half of 2003, certain countries in Asia experienced an outbreak of SARS,
a highly contagious form of atypical pneumonia. In 2009, there was a global outbreak of a new
strain of influenza A virus sub-type H1N1. In the last few years, large parts of Asia experienced
unprecedented outbreaks of avian flu. In 2013, a deadly strain of influenza A virus sub-type H7N9
was reported in the Peoples Republic of China. These infectious diseases seriously interrupted
economic activities and general demand for goods plummeted in the affected regions.
In similar vein, a new strand of virus called MERS-CoV, which also causes acute respiratory
illness, was discovered in 2012. In April 2014, the Ministry of Health in Malaysia reported its first
confirmed case of MERS-CoV. Nonetheless, as the global MERS-CoV situation is still unfolding,
it is uncertain the full impact the infection can have on the economies of Asian countries.
There can be no assurance that an outbreak of SARS, avian flu, H1N1, H7N9, MERS-CoV, EVD
or other contagious diseases, or the measures taken by the governments of affected countries
against such potential outbreaks, will not seriously interrupt our operations or those of our
contractors, suppliers and/or customers. This, in turn, may have a material adverse effect on our
business. The perception that there may be a recurrence of an outbreak of SARS, avian flu, H1N1,
H7N9, MERS-CoV, EVD or other contagious diseases may also have an adverse effect on the
economic conditions of countries in Asia and accordingly, our business.
Our business may be adversely affected by recent developments in the global markets
Since the global economic downturn in late 2008, there have been negative developments in the
global financial markets including the downgrading by major international credit rating agencies of
sovereign debts issued by some of the European Union member countries and the difficult
conditions in the global credit and capital markets. These challenging market conditions have
given rise to reduced liquidity, greater volatility, widening of credit spreads, lack of price
transparency in credit markets, a reduction in available financing, government intervention and
lack of market confidence. These factors, combined with declining business and consumer
confidence, have resulted in global economic uncertainties.
It is difficult to predict how long these developments will last. Further, there can be no assurance
that measures implemented by governments around the world to stabilise the credit and capital
markets will improve market confidence and the overall credit environment and economy. A global
economic downturn could adversely affect our ability to obtain short-term and long-term financing.
It could also result in an increase in the cost of our bank borrowings and reduction in the amount
of banking facilities currently available to us. The inability of our Group to access capital efficiently,
on time, or at all, as a result of possible economic difficulties, may have an adverse effect on our
business. Any deterioration in the global economy could in turn adversely affect the health of the
local economy and impact our business.
In the event that the global economic conditions do not improve or any recovery is halted or
reversed, our business may be adversely affected.

48

RISK FACTORS
RISKS RELATING TO OUR OPERATIONS IN MALAYSIA
We are subject to the Malaysian regulatory regime for the limestone industry
Our operations are subject to a range of Malaysian laws, regulations, policies, guidelines,
standards and requirements in relation to, among other things, quarry development, production,
taxation, labour standards, occupational health and safety, waste treatment and environmental
protection and operation management.
For example, Gridlands existing quarrying right over the lands known as PN 258390, Lot 302284,
Sungai Raya, Kinta and PN 380610, Lot 332220 Sungai Raya, Kinta, Perak is evidenced by a
removal of mineral licence in its favour issued by the Director of Lands and Mines of Perak
pursuant to the Mineral (Perak) Enactment 2003. Such licence shall be valid only till 31 December
2015. In the event that Gridland is unable to renew its licences and Hyper Act is not able to procure
and renew the relevant licences, our Group will not be able to carry out the activities of quarrying
and processing limestone, and our operations, financial condition and future growth will be
adversely affected.
In addition, any changes to the laws, regulations, policies, standards and requirements
concerning any of the aforesaid matters (including any change to the policy regarding the grant
of the quarry lease or quarrying rights in Malaysia that is unfavourable to our Group) or to the
interpretation or enforcement thereof may increase our operating costs and/or may affect our
Group adversely.
There is no assurance that we will be able to comply with any new Malaysian laws, regulations,
policies, standards and requirements applicable to the limestone industry or any changes in
existing laws, regulations, policies, standards and requirements economically or at all. Further,
any such new Malaysian laws, regulations, policies, standards and requirements or any such
change in existing laws, regulations, policies, standards and requirements may also constrain our
future expansion plans and adversely affect the profitability of our Group.
Our business is subject to political, economic, regulatory and social conditions in Malaysia
We are currently operating our business in Malaysia. Our business operations are therefore
dependent on the political, economic, regulatory and social conditions in Malaysia. Any changes
in the policies implemented by the government of Malaysia which may result in currency and
interest rate fluctuations, inflation, capital restrictions, price and wage controls, expropriation and
changes in taxes and duties detrimental to our business may materially affect our operations,
financial performance and future growth. In particular, in the event of expropriation, we may not
be able to continue our business as we would not be able to enforce any quarrying or exploration
rights we had obtained or receive any compensation for the loss of such quarrying or exploration
rights. Unfavourable changes in the social, economic and political conditions of Malaysia or in the
Malaysian government policies in the future may have a negative impact on the operations and
business in Malaysia, which will in turn adversely affect the overall financial performance of our
Group. In addition, Malaysia foreign exchange control may limit our ability to utilise our cash
effectively and affect our ability to receive dividends and other payments from our Malaysian
subsidiaries.
We are subject to the foreign exchange legislation and regulations in Malaysia
Local and foreign investors are subject to foreign exchange administration rules in Malaysia.
Pursuant to the Financial Services Act 2013 and Islamic Financial Services Act 2013, Bank
Negara Malaysia, which is the central bank of Malaysia (Bank Negara) has issued notices
49

RISK FACTORS
(Notices) which embody its general permissions and directions in respect of remittance of funds
to and from Malaysia. The Notices set out the circumstances in which the specific approval of
Bank Negara need not be obtained by residents and non-residents to remit funds to and from
Malaysia. These Notices are reviewed regularly by Bank Negara in line with the changing
environment. As at the Latest Practicable Date, foreign investors are free to repatriate divestment
proceeds, profits, dividends or any income arising from investments in Malaysia. Any future
restriction by the Notices on repatriation of funds may limit our ability on dividends distribution to
the Shareholders from business operations in Malaysia.
There is no assurance that the relevant rules and regulations on foreign exchange control in
Malaysia will not change. In the event that there is any adverse change in the foreign exchange
rules and regulations relating to the borrowing or repatriation of foreign currency, our business and
results of operation may be adversely affected.
RISKS RELATING TO AN INVESTMENT IN OUR SHARES
Investment in shares quoted on Catalist involves a higher degree of risk and can be less
liquid than shares quoted on the Main Board of the SGX-ST
An application has been made for our Shares to be listed for quotation on Catalist, a listing
platform designed primarily for fast-growing and emerging or smaller companies to which a higher
investment risk tends to be attached as compared to larger or more established companies listed
on the Main Board of the SGX-ST. An investment in shares quoted on Catalist may carry a higher
risk than an investment in shares quoted on the Main Board of the SGX-ST. Catalist was newly
formed in December 2007 and the future success and liquidity in the market of our Shares cannot
be guaranteed.
There is no prior market for our Shares and the Placement may not result in an active or
liquid market for our Shares
Prior to this Placement, there has been no public market for our Shares. Although we have made
an application to the SGX-ST to list our Shares on Catalist, there is no assurance that an active
trading market for our Shares will develop or if developed, be sustained after the Placement.
There is also no assurance that the market price for our Shares will not decline below the
Placement Price. The market price of our Shares could be subject to significant fluctuations as
investors sentiments may be affected by external factors such as the outbreak of war, escalation
of hostilities or outbreak of infectious diseases (whether in Singapore or elsewhere). Other factors
including the liquidity of our Shares in the market, differences between our actual financial or
operating results and those expected by investors and analysts, the general market conditions
and broad market fluctuations may also result in significant fluctuations in the market price of our
Shares.
Our Share price may be volatile in future which could result in substantial losses for
investors subscribing for Shares pursuant to the Placement
The trading price of our Shares may fluctuate significantly and rapidly after the Placement as a
result of, among others, the following factors, some of which are beyond our control:
(a)

variations of our operating results;

(b)

changes in securities analysts recommendations, perceptions or estimates of our financial


performance;

(c)

announcements made by us of significant acquisitions, strategic alliances or joint ventures;


50

RISK FACTORS
(d)

additions or departures of key personnel;

(e)

fluctuations in stock market prices and volume;

(f)

involvement in litigation; and

(g)

changes in general economic and stock market conditions.

Future sale, availability or issuance of Shares could adversely affect our Share price
Any future sale, availability or issuance of a large number of our Shares can have a downward
pressure on our Share price. The sale of a significant amount of Shares in the public market after
the Placement, or the perception that such sales may occur, could materially and adversely affect
the market price of our Shares. These factors also affect our ability to sell additional equity
securities. Except as otherwise described in the section entitled Share Capital Moratorium of
this Offer Document, there will be no restriction on the ability of our existing Shareholders to sell
their Shares either on Catalist or otherwise.
In addition, our Share price may be under downward pressure if certain Shareholders sell their
Shares upon the expiry of their moratorium periods.
Negative publicity which includes those relating to any of our Directors, Executive Officers
or Substantial Shareholders may adversely affect our Share price
Negative publicity or announcements relating to our Group and any of our Directors, Executive
Officers or Substantial Shareholders may adversely affect the market perception or the Share
performance of our Share, whether or not it is justified. Examples of these include unsuccessful
attempts in joint ventures, acquisitions or takeovers, or involvement in insolvency proceedings.
As a significant portion of our operations and assets are located outside Singapore,
investors may find it difficult to enforce a Singapore judgment against our Group or
management
A significant portion of our Groups operations and assets are located outside Singapore.
Accordingly, Shareholders may encounter difficulties in effecting service of process in Singapore
if they wish to make a claim against our Group, or the enforcement of a Singapore judgement
against the assets of our Group.
Investors in our Shares would face immediate and substantial dilution in the NAV per Share
and may experience future dilution
Our Placement Price of S$0.23 is higher than our Groups pro forma NAV per Share of 3.3 cents
based on the post-Placement issued share capital. If we were liquidated immediately following this
Placement on the basis of our NAV, each investor subscribing to this Placement would receive
less than the price they paid for their Shares. Please refer to the section entitled Dilution of this
Offer Document for details of the immediate dilution of our Shares incurred by new investors.
In addition, we may issue share awards under the GCCP Performance Share Plan and share
options under the GCCP Employee Share Option Scheme. To the extent that such share awards
and/or share options are ultimately granted and Award Shares or Option Shares are issued
pursuant to such grant, there may be further dilution to investors participating in the Placement.

51

RISK FACTORS
Further details of the GCCP Performance Share Plan and the GCCP Employee Share Option
Scheme are described in the section entitled GCCP Performance Share Plan and GCCP
Employee Share Option Scheme of this Offer Document.
We may not be able to pay dividends in the future
Our ability to declare dividends to our Shareholders will depend on our future financial
performance and distributable reserves of our Company. Our Companys future financial
performance and distributable reserves depend on several factors, such as the successful
implementation of our strategies, the general economic conditions, demand for and selling prices
of our products and services. Many of these factors may be beyond our control. As such, there is
no assurance that our Company will be able to pay dividends to our Shareholders after the
completion of the Placement. In the event that any company in our Group enters into any loan
agreements in the future, covenants therein may also limit when and how much dividends it can
declare and pay.
We are a Cayman Islands incorporated company and the rights and protection accorded to
our shareholders may not be the same as those of other jurisdictions
Our Company is incorporated in the Cayman Islands as an exempted company and is subject to
the Cayman Companies Law. We will also have to comply with the Catalist Rules upon our
admission to the Catalist. The Companies Act may provide shareholders of Singapore
incorporated companies certain rights and protection of which there may be no corresponding
rights or protections under the Cayman Companies Law. As such, if you invest in our Shares, you
may or may not be accorded the same level of shareholder rights and protection that a
shareholder of a Singapore incorporated company would be accorded under the Companies Act.
The rights of our shareholders and the responsibilities of our management and the Board of
Directors under Cayman Islands law may be different from those applicable to a company
incorporated in another jurisdiction, including Singapore and Malaysia. Our corporate affairs are
governed by our Articles, the Cayman Companies Law and the common law of the Cayman
Islands. The laws of the Cayman Islands relating to the protection of the interests of minority
shareholders are to a large extent governed by the common law of the Cayman Islands. The
common law of the Cayman Islands is derived in part from comparatively limited judicial precedent
in the Cayman Islands as well as that from English common law, which has persuasive, but not
binding, authority on a court in the Cayman Islands. The laws of the Cayman Islands relating to
the protection of the interests of minority shareholders may differ in some respects from those
established under statutes and under judicial precedents in Singapore or other jurisdictions. Our
public shareholders may have more difficulty in protecting their interests in connection with
actions taken by our management, members of our Board of Directors or our principal
shareholders than they would as shareholders of a company incorporated in another jurisdiction.
Please refer to Appendix D entitled Selected Extracts of our Articles of Association of this Offer
Document for more details.

52

PLACEMENT STATISTICS
S$0.23

Placement Price
Net Asset Value per Share (1)
Pro forma NAV per Share based on the unaudited pro forma consolidated
statement of financial position of our Group as at 30 September 2014:
(a)

before adjusting for the estimated net proceeds from the issue of
Placement Shares and based on the pre-Placement share capital of
1,071,432,933 Shares

1.5 cents

(b)

after adjusting for the estimated net proceeds from the issue of
Placement Shares and based on the post-Placement share capital of
1,193,432,933 Shares

3.3 cents

Premium of Placement Price over the pro forma NAV per Share based on
the unaudited pro forma consolidated statement of financial position as at
30 September 2014:
(a)

before adjusting for the estimated net proceeds from the issue of
Placement Shares and based on the pre-Placement share capital of
1,071,432,933 Shares

1,433.3%

(b)

after adjusting for the estimated net proceeds from the issue of
Placement Shares and based on the post-Placement share capital of
1,193,432,933 Shares

597.0%

Loss per Share (2)


Historical net loss per Share of our Group for FY2013 based on our
Companys pre-Placement share capital of 1,071,432,933 Shares

0.1 cents

Historical net loss per Share of our Group for FY2013 based on our
Companys pre-Placement share capital of 1,071,432,933 Shares,
assuming that the Service Agreements had been in place from the
beginning of FY2013

0.1 cents

Price Earnings Ratio (2)


Historical PER based on the Placement Price and the historical net EPS of
our Group for FY2013

Not applicable

Historical PER based on the Placement Price and the historical net EPS of
our Group for FY2013, assuming that the Service Agreements had been in
place from the beginning of FY2013

Not applicable

53

PLACEMENT STATISTICS
Net Operating Cash Flow (2)(3)
Historical net operating cash flow per Share of our Group for FY2013 based
on the pre-Placement share capital of 1,071,432,933 Shares

0.3 cents

Historical net operating cash flow per Share of our Group for FY2013 based
on the pre-Placement share capital of 1,071,432,933 Shares, assuming
that the Service Agreements had been in place from the beginning of
FY2013

0.2 cents

Price to Net Operating Cash Flow Ratio (2)(3)


Ratio of Placement Price to historical net operating cash flow per Share of
our Group for FY2013 based on the pre-Placement share capital of
1,071,432,933 Shares

76.7 times

Ratio of Placement Price to historical net operating cash flow per Share of
our Group for FY2013 based on the pre-Placement share capital of
1,071,432,933 Shares, assuming that the Service Agreements had been in
place from the beginning of FY2013

115.0 times

Market Capitalisation
Market capitalisation based on the Placement Price and post-Placement
share capital of 1,193,432,933 Shares

S$274.5 million

Notes:
(1)

Based on an exchange rate of S$1.0000 to MYR2.5712, being the closing exchange rate at at 30 September 2014.

(2)

Based on an exchange rate of S$1.0000 to MYR2.5173, being the average exchange rate for FY2013.

(3)

Net operating cash flow refers to net cash inflows from operating activities.

54

USE OF PROCEEDS AND LISTING EXPENSES


USE OF PROCEEDS
The total net proceeds to be raised by our Company from the Placement, after deducting the
estimated expenses in relation to the Placement of approximately S$4.8 million, is estimated to
amount to approximately S$23.2 million.
The following table sets out the breakdown of the use of proceeds to be raised by our Company:

Amount in
aggregate
(S$000)

Estimated amount
allocated for each
dollar of the gross
proceeds to be raised
from the issue of the
Placement Shares as a
percentage of the
gross proceeds
(%)

15,000

53.5

Working Capital

8,232

29.3

Expenses incurred in connection with


the Placement (1)

4,828

17.2

28,060

100.0

Use of proceeds from the Placement


Development of the Hyper Act Quarry

Total
Note:
(1)

The estimated expenses amounted to approximately S$4.8 million, out of which approximately S$1.3 million will be
capitalised against the capital of our Company and the balance of the estimated expenses will be charged to the
profit and loss of our Company.

In the reasonable opinion of our Directors, there is no minimum amount which must be raised by
the Placement. Currently, we are not engaged in any formal discussion with any parties for
acquisitions, joint ventures or the formation of strategic alliances.
Pending the deployment of the net proceeds from the Placement, the funds will be placed in
deposits with banks and financial institutions or invested in money market instruments or used for
our working capital requirements as our Directors may deem fit at their absolute discretion.
We will make periodic announcements on the use of the net proceeds from the Placement as and
when the funds are materially disbursed, and provide a status report on the use of the proceeds
in the annual report(s) of our Company.
The discussion above represents our Companys reasonable estimate of its allocation of the net
proceeds of the Placement based upon its current plans for our Group and reasonable estimates
regarding its anticipated expenditures. Actual expenditures may vary from these estimates and we
will announce the reasons for such deviations. Our Company may find it necessary or advisable
to reallocate the net proceeds within the categories described above or to use portions of the net
proceeds for other purposes and in the event that our Company decides to reallocate the net
proceeds of the Placement for other purposes, our Company will publicly announce its intention
to do so through an SGXNET announcement to be posted on the internet at the SGX-ST website
http://www.sgx.com.

55

USE OF PROCEEDS AND LISTING EXPENSES


Please refer to the section entitled General Information on our Company and our Group
Business Strategies and Future Plans of this Offer Document for further details.
LISTING EXPENSES
The estimated amount of expenses of the Placement and of the application for Listing, including
the placement commission, management fees, legal and audit fees, fees payable to the SGX-ST
and all other incidental expenses in relation to this Placement is approximately S$4.8 million.
A breakdown of these expenses to be borne by our Company in relation to the Placement is as
follows:

Estimated
amount (1)
(S$000)

Expenses borne by our Company


Listing and application fees
Professional fees
Placement commission

(2)

Miscellaneous expenses
Total

Estimated amount
allocated for each
dollar of the gross
proceeds to be raised
from the issue of the
Placement Shares as a
percentage of the
gross proceeds
(%) (1)

45

0.2

3,404

12.1

982

3.5

398

1.4

4,828

17.2

Notes:
(1)

Figures may not add up due to rounding.

(2)

The amount of placement commission per Placement Share, agreed upon between the Issue Manager, Sponsor and
Placement Agent and our Company is 3.5% of the Placement Price payable for each Placement Share. Please refer
to the section entitled General and Statutory Information Management and Placement Arrangements of this Offer
Document for more details.

56

DIVIDEND POLICY
Our Company has not declared or paid any dividends since its incorporation and our subsidiaries
have not declared or paid any dividends in the Period Under Review.
We currently do not have a fixed dividend policy as we are not profitable. As and when we are
profitable, and if we determine it to be in the best interests of our Company and the Shareholders,
we may declare dividends by way of an ordinary resolution of our Shareholders a general meeting,
but may not pay dividends in excess of the amount recommended by our Board of Directors. The
declaration and payment of dividends will be determined at the sole discretion of our Directors,
subject to the approval of our Shareholders. There can be no assurance that dividends will be paid
in the future and the amount of dividends declared and paid by us in the past should not be taken
as an indicant of the dividends payable in the future.
The form, frequency and amount of future dividends on our Shares will depend on our earnings,
general financial condition, results of operations, capital requirements, cash flow, general
business condition, our development plans and other factors as our Directors may, in their
absolute discretion, deem appropriate (Dividend Factors).
Subject to the Cayman Companies Law and the Articles, we may declare an annual dividend
subject to the approval of our Shareholders in a general meeting but the amount of such dividend
shall not exceed the amount recommended by our Directors. Our Directors may also declare an
interim dividend without the approval of our Shareholders.
Our ability to declare and pay dividends will be dependent on our cash income, the cash available,
our results, financial condition, other cash requirements including capital expenditures, our
borrowing arrangements and other contractual restrictions applicable, and restrictions under
applicable laws, rules and/or regulations. Further details as to the restrictions are also set out in
the section entitled Risk Factors We may be unable to pay dividends in the future of this Offer
Document.
However, investors should note that all foregoing statements, are merely statements of our
present intention and shall not constitute legally binding statements in respect of our future
dividends, which may be subject to modification (including reduction or non-declaration thereof)
in our Directors sole and absolute discretion. No inference should or can be made from any of the
foregoing statements as to our actual future profitability or ability to pay dividends in any of the
periods discussed. The form, frequency and amount of future dividends will depend on the
Dividend Factors.
For information relating to taxes payable on dividends, please refer to the section entitled
Taxation of this Offer Document.

57

SHARE CAPITAL
Our Company was incorporated as an exempted company limited by shares in Cayman Islands on
1 November 2013 under the name of Ultimate Prime Ventures Limited. On 10 July 2014, we
changed our name to GCCP Resources Limited.
As at the date of incorporation, our authorised share capital was US$50,000 comprising 50,000
shares of par value US$1 each and our issued and paid-up share capital was US$1 comprising
one (1) share of par value US$1 each.
As at the date of this Offer Document, our authorised share capital is US$50,000 comprising
221,797,700,000 (1) Shares and the sum of our issued and paid-up share capital and share
premium is US$15.5 million and there are 1,071,432,933 issued Shares.
Note:
(1)

Number derived from the unrounded par value of the Shares.

Pursuant to written resolutions dated 26 February 2015 and 16 April 2015 (the Resolutions), our
shareholders approved, among other things, the following:
(a)

the Share Split;

(b)

our adoption of a new set of Articles of Association;

(c)

the allotment and issue of 127,612,933 Shares (Conversion Shares) pursuant to the
Conversion to the Pre-Placement Investors, which when allotted, issued and fully-paid, will
rank pari passu with the existing issued Shares;

(d)

the allotment and issue of the Placement Shares on the basis that the Placement Shares,
when allotted, issued and fully paid, will rank pari passu in all respects with the existing
issued Shares;

(e)

the adoption of the GCCP Performance Share Plan, and the authorisation of our Directors,
to allot and issue Shares upon the release of Awards granted under the GCCP Performance
Share Plan;

(f)

the adoption of the GCCP Employee Share Option Scheme, and the authorisation of our
Directors to allot and issue Shares pursuant to the exercise of Options granted under the
GCCP Employee Share Option Scheme;

(g)

the approval of the listing and quotation of all the issued Shares (including the Placement
Shares to be issued and allotted pursuant to the Placement), the Conversion Shares, the
Option Shares and the Award Shares on Catalist;

58

SHARE CAPITAL
(h)

the authorisation to our Directors to:


(a)

(i)

issue Shares whether by way of rights, bonus or otherwise;

(ii)

make or grant offers, agreements or options (collectively, Instruments) that


might or would require Shares to be issued during the continuance of this authority
or thereafter, including but not limited to the creation and issue of (as well as
adjustments to) warrants, debentures, convertible securities or other instruments
convertible into Shares; and/or

(iii) notwithstanding that such authority may have ceased to be in force at the time that
Instruments are to be issued, issue additional Instruments arising from
adjustments made to the number of Instruments previously issued in the event of
rights, bonus or other capitalisation issues,
at any time and upon such terms and conditions and for such purposes and to such
persons as our Directors may in their absolute discretion deem fit; and
(b)

issue Shares in pursuance of any Instrument made or granted by our Directors pursuant
to (a)(ii) and/or (a)(iii) above, while such authority was in force (notwithstanding that
such issue of Shares pursuant to the Instruments may occur after the expiration of the
authority contained in the resolution),

provided that:
(1)

the aggregate number of Shares to be issued pursuant to such authority (including the
Shares to be issued in pursuance of Instruments made or granted pursuant to this
authority but excluding Shares which may be issued pursuant to any adjustments
(Adjustments) effected under any relevant Instrument, which Adjustments shall be
made in compliance with the provisions of the Catalist Rules for the time being in force
(unless such compliance has been waived by the SGX-ST) and the Articles of
Association for the time being of our Company), does not exceed 100.0% of the post
Placement issued share capital excluding treasury shares, and provided further that the
aggregate number of Shares to be issued other than on a pro rata basis to Shareholders
(including Shares to be issued in pursuance of Instruments made or granted pursuant
to such authority but excluding Shares which may be issued pursuant to Adjustments
effected under any relevant Instrument) shall not exceed 50.0% of the post Placement
issued share capital excluding treasury shares;

(2)

in exercising such authority, our Company shall comply with the provisions of the
Catalist Rules for the time being in force (unless such compliance has been waived by
the SGX-ST) and the Articles of Association for the time being of our Company; and

(3)

unless revoked or varied by our Company in general meeting by ordinary resolution, the
authority so conferred shall continue in force until the conclusion of the next annual
general meeting of our Company or the date by which the next annual general meeting
of our Company is required to be held, whichever is the earlier.

59

SHARE CAPITAL
For the purposes of this resolution and pursuant to Rules 806(3) and 806(4) of the Catalist
Rules, the post-Placement issued share capital shall mean the total number of issued
Shares of our Company (excluding treasury shares) immediately after the Placement, after
adjusting for: (i) new Shares arising from the conversion or exercise of any convertible
securities; (ii) new Shares arising from exercising share options or vesting of share awards
outstanding or subsisting at the time such authority is given, provided the options or awards
were granted in compliance with the Catalist Rules; and (iii) any subsequent bonus issue,
consolidation or sub-division of Shares.
As at the date of this Offer Document, there is only one class of shares in the capital of our
Company, being the Shares. A summary of the Articles of Association relating to, among others,
the voting rights of our Shareholders are set out in Appendix D entitled Selected Extracts of our
Articles of Association of this Offer Document.
As at the date of this Offer Document, our authorised share capital is US$50,000 comprising
221,797,700,000 (1) Shares and the sum of our issued and paid-up share capital and share
premium is US$15.5 million, and there are 1,071,432,933 issued Shares. Upon the issue and
allotment of the Placement Shares which are the subject of the Placement, our authorised share
capital will be US$50,000 comprising 221,797,700,000 (1) Shares and the resultant sum of our
issued and paid-up share capital of our Company and share premium will be increased to US$36.2
million, and there will be 1,193,432,933 issued Shares.
Note:
(1)

Number derived from the unrounded par value of the Shares.

No person has, or has the right to be given, an option to subscribe for or purchase any securities
of our Company or our subsidiaries. As at the Latest Practicable Date, no option to subscribe for
Shares in our Company has been granted to, or was exercised by, any of our Directors or
Executive Officers.
Details of the changes in the issued and paid-up share capital of our Company since the date of
incorporation and immediately after the Placement are set out below:
Number of
issued shares

Resultant issued and


paid-up share capital
and share premium
(US$)

Issued and fully paid share of par value US$1 each as


at incorporation

Issue of an aggregate of 199 shares of par value US$1


each to Alex Loo, Pang Kim Chon, Siew Peng Keong,
Koay Teng Chin, Chung Man Chong, Loh Heng Kwai
pursuant to a subscription of shares of par value US$1
each by the aforementioned parties

199

200

Sub-division of one (1) share of par value US$1 each


into 47 shares of par value US$0.021 each

9,400

200

Issue of an aggregate of 600 shares of par value


US$0.021 each to Alex Loo and GPF (Delta) pursuant
to a capitalisation of loans owing by our Company to
each of Alex Loo and GPF (Delta)

600

4,663,886

60

SHARE CAPITAL

Number of
issued shares

Resultant issued and


paid-up share capital
and share premium
(US$)

Share Split

943,820,000

4,663,886

Issue of Conversion Shares to the Pre-Placement


Investors pursuant to the Conversion

127,612,933

15,544,639

Issue of Placement Shares pursuant to the Placement

122,000,000

36,173,958

1,193,432,933

36,173,958

Post-Placement issued and paid-up share capital

The issued share capital and share premium of our Company as at incorporation, before the
Placement, and after the Placement, are set forth below. This should be read in conjunction with
Appendix A entitled Audited Consolidated Financial Statements for the financial years ended 31
December 2011, 2012 and 2013, Appendix B entitled Audited Interim Consolidated Financial
Statements for the nine-month period ended 30 September 2014 and Appendix C entitled
Unaudited Pro Forma Financial Information for the financial year ended 31 December 2013 and
the nine-month period ended 30 September 2014 of this Offer Document.

Number of issued and fully


paid-up shares
Issued and fully paid-up share
capital and share premium (US$)

As at
Incorporation

Immediately
before the
Placement

1 share of par
value US$1 each

1,071,432,933
Shares

15,544,639

Immediately
after the
Placement
1,193,432,933
Shares
36,173,958

Save as disclosed above, there have been no other changes in the share capital of our Company
since the date of its incorporation on 1 November 2013.
There were no changes in the issued and paid-up share capital or the number and classes of
shares of each of our subsidiaries, within the three (3) years preceding the Latest Practicable
Date.
Save as disclosed in this section, no shares in or debentures of our Company or our subsidiaries
have been issued, or are proposed to be issued, as fully or partly paid-up for cash, or for a
consideration other than cash, during the last three (3) years preceding the date of lodgement of
this Offer Document.

61

SHARE CAPITAL
SHAREHOLDING AND OWNERSHIP STRUCTURE
Our Directors and Substantial Shareholders and their respective shareholdings immediately
before and after the Placement are summarised below:
Before the Placement
Direct interest
No. of
Shares

After the Placement

Deemed interest

Direct interest

No. of
Shares

No. of
Shares

Deemed interest

No. of
Shares

Directors
Alex Loo(1)

461,190,880

43.0

178,719,080

16.7

461,190,880

38.6

178,719,080

15.0

(1)

Pang Kim Chon

178,719,080

16.7

178,719,080

15.0

Dato Thomas Koh

Denys Collin Munang

Tan Eng Ann

Substantial Shareholders (other than Directors)


Wilma Global(1)

178,719,080

16.7

178,719,080

15.0

Chung Man Chong

133,078,620

12.4

133,078,620

11.2

64,494,367

6.0

64,494,367

5.4

99,981,999

9.3

99,981,999

8.4

54,451,153

5.1

54,451,153

4.6

GPF (Delta)(2)

47,191,000

4.4

47,191,000

4.0

GPF (Falcon)(2)

17,303,367

1.6

17,303,367

1.5

Grandale Enterprise Limited(3)

35,487,632

3.3

35,487,632

3.0

Other Pre-Placement
Investors(5)

46,420,213

4.3

46,420,213

3.9

Other existing Shareholders

35,487,632

3.3

35,487,632

3.0

Other existing public


Shareholders(7)

62,103,356

5.8

62,103,356

5.2

122,000,000

10.2

(2)

Accion

(3)

Pay Cher Wee


(4)

Woodburn

Other Shareholders

(6)

Public
Total

1,071,432,933 100.0

1,193,432,933 100.0

Notes:
(1)

Wilma Global is an investment holding company incorporated in the British Virgin Islands on 22 August 2014. Alex
Loo, our Executive Chairman and CEO and Pang Kim Chon, our Executive Director and COO, holds 50.4% and
49.6% of Wilma Global respectively and are each deemed interested in the Shares held by Wilma Global.

(2)

GPF (Delta) and GPF (Falcon) are segregated portfolios under GPF, a fund company established as a segregated
portfolio company in the Cayman Islands. The fund manager of GPF is Accion, with full discretionary power and
authority over the investments for each segregated portfolio of GPF. Accordingly, Accion is deemed interested in the
Shares held by GPF (Delta) and GPF (Falcon). Accion does not hold any shares in GPF (Delta) and GPF (Falcon).
The directors and shareholders of Accion are Chua Thiam Joo, Pay Cher Wee and Teo Kian Huat.

(3)

Pay Cher Wee is the sole shareholder of Grandale Enterprises Limited, an investment holding company
incorporated in the British Virgin Islands on 9 March 2012, and a director and shareholder of Accion. He is deemed
interested in the Shares held by Grandale Enterprises Limited and the Shares which Accion is deemed interested
in. Save as disclosed above, Pay Cher Wee is not related, directly or indirectly, to the Directors, Executive Officers
and Substantial Shareholders of our Company.

62

SHARE CAPITAL
(4)

Woodburn is an investment holding company incorporated in the British Virgin Islands on 29 April 2013. Woodburn
is owned by Qing Guangmei, who is not related, directly or indirectly, to the Directors, Executive Officers or
Substantial Shareholders of our Company.

(5)

The other Pre-Placement Investors apart from GPF (Delta), GPF (Falcon) and Woodburn are Soo Kee Wee, Ng Han
Meng, Ciliandra Fangiono, Fong Kim Chit, Lee Chun Fun, Wang Yu Huei, Teo Khiam Chong and Chang Wei Chian
Benjamin. Save as disclosed above, the Pre-Placement Investors are not related, directly or indirectly, to the
Directors, Executive Officers and Substantial Shareholders of our Company.

(6)

The other existing Shareholders are Loh Heng Kwai, Ian Lim and NovaGold Limited.

(7)

The other existing public Shareholders are Koay Teng Chin and Teng Chang Yeow, who are not related to the
Directors, Substantial Shareholders, controlling Shareholders and their Associates and are deemed to be existing
public shareholders. Accordingly, they are included in the minimum 15% Shares to be held in public hands in
accordance with Rule 406(1) of the Catalist Rules.

Save as disclosed above and in the section entitled Directors, Management and Staff of this
Offer Document, there are no other relationships among our Directors, Substantial Shareholders
and Executive Officers.
Save as disclosed in the section entitled Restructuring Exercise of this Offer Document, there
has been no change in the percentage ownership of Shares of our Directors and Substantial
Shareholders from the incorporation of our Company until the Latest Practicable Date.
The Shares held by our Directors and Substantial Shareholders do not carry voting rights that are
different from the Placement Shares. Our Directors are not aware of any arrangement, the
operation of which may, at a subsequent date, result in a change in control of our Company.
As at the Latest Practicable Date, our Company has only one class of shares, being our Shares
which are in registered form. There is no restriction on the transfer of fully paid ordinary shares
in scripless form except where required by law or the Catalist Rules or our Articles.
There has not been any public take-over offer by a third party in respect of our Shares or by our
Company in respect of the shares of another corporation or units of business trust which has
occurred between the date of its incorporation to the Latest Practicable Date.
Save as disclosed above, our Company is not directly or indirectly owned or controlled, whether
severally or jointly by any other corporation, any government or person.
There are no Shares in our Company that are held by or on behalf of our Company or by the
subsidiaries of our Company.
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP
Save as disclosed below and in the sections entitled Share Capital and Restructuring Exercise
of this Offer Document, there were no significant changes in the percentage of ownership of our
Directors and Substantial Shareholders in our Company in the last three (3) years prior to the
Latest Practicable Date.

63

SHARE CAPITAL
MORATORIUM
Promotors and other shareholders
To demonstrate commitment to our Group, the following persons in the table below has
undertaken to the Issue Manager and Sponsor not to, amongst others, directly or indirectly, sell,
contract to sell, realise, transfer, assign, pledge, grant any option to purchase, grant any security
over, encumber of otherwise dispose of, or enter into any agreement that will directly or indirectly
constitute or will be deemed as a disposal of any part of his shareholding interests in our Company
immediately after the Listing (Original Shareholding):
(a)

for a period of 12 months commencing from our Companys date of admission to Catalist
(Initial Period);

(b)

to below 50.0% of such persons Original Shareholding (adjusted for any bonus issue or
subdivision) in our Company for a period of 12 months commencing from the expiry of the
Initial Period (Second Period); and

(c)

to below 25.0% of such persons Original Shareholdings (adjusted for any bonus issue or
subdivision) in our Company for a period of 12 months commencing from the expiry of the
Second Period.

Original Shareholding

Percentage (%) of
post-Placement
share capital

Alex Loo

461,190,880

38.6

Wilma Global

178,719,080

15.0

Chung Man Chong

133,078,620

11.2

4,435,954

0.4

Name

Ian Lim

Alex Loo and Pang Kim Chon has each also undertaken to the Issue Manager and Sponsor not
to, amongst others, directly or indirectly, sell, contract to sell, realise, transfer, assign, pledge,
grant any option to purchase, grant any security over, encumber of otherwise dispose of, or enter
into any agreement that will directly or indirectly constitute or will be deemed as a disposal of any
part of his shareholding interests in Wilma Global for a period of 36 months commencing from our
Companys date of admission to Catalist.
Other Shareholders
To demonstrate commitment to our Group, the following persons in the table below has each
undertaken to the Issue Manager and Sponsor not to, amongst others, directly or indirectly, sell,
contract to sell, realise, transfer, assign, pledge, grant any option to purchase, grant any security
over, encumber of otherwise dispose of, or enter into any agreement that will directly or indirectly
constitute or will be deemed as a disposal of any part of his shareholding interests in our Company
immediately after the Listing for a period of 12 months commencing from our Companys date of
admission to Catalist (Initial Period), and for a period of six (6) months thereafter not to sell,
transfer, assign, dispose of, realise or enter into any agreement that will directly or indirectly
constitute or will be deemed as a disposal of any part of such persons shareholding interests in
our Company to below 50.0% of their respective original shareholdings (adjusted for any bonus
issue or subdivision) in our Company.
64

SHARE CAPITAL

Number of Shares

Percentage (%) of
post-Placement
share capital

Grandale Enterprises Limited

35,487,632

3.0

NovaGold Limited

17,743,816

1.5

Loh Heng Kwai

13,307,862

1.1

Name

Pre-Placement Investors and other Existing Shareholders


Each of the following persons has undertaken that they will not directly or indirectly, sell, contract
to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security
over, encumber or otherwise dispose of, or enter into any agreement that will directly or indirectly
constitute or will be deemed as a disposal of, any part of his interest as reflected against his name
in the table below, for a period of 12 months commencing from the date of our Companys
admission to Catalist.

Number of Shares

Percentage (%) of
post-Placement
share capital

GPF (Delta)

25,451,870

2.1

Woodburn

28,364,197

2.4

Wang Yu Huei

12,616,713

1.1

GPF (Falcon)

7,303,367

0.6

Soo Kee Wee

2,813,872

0.2

Ng Han Meng

1,758,670

0.1

Ciliandra Fangiono

1,758,670

0.1

Fong Kim Chit

1,758,670

0.1

Lee Chun Fun

703,469

0.1

Teo Khiam Chong

548,553

0.05

Chang Wei Chian Benjamin

548,553

0.05

Name

65

CAPITALISATION AND INDEBTEDNESS


The following table shows the cash and cash equivalents as well as capitalisation and
indebtedness of our Group:
(i)

as at 30 September 2014 based on our Audited Interim Consolidated Financial Statements


for the Nine-Month Period Ended 30 September 2014;

(ii)

as at 31 January 2015 based on our unaudited consolidated management accounts; and

(ii)

as adjusted for the net proceeds (1) from the Placement.

(MYR)
Cash and cash equivalents

As at
30 September
2014

As at
31 January 2015

18,301,712

8,734,356

As adjusted
for the net
proceeds from
the Placement
71,058,062(1)

Indebtedness
Current
Bank overdraft, secured
Derivative financial instruments

20,465,398

(2)

20,465,398

(2)

(3)

Finance lease liabilities

157,598

234,962

234,962

Term loan at BLR + 1.00% pa

313,016

321,230

321,230

19,423,633

19,465,395

Finance lease liabilities

355,959

630,342

630,342

Term loan at BLR + 1.00% pa

942,810

830,216

830,216

41,658,414

41,947,543

2,016,750

1,432,298

9,318,975

43,090,712

51,266,518

Non-current
Convertible loan

Total indebtedness
Total shareholders equity
Total capitalisation and
indebtedness

(3)

111,573,474(1)(3)

113,590,224

Notes:
(1)

Adjusted to include the net proceeds from the placement of approximately MYR62.3 million (or the equivalent of
S$23.2 million based on an exchange rate of S$1.0000 to MYR2.6827, being the closing exchange rate as at the
Latest Practicable Date).

(2)

The MYR20.5 million in derivative financial instruments represents the derivative component of the Convertible Loan
that relates to the Pre-Placement Investors right to convert the Convertible Loan into Shares.

(3)

This takes into account the conversion of the Convertible Loan.

The Company entered into the Convertible Loan Agreements with the Pre-Placement Investors for
an aggregate amount of S$18.8 million at an interest rate of 16.0% per annum that converts into
ordinary fully paid shares upon our Company listing on the SGX-ST. One of the Pre-Placement
Investors had converted the Convertible Loan with a nominal value of S$4.0 million into Shares
on 2 May 2014.

66

CAPITALISATION AND INDEBTEDNESS


The Convertible Loans are extended to the Company on the condition that pledge documents are
duly executed by the Company where the Company shall pledge its shares in Gridland and Hyper
Act to the convertible loan holders as security for the fulfilment of the Companys obligations to
the loan holders. The pledge documents contain a term to the effect that the pledge shall be
discharged within seven (7) business days of the conversion or the repayment of all outstanding
payments under the Convertible Loan Agreements.
The term of the Convertible Loan Agreements is 24 months from the drawdown date where the
right to convert is at a conversion price which ranges from 50.0% to 65.0% of the target valuation
of S$200 million divided by the number of Shares prior to conversion. The holders have the right
to demand repayment if the Company does not complete an initial public offering on the SGX-ST
after 24 months from the drawdown date or abort the process for the application of the initial public
offering.
As at the Latest Practicable Date, there were no material changes to our capitalisation and
indebtedness as disclosed above, save for changes in our reserves arising from the day-to-day
operations in the ordinary course of our business.
As at the date of this Offer Document, the Convertible Loan has been converted into Shares and
the pledges have been discharged.
Banking and credit facilities
As at the Latest Practicable Date, our Groups banking and credit facilities from various banks and
financial institutions were as follows:
Facilities
granted
(MYR)

Utilised
(MYR)

Term loan Hong Leong Bank


Berhad

1,650,000

1,650,000

Bank overdraft UOB

2,000,000

2,000,000 BLR(1)+2.25

Term loan UOB(2)

2,300,000

2,300,000 BLR(1)+1.00

60 months
commencing from
1 month from the
date of first
release of the
term loan

Types of
facilities/(name of bank)

Unutilised
(MYR)

Interest
rate
(%)

Maturity profile

BLR(1)+1.00

May 2018

Notes:
(1)

BLR is the Malaysia Base Lending Rate.

(2)

The Company had accepted a letter of offer from United Overseas Bank (Malaysia) Bhd in relation to the term loan
on 9 December 2014, and will enter into a facilities agreement with UOB Bank.

As at the Latest Practicable Date, all our existing borrowings were secured by, among others,
mortgages over our properties as well as joint and several personal guarantees and collaterals
provided by our Executive Chairman and CEO, Alex Loo, and his spouse, Tan Swee Tiang. Please
refer to the section entitled Interested Person Transactions Present and Ongoing Interested
Person Transactions of this Offer Document for further details.

67

CAPITALISATION AND INDEBTEDNESS


To the best of our Directors knowledge, as at the Latest Practicable Date, we are not in breach
of any of the terms and conditions or covenants associated with any credit arrangement or bank
loan which could materially affect our financial position and results or business operations, or the
investments of our Shareholders.
As at the Latest Practicable Date, there were no material changes to our capitalisation and
indebtedness as disclosed above, save for changes in our reserves arising from the day-to-day
operations in the ordinary course of our business.
As at the Latest Practicable Date, save as disclosed above and the convertible loans pursuant to
the Convertible Loan Agreements, there are no other loans or borrowings or banking facilities
taken up by our Company.

68

DILUTION
Dilution is the amount by which the Placement Price paid by the subscribers of our Shares in this
Placement exceeds our NAV per Share immediately after the Placement. Our pro forma NAV per
Share as at 30 September 2014, after adjusting for the Conversion but before adjusting for the
estimated net proceeds due to our Company from the Placement and based on our Companys
pre-Placement issued and paid-up share capital of 1,071,432,933 Shares, was approximately 1.5
cents per Share.
Pursuant to the Placement in respect of, inter alia, 122,000,000 Placement Shares at the
Placement Price, our pro forma NAV per Share as at 30 September 2014, after adjusting for the
Conversion, and the estimated net proceeds due to our Company from the Placement and based
on our Companys post-Placement issued and paid up share capital of 1,193,432,933 Shares
would have been approximately 3.3 cents. This represents an immediate increase in pro forma
NAV per Share of approximately 1.8 cents to our existing Shareholders and an immediate dilution
in NAV per Share of approximately 19.7 cents or approximately 85.7% to our new public investors.
The following table illustrates the dilution on a per Share basis as at 30 September 2014:
Cents (S$)
Placement Price per Share

23.0

Pro forma NAV per Share adjusted for the Conversion and based on
the pre-Placement share capital of 1,071,432,933 Shares

1.5

Increase in pro forma NAV per Share attributable to existing Shareholders

1.8

Pro forma NAV per Share after the issue of Placement Shares and based on
the post-Placement share capital of 1,193,432,933 Shares

3.3

Dilution in pro forma NAV per Share to new public investors

19.7

Dilution in pro forma NAV per Share to new public investors (%)

85.7

69

DILUTION
The following table summarises the total number of Shares that have been subscribed for and/or
purchased by our existing Shareholders since our incorporation, the total consideration paid by
them and the average effective cash cost per Share in respect of such Shares to our
Shareholders, and the public Shareholders who subscribe for the Placement Shares at the
Placement Price pursuant to the Placement:
Number of
Shares
acquired
by such
Shareholder

Total
Consideration
(S$)

Average
effective cost
per Share
(cents)

Directors
Alex Loo

631,038,052

1,944,793

0.3

88,719,080

25.5

0.00003

Wilma Global

178,719,080

51.4

0.00003

Chung Man Chong

133,078,620

38.2

0.00003

Woodburn

54,451,153

6,000,000

11.0

GPF (Delta)

47,191,000

5,000,000

10.6

GPF (Falcon)

17,303,367

2,300,000

13.3

Soo Kee Wee

6,292,133

800,000

12.7

Ng Han Meng

3,932,583

500,000

12.7

Ciliandra Fangiono

3,932,583

500,000

12.7

Fong Kim Chit

3,932,583

500,000

12.7

Lee Chun Fun

1,573,034

200,000

12.7

Wang Yu Huei

24,616,713

2,760,000

11.2

Teo Khiam Chong

1,070,292

120,000

11.2

Chang Wei Chian Benjamin

1,070,292

120,000

11.2

Teng Chang Yeow

44,359,540

12.7

0.00003

Grandale Enterprise Limited

35,487,632

10.2

0.00003

NovaGold Limited

17,743,816

5.1

0.00003

Koay Teng Chin

17,743,816

5.1

0.00003

Loh Heng Kwai

13,307,862

3.8

0.00003

4,435,954

38,892

0.9

122,000,000

28,060,000

23.0

Pang Kim Chon


Substantial Shareholders

Pre-Placement Shareholders

Other Existing Shareholders

Ian Lim
New public Shareholders

70

RESTRUCTURING EXERCISE
In anticipation of the Placement, our Group undertook the Restructuring Exercise to rationalise
and streamline our Groups corporate structure, pursuant to which our Company became the
holding company for our operations.
The details of our Restructuring Exercise are as follows:
(1)

Incorporation of our Company


Our Company was incorporated on 1 November 2013 in Cayman Islands in accordance with
the Cayman Companies Law as an exempted company with an initial paid-up share capital
of US$1 comprising one (1) share of par value US$1 each held by Offshore Incorporations
(Cayman) Limited.
For further details on the changes in the share capital of our Company within the past three
(3) years preceding the date of lodgement of this Offer Document, please see the section
entitled General and Statutory Information Share Capital for more details.

(2)

Acquisition of our Company by Alex Loo and capitalisation of our Company


On 2 December 2013:
(a)

our Executive Chairman and CEO, Alex Loo acquired one (1) share of par value US$1
from Offshore Incorporations (Cayman) Limited for a consideration of US$1; and

(b)

the following parties subscribed for such number of shares of par value US$1 each at
a subscription price of US$1 per Share as set out below:
Number of
Shares
Subscribed
for

Subscription
Amount
(US$)

Resultant
Shares
held by
Shareholder

Resultant
Shareholding
Percentage
(%)

137

137

138

69.0

Pang Kim Chon

20

20

20

10.0

Chung Man Chong

30

30

30

15.0

Siew Peng Keong

2.5

Koay Teng Chin

2.0

Loh Heng Kwai

1.5

199

199

200

100.0

Name
Alex Loo

Total

Following the above transactions, the total issued and paid up share capital of our Company
increased from US$1 to US$200 comprising 200 shares of par value US$1 each.

71

RESTRUCTURING EXERCISE
(3)

Acquisition of Gridland by our Company


Pursuant to share transfer instruments each dated 26 December 2013, our Company
acquired from each of:
(a)

Alex Loo, 2,500,000 ordinary shares in the share capital of Gridland at a cash
consideration of MYR2.5 million; and

(b)

Tan Swee Tiang (who was holding such shares on trust on behalf of Alex Loo),
2,500,000 ordinary shares in the share capital of Gridland at a cash consideration of
MYR2.5 million.

Both transfers were made on a willing buyer willing seller basis and were not on an arms
length basis nor on normal commercial terms as the consideration was based on the issued
and paid up share capital of Gridland, which was in a net liabilities position at the time of
acquisition.
Following the completion of the abovementioned transfers, Gridland became a wholly-owned
subsidiary of our Company.
(4)

Acquisition of Hyper Act by our Company


Pursuant to share transfer instruments each dated 26 December 2013, our Company
acquired from each of:
(a)

Alex Loo, one (1) ordinary share in the share capital of Hyper Act at a cash
consideration of MYR1; and

(b)

Chung Man Chong, one (1) ordinary share in the share capital of Hyper Act at a cash
consideration of MYR1.

Both transfers were made on a willing buyer willing seller basis and were not made on an
arms length basis nor on normal commercial terms as the consideration was based on the
issued and paid up share capital of Hyper Act, which was in a net liabilities position at the
time of acquisition.
Following the completion of the abovementioned transfers, Hyper Act became a whollyowned subsidiary of our Company.
(5)

Changes in Shareholdings of our Company


The following transfers of Shares were made:
(a)

on 10 February 2014, Alex Loo acquired five (5) shares of par value US$1 each
amounting to 2.5% of the total number of shares of par value US$1 each of our
Company from Siew Peng Keong for a consideration of US$5; and

72

RESTRUCTURING EXERCISE
(b)

on 14 March 2014, the following parties acquired such number of shares of par value
US$1 each from Alex Loo for such consideration as set out below:

Number of
Shares

Shareholding
Percentage
(%)

Consideration
(US$)

Teng Chang Yeow

10

5.0

10

NovaGold Limited

2.0

Grandale Enterprises Limited

4.0

22

11.0

22

Name

Total

Following the above transactions, Alex Loo held 121 shares of par value US$1 each
amounting to 60.5% of the total number of shares of par value US$1 each.
(6)

Share Split
On 15 April 2014, each share of par value US$1 each in our Company was sub-divided into
47 shares of par value US$0.021 each in our Company, resulting in 9,400 shares of par value
US$0.021 each.

(7)

Capitalisation of Debt owing by our Company


On 2 May 2014:
(a)

Alex Loo subscribed for 200 shares of par value US$0.021 each for a consideration of
MYR5.0 million which is to be satisfied by way of the capitalisation of the debt of
MYR5.0 million owed by our Company to Alex Loo; and

(b)

GPF (Delta) subscribed for 400 shares of par value US$0.021 each for a consideration
of S$4.0 million which is to be satisfied by way of the capitalisation of the debt of S$4.0
million owed by our Company to GPF (Delta).

Following the above transactions, the total issued and paid up share capital of our Company
increased from US$200 to US$212.8 comprising 10,000 shares of par value US$0.021 each
and the shareholdings of our Company were as follows:

Number of
Shares

Shareholding
Percentage
(%)

5,887

58.9

GPF (Delta)

400

4.0

Pang Kim Chon

940

9.4

1,410

14.1

Koay Teng Chin

188

1.9

Loh Heng Kwai

141

1.4

Name
Alex Loo

Chung Man Chong

73

RESTRUCTURING EXERCISE

Number of
Shares

Name
Teng Chang Yeow

470

4.7

NovaGold Limited

188

1.9

Grandale Enterprises Limited

376

3.8

10,000

100.0

Total
(8)

Shareholding
Percentage
(%)

Acquisition of our Controlling Shareholder, Wilma Global, by Alex Loo and Pang Kim
Chon
Wilma Global, our Controlling Shareholder, was incorporated on 22 August 2014 in the
British Virgin Islands in accordance with the laws of the British Virgin Islands as a company
limited by shares.
On 23 October 2014, our Executive Chairman and CEO, Alex Loo was issued 5,036 ordinary
shares in the capital of Wilma Global for a consideration of US$50.36 and our Executive
Director and COO, Pang Kim Chon was issued 4,964 ordinary shares in the capital of Wilma
Global for a consideration of US$49.64.

(9)

Share Split
On 26 February 2015, each share of par value US$0.021 each in our Company was
sub-divided into 94,382 Shares resulting in 943,820,000 issued Shares.

(10) Transfer to Ian Lim


In recognition of and to reward Ian Lim for his past contributions to our Group, Alex Loo had,
pursuant to share transfer instrument dated 26 February 2015 divested to Ian Lim, 4,435,954
Shares at a cash consideration of MYR0.1 million.
The transfer was made on a willing buyer willing seller basis.
(11) Acquisition of Shares by Wilma Global
Pursuant to a share swap agreement dated 26 February 2015 between Alex Loo, Pang Kim
Chon and Wilma Global, Wilma Global acquired such number of Shares from each of Alex
Loo and Pang Kim Chon as set out in the table below:

Name
Alex Loo
Pang Kim Chon
Total

Number of Shares

Shareholding as a
percentage of the total
number of Shares after
the Share Split
(%)

90,000,000
88,719,080

9.5
9.4

178,719,080

18.9

74

RESTRUCTURING EXERCISE
The consideration for the acquisition of such Shares by Wilma Global was satisfied by the
issue of new ordinary shares in the share capital of Wilma Global as follows:

Name
Alex Loo
Pang Kim Chon
Total

Resultant Number
of shares in
Wilma Global

Shareholding as a
percentage of the
total number
of shares in
Wilma Global
(%)

90,000,000
88,719,080

50.4
49.6

178,719,080

100.0

Following the above transaction, the shareholdings of our Company were as follows:

Number of Shares

Shareholding
Percentage
(%)

Alex Loo
Wilma Global
Chung Man Chong
Teng Chang Yeow
NovaGold Limited
Griffin (Delta)
Grandale Enterprises Limited
Koay Teng Chin
Loh Heng Kwai
Ian Lim

461,190,880
178,719,080
133,078,620
44,359,540
17,743,816
37,752,800
35,487,632
17,743,816
13,307,862
4,435,954

48.9
18.9
14.1
4.7
1.9
4.0
3.8
1.9
1.4
0.5

Total

943,820,000

100.0

Name

(12) Conversion of loan to Shares pursuant to Convertible Loan Agreements


On 23 March 2015, the Company allotted and issued 127,612,933 Conversion Shares to the
Pre-Placement Investors. These Conversion Shares were allotted and issued by our
Company pursuant to the Convertible Loan Agreements and amounted to approximately
11.9% of the total number of Shares after the Conversion. For further details of the
shareholdings of our Company immediately before the Placement, please refer to the section
entitled Share Capital Shareholding and Ownership Structure of this Offer Document.

75

GROUP STRUCTURE
Our Group structure after the Restructuring Exercise and as at the date of this Offer Document is
as follows:

Company

100%

100%

Gridland

Hyper Act

The details of each subsidiary of our Group as at the date of this Offer Document are as follows:

Date and Place of


Incorporation

Principal Business
Activities/ Principal Place
of Business

% Ownership
Interest held by our
Company/Group

Gridland

3 February
2009/Malaysia

Quarrying, processing and


sale of limestone/Malaysia

100

Hyper Act

19 October
2009/Malaysia

Quarrying, processing and


sale of limestone/Malaysia

100

Company

Save as disclosed above, our Group does not have any subsidiaries or associated companies.
Save as disclosed in this Offer Document, none of our Directors or Substantial Shareholders has
any interest, whether direct or indirect, in our Group or any of our subsidiaries of our Group.
Our subsidiaries are not listed on any stock exchange.

76

SELECTED CONSOLIDATED FINANCIAL INFORMATION


The following selected financial information should be read in conjunction with the full text of the
Offer Document, including Appendix A entitled Audited Consolidated Financial Statements for the
financial years ended 31 December 2011, 2012 and 2013, Appendix B entitled Audited Interim
Consolidated Financial Statements for the nine-month period ended 30 September 2014 and the
section entitled Managements Discussion and Analysis of Results of Operations and Financial
Position of this Offer Document and the related notes elsewhere in this Offer Document.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(MYR)
Revenue
Cost of sales
Gross profit

FY2011

Audited
FY2012

2,294,356

7,668,290

(1,591,134) (7,118,172)

Unaudited
9M2013

FY2013

Audited
9M2014

432,990

(344,412)

703,222

550,118

88,578

49,475

10,690

26,102

13,353

13,225

Gain on disposal of property,


plant and equipment

12,711

Foreign exchange gain

164,024

Other items of income


Interest income

Other items of expense


General and administrative
expenses

(677,280) (1,814,077) (1,919,605) (1,275,007)

(8,221,511)

Finance costs

(427,858)

(2,750,102)

Loss before tax

(352,441) (1,569,153) (2,341,724) (1,600,260) (10,705,786)

Income tax expense


Loss for the year/period,
representing total
comprehensive income
for the year/period
attributable to owners
of the Company

(328,595)

(37,248)

(5,436)

(448,221)

(338,606)

(389,689) (1,574,589) (2,341,724) (1,600,260) (10,705,786)

Pre-Placement LPS (cents) (1)

(0.04)

(0.1)

(0.2)

(0.1)

(1.0)

Post-Placement LPS
(cents) (2)

(0.03)

(0.1)

(0.2)

(0.1)

(0.9)

Notes:
(1)

For comparative purposes, the pre-Placement LPS for the Period Under Review has been computated based on the
loss for the year attributable to owners of our Company and our pre-Placement share capital of 1,071,432,933
Shares.

(2)

For comparative purposes, the post-Placement LPS for the Period Under Review has been computated based on
the loss for the year attributable to owners of our Company and our post-Placement share capital of 1,193,432,933
Shares.

77

SELECTED CONSOLIDATED FINANCIAL INFORMATION


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Audited
As at
As at
As at
31 December 31 December 31 December
2011
2012
2013

(MYR)
ASSETS
Non-current asset
Property, plant and equipment
Prepayments for property,
plant and equipment

As at
30 September
2014

4,890,955

5,162,808

9,304,960

27,096,756

3,482,000

4,890,955

5,162,808

12,786,960

27,096,756

4,769,623
3,799
363,747
3,234

2,352,942
3,411
621,938
3,623
1,200

57,359
11,397
833,245
149,926
1,168

417,950
1,544,332
789,305
1,062,188
18,301,712
2,096

5,140,403

2,983,114

1,053,095

22,117,583

10,031,358

8,145,922

13,840,055

49,214,339

103,762
27,432
4,756,057

150,257
17,169
4,165,998

11,671,011
181,862
4,432,316

3,797,519
2,326,109
470,613

29,777

20,465,398

4,917,028

4,333,424

16,285,189

27,059,639

7,471
72,119

352,347

1,435,796

20,722,402

79,590

352,347

1,435,796

20,722,402

Total liabilities

4,996,618

4,685,771

17,720,985

47,782,041

Net assets/(liabilities)

5,034,740

3,460,151

(3,880,930)

1,432,298

5,000,002

5,000,002

Current assets
Inventories
Trade and other receivables
Prepayments
Pledged deposits
Cash at banks and on hand
Income tax recoverable

Total assets
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Accrued operating expenses
Loans and borrowings
Derivative financial
instruments
Income tax payable

Non-current liabilities
Deferred tax liabilities
Loans and borrowings

Equity attributable to
owners
of the Company
Share capital
Accumulated
earnings/(losses)

34,738

Total equity
Total equity and liabilities
NAV per Share (cents)

(1)

645

16,019,659

(1,539,851)

(3,881,575)

(14,587,361)

5,034,740

3,460,151

(3,880,930)

1,432,298

10,031,358

8,145,922

13,840,055

49,214,339

0.5

0.3

(0.4)

0.1

Note:
(1)

The NAV per Share has been computed based on our pre-Placement share capital of 1,071,432,933 Shares.

78

SELECTED CONSOLIDATED FINANCIAL INFORMATION


SUMMARY OF OUR PRO FORMA FINANCIAL INFORMATION
The following selected financial information should be read in conjunction with the full text of the
Offer Document, including Appendix C entitled Unaudited Pro Forma Financial Information for the
Financial year ended 31 December 2013 and the nine-month period ended 30 September 2014
and the section entitled Managements Discussion and Analysis of Results of Operations and
Financial Position of this Offer Document.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
FY2013
9M2014

(MYR)
Revenue

432,990

Cost of sales

(344,412)

Gross profit

88,578

26,102

13,225

164,024

Other items of income


Interest income
Foreign exchange gain
Other items of expense
General and administrative expenses
Finance costs
Loss on conversion of convertible loan
Loss before tax
Income tax expense

(8,221,511)

7,243,763

(6,891,364)

42,577,040

(42,129,516)

(51,714,306)

(56,976,564)

Loss for the year/period, representing total


comprehensive income for the year/period
attributable to owners of the Company
Pre-Placement LPS (cents) (1)
Post-Placement LPS (cents)

(1,919,605)

(2)

(51,714,306)

(56,976,564)

(4.8)

(5.3)

(4.3)

(4.8)

Notes:
(1)

For comparative purposes, the pro forma pre-Placement LPS for the Period Under Review has been computated
based on the loss for the year attributable to owners of our Company and our pre-Placement share capital of
1,071,432,933 Shares.

(2)

For comparative purposes, the pro forma post-Placement LPS for the Period Under Review has been computated
based on the loss for the year attributable to owners of our Company and our post-Placement share capital of
1,193,432,933 Shares.

79

SELECTED CONSOLIDATED FINANCIAL INFORMATION


UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
As at
31 December 2013

(MYR)

As at
30 September 2014

ASSETS
Non-current asset
Property, plant and equipment

9,304,960

27,096,756

Prepayments for property, plant and equipment

3,482,000

12,786,960

27,096,756

417,950

Trade and other receivables

57,359

1,544,332

Prepayments

11,397

789,305

833,245

1,062,188

48,979,166

18,301,712

1,168

2,096

49,882,335

22,117,583

62,669,295

49,214,339

6,671,011

3,797,519

181,862

2,326,109

4,432,316

470,613

11,285,189

6,594,241

1,435,796

1,298,769

Total liabilities

12,720,985

7,893,010

Net assets

49,948,310

41,321,329

Share capital

103,202,467

102,179,468

Accumulated losses

(53,254,157)

(60,858,139)

Total equity

49,948,310

41,321,329

Total equity and liabilities

62,669,295

49,214,339

4.7

3.9

Current assets
Inventories

Pledged deposits
Cash at banks and on hand
Income tax recoverable

Total assets
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Accrued operating expenses
Loans and borrowings

Non-current liabilities
Loans and borrowings

Equity attributable to owners of the Company

NAV per Share (cents) (1)


Note:
(1)

The pro forma NAV per Share has been computed based on our pre-Placement share capital of 1,071,432,933
Shares.

80

SELECTED CONSOLIDATED FINANCIAL INFORMATION


BASIS OF PREPARATION
The unaudited pro forma financial information is arrived at based on the assumptions that the
significant events set out below have taken place on 1 January 2013 for the year ended 31
December 2013 and 1 January 2014 for the nine months ended 30 September 2014:
(a)

our Company entered into the Convertible Loan Agreements with the Pre-Placement
Investors for an aggregate amount of S$18.8 million at an interest rate of 16.0% per annum
that converts into ordinary fully paid shares upon our Company listing on the SGX-ST. One
of the Pre-Placement Investors had converted the Convertible Loan with a nominal value of
S$4.0 million into Shares on 2 May 2014.
The term of the Convertible Loan Agreements is 24 months from the drawdown date. The
holders have the right to demand repayment if the Company does not complete an initial
public offering on the SGX-ST after 24 months from the drawdown date or abort the process
for the application of the initial public offering. For the purpose of the pro forma adjustments,
our Company is assumed to be listed on the SGX-ST in March 2015 and the Convertible
Loan is assumed to convert into ordinary fully paid shares. This results in a loss on
conversion of S$16.4 million; and

(b)

our Company issued an aggregate of 200 Shares pursuant to step 7 of the Restructuring
Exercise for MYR5.0 million pursuant to a capitalisation of loans owing to a Director.

81

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
The following discussion of our business, financial condition and results of operations for GCCP
Resources Limited should be read in conjunction with the full text of the Offer Document, including
Appendix A entitled Audited Consolidated Financial Statements for the financial years ended 31
December 2011, 2012 and 2013 and Appendix B entitled Audited Interim Consolidated Financial
Statements for the nine-month period ended 30 September 2014 of this Offer Document and the
related notes elsewhere in this Offer Document.
This discussion contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ significantly from those projected in the forward-looking statements.
Factors that might cause future results to differ significantly from those projected in the
forward-looking statements include, but are not limited to, those discussed below and elsewhere
in this Offer Document, particularly in the section entitled Risk Factors of this Offer Document.
Under no circumstances should the inclusion of such forward-looking statements herein be
regarded as representation, warranty or prediction with respect to the accuracy of the underlying
assumptions by our Company, the Issue Manager and Sponsor, the Placement Agent or any other
person. Investors are cautioned not to place undue reliance on these forward-looking statements
that speak only as at the date hereof. Please refer to the section entitled Cautionary Note On
Forward-looking Statements of this Offer Document.
OVERVIEW
Our Group is principally engaged in the business of quarrying and processing of limestone by
crushing the quarried limestone into varying particle sizes as required by our customers. Our
business operations are principally located in Simpang Pulai, Ipoh, Perak, Malaysia.
Please refer to the section entitled General Information on our Company and our Group of this
Offer Document for more details on our Group.
Revenue
Prior to FY2012, our Group was engaged in the ad-hoc trading of minerals where Gridland sold
iron ore and coal to our customers, Ann Joo Integrated Steel Sdn Bhd and Hap Seng Clay
Products Sdn Bhd respectively. Our Group ceased the business in trading minerials in end of
2012. Thereafter, our Group became principally engaged in the business of quarrying and
processing of limestone for sale through our Gridland Quarry. As such, our past financial
performance attributable to the ad-hoc trading of iron ore and coal bears no relation to, and
provides no indication as to our future financial performance in the business of quarrying and
processing of limestone.
For FY2013 and 9M2014, our Groups main focus was on the preparation, exploration and
development of our Gridland Quarry where quarrying of limestone began in January 2013. The
extracted limestone was stockpiled in anticipation of the commissioning of the Gridland Crushing
Plant, which will be used to further process the extracted limestone. The Gridland Crushing Plant
was commissioned in May 2014 and production of crushed limestone commenced in June 2014.
Our Group recorded its first sale to a third-party customer, Pulai Rock Industries Sdn Bhd, in June
2014.
In June 2014, our Group completed the acquisition of the Hyper Act Quarry. As at the Latest
Practicable Date, preparation work on the Hyper Act Quarry is ongoing. Our Group estimates the
commencement of stockpiling of limestone and commencement of production to be on or around
the second half of 2015. Upon the commencement of production, our Group will derive further
revenue from the sale of limestone from the Hyper Act Quarry.
82

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Revenue is recognised upon the fulfilment of all the following conditions: (i) ownership of the
product is passed to the customers; (ii) when no further processing is required from our Company;
(iii) the quantity of limestone is determined; and (iv) the selling price is fixed. Our Group generally
recognises revenue from the sale of our limestone upon the transfer of significant risk and reward
of ownership of our products to the customer, usually on the delivery of our limestone.
The breakdown of our revenue by business segments for the Period Under Review are set out
below:
Audited
FY2012
(MYR)
%

FY2011
(MYR)
%
Iron ore

2,294,356 100.0 6,061,299

Coal

1,606,991

Crushed limestone

Total

FY2013
(MYR)
%

79.0

Unaudited
9M2013
(MYR)
%

Audited
9M2014
(MYR)
%

21.0

432,990 100.0

2,294,356 100.0 7,668,290 100.0

432,990 100.0

Our revenue is mainly dependent on the following factors:


(a)

the market prices of our crushed limestone;

(b)

processing capacity;

(c)

the demand for our crushed limestone;

(d)

the grade and quality of our limestone quarried; and

(e)

the economy as a whole.

Please refer to the section entitled Risk Factors of this Offer Document for other factors which
may affect our revenue.
Cost of sales
For FY2011 and FY2012, the cost of sales recognised was mainly from the sale of iron ore and
coal. As the sale of crushed limestone only commenced in June 2014, our Group did not recognise
any cost of sales in relation to the sale of our crushed limestone in FY2013 but recognised cost
of sales in 9M2014. The breakdown of our cost of sales for FY2011, FY2012, FY2013, 9M2013
and 9M2014 are set out below:
Audited
FY2012
(MYR)
%

FY2011
(MYR)
%
Iron ore
Raw material

1,591,134 100.0 5,956,590

Audited
9M2014
(MYR)
%

16.3

344,412

100.0

7,118,172 100.0

344,412

100.0

1,161,582

Crushing cost

1,591,134 100.0

Unaudited
9M2013
(MYR)
%

83.7

Coal
Raw material

Total

FY2013
(MYR)
%

83

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
As at the Latest Practicable Date, our Group has commenced production of limestone. Our
Groups cost of sales relating to the sale of our limestone comprised of the following:
(a)

mining costs;

(b)

direct labour costs;

(c)

processing costs; and

(d)

site administrative costs.

The factors that affect our cost of sales include the following:
(i)

the grade of our limestone;

(ii)

the type of our crushed limestone;

(iii) the quantity of our crushed limestone; and


(iv) the prices of our crushed limestone.
Gross profit and margin
We recorded gross profits of MYR0.7 million, MYR0.6 million and MYR88,578, representing gross
margins of 30.7%, 7.2% and 20.5% in FY2011, FY2012 and 9M2014 respectively. Our Group did
not generate gross profit in FY2013 and 9M2013 as there was no revenue in FY2013 and 9M2013
respectively. In FY2013, our Group had ceased the business in trading minerials and only
commenced production of crushed limestone in June 2014.
Other income
Other income comprised mainly of the interest received for the fixed deposits placed in the bank
and a gain on the disposal of property, plant and equipment which was a result of a disposal of
motor vehicle at a gain of MYR12,711 in FY2012 and foreign exchange gain of MYR164,024 in
9M2014. Other income represented MYR49,475, MYR23,401, MYR26,102, MYR13,353 and
MYR177,249 in FY2011, FY2012, FY2013, 9M2013 and 9M2014 respectively.
General and administrative expenses
Our general and administrative expenses comprised mainly of staff-related expenses, sales
commission paid to the third party sales agent bringing in the sales, professional fees, IPO
expenses, office rental, amortisation of leasehold land, depreciation of machinery and equipment
and expenses incurred for the preparation, exploration and development of the Gridland Quarry
such as sub-contractor wages, blasting expenses, and expenses from the maintenance and rental
of various heavy equipment and machinery. General and administrative expenses represented
MYR0.7 million, MYR1.8 million, MYR1.9 million, MYR1.3 million and MYR8.2 million in FY2011,
FY2012, FY2013, 9M2013 and 9M2014 respectively.

84

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Finance costs
Finance costs comprised mainly of interest expenses on term loans, obligations under finance
leases, convertible loans and bank overdraft. Finance costs represented MYR0.4 million, MYR0.3
million, MYR0.4 million, MYR0.3 million and MYR2.8 million in FY2011, FY2012, FY2013, 9M2013
and 9M2014 respectively.
Taxation
For the Period Under Review, our Group was subjected to income taxation in Malaysia. The
Malaysian statutory corporate tax rate during the Period Under Review was 25.0%.
RESULTS OF OPERATIONS
Breakdown of our past performance by business division and geographical regions
Our Group is principally engaged in the business of quarrying and processing of limestone which
commenced in FY2013. Prior to FY2012, our Group was engaged in the business of trading
minerals which were ad-hoc transactions. Our Group has since focused on its limestone quarrying
and processing business which is principally located in Malaysia. Accordingly, a segmentation of
our financial performance by business division and geographical regions will not be meaningful.
REVIEW OF PAST PERFORMANCE
Reconciliation of the audited and pro forma consolidated statement of comprehensive
income for FY2013
In FY2013, our Group recorded a loss before income tax of MYR2.3 million. Our Group will record
a pro forma loss before income tax of MYR51.7 million. The increase in loss before tax of
MYR49.4 million is mainly due to:
(a)

the interest accrual of MYR6.8 million of the Convertible Loan which assumes the
Conversion of the Convertible Loan occurring in March 2015. The finance cost relates to the
accretion of the carrying amount of the liability component to the principal amount of the
Convertible Loan; and

(b)

the accounting treatment for the loss on the Conversion of the Convertible Loan into Shares
at a conversion price which ranges from 50.0% to 65.0% of the target valuation of S$200
million divided by the number of Shares prior to Conversion.

Reconciliation of the audited and pro forma consolidated statement of comprehensive


income for 9M2014
In 9M2014, our Group recorded a loss before income tax of MYR10.7 million. Our Group will
record a pro forma loss before income tax of MYR57.0 million. The increase in loss before tax of
MYR46.3 million is mainly due to:
(a)

the interest accrual of MYR4.1 million of the Convertible Loan which assumes the
Conversion of the Convertible Loan occurring in March 2015. The finance cost relates to the
accretion of the carrying amount of the liability component to the principal amount of the
Convertible Loan; and

85

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
(b)

the accounting treatment for the loss on the Conversion of the Convertible Loan into Shares
at a conversion price which ranges from 50.0% to 65.0% of the target valuation of S$200
million divided by the number of Shares prior to Conversion.

FY2011 vs FY2012
Revenue
Our Group was mainly engaged in the business of trading minerals in FY2011 and FY2012. Our
total revenue increased by approximately MYR5.4 million or 234.8% from MYR2.3 million in
FY2011 to MYR7.7 million in FY2012. This increase was mainly due to the increase in demand of
iron ore from our sole customer and also the additional sale of coal in FY2012.
Cost of sales
Our cost of sales increased by MYR5.5 million or 343.8% from MYR1.6 million in FY2011 to
MYR7.1 million in FY2012. This increase was mainly due to the increase in sales of iron ore and
the additional sale of coal in FY2012.
Gross profit and margin
Our gross profit decreased by approximately MYR0.1 million or 14.3% from MYR0.7 million in
FY2011 to MYR0.6 million in FY2012. This decrease was due to a lower margin generated from
the sale of iron ore as a result of the volatility of iron ore prices and higher cost of sales.
Consequently, the gross profit margin decreased from 30.7% in FY2011 to 7.2% in FY2012.
Other income
Our other income decreased by MYR26,074 or 52.7%, from MYR49,475 in FY2011 to MYR23,401
in FY2012. This was due to our Group recording a lower interest arising from the part-withdrawal
of our fixed deposits and a one-off interest received for the retention sum from the prior year. In
FY2012, our Group further recorded MYR12,711 as a result of a gain on disposal of property, plant
and equipment. There was no such gain on disposal of property, plant and equipment in FY2011.
General and administrative expenses
Our general and administrative expenses increased by MYR1.1 million or 157.1% from MYR0.7
million in FY2011 to MYR1.8 million in FY2012. The increase was mainly due to the increase in
salary and wages, sales commission paid to third parties and expenses such as sub-contractor
wages, blasting expenses and expenses from the maintenance and rental of various heavy
equipments and machinery for the building of infrastructure at the Gridland Quarry.
Finance costs
Finance costs decreased by MYR0.1 million or 25.0% from MYR0.4 million in FY2011 to MYR0.3
million in FY2012 mainly due to the reduction in term loans.

86

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Loss before tax
As a result of the above, loss before tax increased by approximately MYR1.2 million or 300.0%
from MYR0.4 million in FY2011 to MYR1.6 million in FY2012.
FY2012 vs FY2013
Revenue
Our revenue for FY2012 was MYR7.7 million which was generated from our Groups prior
business in trading minerals. There was no revenue in FY2013 because our Group had ceased the
business in trading minerals to focus on the preparation, exploration and development of quarry
site. Our Group only commenced production of crushed limestone in June 2014.
Cost of sales
Our cost of sales for FY2012 was MYR7.1 million which was due to raw material purchases of iron
ore and coal. There was no cost of sales in FY2013 as the production of our crushed limestone
had not commenced. Expenses related to the preparation, exploration and development of the
Gridland Quarry were charged as general and administrative expenses.
Gross profit and margin
Our gross profit and gross profit margin for FY2012 was MYR0.6 million and 7.2% respectively.
There was no gross profit in FY2013 as the production of our crushed limestone had not
commenced.
Other income
Our other income increased by MYR2,701 or 11.5% from MYR23,401 in FY2012 to MYR26,102 in
FY2013. This was mainly due to a higher interest income arising from the increase in our fixed
deposits pledged to the bank to obtain further financing.
General and administrative expenses
Our general and administrative expenses increased by MYR0.1 million or 5.6% from MYR1.8
million in FY2012 to MYR1.9 million in FY2013. The increase was mainly due to the expenses
incurred for the preparation, exploration and development of the Gridland Quarry because of the
rental of extra machinery as well as the increase in salary and wages. There was no sales
commission paid in FY2013 as there was no sales for that year.
Finance costs
Finance costs increased by MYR0.1 million or 33.3% from MYR0.3 million in FY2012 to MYR0.4
million in FY2013 mainly due to the increased financing of the Gridland Quarry through bank
overdrafts and term loans as our Group began to focus on the preparation, exploration and
development of the Gridland Quarry.

87

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Loss before tax
As a result of the above, loss before tax increased by approximately MYR0.7 million or 43.8% from
MYR1.6 million in FY2012 to MYR2.3 million in FY2013.
9M2013 vs 9M2014
Revenue
We commenced production of crushed limestone and generated our first sales in June 2014. Our
total revenue in 9M2014 amounted to approximately MYR0.4 million. We did not generate any
revenue in 9M2013.
Cost of sales
Our cost of sales for 9M2014 amounted to approximately MYR0.3 million. We did not incur any
cost of sales in 9M2013 as we did not generate any revenue.
Gross profit and margin
Our gross profit for 9M2014 was amounted to MYR88,578, and our gross profit margin was 20.5%.
Other income
Our other income increased by MYR163,896 or 1,227.4%, from MYR13,353 in 9M2013 to
MYR177,249 in 9M2014. This was mainly due to foreign exchange gains arising from the
proceeds of the Convertible Loan.
General and administrative expenses
Our general and administrative expenses increased by MYR6.9 million or 530.8% from MYR1.3
million in 9M2013 to MYR8.2 million in 9M2014. The increase was mainly due to the preparation,
exploration and development of the Gridland Quarry, and expenses relating to the preparation for
the Listing.
Finance costs
Finance costs increased by MYR2.5 million or 833.3% from MYR0.3 million in 9M2013 to MYR2.8
million in 9M2014 mainly due to the accretion of carrying amount of liability component to the
principal amount of convertible loan.
Loss before tax
As a result of the above, loss before tax increased by approximately MYR9.1 million or 568.8%
from MYR1.6 million in 9M2013 to MYR10.7 million in 9M2014.

88

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
REVIEW OF FINANCIAL POSITION
Reconciliation of the audited and pro forma consolidated statement of financial position as
at 31 December 2013
As at 31 December 2013, we were in a net liabilities position of MYR3.9 million. Further to the
capitalisation of a loan owing to a Director and the Conversion of the Convertible Loan upon
Listing, our Group will record a net assets position of MYR49.9 million.
Reconciliation of the audited and pro forma consolidated statement of financial position as
at 30 September 2014
As at 30 September 2014, we were in a net assets position of MYR1.4 million. Further to the
Conversion of the Convertible Loan upon Listing, our Group will record a net assets position of
MYR41.3 million.
As at 31 December 2013
Non-current assets
As at 31 December 2013, our non-current assets of MYR12.8 million, accounted for 92.8% of our
total assets. Our non-current assets comprised of property, plant and equipment, and
prepayments for property, plant and equipment.
Property, plant and equipment of MYR9.3 million accounted for 72.7% of non-current assets,
which comprised of plant and machinery, furniture, fixtures and equipment, motor vehicles,
quarrying infrastructure and leasehold land of the Gridland Quarry.
Prepayments for property, plant and equipment of MYR3.5 million accounted for 27.3% of
non-current assets, which comprised mainly the commissioning of a crusher plant and a deposit
for the quarry land at the Hyper Act Quarry.
Current assets
As at 31 December 2013, our current assets of MYR1.1 million, accounted for 8.0% of our total
assets. Our current assets comprised of trade and other receivables, prepayments, pledged
deposits, cash at banks and on hand, and income tax recoverable.
Trade and other receivables of MYR57,359 accounted for 5.2% of current assets, which
comprised mainly deposits.
Pledged deposits of MYR0.8 million accounted for 72.7% of current assets.
Cash at bank and on hand as at 31 December 2013 amounted to approximately MYR0.1 million,
or 9.1% of current assets.

89

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Non-current liabilities
As at 31 December 2013, our non-current liabilities of MYR1.4 million, accounted for 7.9% of our
total liabilities. Our non-current liabilities comprised of loans and borrowings which consisted of
obligation under finance lease of MYR0.3 million and a term loan of MYR1.2 million with an
average interest rate of 4.8% and 6.6% per annum respectively.
Current liabilities
As at 31 December 2013, our current liabilities of MYR16.3 million, accounted for 92.1% of our
total liabilities. Our current liabilities comprised of trade and other payables, loans and
borrowings, and accrued operating expenses.
Trade and other payables of MYR11.7 million accounted for 71.8% of current liabilities, which
comprised of MYR8.5 million due to Directors, MYR2.4 million due to Shareholders and other
payables of MYR0.8 million. These were advances made by our Directors for the acquisition of
Gridland and Hyper Act, and the preparation and development of the Gridland Quarry and Hyper
Act Quarry.
Loans and borrowings of MYR4.4 million accounted for 27.0% of current liabilities, which
comprised of obligations under finance lease of MYR0.1 million, term loans of MYR2.2 million and
bank overdrafts of MYR2.1 million.
Accrued operating expenses of MYR0.2 million accounted for 1.2% of current liabilities.
Equity attributable to owners of the Company
As at 31 December 2013, our Group was in a net liabilities position of MYR3.9 million which mainly
comprised of our issued and paid up share capital of MYR645 and accumulated losses of MYR3.9
million.
As at 30 September 2014
Non-current assets
As at 30 September 2014, our non-current assets of MYR27.1 million accounted for 55.1% of our
total assets. Our non-current assets comprised of property, plant and equipment. This is an
increase of MYR14.3 million as compared to 31 December 2013, which is due to the acquisition
of property, plant and equipment and acquisition of land for the Hyper Act Quarry.
Current assets
As at 30 September 2014, our current assets of MYR22.1 million accounted for 44.9% of our total
assets. Our current assets comprised of inventories, trade and other receivables, prepayments,
pledged deposits, cash at banks and on hand and income tax recoverable.
Our inventories of MYR0.4 million accounted for 1.9% of our current assets, which comprised of
blasted stock piles and crushed limestones of different sizes.

90

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Trade and other receivables of MYR1.5 million accounted for 6.8% of current assets, which
comprised mainly receivables from the sale of crushed limestone, deposits and amount due from
convertible loan holders. The amount due from convertible loan holders has been fully repaid as
at the Latest Practicable Date.
Prepayments of MYR0.8 million accounted for 3.6% of current assets, which comprised mainly
prepaid listing expenses.
Pledged deposits of MYR1.1 million accounted for 5.0% of our current assets.
Cash at banks and on hand as at 30 September 2014 amounted to approximately MYR18.3 million
or 82.8% of current assets. This is an increase of MYR18.2 million as compared to 31 December
2013, which is due to the proceeds received from the Convertible Loan.
Non-current liabilities
As at 30 September 2014, our non-current liabilities of MYR20.7 million accounted for 43.3% of
our total liabilities. Our non-current liabilities comprised of obligations under finance leases, loans
and borrowings, and convertible loans.
Current liabilities
As at 30 September 2014, our current liabilities of MYR27.1 million accounted for 56.7% of our
total liabilities. Our current liabilities comprised of trade and other payables, loans and
borrowings, accrued operating expenses and derivative financial instruments.
Trade and other payables of MYR3.8 million accounted for 14.0% of total current liabilities, which
comprised of MYR2.2 million in other payables and MYR1.6 million in amounts due to directors.
This is a decrease of MYR7.9 million as compared to 31 December 2013, which is due to the
repayment of amounts due to shareholders and directors.
Loans and borrowings of MYR0.5 million accounted for 1.8% of current liabilities, which comprised
of loans and borrowings, obligations under finance leases and bank overdrafts. This is a decrease
of MYR3.9 million as compared to 31 December 2013, which is due to the repayment of a term
loan and bank overdraft.
Accrued operating expenses of MYR2.3 million accounted for 8.5% of current liabilities.
Derivative financial instruments of MYR20.5 million accounted for 75.6% of current liabilities.
Equity attributable to owners of the Company
As at 30 September 2014, our Group was in net assets position of MYR1.4 million which mainly
comprised of our issued and paid up share capital of MYR16.0 million and accumulated losses of
MYR14.6 million.

91

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
LIQUIDITY AND CAPITAL RESOURCES
As at the Latest Practicable Date, the Group has two (2) sources of cash categorised as internal
and external sources. Internal sources refer to cash generated from our Groups operating
activities. External sources of funds comprise mainly borrowings and capital investment from
financial institutions, shareholders, directors and investors. The principal uses of these cash
sources are to finance purchases, capital expenditure and operating expenses such as staffrelated expenses, rental, professional fees and administrative expenses.
As at the Latest Practicable Date, our Group had cash and cash equivalents of MYR5.8 million.
As at the Latest Practicable Date, our Group had total banking facilities of MYR4.3 million which
are unutilised. Please refer to the section entitled Capitalisation and Indebtedness of this Offer
Document for further details.
In view of the foregoing and after taking into consideration of the following:
(a)

to demonstrate his commitment to our Group, our Groups Executive Chairman and CEO,
Alex Loo, capitalised his shareholders loan of MYR5.0 million to strengthen the Groups
working capital position. This has improved our Groups capitalisation and lowered our
gearing, enabling our Group better access to external borrowings if required;

(b)

subsequent to 31 December 2013, our Group managed to raise an aggregate of S$18.8


million from the Pre-Placement Investors through the Convertible Loan Agreements;

(c)

as at 30 September 2014, our Group has repaid a loan of MYR2.0 million. As at the Latest
Practicable Date, our Group has a facility of MYR4.3 million which has not been utilised. As
such, our Group believes that it is able to obtain additional borrowings if required;

(d)

while the Gridland Quarry has only begun production in June 2014, our Group estimates that
production and sales will be self-sustaining in providing positive cash flows in FY2015; and

(e)

the preparatory works on the Hyper Act Quarry are on-going. Completion of preparatory
works and commencement of stockpiling of limestone is estimated to be completed within the
second half of 2015. Thereafter, our Group will be able to generate additional revenue and
operating cash flows from the commencement of production at the Hyper Act Quarry, which
will improve the working capital position of our Group.

Our Directors are of the reasonable opinion that, after taking into consideration the above and
having made due and careful enquiry and after taking into account the expected cash flows
generated from our Groups operations, our Groups banking facilities and our Groups existing
cash at banks and on hand, the working capital available to our Group as at the date of lodgement
of this Offer Document is sufficient for present requirements and for at least 18 months after the
Listing of our Group on Catalist.
The Sponsor is of the reasonable opinion that, after taking into consideration the above and
having made due and careful enquiry and after taking into account the expected cash flows
generated from our Groups operations, our Groups banking facilities and our Groups existing
cash at banks and on hand, the working capital available to our Group as at the date of lodgement
of this Offer Document is sufficient for present requirements and for at least 18 months after the
listing of our Group on the Catalist.

92

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
The following table sets out a summary of our Companys cash flow for the Period Under Review.

(MYR)

FY2011

Audited
FY2012

FY2013

Net cash flows (used in)/from


operating activities

(955,342)

1,275,785

7,149,529

Net cash flows used in


investing activities

(196,812)

Net cash flows from/(used in)


financing activities
Net (decrease)/increase in
cash and cash equivalents
at the end of the year/period

400,947

Cash and cash equivalents


at the beginning of the
year/period

15,713

Cash and cash equivalents


at the end of the
year/period (1)

Audited
9M2014

3,480,305 (10,849,738)

(176,375) (8,142,331) (4,533,109) (14,870,995)


(2,426,055) 1,145,747

(751,207) (1,326,645)

Effect of exchange rate


changes on cash and cash
equivalents

Unaudited
9M2013

1,320,244

45,781,584

152,945

267,440

20,060,851

150,055

(735,494) (2,062,139) (2,062,139)

(1,909,194)

(735,494) (2,062,139) (1,909,194) (1,794,699) 18,301,712

Note:
(1)

Cash and cash equivalents at the end of the period includes cash at banks and on hand, and bank overdrafts. Cash
at banks and on hand amounted to MYR3,234, MYR3,623, MYR0.1 million, and MYR18.3 million for FY2011,
FY2012, FY2013, and 9M2014 respectively. Bank overdrafts amounted to MYR0.7 million, MYR2.1 million, and
MYR2.1 million for FY2011, FY2012 and FY2013 respectively. There is no bank overdraft for 9M2014.

FY2011
In FY2011, we recorded a net cash outflow from operating activities of MYR1.0 million, which was
a result of operating cash inflows before changes in working capital of MYR0.4 million adjusted for
working capital outflows of MYR0.9 million and net interest paid of MYR0.4 million. The decrease
in net working capital was mainly due to the following:
(a)

increase in trade and other receivables of MYR1.0 million; and

(b)

increase in prepayments of MYR3,798;

which was partially offset by:


(c)

increase in trade and other payables of MYR89,905.

Net cash outflow from investing activity of MYR0.2 million was due to purchases of property, plant
and equipment.

93

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Net cash inflow generated from financing activities of MYR0.4 million was due to the proceeds
from term loans of MYR0.6 million. This was partially offset by the repayment of term loans of
MYR0.2 million, repayment of hire purchase of MYR5,552 and placement of pledged deposits of
MYR9,891.
As at 31 December 2011, our cash and cash equivalents were an overdraft of MYR0.7 million.
FY2012
In FY2012, we recorded a net cash inflow from operating activities of MYR1.3 million, which was
a result of operating cash outflow before changes in working capital of MYR0.8 million adjusted
for working capital inflows of MYR2.5 million, net interest paid of MYR0.3 million and income tax
paid of MYR43,885. The increase in net working capital was mainly due to the following:
(a)

decrease in trade and other receivables of MYR2.4 million; and

(b)

increase in trade and other payables of MYR46,495;

which was partially offset by:


(c)

decrease in accrued operating expenses of MYR10,263.

Net cash outflow from investing activities of MYR0.2 million, which was due to the purchase of
property, plant and equipment. This was partially offset by proceeds from disposals of plant,
property and equipment of MYR94,940.
Net cash outflow from financing activities of MYR2.4 million which was due to the repayment of
term loans of MYR4.0 million, repayment of hire purchases of MYR0.2 million and the placement
of pledged deposits of MYR0.2 million. This was partially offset by proceeds from term loans of
MYR2.0 million.
As at 31 December 2012, our cash and cash equivalents were an overdraft of MYR2.1 million.
FY2013
In FY2013, we recorded a net cash inflow from operating activities of MYR7.1 million, which was
a result of operating cash outflows before changes in working capital of MYR0.7 million adjusted
for working capital inflows of MYR9.0 million, exploration expenditure of MYR0.7 million and net
interest paid of MYR0.4 million. The increase in net working capital was mainly due to the
following:
(a)

increase in trade and other receivables of MYR2.3 million;

(b)

increase in trade and other payables of MYR6.5 million; and

(c)

increase in accrued operating expenses of MYR0.2 million.

Net cash outflow from investing activities of MYR8.1 million was due to the purchases and
prepayment of purchases of property, plant and equipment.

94

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Net cash inflow generated from financing activities of MYR1.1 million was mainly due to the
proceeds from term loans of MYR1.6 million. This was partially offset by repayment of term loans
of MYR0.1 million, repayment of hire purchase of MYR0.1 million and placement of pledged
deposits of MYR0.2 million.
As at 31 December 2013, our cash and cash equivalents were an overdraft of MYR1.9 million.
9M2014
In 9M2014, we recorded a net cash outflow from operating activities of MYR10.8 million, which
was a result of operating cash outflows before changes in working capital of MYR7.0 million
adjusted for working capital outflows of MYR3.4 million, exploration expenditure of MYR0.3 million
and net interest paid of MYR0.1 million. The decrease in net working capital was mainly due to the
following:
(a)

increase in inventories of MYR0.4 million;

(b)

increase in trade and other receivables of MYR1.5 million;

(c)

increase in prepayments of MYR0.8 million; and

(d)

decrease in trade and other payables of MYR2.9 million;

which was partially offset by:


(e)

increase in accrued operating expenses of MYR2.1 million.

Net cash outflow from investing activity amounted to MYR14.9 million, which was due to
purchases of property, plant and equipment.
Net cash inflow generated from financing activities of MYR45.8 million was mainly due to the
proceeds received from the issuance of convertible loans of MYR48.3 million. This was partially
offset by repayments of term loans of MYR2.2 million, repayment of hire purchase of MYR0.1
million and placement of pledged deposits of MYR0.2 million.
As at 30 September 2014, our cash and cash equivalents were MYR18.3 million.
SEASONALITY
Our Group does not experience any significant seasonality in the course of our business.
INFLATION
Our financial performance for the Period Under Review was not materially affected by inflation.

95

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
CAPITAL EXPENDITURE AND DIVESTMENTS AND COMMITMENTS
Capital expenditure
The capital expenditures made by our Group during the Period Under Review and from 1 October
2014 up to the Latest Practicable Date were as follows:

(MYR)

FY2011

FY2012

FY2013

53,889

152,348

4,459,351

Plant & equipment

237,923

649,967

200,980

Total

291,812

802,315

4,660,331

Leasehold land

9M2013

9M2014

1 October 2014
up to the
Latest
Practicable
Date

4,336,678 10,433,188
200,980

8,175,807

298,437

4,537,658 18,608,995

298,437

The above capital expenditures were primarily financed by external generated funds comprised
mainly of borrowings from financial institutions and capital investment from shareholders,
directors and investors.
Divestments
The divestments made by our Group during the Period Under Review and from 1 October 2014
up to the Latest Practicable Date were as follows:

FY2011

FY2012

FY2013

9M2013

9M2014

1 October
2014 up to
the Latest
Practicable
Date

Plant & equipment

102,786

74,900

1,430

Total

102,786

74,900

1,430

(MYR)

Capital commitments
As at the Latest Practicable Date, our Group did not have any capital commitments.

96

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Operating lease commitments
As at 30 September 2014 and the Latest Practicable Date, our Group has the following operating
lease payment commitments relating to rental payable for our office premises and certain items
of plant and machinery as disclosed in the section entitled General Information on our Company
and Our Group Properties and Fixed Assets of this Offer Document. We intend to finance the
below operating lease commitments with internally generated funds.

As at
30 September
2014

As at the
Latest
Practicable
Date

34,000

142,510

Later than 1 year but not later than 5 years

More than 5 years

34,000

142,510

(MYR)
Not later than 1 year

Total

Finance lease commitments


As at 30 September 2014 and the Latest Practicable Date, the finance lease commitments our
Group has were as follows:

As at
30 September
2014

(MYR)

As at the
Latest
Practicable
Date

Not later than 1 year

157,598

279,747

Later than 1 year but not later than 5 years

355,959

804,877

513,557

1,084,624

More than 5 years


Total

The above finance lease commitments were primarily financed by internally generated resources.
Contingent liabilities
As at the Latest Practicable Date, our Group does not have any contingent liabilities.
EXCHANGE CONTROLS
Malaysia
There is no restriction on amount of repatriation of capital, profits, and income earned from
Malaysia. Repatriation of funds from divestment of MYR assets or profits and dividends arising
from the investments in Malaysia, however, must be made in foreign currency other than the
currency of the State of Israel.
97

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL POSITION
Cayman Islands
There are no exchange controls enforced in the Cayman Islands.
Singapore
There are no exchange controls enforced in Singapore.
FOREIGN EXCHANGE MANAGEMENT
Our Groups transactions are largely denominated in MYR and have limited exposure to foreign
exchange risk. In FY2012, our Group was subjected to foreign exchange exposure in the trading
of coal as coal was purchased in USD currency from Indonesia for the sale in Malaysia. This was
a one-off transaction with a sole customer. As a result, our foreign exchange gains or losses for
the Period Under Review have been not significant.
We do not currently have a formal hedging policy although we may, subject to the approval of our
Board, enter into relevant transactions when necessary, to hedge our exposure to foreign currency
fluctuations. We will also put in place, where necessary, procedures to hedge our exposure to
foreign currency fluctuations. Such procedures will be reviewed and approved by our Audit
Committee and our Board.
SIGNIFICANT ACCOUNTING POLICY CHANGES
There has been no significant change in the accounting policies for our Group during the Period
Under Review. Please refer to Appendix A entitled Audited Consolidated Financial Statements for
the financial years ended 31 December 2011, 2012 and 2013 and Appendix B entitled Audited
Interim Consolidated Financial Statements for the nine-month period ended 30 September 2014
of this Offer Document for more details on our accounting policies.

98

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


The following discussion on our Groups limestone exploration and quarrying activities should be
read in conjunction with Appendix F entitled Independent Qualified Persons Report of this Offer
Document.
HISTORY
Our Company is an exempted company incorporated in the Cayman Islands on 1 November 2013.
In preparation for our listing, we undertook the Restructuring Exercise whereby our Company
acquired the entire shareholding interest in Gridland and Hyper Act and became the holding
company of our Group. Please refer to the section entitled Restructuring Exercise of this Offer
Document for further details.
Our Group originated with the incorporation of Gridland in Malaysia in February 2009 by our
Executive Chairman and CEO, Alex Loo, who had identified potential in the Malaysian limestone
industry. Gridland acquired the Gridland Quarry in October 2009, which is a limestone quarry of
approximately 25 acres situated in Perak, Malaysia, from Kayangan Prinsip Sdn Bhd for a
consideration of MYR5.0 million which was satisfied in cash. Kayangan Prinsip Sdn Bhd is a third
party and is not related to the Directors, Substantial Shareholders or Key Executives of our
Company. The Gridland Quarry is located in close proximity to quicklime processing companies
that utilise crushed limestone produced by our Group. For further details on the Gridland Quarry,
please refer to the section entitled General Information on our Company and our Group Our
Quarries of this Offer Document.
Since the acquisition of the Gridland Quarry, our Group has spent significant time and effort in
preparing the quarry for production, taking steps such as reclaiming sections of the land and
carrying out piling and foundation works for the crushing plant for the Gridland Quarry (Gridland
Crushing Plant) and an electrical substation, benching works and construction of working
platforms on the limestone hill for limestone quarrying, and acquiring equipment and vehicles such
as the Gridland Crushing Plant, excavators and wheel loaders which are necessary for the
production to take place. The costs for the preparatory works and the acquisition were largely
funded by our Executive Chairman and CEO, Alex Loo, which demonstrates his commitment
towards our Groups business. The period of preparation had also allowed our Groups
management team to learn about and acquire hands-on experience in respect of the limestone
industry. Our Group, recognising the technical nature of limestone production, had also engaged
Steve Loh, a mining consultant with more than 40 years of experience in quarrying and to the best
of the knowledge of our Directors is as at the Latest Practicable Date a quarry consultant for 44
out of the 66 operating quarries in Perak, Malaysia to provide advice to our Group on statutory
obligations in respect of the relevant licences, permits and approvals for Gridland and Hyper Act.
In addition to the preparatory works, our management team, in particular our Executive Chairman
and CEO, Alex Loo, with a view towards developing networks in the limestone industry, has been
establishing and maintaining close interactions with limestone industry players.

99

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Prior to the commencement of the quarrying of limestone from the Gridland Quarry, our Group was
engaged in ad-hoc trading of iron ore and coal in FY2011 and FY2012. Our Group commenced the
quarrying of limestone from the Gridland Quarry in January 2013 and with such commencement,
our Group ceased the trading of iron ore and coal to focus on its limestone quarrying and
processing business. The quarried limestone was stockpiled in anticipation of the commissioning
of the Gridland Crushing Plant, which will be used to further process the quarried limestone by
breaking it down into various particle sizes of up to 90.0mm, as required by our customers who
are typically parties who require our limestone for the manufacture of PCC. The Gridland Crushing
Plant was commissioned in May 2014 and our Groups production of crushed limestone
commenced in June 2014. Our Group has, as at the Latest Practicable Date, produced
approximately 111,148t of crushed limestone.
In June 2014, as part of our Groups plans to become a market leader in the limestone industry
in Malaysia, our Group acquired the Hyper Act Quarry, a limestone quarry of 60 acres situated in
Perak, Malaysia, which is located approximately 3.3km away from the Gridland Quarry from
Virgo-Up Ventures Sdn Bhd, Yayasan Bina Upaya Darul Ridzuan, Konsep Tuah Sdn Bhd, Shafarra
Trade, Travel & Services Sdn Bhd and YBU Holdings Sdn Bhd (collectively, the Hyper Act
Vendors), for an aggregate consideration of MYR9.0 million which was fully satisfied in cash. The
Hyper Act Vendors are third parties who are not related to the Directors, Substantial Shareholders
or Key Executives of our Company. As at the Latest Practicable Date, preparatory works on the
Hyper Act Quarry are on-going. Our Group has applied for and is pending approvals for the
relevant business licences, approvals and permits for the Hyper Act Quarry which include, inter
alia, the removal of mineral licence from the Department of Lands and Mines of Perak.
BUSINESS OVERVIEW
Our Group is principally engaged in the business of quarrying and the processing of limestone by
crushing the quarried limestone into varying particle sizes as required by our customers. Our
business operations are principally located in Simpang Pulai, Ipoh, Perak, Malaysia.
Our Group, through the Gridland Quarry, produces crushed limestone of varying particle sizes of
up to 90.0mm that are sold to our customers who are typically parties who require our crushed
limestone for the manufacture of PCC. The Gridland Quarry commenced production of crushed
limestone in June 2014 and has a production capacity of up to 40,000t of crushed limestone per
month. For further details on our quarries and our limestone reserves, please refer to the section
entitled General Information on our Company and our Group Our Quarries of this Offer
Document.
As at the Latest Practicable Date, our Group is in the process of undertaking the preparatory work
involved in making the Hyper Act Quarry operational, in particular the construction of a crushing
plant (Hyper Act Crushing Plant) and limestone powder production plant (Powder Plant). Our
Group intends to, subsequent to the receipt of approvals by the relevant authorities and the
completion of the construction of the Hyper Act Crushing Plant and Powder Plant, produce
crushed limestone of varying particle sizes of up to 100.0mm and limestone powder, both of which
will be sold to customers to produce GCC. For further details on the Hyper Act Quarry, our
limestone reserves and our development plans for the Hyper Act Quarry, please refer to the
sections entitled General Information on our Company and our Group Our Quarries and
General Information on our Company and our Group Business Strategies and Future Plans of
this Offer Document respectively.

100

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


OUR QUARRIES
Gridland Quarry and Hyper Act Quarry are wholly owned by Gridland and Hyper Act respectively
and are approximately 3.3km apart from each other. Our quarries cover a total acreage of
approximately 85.0 acres.
Both quarries are in the industrialised area of the city of Ipoh, Perak, Malaysia which is about
180.0km north of Kuala Lumpur, the capital of Malaysia. Ipoh is the capital city of Perak State in
Malaysia. There are numerous active quarries producing raw calcium carbonate material and
limestone processing plants belonging to multinational and domestic companies in the same area,
which can be accessed via the North-South Expressway in Malaysia.
Gridland Quarry

Source: Our Company

Gridland Quarry has a total acreage of approximately 25.0 acres and has a mining elevation
ranging from 50.0m to 240.0m. The Gridland Quarry is located in the Sengat Quarry Zone which,
based on the Independent Qualified Persons Report, is well known for good limestone deposits.
The Gridland Quarry is accessible to any motor vehicles or highway trucks through the
surrounding area.
As of 30 September 2014, the limestone Mineral Resource in the Gridland Quarry comprises a
total Measured and Indicated Mineral Resource of 26Mt (totals may appear to be inconsistent due
to appropriate rounding and are inclusive of Ore Reserves), which includes a Measured Mineral
Resource of 1.4Mt and an Indicated Mineral Resource of 24Mt.
As of 30 September 2014, the limestone Ore Reserves in the Gridland Quarry comprise 4.3Mt of
Probable Ore Reserves.

101

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


At the Gridland Quarry, approximately 18.0 acres is dedicated to quarrying of limestone, 4.0 acres
is utilised for the Gridland Crushing Plant and the remaining area is used as a working area and
safety corridor.
Hyper Act Quarry

Source: Our Company

102

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


The Hyper Act Quarry has a total acreage of approximately 60.0 acres and has a mining elevation
ranging from 100.0m to 400.0m. The Hyper Act Quarry is situated in the Keramat Pulai Quarry
Zone and access to the Hyper Act Quarry is through a main public access road.
As of 30 September 2014, the limestone Mineral Resource in the Hyper Act Quarry comprises a
total Measured and Indicated Mineral Resource of 160Mt (totals may appear to be inconsistent
due to appropriate rounding and are inclusive of Ore Reserves), which includes a Measured
Mineral Resource of 47Mt and an Indicated Mineral Resource of 120Mt.
As of 30 September 2014, the limestone Ore Reserves in the Hyper Act Quarry comprise a total
of 22.0Mt, which includes Proved Ore Reserves of 2.2Mt and Probable Ore Reserves of 19.7Mt.
Development plans for Hyper Act Quarry
We have yet to commence quarrying or production of crushed limestone or limestone powder at
the Hyper Act Quarry. Our Company has plans to develop and commence production at the Hyper
Act Quarry, further details of which is set out in the section entitled General Information on our
Company and our Group Business Strategies and Future Plans of this Offer Document.
RESOURCE AND RESERVES
Resource and Reserves statements
According to the Independent Qualified Persons Report, the Resource and Reserves estimates
in our Gridland Quarry and Hyper Act Quarry are reported in conformity with the JORC Code. A
summary of statements of Resources and Reserves at the Gridland Quarry and Hyper Act Quarry
as at 30 September 2014 are as set out below:
Limestone Resource Statement of the Group as at 30 September 2014 (1)

Category

Hyper Act
Tonnage
(Mt)

Hyper Act
Grade
(CaCO 3%)

Gridland
Tonnage
(Mt)

Gridland
Grade
(CaCO 3%)

Measured

47

96

1.4

98

Indicated

120

96

24

98

Total measured and indicated

160 (2)

96

26 (2)

98

10

96

20

98

Inferred
Notes:
(1)

The procedures and parameters used for resource estimation are set out in section V of Appendix F entitled
Independent Qualified Persons Report of this Offer Document.

(2)

The total figure is the aggregate of the Measured and Indicated Mineral Resource and may appear to be inconsistent
due to appropriate rounding.

103

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Ore Reserve Statement of the Group as at 30 September 2014 (1)

Category

Mineral
Type

Hyper Act
Tonnage
(Mt)

Hyper Act
Grade
(CaCO 3%)

Gridland
Tonnage
(Mt)

Gridland
Grade
(CaCO 3%)

Proved

Limestone

2.2

96.1

N/A (2)

Probable

Limestone

19.7

96.1

4.3

98.2

96.1

4.3

98.2

Total

Limestone

22.0

(3)

N/A (2)

Notes:
(1)

The procedures and parameters used for reserve estimation are set out in section VIII of Appendix F entitled
Independent Qualified Persons Report of this Offer Document.

(2)

Insufficient studies conducted to determine.

(3)

The total figure is the aggregate of the Proved and Probable Ore Reserves and may appear to be inconsistent due
to appropriate rounding.

Please refer to the section entitled Glossary of Technical Terms of this Offer Document for the
definitions of Measured, Indicated and Inferred Resources as well as Proved and Probable Ore
Reserves.
The Resource and Reserves estimates should not be regarded as a representation that all these
amounts can be achieved and/or be economically exploited and nothing contained herein should
be interpreted as an assurance of the economic life of our limestone Reserves and Resource or
the economic viability of our future operations. The actual quarry life can also differ from the
projected quarry life for a number of reasons, including, inter alia, changes in the production rate.
In addition, as we have possession of the Gridland Quarry and the Hyper Act Quarry and the right
to undertake the business operations only for the lease terms of the respective quarries, assuming
there is no renewal of the lease terms of the respective quarries upon their expiry, we may not be
able to fully extract and monetise the Resource and/or the Reserves available at the Gridland
Quarry and Hyper Act Quarry.
To the best of our knowledge, no material changes have occurred to the Gridland Quarry, the
Hyper Act Quarry and/or the business since the effective date of the Independent Qualified
Persons Report, being 30 September 2014, which has or may have a material impact on the key
bases and assumptions and/or the findings or opinions under the Independent Qualified Persons
Report.
Please refer to Appendix F entitled Independent Qualified Persons Report of this Offer
Document for further details of Resource and Reserves estimation in our Gridland Quarry and
Hyper Act Quarry.
INDEPENDENT VALUATION
As part of the Listing, the Directors have appointed the Independent Valuer to conduct an
independent valuation of the Gridland Quarry and the Hyper Act Quarry. The Independent
Valuation Report has been prepared in accordance with the VALMIN Code. The valuation was
carried out on a Fair Market Value basis. Please refer to Appendix G entitled Independent
Valuation Report of this Offer Document for further details.
Fair Market Value is defined as the amount of money (or the cash equivalent of some other
consideration) for which the mineral asset should change hands on the valuation date in an open
and unrestricted market between a willing buyer and a willing seller in an arms length
transaction, with each party acting knowledgeably, prudently and without compulsion.
104

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Based on the results of the Independent Valuers investigations and analysis outlined in the
Independent Valuation Report, the Independent Valuer is of the opinion that the Fair Market Value
of the Gridland Quarry and the Hyper Act Quarry as at 30 September 2014 is in the range of
US$170 million to US$580 million with a preferred value of US$310 million. A sensitivity analysis
has also been included in the valuation given the changes in assumptions to the product price,
operating cost and capital cost against a +/- 1 percentage point and 2 percentage point change
in discount rate. For more information, please refer to the section Sensitivity Analysis of
Appendix G entitled Independent Valuation Report of this Offer Document.
Please refer to Appendix G entitled Independent Valuation Report of this Offer Document for
further details.
LIMESTONE AND ITS USES
Limestone is a calcium carbonate rock, which is a granular or crystalline rock formed by biological
and chemical precipitation of calcium carbonate from seawater, normally deposited close to its site
of formation.
Calcium carbonate rocks can be divided into two (2) types based on their commercial production
methods:
(a)

ground calcium carbonate (GCC), which is produced by crushing and grinding a carbonate
rock, such as limestone; and

(b)

precipitated calcium carbonate (PCC), which is made by:


(i)

converting limestone to quicklime and carbon dioxide by carbonisation at high


temperature;

(ii)

adding water to turn quicklime into hydrated lime; and

(iii) converting hydrated lime into PCC by carbonisation.


PCC and GCC are used in, or in the manufacturing processes for, many products, such as:

adhesives;

animal feed;

carriers for insecticides and herbicides;

ceramics;

cleaning products;

elastomers;

fertilisers;

foodstuff;

glass;

paints;

paper;

plastics;

pharmaceuticals;

rubber;

sealants;

toiletries; and

water treatment.
105

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


WORK PROCESS
The following diagrammatic depiction generally represents our work process for the Gridland
Quarry and Hyper Act Quarry (subsequent to the receipt of approval by the relevant authorities
and commencement of production) as at the Latest Practicable Date:
Quarrying

Processing

Sale

Quarrying
Quarrying consists of removing blocks or pieces of stone from an identified and unearthed
geologic deposit. Differences in the particular quarrying techniques used often stems from
variations in the physical properties of the deposit itself (such as density, fracturing/bedding
planes and depth), financial considerations, and the site owners preference.
In summary, the quarrying process involves the following steps:
(a)

locating or creating minimal breaks in the stone;

(b)

removing the stone using heavy machinery;

(c)

securing the stone on a vehicle for transport; and

(d)

moving the material to storage.

There are two (2) types of quarrying operation methods which can be implemented smoothly. They
are the open-cast quarrying method and the basement quarrying method. These two (2) types of
quarrying operations are similar except that an open-cast quarrying method develops upwards
and downwards and the basement quarrying method develops downwards. The relevant permit
which the Group has, enables the Group to implement the open-cast quarrying method or the
basement quarrying method, depending on the stage of quarrying which the Group is in for the
particular quarry it is conducting the quarrying work.
In order for quarrying works to commence, there would be a need to gain access to the limestone
deposit. This is achieved by removing the layer of earth, vegetation and rock unsuitable for the
final limestone product, which are collectively referred to as overburden, with heavy equipment
that is mostly coupled with small explosive charges. The overburden is then transferred to onsite
storage for potential use in later reclamation of the site.
After the face of the limestone is exposed, the stone is removed from the quarry in benches using
a variety of techniques suitable to the geology and characteristics of the limestone deposit.
Benches typically have a height and depth equating to eight (8) to 12 ft and length of 20 ft or more.

106

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Quarrying operations typically include drilling holes along the perimeter of the bench followed by
installation of explosive charges to initiate blasting which is typically carried out in a controlled
manner to obtain the rocks. Primary blasting will be used to fracture the rocks initially followed by
secondary or boulder blasting to further fracture the rocks. Primary and secondary blasting is
usually conducted separately. Such blasting operations are typically carried out twice a week and
once a week for primary blasting and secondary blasting respectively. The installation of such
explosive charges and the blasting work is carried out by an independent consultant.
Once the bench is blasted loose from the deposit, heavy equipment is used to lift the limestone
and transfer to temporary storage.
Processing
Processing is based on well-established methods of crushing, screening and roller and ball
milling. The important properties in dry processing include the density, particle size, particle
shape, surface treatment and brightness.
Our crushing plant consists of four (4) main sections primary crushing section, primary stockpile,
secondary crushing system and final product stockpile. As at the Latest Practicable Date, the
crushing capacity of our Gridland Crushing Plant is approximately 240.0t per hour.
The general procedures for processing begin with the breaking of extracted limestone with heavy
machinery at temporary storage site. The limestone is then transported to the initial stage of the
crushing plant at the dump hopper. Processing commences with the limestone entering the
primary crushing stage through a jaw crusher where the stones are crushed to a size suitable for
secondary crushing. Waste rocks and crushed limestone of smaller sizes are sieved out using
vibrating screens prior to the primary stockpile.
The conveyor belts in the crushing plant then transport the stones to a secondary crusher for
further processing into specific sizes, which are again segregated using a vibrating screen. The
final product is then sent to temporary storage prior to transport to customers. Excess/waste rocks
are stored onsite for further uses such as landfill or sold to consumers in the agricultural and
construction industry.
Sale
We enter into sale arrangements directly with our customers. We may in future enter into
limestone off-take agreements with limestone consumers.
PRODUCTION CAPACITY
The following table shows our Groups production capacity for our crushed limestone for the
Period Under Review:
FY2011
Maximum production capacity
(tons per month) (1)
Actual production (tons)
Utilisation rate (%) (3)

(2)

FY2012

FY2013

9M2014

40,000

48,649

N.A.

N.A.

N.A.

20.1

107

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Notes:
(1)

The maximum production capacity during the financial periods under review were calculated based on an average
production rate of 240.0t per hour, the aggregate eight (8) hours work shift per day for 21 operating days per month.

(2)

Our Group is in the initial stages of production and has not been operating at full capacity. Actual production is
anticipated to increase as our Group ramps up production after the first few months of operation.

(3)

The utilisation rates were computed using actual volumes of crushed limestone produced divided by the estimated
maximum production capacity.

QUALITY ASSURANCE
We place great emphasis on the quality of our crushed limestone. We believe that having an
established quality management system is one of the main factors contributing to our success and
reputation of quality products.
We monitor the quality of our limestone through on-site inspections at the quarries. Samples of
crushed limestone are collected once a month from our stockpiles at the quarries and analysed
by sending to third party laboratories for chemical composition, colour and brightness. It is
anticipated that Hyper Act would have its own laboratory and such testing may be conducted
in-house.
Our quality assurance processes are led by a quarry manager. He is responsible for overseeing
the various inspections conducted on-site and at the crusher plants. As at the Latest Practicable
Date, the quarry manager is assisted by two (2) workers.
During the period 1 October 2014 to the Latest Practicable Date, we have not received any
significant complaints from customers of our crushed limestone.
OUR MAJOR CUSTOMERS
We sell our crushed limestone of various sizes to domestic customers.
In June 2014, our Group commenced production of crushed limestone. As at the Latest
Practicable Date, our Group has two (2) customers, namely Limetreat Sdn Bhd, a subsidiary of
NSL Chemicals Sdn Bhd, and Pulai Rock Industries Sdn Bhd.

Major customers

As a percentage of total sales (%)


FY2011
FY2012
FY2013
9M2014

Ann Joo Integrated Steel Sdn Bhd

100.0

79.0

Hap Seng Clay Products Sdn Bhd

21.0

Pulai Rock Industries Sdn Bhd

48.0

Limetreat Sdn Bhd, a subsidiary of NSL


Chemicals Sdn Bhd

52.0

108

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


We generally do not enter into long-term or exclusive agreements with any of our major
customers. Our Group is not materially dependent on any contract with any major customer and
customers for our crushed limestone can be sourced from the market without significant
difficulties. Since the commencement of production in June 2014 to the Latest Practicable Date,
we have sold 6,178t of crushed limestone to Pulai Rock Industries Sdn Bhd and have invoiced
15,000t of crushed limestone to Limetreat Sdn Bhd, a subsidiary of NSL Chemicals Sdn Bhd
pursuant to purchase orders.
During the Period Under Review and prior to the commencement of the limestone quarrying and
processing business of our Group, Gridland sold iron ore to Ann Joo Integrated Steel Sdn Bhd and
coal to Hap Seng Clay Products Sdn Bhd, with the total sales amounting to approximately MYR7.6
million. The sales of iron ore and coal were ad-hoc transactions and Gridland has since focused
on its limestone quarrying and processing business.
As at the date of this Offer Document, none of our Directors, Substantial Shareholders or their
respective Associates has any interest (direct or indirect) with any customer.
OUR MAJOR SUPPLIERS
Our major suppliers for the Period Under Review are set out below:
Percentage of operating costs (%)
FY2011
FY2012
FY2013
9M2014

Major suppliers

Nature of services

Sam Hoe Hup Kee


Engineering Works
Sdn Bhd

Contractor for
mechanical and
electrical works

0.2

3.1

4.8

NSL Chemicals (M)


Sdn Bhd

Supplier of waste for


the purpose of land
filling

4.4

2.4

0.1

Khai Huat Rock


Blasting Sdn Bhd

Rental of pneumatic
crawler drill

2.0

7.9

2.8

Our Group carefully evaluates and chooses experienced suppliers and will only work with those
who are able to provide good and timely services at competitive prices.
We generally do not enter into long-term or exclusive agreements with any of our major suppliers.
Our Group is not materially dependent on any contract with any supplier and the products supplied
by the above major suppliers can be sourced from other alternative suppliers in the market without
significant difficulties.
To the best of our Directors knowledge, we are not aware of any information or arrangements
which would lead to a cessation or non-renewal of our current relationship with any of the above
major suppliers or service providers.
As at the date of this Offer Document, none of our Directors or Substantial Shareholders or their
respective Associates has any interest (direct or indirect) in the abovementioned major suppliers
or service providers.

109

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


CREDIT MANAGEMENT
Credit terms offered to our customers
We generally require our customers to make payment within 30 days from their collection of our
crushed limestone. Nonetheless, in the event that customers request for more favourable credit
terms, our Company will assess the credit terms to be offered to customers on a case-by-case
basis and such credit terms offered will take into account, inter alia, the creditworthiness of the
customer, as well as the size and regularity of the customers purchases.
Our average trade receivables turnover days for the Period Under Review were as follows:
FY2011

FY2012

FY2013

9M2014

N.A.

30 (1)

Average trade receivables turnover days (1)


Note:
(1)

As our Group commenced production in June 2014, we have recorded trade receivables for only four (4) months in
9M2014.

In FY2011, our trade receivables were mainly due to proceeds from the sale of iron ore and were
not relevant to our current business. Our trade receivables in 9M2014 are due to the sales of our
crushed limestone.
As we commenced production in June 2014, we have recorded trade receivables for only four (4)
months in 9M2014. Our trade receivables (net of impairment loss on trade receivables) as at 30
September 2014 amounted to MYR0.2 million and the trade receivables ageing schedule as at 30
September 2014 was as follows:
Percentage of total
trade receivables
(%)

Age of trade receivables


Neither past due or impaired

100.0

Past due 0 30 days

Past due 31 90 days

100.0

As at the Latest Practicable Date, the trade receivables of MYR0.2 million had been fully collected.
Save for the above, during the Period Under Review, all outstanding trade receivables from third
parties were collected within the credit period extended. No provisions for bad debts were made.
Credit terms granted by our suppliers
In general, the credit period stipulated in the contracts signed between our Group and our
suppliers is within 30 days of delivery of goods and services. It is not meaningful to calculate the
trade payables turnover days of our Group for the Period Under Review as the expenditure
incurred by our Group during the Period Under Review was not of a trading nature.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Our average trade payables turnover days for the Period Under Review were as follows:
FY2011

FY2012

FY2013

9M2014

N.A.

30 (1)

Average trade payables turnover days (1)


Note:
(1)

As our Group commenced production in June 2014, we have recorded trade payables for only four (4) months in
9M2014.

In FY2011, our trade payables were mainly attributable to cost of iron ore purchased and were not
relevant to our current business. Our trade payables in 9M2014 are due to the production of our
crushed limestone.
INVENTORY MANAGEMENT
It is not meaningful to calculate the inventory turnover days of our Group for the Period Under
Review in line with the absence of significant sales of our Group for such period.
Due to the nature of our business and the time required to extract and remove limestone from the
quarries, we typically require our customers to provide a notice period of approximately one (1)
to two (2) months for the delivery of our crushed limestone, depending on the size of the order.
As such, contracts are typically entered into in advance and the actual delivery of our crushed
limestone takes place approximately one (1) to two (2) months from the date the contract was
entered into.
SALES AND MARKETING
Our Executive Chairman and CEO, Alex Loo and our Executive Director and COO, Pang Kim Chon
oversee the sales and marketing aspects of our Group which covers our domestic sales and
exports and are assisted by a business development manager. Presently, the sales and marketing
of our Group include (i) formulating sales and marketing strategies; (ii) establishing and
maintaining relationships with new and existing customers; and (iii) direct marketing, trade fairs
and conferences. We intend to set up a sales and marketing department and to hire a manager
to oversee the department.
From time to time, we are also approached directly by customers.
INSURANCE
For the Period Under Review and for the period commencing from 1 October 2014 up to the Latest
Practicable Date, we were in compliance with applicable Malaysia laws, rules and regulations
obtaining insurance for our employees.
For our office and other working premises, we have maintained insurance policies which cover
such premises for losses due to fire. As for staff and employees, we have taken up policies
including social security insurance. For our limestone quarrying operations, we have taken up
policies such as public liability, motor equipment and equipment all-risks insurance.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Our Directors are of the view that our Groups business and operations are sufficiently covered by
the current insurance policies taken up. We periodically review and assess our risks and make
necessary adjustments to our insurance coverage to meet our needs and comply with industry
practice in Malaysia.
INTELLECTUAL PROPERTY
Our business is not materially dependent on any patent, patent rights, licences, processes or
other intellectual property.
LICENCES, PERMITS AND APPROVALS
To the best of our Directors knowledge, our Group has obtained all material licences, permits and
approvals for our business operations in the Gridland Quarry. The details of such licences, permits
and approvals are set out below:
Name of
Approval/Licence

Description of
Approval/Licence

Issuing Body

Date of Expiry

Removal of mineral
licence (also known as
Form K)

For removal of mineral


from the lands
PN258388 Lot 302284
and PN258390 Lot
302283 at Mukim Sungai
Raya, Daerah Kinta,
Negeri Perak

Department of
Lands and Mines
of Perak

31 December
2015

Quarry scheme approval


letter (Quarry Scheme
Approval Letter)

Approval letter in respect


of the quarry operating
scheme for PN 258390
Lot 302284 of Sungai
Raya, Kinta and PN
380610 Lot 332220
Sungai Raya, Kinta

Minerals and
Geoscience
Department of
Perak

31 December
2015

Letter of Authorisation
for Quarry Blasting

Approval letter for quarry


blasting

Minerals and
Geoscience
Department of
Perak

Not applicable

Letter of Approval for


Installation of Machinery

Approval for installation


of machinery

Occupational
Safety and
Health
Administration

Not applicable

Letter of Approval in
relation to the
application to extend the
approval of buying,
carrying and use of
explosives (Explosives
Approval)

Approval to extend the


approval of purchasing,
carrying and use of
explosives

Police contingent
headquarters of
the Royal
Malaysia Police
Ipoh, Perak

31 December
2015

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Our Group has not commenced operations at the Hyper Act Quarry and is in the process of
applying for the necessary licences, permits and approvals for our business operations in the
Hyper Act Quarry. As at the Latest Practicable Date, our Group has received a Quarry Scheme
Approval Letter for the Hyper Act Quarry. In respect of the Form K, our Group intends to apply for
the Form K for the Hyper Act Quarry before it commences operations in the second half of 2015.
Our Directors are of the view that the Group will not have any difficulty in obtaining the Form K,
on the basis that the application for the Form K is procedural in nature as the Quarry Scheme
Approval Letter has already been obtained. In addition, our quarry consultant, Loh Consultants
Sdn. (1974) (LCS), is of the view that the application for the Form K is procedural in nature, and
has expressed confidence that our Group will not have any difficulty in obtaining the Form K. The
Legal Adviser to our Company on Malaysia Law, Jeff Leong, Poon & Wong, is not aware of any
difficulties in obtaining the Form K for the Hyper Act Quarry.
To the best of our Directors knowledge, our Company has obtained all necessary licences,
permits and approvals for our business operations. As at the Latest Practicable Date, none of the
aforesaid licences, permits and approvals have been suspended, revoked or cancelled, and save
as disclosed in the section entitled Risk Factors of this Offer Document and to the best of our
Directors knowledge, we are not aware of any facts or circumstances which would cause such
licences, permits and approvals to be suspended, revoked, or cancelled as the case may be, or
for any applications for, or renewal of, any of these licences, permits, approvals and certificates
to be rejected by the relevant authorities.
The Legal Adviser to our Company on Malaysia Law, Jeff Leong, Poon & Wong, has provided a
legal opinion that it is not aware of any breach by Gridland of the conditions of the (i) Quarry
Scheme Approval letter; (ii) Removal of Mineral Licence; and (iii) Explosives Approval, and to the
best of its knowledge, is not aware of any difficulties for Gridland to renew the (i) Quarry Scheme
Approval letter; (ii) Removal of Mineral Licence; and (iii) Explosives Approval. Please refer to
Appendix E entitled Legal Opinion from Jeff Leong, Poon & Wong of this Offer Document for
more details on the above legal opinion and its relevant bases.
GOVERNMENT REGULATIONS
Cayman Islands
Our Company is an investment holding company incorporated in the Cayman Islands. As such, our
Group is not subject to any specific legislation, regulatory controls or environmental issues other
than those generally applicable to companies operating in the Cayman Islands. Our Group has not
experienced any adverse effect on our business complying with these laws and regulations and
our Directors believe that our Group has complied with all relevant laws and regulations. Please
refer to Appendix H entitled Summary of Certain Provisions of The Cayman Islands Companies
Law of this Offer Document for further details.

113

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Malaysia
Our Groups quarrying operations in Malaysia are governed by various laws and regulations. A
summary of some of these and other laws and regulations of Malaysia which are or may be
applicable to us in connection with the limestone business as at the Latest Practicable Date is set
out below:
Quarrying of limestone
There is no specific legislation that governs the quarrying of limestone, and each specific task in
the quarrying of limestone is governed by specific and separate legislation including the Perak
Quarry Rules 1992 (the Quarry Rules), the Mineral (Perak) Enactment 2003, the Environmental
Quality Act 1974 (EQA) and the Explosives Act 1957.
To be able to secure the approval to quarry limestone from the Gridland Quarry and the Hyper Act
Quarry, Gridland and Hyper Act are required to submit, and (where applicable) secure the
approvals of the relevant authority for an environmental impact assessment report and quarry
scheme report and to submit an environmental management plan, all of which have been obtained
by or complied with by Gridland as at the Latest Practicable Date, and further details of which are
set out below.
Environment Impact Assessment Report
Pursuant to Section 34A(2) of EQA, the person intending to carry out any prescribed activity shall
appoint a qualified person to conduct an environmental impact assessment and to submit a report
which shall contain an assessment of the impact such activity will have or is likely to have on the
environment and the proposed measures that shall be undertaken to prevent, reduce or control
the adverse impact on the environment.
The said environment impact assessment report shall be submitted to and be approved by the
Director General of Department of Environment before any quarry activity commences.
Gridland has submitted and obtained approval from the Director General of the Department of
Environment on 26 January 2010 for its quarry operation at the lands known as PN 258390, Lot
302284, Sungai Raya, Kinta and PN 380610 Lot 332220 Sungai Raya, Kinta, Perak (EIA
Approval Letter).
Environmental Management Plan
Pursuant to the EIA Approval Letter, an environmental management plan was prepared for
Gridlands quarry operation at the lands known as PN 258390 Lot 302284, Sungai Raya, Kinta,
Perak and PN 380610 Lot 332220, Sungai Raya, Kinta, Perak.
The said environmental management plan provides guidelines for environment control, proposes
action plans for mitigation and abatement of the impacts during different stages of quarry
development, operation and abandonment.
Quarry Operating Scheme
The Quarry Rules stipulate that a quarry operating scheme must be prepared, submitted and
approved by the relevant authority before a quarry operation commences. The quarry operating
scheme shall demonstrate that sufficient consideration has been given to the safety of the public
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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


and persons involved in the work, provide that measures of dumping of waste materials and a
program of reclamation and protection on abandoned workings, provide measures for
environmental protection in accordance with any law currently in force relating to environmental
or pollution control, and contain any other details and information as may be required.
Renewal of the quarry scheme approval letter has to be done annually.
The current quarry scheme approval letter issued by the Minerals and Geoscience Department of
Perak approving Gridland to carry out quarrying operations at the lands known as PN 258390, Lot
302284, Sungai Raya, Kinta, Perak and PN 380610 Lot 332220 Sungai Raya, Kinta, Perak is valid
until 31 December 2015, and is subject to certain conditions, including but not limited to the
following:
(a)

the quarry scheme approval letter being displayed at the office of the quarry at all times;

(b)

the boundaries of the quarry land being marked clearly, correctly and preserved;

(c)

public liability insurance being obtained to cover any potential damage to public property;
and

(d)

primary and secondary explosions not being carried out simultaneously.

Workplace safety and health measures


The Occupational Safety and Health Act 1994 (OSHA) applies throughout Malaysia in the
industries specified in its First Schedule of OSHA, which includes the quarrying industry.
The OSHA makes provisions for securing the safety, health and welfare of persons at work, for
protecting others against risks to safety or health in connection with the activities of persons at
work, and to promote an occupational environment for persons at work which is adapted to their
physiological and psychological needs.
It shall be the duty of every employer to conduct its undertaking in such a manner as to ensure,
so far as is practicable, that it and other persons, not being its employees, who may be affected
are not thereby exposed to risks to their safety or health.
Pursuant to OSHA, all employers with 40 or more employees at the place of work (or as the
Director General of Occupational Safety and Health directs) must establish a safety and health
committee to more effectively promote and develop safety and health measures for employees at
the place of work. More specific duties of the employers are laid out in the Occupational Safety
and Health (Safety and Health Officer) Regulations 1997 (the OSHA Regulations). It is also
required of a company under the OSHA to appoint a safety and health officer (Safety and Health
Officer) who is required to possess such qualifications or have received such training as
prescribed under the OSHA Regulations. The Safety and Health Officer is required to submit a
monthly report pertaining to the safety and health activities carried out by the company to the
Department of Occupational Safety and Health.
The OSHA also requires a company to notify the nearest occupational safety and health office of
any accident, dangerous occurrence, occupational poisoning or occupational disease which has
occurred or is likely to occur at the place of work.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


A company is also required to prepare a chemical health risk assessment report and keep a
register of chemicals hazardous to health in accordance to the Occupational Safety and Health
(Use and Standards of Exposure of Chemicals Hazardous to Health) Regulations 2000.
The failure to comply with the requirements of OSHA and its regulations is an offence which may
result in liability in fines, terms of imprisonment or both.
Requirements under the Factories and Machinery Act 1967 (FMA)
The FMA provides for the control of factories with respect to matters relating to the safety, health
and welfare of person therein, the registration and inspection of the machinery and for matters
connected therewith. It regulates factories and machinery by way of registration and examination
of such machinery to ensure the maintenance of safety, health and the welfare of all persons.
The FMA requires all machinery to be of sound construction and sound material, free from defect
and suitable for the purpose and shall be properly maintained.
Pursuant to the FMA, no person shall operate any machinery in respect of which a certificate of
fitness is required (such as steam boiler, unfired pressure vessel and hoisting machine) unless a
valid certificate of fitness is in force. Further, no person shall install or caused to be installed any
machinery in any factory or any machinery in respect of which a certificate of fitness is prescribed,
except with the written approval of Chief Inspector of Factories and Machinery.
The FMA also requires any person who intends to use any premises as a factory to submit a
prescribed form to the Chief Inspector of Factories and Machineries one (1) month prior to the
commencement of use of the premises as a factory. Every factory is also required to keep a
factory general register in accordance with Section 38 of the FMA.
The failure to comply with the requirements under the FMA and its regulations is an offence which
may result in liability in fines, terms of imprisonment or both.
Use of explosives
Blasting is a regulated activity in Malaysia. Section 20 of the Quarry Rules provides that no
explosives shall be brought into, stored in, placed in, moved about or used in any quarry except
of such standard, in such places, in such quantities, in such manner and under such conditions
as shall be approved.
Additional approval is required pursuant to the Explosives Act 1957 which governs the
manufacture, use, sale, storage, transport, import and export of explosives. Hence, unless
exempted, a permit is required for the purchase, sale or possession of any explosive and the
Royal Malaysia Police is the licensing authority for issuing such permit and, or licence.
The Company has obtained approval for the buying, carrying and use of explosives by virtue of
the letter of approval dated 9 January 2015 issued by Police Contingent Headquarters of the
Royal Malaysia Police Ipoh, Perak which also provides the amount of explosives permitted for
blasting and the names of shot-firers who are permitted to purchase, carry and use the explosives.
All the blasting works at Gridlands quarry are undertaken by holder(s) of valid Shot-Firers
Certificate(s) who are independent contractors engaged by Gridland.

116

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


The failure to comply with the requirements under the Explosives Act 1957 and the Quarry Rules
is an offence which may result in liability in fines, terms of imprisonment or both.
KEY CONTRACTORS AND CONSULTANTS
Our Group works closely with third party contractors for the administration and renewal of our
Companys approval to quarry and environmental impact assessment approvals with the relevant
Malaysian government authorities.
Our Group selects third party contractors based on our internal selection procedures which
include assessing the skills, experience and track record of the contractors. Agreements with the
third party contractors are based on a fixed tenure of a specified term, or on a per assignment
basis, which are renewable subsequently if the quality of the works carried out by them is
satisfactory. Our Group enjoys a stable relationship with our contractors as we have been working
with the same contractors since the commencement of our projects in Gridland and Hyper Act and
will continue to work with them.
Loh Consultants Sdn. (1974)
Our key consultant is LCS, which is headed by Steve Loh, a mining consultant with more than 40
years of experience in mining and quarrying. Steve Loh provides advice to our Group on statutory
obligations in respect of the approval to quarry for Gridland and Hyper Act since 2012. For each
of FY2012, FY2013 and 9M2014 as well as from 1 October 2014 to the Latest Practicable Date,
we have paid LCS approximately MYR12,000, MYR72,000, MYR54,000 and MYR24,000 in
consultancy fees respectively.
LCS has been appointed as a quarry consultant by Gridland by a letter of appointment dated 1
January 2015. Under the terms of the appointment, LCS shall act as the designated quarry
consultant for Gridland and its group of companies from January 2015 to December 2015. The
scope of services provided by LCS includes but is not limited to the following: carrying out safety
management plans; preparing blast proposals; regular site visits to the quarry; and regular
correspondences with regulatory authorities. In consideration for such services, Gridland shall
pay LCS a retaining fee of MYR6,000 per month (inclusive of 6.0% service tax).
LEGAL OPINION FROM JEFF LEONG, POON & WONG
Please refer to Appendix E entitled Legal Opinion from Jeff Leong, Poon & Wong of this Offer
Document for the legal opinion from the Legal Adviser to our Company on Malaysian Law.
STAFF TRAINING
We believe that the technical competence, product knowledge and execution skills of our staff are
instrumental in maintaining our competitive position. The objective of our staff training is to equip
our staff with the necessary skills and knowledge to ensure that they are able to fulfil their job
responsibilities and to enhance their work performance. To that end, our employees at all levels
are provided with orientation training and industrial training, with a particular focus on the
knowledge and skills pertaining to their vocation for example the operation of certain equipment,
and occupational safety.
Our Group intends to send selected employees for external short term training courses. For
example, our finance staff may attend courses and seminars conducted by external organisations
to keep abreast with changes in accounting requirements.
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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


During the Period Under Review, our staff training costs were not material.
ENVIRONMENTAL PROTECTION AND COMMUNITY DEVELOPMENT
The Companys policy in respect of environmental protection and community development is to
develop and manage its quarrying operations with an aim to maximise its compliance with the
environmental regulations, as set out in the section entitled General Information on our Company
and our Group Government Regulations of this Offer Document, and minimise any harm to the
environment while remaining sensitive to local cultural and community expectations.
Our Group has made efforts to integrate with the local population in the vicinity where our Gridland
Quarry and Hyper Act Quarry are located and to assist them in social and economic development.
We have provided the local community with employment opportunities, as well as training and
skills development for our local staff and provided business opportunities for local businesses. We
are also developing a corporate social responsibility policy which will formally address our Groups
impact on the local community.
Our Group will make disclosure of our Groups policies and practices in relation to operating in a
sustainable manner in its annual report, including but not limited to, its environmental and social
responsibility policies, in compliance with Rule 1204(23)(c) and Practice Note 4C of the Catalist
Rules.
SAFETY POLICY
Due to the nature of our business, incidents that may have detrimental effects on the health and
safety of our workers and the condition of our machinery and equipment may occur from time to
time. Our Group aims to operate our business in such a manner that all reasonable and
practicable measures will be taken to protect our workers and the condition of our machinery and
equipment from such detrimental effects. In order for our Group to achieve our aim, our Group has
an existing set of environmental, health and safety policies to protect the health and safety of our
staff and workers and maintain the good working condition of our machinery and equipment.
Since the commencement of our operations till the Latest Practicable Date, no accidents that have
resulted in death or serious injuries have occurred at the quarrying site operated by our Group.
RESEARCH AND DEVELOPMENT
Our Group has not incurred any expenditure on research and development activities for the Period
Under Review and for the period commencing from 1 October 2014 up to the Latest Practicable
Date.
COMPETITION
Given the clear geographical demarcation of limestone quarrying rights and licences and the
distinct quality of the limestone of different quarries, quarrying companies in general do not
compete directly with one another in terms of the supply or source of limestone.
However, in selling our crushed limestone of varying sizes, we will compete with other producers
of limestone products of a similar nature, quality and/or for a similar usage. In general, limestones
of different brightness complement rather than compete with each other.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


We anticipate that our main competitors will be domestic limestone quarrying companies and/or
limestone product producers as follows:
Quarry

Product

Main Competitor

Gridland Quarry

PCC-grade crushed limestone


(particle size of 90mm and
below)

MCB Industries Sdn. Bhd.

Hyper Act Quarry

GCC-grade crushed limestone


(particle size of 100mm and
below)

Danshak Sdn. Bhd.

Hyper Act Quarry

GCC-grade limestone powder

Imerys Minerals Malaysia Sdn Bhd


Omya Malaysia Sdn Bhd
Zantat Sdn Bhd

We believe that we are able to provide limestone products which meet our customers needs and
preferences when competing with limestone products from our competitors.
To the best of our Directors knowledge, there are no published statistics that can be used to
accurately measure the market share of our business.
COMPETITIVE STRENGTHS
We have one of the biggest GCC-grade limestone reserves and resources in Malaysia
Based on the Independent Qualified Persons Report, our Group has approximately 26.3Mt of Ore
Reserves, and approximately 186Mt of total Measured and Indicated Resources of limestone. In
particular, the Hyper Act Quarry which has approximately 22.0Mt of Ore Reserves, and
approximately 160Mt of total Measured and Indicated Resources of GCC-grade limestone. Our
Directors believe our Group holds one of the biggest GCC-grade limestone deposits in Malaysia,
which is used in the production of GCC products.
Our current production plan for the Hyper Act Quarry is to reach full production and produce
approximately 3.5Mt of GCC-grade crushed limestone and limestone powder in 2017, sufficient to
provide a constant supply of such crushed limestone and limestone powder.
Given that limestone, being a natural resource and having to be extracted from existing or newly
discovered limestone quarries, is limited in supply and growing in demand. Our Directors believe
that having one of the biggest limestone reserves in Malaysia will make us one of the few
limestone producers in Malaysia that is able to meet the growing demand of GCC-grade and
PCC-grade limestone.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Our limestone is of PCC-grade and GCC-grade
Based on the Independent Qualified Persons Report, the quality of the reserves in the Gridland
Quarry and Hyper Act Quarry are of PCC-grade and GCC-grade respectively, with the calcium
carbonate content of the limestone reserves being higher than 96.0% for both quarries and the
average ISO brightness value from samples analysed from the Hyper Act Quarry is 94.7.
Assuming that the chemical properties of the limestone extracted exhibit the qualities set out in the
Independent Qualified Persons Report, the crushed limestone from the quarries will be suitable
for further processing into PCC and GCC products and use in a wide range of industries such as,
among others, paper, paints, plastics, rubber, adhesives, sealants and pharmaceuticals. For
further details on the potential uses of our limestone, please refer to the section entitled General
Information on our Company and our Group Limestone and its Uses of this Offer Document.
We have an experienced and competent management team
Our Group is led by a dedicated and experienced management team, helmed by our Executive
Chairman and Chief Executive Officer, Alex Loo, who is a seasoned entrepreneur with experience
in the minerals industry. He is also assisted by Executive Director and COO, Pang Kim Chon and
our Director of Operations (Gridland), Loh Heng Kwai, as well as an experienced team of
production staff.
Our Gridland Quarry and Hyper Act Quarry are easily accessible and conveniently located
Our Gridland Quarry and Hyper Act Quarry are situated close to ports, airports, highways and rail
systems which enable us to expedite delivery of our products conveniently and efficiently
compared to our competitors who do not enjoy similar proximity to such transport infrastructure
and many of our potential customers, which affords us transport cost-savings and efficiencies. We
are also situated close to our potential customers, of which a significant number we anticipate to
be based in Malaysia, which also affords us transport cost savings and provides us with a
competitive edge over our competitors who may be located in other parts of the world.
We have strong working relationships with contractors and/or consultants
We believe that we have been able to achieve cost efficiencies in the production of crushed
limestone for sale largely from our strong working relationships with our contractors and/or
consultants which are leading players in Malaysia in their respective niche markets. Such
contractors and/or consultants have offered their services and provided technical support to our
Group at competitive prices.

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


PROPERTIES AND FIXED ASSETS
The following table sets out all the properties owned by our Group or in which our Group has an
interest in, as at the Latest Practicable Date:
Approximate
land area
(sq ft)

Tenure

Description
of use

1,021,301

Until 28 June 2043

Gridland Quarry

67,705

Until 17 September
2056

Gridland Quarry

HSD 214644 PT 24116,


Mukim Sungai Raya,
Daerah of Kinta, Negeri Perak

422,505

Until 14 June 2043

Hyper Act Quarry

HSD 215515 PT 24149,


Mukim Sungai Raya,
Daerah Kinta, Negeri Perak

357,922

Until 31 July 2043

Hyper Act Quarry

HSD 212118 PT 23164,


Mukim Sungai Raya,
Daerah Kinta, Negeri Perak

435,615

Until 27 March 2043

Hyper Act Quarry

HSD 199908 PT 23014,


Mukim Sungai Raya,
Daerah Kinta, Negeri Perak

871,209

Until 6 June 2041

Hyper Act Quarry

HSD 217328 PT 24226,


Mukim Sungai Raya,
Daerah Kinta, Negeri Perak

383,389

Until 3 December 2043

Hyper Act Quarry

Location
PN 380610 Lot 332220 (formerly
known as H.S.(D)214917, Lot
302283 and H.S.(D)53384 PT
2799) Mukim Sungai Raya,
Daerah Kinta, Negeri Perak
PN 258390 Lot 302284,
Mukim Sungai Raya,
Daerah Kinta, Negeri Perak

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GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


The following table sets out all the properties leased by our Group as at the Latest Practicable
Date:

Tenant/
Lessee

Location

Approximate
land area
(sq ft)

Tenure

Monthly
Rental

Description
of use

Lessor

Gridland

Unit 1D, Persiaran


Rapat Baru, Medan
Lapangan Lagenda,
31350, Ipoh, Perak

1,400

Until 31 March
2015(1)

MYR900

Office (to store


samples collected
from quarry sites)

Chai Sen
Hoo

Gridland

Unit A-1-3, Block A


(Azalea) Damaipuri
Condominium,
Cheateau Garden,
30250, Ipoh, Perak.

1,465

Until 31 March
2015(2)

MYR2,200

Residential
property (for
occupation by
employees)

Serene
Diane A/P
Santhana
Dass

Gridland

First Floor, 30,


Medan Lapangan
Lagenda 2, Medan
Lapangan Lagenda,
31350, Ipoh, Perak.

1,948

Until 30 April
2015

MYR450

Office

Pretty
Beauty Zone
(a
partnership)

Gridland

56-2 & 56-M, Jalan


PJU 5/21, The
Strand, Kota
Damansara, 47810,
Petaling Jaya.

2,410

Until 31 March
2015(3)

MYR2,350

Office

Yeong Kwok
Seng

On 1 October 2014, Gridland entered into sale and purchase agreements in relation to the
purchase of Units 21-01, 21-02, 21-03 and 21-3A in a mixed development known as Cascades
(Corporate) erected on part of all that piece of leasehold land held under PN 97694, Lot 53298
(formerly held under HS(D) 237769, PT 9793), Pekan Baru Sungai Buloh, Daerah Petaling, Negeri
Selangor by Gridland (the Cascades Properties). As at the Latest Practicable Date, Gridland is
in the process of acquiring vacant possession of the Cascades Properties for use by the Group
as corporate offices. (4) Please refer to the section entitled General and Statutory Information
Material Contracts of this Offer Document for further details.
As at the Latest Practicable Date, the fixed assets of our Group, comprising heavy equipment,
machineries, motor vehicles, equipment and furniture, computer and software, mining property
and construction-in-progress, have a net book value of approximately MYR29.5 million.
To the best of our Directors knowledge and belief, there are no regulatory requirements that may
materially affect our Groups utilisation of tangible fixed assets.
Notes:
(1)

The tenancy has subsequently been renewed on 28 March 2015 with the Lessor on substantially the same terms
up till 31 March 2016.

(2)

The tenancy has subsequently been renewed on 1 April 2015 with the Lessor on substantially the same terms up
till 31 March 2016.

(3)

The tenancy has subsequently been renewed on 13 April 2015 with the Lessor on substantially the same terms up
till 30 June 2015.

(4)

Vacant possession of the Cascades Properties was passed to Gridland on 14 April 2015.

122

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


INDUSTRY OVERVIEW
The section is a summary of certain salient information, statistics and data presented in Appendix
F entitled Independent Qualified Persons Report of this Offer Document, as confirmed by the
Independent Geologist. While our Directors have taken reasonable action to ensure that the
information, statistics and data is extracted accurately and fairly, and has been included in this
Offer Document in its proper form and context, they have not independently verified the accuracy
of the relevant information, statistics and data.
The world total demand for GCC and PCC is forecast to grow by an average of 3.6% per annum
(p.a.) to reach 88.9Mt in 2016 as shown in the table below.
World demand forecast for GCC and PCC by market, 2011 and 2016

2011 (t)

Growth
(% p.a.)

2016 (t)

Share
2016 (%)

Paper

29,050,000

3.1

33,900,000

38

Plastics

19,275,000

4.6

24,135,000

27

Paint

8,800,000

3.8

10,605,000

12

Adhesives/Sealants

4,775,000

5.0

6,090,000

Rubber

5,075,000

2.8

5,830,000

Others

7,400,000

2.5

8,370,000

74,375,000

3.6

88,930,000

100

Total
Source: Roskill Information Services

This is lower than the forecast growth in global GDP of 4.5% p.a. to 2016, largely because of the
substitution or replacement with other minerals. Paper will continue to be the largest market for
both forms of calcium carbonate but growth is expected to be limited by low levels of demand in
developed economies and the increasing use of digital media. Higher growth rates are expected
in adhesives/sealants (5.0% p.a.) and plastics (4.6% p.a.).
Demand Forecast for GCC
World demand for GCC is forecast to rise by an average of 3.5% p.a. through 2016 to reach nearly
72.0Mt as shown in the table below.
World demand forecast for GCC by market 2011 and 2016

2011 (t)

Growth
(% p.a.)

2016 (t)

Share
2016 (%)

Paper

23,750,000

3.1

27,675,000

38

Plastics

15,500,000

4.5

19,200,000

27

Paint

6,950,000

3.6

8,290,000

11

Adhesives/Sealants

4,400,000

4.8

5,570,000

Rubber

3,600,000

2.8

4,125,000

Others

6,225,000

2.4

7,020,000

10

60,425,000

3.5

71,880,000

100

Total
Source: Roskill Information Services

123

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Growth will be led by plastics, particularly PVC, and China. The adhesives and sealants markets
is also forecasted to show strong growth overall, which is expected to be concentrated in Asia,
particularly China. In other sectors, growth in demand for GCC is expected to average <4.0% p.a.,
due to competition with other minerals and because outside Asia these markets are mature. Paper
will remain the major market but the rise in Asian demand will be partly offset by much lower
growth in Europe and North America. In these two regions, the paper industry is suffering from
overcapacity and GCC competes with kaolin, though to a declining degree, and PCC.
Demand for GCC is forecast to be increasingly concentrated in Asia. Growth rates in Europe and
North America are expected to be much lower, with details shown in the table below.
Regional demand forecast for GCC by market, 2016 (Unit: t)
Paper

Plastics

Paint

Rubber

Adhesive

Paper

Total

14,800,000

11,700,000

3,075,000

1,825,000

2,350,000

1,460,000

35,210,000

Europe

8,000,000

2,900,000

2,075,000

915,000

1,450,000

1,900,000

17,240,000

North
America

3,775,000

2,425,000

1,085,000

735,000

1,500,000

2,700,000

12,220,000

South
America

500,000

300,000

325,000

175,000

175,000

350,000

1,825,000

Others

600,000

1,875,000

1,730,000

475,000

95,000

610,000

5,385,000

27,675,000

19,200,000

8,290,000

4,125,000

5,570,000

7,020,000

71,880,000

Asia

Total

Source: Roskill Information Services

Demand Forecast for PCC


World demand for PCC is forecast to rise from 13.9Mt in 2011 to 17.1Mt in 2016, an average
increase of 4.1% p.a. Paper will remain the largest single market though growth rates in the
adhesives/sealants, plastics and paint sectors are forecast to be higher with details shown in the
table below.
World demand forecast for PCC by market, 2011 and 2016

2011 (t)

Growth
(% p.a.)

2016 (t)

Share
2016 (%)

Paper

5,300,000

3.3

6,225,000

36

Plastics

3,775,000

5.5

4,935,000

29

Paint

1,850,000

4.6

2,315,000

14

Adhesives/Sealants

1,475,000

2.9

1,705,000

10

Rubber

375,000

6.8

520,000

Others

1,175,000

2.8

1,350,000

13,950,000

4.1

17,050,000

100

Total
Source: Roskill Information Services

124

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Future growth in paper will result from, inter alia, higher paper production and rising mineral
contents in Asia. Plastics and paint are expected to have the highest growth rates because of
rising demand, primarily in China and other Asian countries.
Most of the increase will be from Asia, primarily in the Chinese plastics and paper industries,
where PCC is well established and in many cases is the mineral of choice for consumers, with
details shown in the table below.
Regional demand forecast for PCC by market, 2016 (Unit: t)
Paper

Plastics

Paint

Rubber Adhesive

Paper

Total

Asia

2,850,000

4,350,000

1,795

975,000

370,000

Europe

1,675,000

160,000

120

155,000

60,000

160,000

2,330,000

North America

1,350,000

215,000

220

240,000

55,000

135,000

2,215,000

South America

225,000

100,000

90

60,000

15,000

120,000

610,000

Others

125,000

110,000

90

275,000

20,000

65,000

685,000

6,225,000

4,935,000

Total

2,315 1,705,000

870,000 11,210,000

520,000 1,350,000 17,050,000

Source: Roskill Information Services

Historical price of quicklime, hydrated lime and crushed limestone


Based on the US Geological Survey, the seven (7) years historical process and price trend of
quicklime, hydrated lime and crushed limestone are set out below.
Quicklime, Hydrated Lime and Crushed Limestone from 2007 to 2013 (Unit: US$/Mt)
Year
Quicklime
Hydrated Lime
Crushed Limestone

2007

2008

2009

2010

2011

2012

2013

84.6

89.9

102

103.7

107.9

115.4

116.0

102.4

107.2

126.4

124.7

130.9

136.9

138.0

8.58

9.36

9.73

9.58

9.65

9.73

9.75

Sources:
Quicklime, Hydrate Mineral Commodity Summaries 2012 and 2014
http://minerals.usgs.gov/minerals/pubs/commodity/lime/mcs-2012-lime.pdf;
http://minerals.usgs.gov/minerals/pubs/commodity/lime/mcs-2014-lime.pdf;
Crush stone Mineral commodity summaries 2012 and 2014
http://minerals.usgs.gov/minerals/pubs/commodity/stone_crushed/mcs-2014-stonc.pdf;
http://minerals.usgs.gov/minerals/pubs/commodity/stone_crushed/mcs-2012-stonc.pdf

125

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Price trend of quicklime, hydrated lime and crushed limestone from 2007 to 2013

160

140

120

100

Quicklime (USD/metric ton)


80

Hydrate (USD/metric ton)


Crushed Stone (USD/metric ton)

60

40

20

0
2007

2008

2009

2010

2011

2012

2013

Sources:
Quicklime, Hydrate-Mineral Commodity Summaries 2012 and 2014
http://minerals.usgs.gov/minerals/pubs/commodity/lime/mcs-2012-lime.pdf;
http://minerals.usgs.gov/minerals/pubs/commodity/lime/mcs-2014-lime.pdf;
Crush Stone-Mineral Commodity Summaries 2012 and 2014
http://minerals.usgs.gov/minerals/pubs/commodity/stone_crushed/mcs-2014-stonc.pdf;
http://minerals.usgs.gov/minerals/pubs/commodity/stone_crushed/mcs-2012-stonc.pdf

PROSPECTS
The following discussion about limestone quarryings prospects includes forward-looking
statements that involve risks and uncertainties. Actual results could differ from those that may be
projected or implied in these forward-looking statements. Please refer to the section entitled
Cautionary Note on Forward-Looking Statements of this Offer Document.
Our Directors believe that the prospects of the limestone industry are good due to the following
factors:
Limestone consumption is projected to increase
Based on the development trend predicted by Roskill Information Services for the world total
demand for GCC and PCC over the period 2011 to 2016, it is expected that the world total demand
for limestone to grow from 2011 to 2016.

126

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Please refer to the section entitled General Information on our Company and our Group
Industry Overview of the Offer Document for further details.
Price outlook is positive
Based on estimates published by United States Geological Survey (USGS) in the Mineral
Commodity Summaries 2012 and 2014 (1), prices of quicklime increased from US$84.6/Mt in 2007
to US$116/Mt in 2013. The prices of hydrated lime increased from US$102.4/Mt in 2007 to
US$138/Mt in 2013 and similarly, the prices of crushed limestone increased from US$8.58/Mt to
US$9.75/Mt in 2013.
Accordingly, our Directors expect prices of limestone to trend upwards in the near-term due to the
increase of consumption of limestone and limestone products.
Please refer to the section entitled General Information on our Company and our Group
Industry Overview of the Offer Document for further details.
Growth of the limestone powder business in Malaysia
Malaysia has a well-developed industry for the production of limestone powder, the raw material
of which is GCC-grade crushed limestone. Our Directors anticipate that there will be an increase
in the production of limestone powder in Malaysia which will correspondingly increase demand for
our crushed limestone.
Note:
(1)

Source: Mineral Commodity Summaries 2012 and Mineral Commodity Summary 2014 by USGS. USGS has not
consented to the inclusion of this statement, information or compilation (as the case may be) for the purposes of
Section 249 of the SFA, and are therefore not liable for this statement under Sections 253 and 254 of the SFA. While
our Directors have taken reasonable actions to ensure that the information have been reproduced in its proper form
and context, and that the information is extracted accurately and fairly, they have not conducted an independent
review, or verified the accuracy of the contents, of the above information.

BUSINESS STRATEGIES AND FUTURE PLANS


Development of the Hyper Act Quarry
As part of our Groups development plan for the Hyper Act Quarry, we intend to:
(a)

acquire a plot of land in the vicinity of the Hyper Act Quarry, on which we intend to set up the
limestone production facility for the Hyper Act Quarry, which includes, inter alia, a workshop,
site office and an electrical substation (Plant Site);

(b)

commission the construction of the Hyper Act Crushing Plant, a 1,000t per hour crushing
plant, which is to be situated at the Plant Site; and

(c)

commission the construction of the Powder Plant, a limestone powder production plant

(collectively, the Development Plan).

127

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


The Development Plan will be undertaken in the following phases:
(i)

Plant Site and Hyper Act Crushing Plant Phase


The commencement and completion of the acquisition of the Plant Site is anticipated to be
in the first and second quarter of 2015 respectively and the completion of the preparatory
work on the Plant Site to make the same operationally ready for quarrying is anticipated to
be on or about second half of 2015.
Construction of the Hyper Act Crushing Plant is expected to commence on or about first half
of 2015 and the same is expected to be operational in the second half of 2015. The Hyper
Act Crushing Plant is expected to increase our Groups production capacity by 1,000t of
crushed limestone per hour.
The total capital expenditure for the Plant Site and the Hyper Act Crushing Plant is
approximately MYR17.2 million.

(ii)

Powder Plant Phase


Construction of the Powder Plant is anticipated to commence in the first half of 2015 and the
same is expected to be operational in the first quarter of 2016. The Powder Plant is expected
to have an initial production capacity of 20,000t of limestone powder per month.
The total capital expenditure for the Plant Site and the Hyper Act Crushing Plant is
approximately MYR193.1 million.

In aggregate, the estimated capital expenditure for the Development Plan is approximately
MYR210.3 million. We have earmarked approximately S$15.0 million (or the equivalent of
MYR40.2 million) of the proceeds to the Placement to be used to fund the Development Plan.
For further details on the estimated capital expenditure for the Development Plan, please refer to
Appendix F entitled Independent Qualified Persons Report of this Offer Document.
The Independent Geologist and the Independent Valuer have reviewed the development plans as
disclosed above, and have opined that they are satisfied with, and have no comments to, such
plans and phases, and the capital expenditure for each such phase, for our Company to
commence production.
For further details on the Hyper Act Quarry, please refer to the section entitled General
Information on our Company and our Group Our Quarries of this Offer Document.
Further exploration activities to increase limestone resources and output
We intend to carry out further exploration activities such as geological mapping, rock sampling,
drilling activities, excavating and tunnelling, collection and analysis of exploration data and
exploring and locating new deposits within specific areas permitted for exploration.
Barring any unforeseen circumstances, we intend to engage a professional geological company
to survey the areas permitted for exploration and determine the quantity of limestone resources
present in these areas. The survey results will assist us to facilitate the increase of our Groups
limestone resources and enable us to plan our business operations to optimise efficiency.

128

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Acquisition of additional limestone quarries
We plan to continue to increase our limestone resources through possible strategic acquisitions
of limestone quarries and will evaluate acquisition opportunities as and when they arise. Currently,
our Group is not engaged in discussions with any party for acquisitions, joint ventures or strategic
alliances in connection with the foregoing. Should such opportunity arise, we will seek approval,
where necessary, from Shareholders and the relevant authorities as required by the relevant laws
and regulations.
Venture into the business of PCC production
We may consider expanding our scope of business to be a producer of PCC in the future. By virtue
of being a producer of PCC-grade crushed limestone, a primary raw material for PCC, we would
have greater ability to control our costs as a producer of PCC. Venturing into the business of PCC
production would allow us to enjoy the relatively higher profit margins, compared to the sale of
PCC-grade crushed limestone, from the sale of PCC.
In connection with such intention, we may acquire machinery and equipment required for the
production of PCC, such the kiln, carbonator, dryer and centrifuge, among others. Alternatively,
should the opportunity arise, we may acquire other PCC processing facilities that are already in
operation. In the event we venture into the business of PCC production, we will comply with any
law, regulations or other requirements which may be applicable to us and the business of PCC
production, including the Catalist Rules, at the material time prior to venturing into the business
of PCC production.
Establishing a broad customer base with strong customer relationships
Presently, we supply our products to domestic customers in Malaysia, many of whom require our
crushed limestone and/or limestone powder for the manufacture of PCC and GCC. We plan to
continue developing relationships with customers as well as distributors that have a strong track
record, established customer base and broad sales and marketing networks. We also intend to
increase customer and market exposure to our Group by attending industry forums, trade fairs and
exhibitions where we can establish communication with limestone industry participants, such as
manufacturers of paint and paper who can be potential direct customers for our crushed limestone
powder. We also intend to expand our customer base internationally as we recognise a demand
for our crushed limestone and limestone powder in countries such as China and India.
Maintaining safe and environmentally friendly quarrying operations
We plan to complement and support our quarrying operations with a safe and environmentally
friendly environment. We have established procedures relating to environmental, health and
safety issues. We will continue to organise relevant training and workshops for our employees,
formulate manuals and policies from the safety and environmental protection perspective, and
monitor the safety and environmental standards of our working environment.
ORDER BOOK
As at the Latest Practicable Date, our Group has conducted sales on a purchase order basis.
Therefore, as at the Latest Practicable Date, there is no requirement to maintain an order book.

129

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP


Our Company intends to negotiate formal off-take or distribution agreements for our Groups
production, which include crushed limestone and limestone powder. Our Company will be required
to maintain an order book if it formalises such off-take or distribution agreements with its potential
customers.
TREND INFORMATION
Our Directors have observed the following trends based on the revenue and operations of our
Group as at the Latest Practicable Date:
(a)

Limestone, being a natural resource, and especially those of high-grade quality, is prone to
depletion due to extraction. As supply dwindles, the price of limestone will increase if demand
stays constant, and such increase will be greater with increased demand, which would lead
to an increase in prices of limestone;

(b)

We are in the development phase of the operations of the Hyper Act Quarry and a ramp-up
phase in respect of the operations of the Gridland Quarry. We expect our cost of operations
to materially increase with the commencement of our quarrying operations of the Hyper Act
Quarry and the increase of our operations in the Gridland Quarry; and

(c)

Costs of diesel, labour and electricity are expected to increase in the near future and in the
event our Group is unable to pass on all or part of such costs to our customers, such overall
increase in our costs of operations will result in lower profit margins for our Group.

Save as disclosed above in the sections entitled Risk Factors, Managements Discussion and
Analysis of Results of Operations and Financial Position, General Information on our Company
and our Group Prospects and General Information on our Company and our Group Business
Strategies and Future Plans of this Offer Document, and barring any unforeseen circumstances,
our Directors believe that there are no other significant recent known trends in the prices and
costs of our products and services, or any known uncertainties, demands, commitments or events
that are reasonably likely to have a material effect on our revenue, profitability, liquidity and capital
resources. They are also not aware of any such trends that would cause the financial information
disclosed in this Offer Document to be not necessarily indicative of our future operating results or
financial condition. Please also refer to the section entitled Cautionary Note on Forward-Looking
Statements of this Offer Document for further details.

130

DIRECTORS, MANAGEMENT AND STAFF


DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our
Group. The particulars of each of our Directors are set out below:

Name

Age

Residential address

Country of
principal
residence

Designation/
principal
occupation

Loo An Swee
(Alex Loo)

47

89 Persiaran Dedap
Batik Sierramas
47000 Sungai Buloh
Selangor, Malaysia

Malaysia

Executive
Chairman and CEO

Pang Kim Chon

51

Lot 49H12A
Lorong Puncak Desa 1
Kiansom Country Height
Jalan Kiansom
88450 Inanam
Kota Kinabalu
Sabah, Malaysia

Malaysia

Executive Director
and COO

Tan Eng Ann

47

Blk 651 #08-08


Jalan Tenaga
Singapore 410651

Singapore

Lead Independent
Director

Dato Koh Boon Thye


(Dato Thomas
Koh)

57

20, Jalan TR9/1


Tropicana Golf &
Country Resort
47410 Petaling Jaya
Selangor Darul Ehsan
Malaysia

Malaysia

Independent
Director

Denys Collin Munang

47

3-20-3A The Residence


Condominium
Jalan Wan Kadir 5
Taman Tun Dr Ismail 6000
Kuala Lumpur, Malaysia

Malaysia

Independent
Director

The working, business experience and areas of responsibility of our Directors are set out below:
Alex Loo is our Executive Chairman and CEO. He is responsible for our Groups overall
management, formulating our Groups strategic directions and expansion plans, developing and
maintaining relationships with our customers and suppliers and overseeing our Groups general
operations. He has been instrumental in the expansion of our Group and continually sources for
investment opportunities to promote the growth of our Groups business.
Alex Loo started his career as a marketing executive at Renaware Marketing Sdn. Bhd. after
obtaining the Sijil Pelajaran Malaysia (SPM), or the Malaysian Certificate of Education in 1985.
Alex Loo joined Dragonway Furniture Fitting Sdn Bhd as a marketing executive in 1989. In 1993,
he left Dragonway Furniture Fitting Sdn Bhd and established Vantage Wood Sdn Bhd, a company
that was engaged in the supply of timber materials for construction use, where he was the chief
executive officer. In 1998, he established Vantage Resources Sdn Bhd, a company that was
engaged in the business of coal trading, where he was also the chief executive officer. He left both
Vantage Wood Sdn Bhd and Vantage Resources Sdn Bhd in 2007 and subsequently established
our Group in 2009 through the incorporation of Gridland.
131

DIRECTORS, MANAGEMENT AND STAFF


Pang Kim Chon is our Executive Director and COO. He joined the Group in 2013 and has over
20 years of management and operational experience. He is responsible for and oversees the
overall operations of our Group, including our sales, marketing and daily operations.
Pang Kim Chon first started his career as an administration manager in Rimyasa Development
Sdn Bhd between 1988 and 1989. He joined Rimyasa Marketing Sdn Bhd in 1990 and took up
various positions before becoming its managing director. In 2008, he left Rimyasa Marketing Sdn
Bhd and joined Vantage Resources Sdn Bhd as an executive director. Between 2009 and 2012,
Pang Kim Chon also served as a director of Rimyasa Corporation Sdn. Bhd. He holds a Bachelor
of Management (Honours) degree from University Sains Malaysia.
Tan Eng Ann is our Lead Independent Director and was appointed to our Board in September
2014. He is currently the chief financial officer of R H International Pte Ltd. He was previously an
executive director and the chief financial officer of Chiwayland International Limited (formerly
known as R H Energy Ltd.) which he joined in 2007. He has over 18 years of experience in the
financial field, having held managerial positions with Yamaichi Merchant Bank, AIB Govett (Asia)
Ltd and Standard Chartered Bank from 1994 to 2002. In 2002, Tan Eng Ann joined Technics Oil
& Gas Limited as the group financial controller and was subsequently promoted to finance director
in 2004, where he was responsible for finance and corporate development. From 2005 to 2006,
he was the chief financial officer of Beijing Concept Holdings Pte Ltd where he headed the finance
department. Tan Eng Ann is a qualified Chartered Financial Analyst of the Association for
Investment Management and Research and a fellow member of the Institute of Singapore
Chartered Accountants. He holds a Bachelor of Accountancy (Honours) degree from Nanyang
Technological University.
Dato Thomas Koh is our Independent Director and was appointed to our Board in September
2014. He is currently a senior partner in the law firm Messrs Isharidah Ho Chong & Menon, having
joined the firm since 1993. Dato Thomas Koh commenced his legal practice in the law firm Messrs
Rashid & Lee. Between 1984 and 1986, he was a partner in the litigation department of the law
firm Messrs Yusoff Shamsuddin & Partners. He then moved to the law firm Messrs KH Koh, Azhar
& Koh where he was a partner heading the conveyancing department from 1986 to 1993. He was
admitted as a Barrister to the Bar of England and Wales in 1983 and as an Advocate and Solicitor
of the High Court of Malaya in 1984. He obtained a Bachelor of Laws with Honours from University
of London in 1982. In addition, he was awarded the Darjah Dato Paduka Tuanku Jaafar (DPTJ)
in 2008.
Denys Collin Munang is our Independent Director and was appointed to our Board in September
2014. He is currently the group chief executive officer and deputy managing director of Pontian
United Plantations Berhad. Denys Collin Munang started his career in the Omya AG group of
companies in 1995. In his 14 years in the Omya AG group of companies, he held various senior
positions in the group including the chief executive officer of Omya Malaysia Sdn. Bhd., the sales
director for West Asia region in Omya AG and chief executive officer at Omyas West Asia
operations based in Mumbai. He also served as the director for Strategic Projects, heading the
mergers and acquisitions and business planning departments for Omya AG in the Asia Pacific
region.
Between 2010 and 2013, Denys Collin Munang joined Felda Global Venture Holdings Bhd as its
vice president where he was head of strategy, business corporate global plantation before
undertaking his appointment in Pontian United Plantation Berhad, which is a subsidiary of Felda
Global Venture Holdings Bhd. Between 2012 and 2014, he also served as a board member of
Australian Agricultural Corporation Ltd.

132

DIRECTORS, MANAGEMENT AND STAFF


Denys Collin Munang holds a Bachelors degree in Economics from the University of Sydney.
The list of present and past directorships of each Director over the last five (5) years excluding
those held in our Company, is set out below:
Name

Present Directorships

Past Directorships

Alex Loo

Group Companies
Gridland
Hyper Act

Group Companies

Other Companies
E.X Builders Hardware (M)
Sdn Bhd (2)
Vantage Wood Sdn Bhd
Vantage Resources Sdn Bhd
Cosmo World Resources
Sdn Bhd
Agile Consortium Sdn Bhd
Grand Mega Resources
(M) Sdn Bhd
Tekan Wawasan Sdn Bhd
Exponential Quarry Sdn Bhd.
Wilma Global Investments
Limited
Golden Bond Enterprises
Limited

Other Companies
Tasek Cement Quarries
Sdn Bhd
Deluxe Focus Sdn Bhd (1)
Hanzen Wood Products
Sdn Bhd (1)
Malaysian-Myanmar Resources
Sdn Bhd
Sinmalindo Construction
Sdn Bhd (1)

Group Companies
Gridland
Hyper Act

Group Companies

Other Companies
Rimyasa Marketing Sdn Bhd
Gunung Aneka Sdn Bhd (4)
Mobilaffiche (M) Sdn Bhd
Aim Advertising Sdn Bhd
Vantage Resources Sdn Bhd
Vantage Wood Sdn Bhd
Rimyasa Corporation Sdn Bhd
PEP Publication Sdn Bhd
Proaktif Media Sdn Bhd
Keluarga Timur Sdn Bhd
Cosmo World Resources
Sdn. Bhd.
Profit Nation Borneo Sdn. Bhd.
Wilma Global Investments
Limited

Other Companies
Kayu Segak Sdn Bhd (1)

Pang Kim Chon

133

DIRECTORS, MANAGEMENT AND STAFF


Name

Present Directorships

Past Directorships

Dato Thomas Koh

Group Companies

Group Companies

Other Companies
Arena Selasih Sdn Bhd
Vibrant Consortium Sdn Bhd

Other Companies
Sistem Leasing (Malaysia)
Sdn Bhd (1)
Concord Arcade Sdn Bhd (1)
HMC International Sdn Bhd

Group Companies

Group Companies

Other Companies
Trusjadi Holdings Sdn Bhd
Tangkob Associates Sdn Bhd
Rayasan Sdn Bhd (4)
Pontian United Plantations
Sdn Bhd
Pontian Fico Plantations
Sdn Bhd
Pontian Orico Plantations
Sdn Bhd
Pontian Hillco Plantations
Sdn Bhd
Pontian Materis Plantations
Sdn Bhd
Pontian Pendirosa Plantations
Sdn Bhd
Pontian Subok Plantations
Sdn Bhd
Kilang Kelapa Sawit Pontian
Sdn Bhd
Bangsan Sdn Bhd
Redefined Land Sdn Bhd
Rawajaya Sdn Bhd
Blossom Plantations Sdn Bhd
Sabahanya Plantations Sdn Bhd
Malacca Plantation Sdn Bhd
Jubilant Paradise Sdn. Bhd.
Fortune Plantations Sdn. Bhd.
Asian Plantations (Sarawak)
Sdn. Bhd.
Asian Plantations (Sarawak) II
Sdn. Bhd.

Other Companies
Teledex Associates Sdn Bhd (1)
Felda Farm Products Sdn Bhd
Feltex Co. Ltd
PT Felda Indo Rubber
Australian Agricultural Co Ltd
Tangkob Omya (Malaysia)
Sdn Bhd (3)

Denys Collin Munang

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DIRECTORS, MANAGEMENT AND STAFF


Name

Present Directorships

Past Directorships

Asian Plantations (Sarawak) III


Sdn. Bhd.
Asian Plantations Milling
Sdn Bhd
BJ Corporation Sdn Bhd
Inconsetia Sdn Bhd
South Asian Farm Sdn Bhd
Grand Performance Sdn Bhd
Kronos Plantation Sdn Bhd
Tan Eng Ann

Group Companies

Group Companies

Other Companies
Greenzone Energy Pte. Ltd.
Amersun Energy Pte. Ltd.
R H Energy (HK) Limited
Zoneda Energy Ltd.
Hiap Tong Corporation Ltd.
Isoteam Ltd.

Other Companies
QTC Technologies Pte. Ltd.
Amersun Coating Pte. Ltd.
Natural Best Limited
Ruihua Petrochemical Co., Ltd
Chiwayland International Limited
(formerly known as R H Energy
Ltd.)

Notes:
(1)

These companies have been dissolved.

(2)

This company is in the process of striking off.

(3)

This company has been voluntarily wound up.

(4)

These companies are in the process of voluntary winding up.

EXECUTIVE OFFICERS
The day-to-day operations are entrusted to our Executive Directors who are assisted by an
experienced and qualified team of Executive Officers. The particulars of our Executive Officers are
set out below:

Name

Age

Residential address

Country of
principal
residence

Designation/
principal occupation

Lim Koh Huat


(Ian Lim)

42

39 Jalan Mempoyan
Taman Tanamera
47630 Subang Jaya
Selangor, Malaysia

Malaysia

CFO

Loh Heng Kwai

53

26, Lebuh Semangat 2


Taman Rapat Indah
31350, Ipoh, Perak
Malaysia

Malaysia

Director of Operations
(Gridland)

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The working, business experience and areas of responsibility of our Executive Officers are set out
below:
Ian Lim joined our Group as our CFO in February 2014. As our CFO, he is responsible for
overseeing the financial and accounting management and reporting.
Ian Lim commenced his career in C.T. Lim & Co in 1993 as an audit assistant and was
subsequently promoted to its audit senior, where he was responsible for assisting the firm in
providing auditing service and other valued added services such accounting, tax and secretarial
services. Between 1995 and 1997, he was an accounts executive in Creative Restaurant Sdn.
Bhd., a food and beverage consulting company. Between 1997 and 1999, he was a senior
accounts executive in Sitt Tatt Marketing Sdn. Bhd., a company in the business of trading
industrial gases, welding equipment and various types of chemical products. He was also an
accountant from 1999 to 2002 in Sonoco (Malaysia) Sdn. Bhd., a manufacturer of industrial paper
cores and composite paper cans based in the United States of America. Between 2002 and 2003,
Ian Lim was a finance and human resource manager in Rovski Group of Companies, where he
was responsible for the Groups finance, human resource and administrative matters. Prior to
joining the Group, between 2003 and 2014, Ian Lim was a country financial controller in Globelink
Container Line (M) Sdn. Bhd., a subsidiary of CWT Ltd., which is a company listed on the Main
Board of the SGX-ST, where he was responsible for its finance, human resource and
administrative matters.
Ian Lim obtained the Sijil Tinggi Pelajaran Malaysia (STPM) in 1992 and is a Chartered Certified
Accountant under the Association of Chartered Certified Accountants. He is a Chartered
Accountant of the Malaysian Institute of Accountants.
Loh Heng Kwai is our Director of Operations (Gridland). He joined our Group in October 2011 and
is responsible for designing and planning our Groups quarrying operations in Gridland Quarry,
and overseeing our quarrying operations, including the supervision of the workers and ensuring
compliance with applicable safety and regulatory requirements.
Loh Heng Kwai first started his career in 1982 as an assistant senior executive at Lafarge Malayan
Cement Sdn. Bhd., where he was responsible for the day to day operations of the cement plant,
such as monitoring the production process and supervising of the workers. Between 2004 and
2011, he joined Tasek Corporation Bhd, which is a cement manufacturing company, as a supply
chain manager, where he was responsible for the production of cement and ensuring that the
production targets set by management are met.
Loh Heng Kwai holds a Bachelor of Arts degree from Ottawa University, Kansas, United States of
America.

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DIRECTORS, MANAGEMENT AND STAFF


The list of present and past directorships of each Executive Officer over the last five (5) years
excluding those held in our Company, is set out below:
Name

Present Directorships

Past Directorships

Ian Lim

Group Companies
Hyper Act

Group Companies

Other Companies

Other Companies

Group Companies

Group Companies

Other Companies

Other Companies

Loh Heng Kwai

Note:
(1)

This company is in the process of voluntary winding up.

MANAGEMENT REPORTING STRUCTURE


Our management reporting structure is as follows:
Board of Directors

Executive Chairman and CEO


Alex Loo

Executive Director
and COO

CFO
Ian Lim

Pang Kim Chon

Director of
Operations (Gridland)
Loh Heng Kwai

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DIRECTORS, MANAGEMENT AND STAFF


EMPLOYEES
All the full-time employees of our Group for the past three (3) financial years ended 31 December
2011, 2012 and 2013 and the financial period ended 30 September 2014 are based in Malaysia.
The functional distribution of full-time employees of the Group as at 31 December 2011, 2012 and
2013, 30 September 2014 and as at the Latest Practicable Date was as follows:

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

As at
the Latest
Practicable
Date

Management (1)

Finance,
accounts,
administration

Business
development

Operations

26

26

Total

11

36

37

Note:
(1)

Directors of our Group are classified under Management.

The number of employees increased from 11 to 37 in line with the expansion of the business plans
and scope of our Group. We do not experience any significant seasonal fluctuations in our number
of employees. We do not employ any temporary or part time employees.
The relationship between the management of our Group and our employees is good and is
expected to continue and remain as such in the future. The employees of our Group are not
unionised and there have been no industrial disputes with the employees or any work stoppage
which has affected our Groups operations since we commenced operations.
Other than amounts set aside or accrued in respect of mandatory employee funds, we have not
set aside or accrued any amount of money to provide for pension, retirement or similar benefits
to our employees.

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DIRECTORS, MANAGEMENT AND STAFF


REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATED EMPLOYEES
Directors and Executive Officers
The compensation paid to our Directors and our Executive Officers by our Group for FY2013 and
FY2014 (being the two (2) most recent completed financial years), and the estimated
compensation to be paid to our Directors and our Executive Officers for FY2015 by our Group (on
an aggregate basis and in remuneration bands (1)) are as follows:

FY2013

FY2014

FY2015
(Estimated)

Band A

Band A

Band A

Pang Kim Chon

Band A

Band A

Dato Thomas Koh

Band A

Band A

Denys Collin Munang

Band A

Band A

Tan Eng Ann

Band A

Band A

Band A

Band A

Band A

Band A

Band A

Directors
Alex Loo

Executive Officers
Ian Lim
Loh Heng Kwai
Note:
(1)

Band A: Compensation from S$1 to S$250,000 per annum.

Related Employees
Save for remuneration paid to Loo Han Hwa, who is the brother of our Executive Chairman and
CEO, Alex Loo, in respect of his employment as a general worker with Gridland since August 2012
and the remuneration paid to Loo Wooi Hong, the son of Alex Loo, in respect of his employment
as an administrative executive of Gridland since November 2014, for the Period Under Review
and up to the Latest Practicable Date there was no remuneration paid to employees, who are
related to our Directors, Substantial Shareholders or Controlling Shareholders (including related
employees who have since left our Company).
Between 1 October 2014 to the Latest Practicable Date, the estimated aggregate remuneration
(including bonus) of employees who are related to our Directors and Substantial Shareholders or
Controlling Shareholders is approximately MYR29,500.
As at the Latest Practicable Date, save as otherwise disclosed in this Offer Document, there was
no employee who was related to the Directors or Substantial Shareholders.

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DIRECTORS, MANAGEMENT AND STAFF


The remuneration of employees who are related to our Directors and Substantial Shareholders will
be reviewed annually by our Remuneration Committee to ensure that their remuneration packages
are in line with our staff remuneration guidelines and commensurate with their respective job
scopes and level of responsibilities. Any bonus, pay increases and/or promotions for these related
employees will also be subject to the review and approval of our Remuneration Committee. In
addition, any new employment of related employees and the proposed terms of their employment
will also be subject to the review and approval of our Remuneration Committee. In the event that
a member of our Remuneration Committee is related to the employee under review, he will abstain
from the review.
SERVICE AGREEMENTS
On 26 February 2015, our Company entered into separate service agreements (collectively, the
Service Agreements and individually, the Service Agreement) with Alex Loo and Pang Kim
Chon (collectively, the Executives and individually, the Executive).
Each Service Agreement will continue for an initial period of three (3) years and upon the expiry
of such period, and either party may terminate the Service Agreement by giving to the other party
not less than six (6) months written notice.
The employment of each Executive shall be automatically renewed on the same terms herein
upon expiry thereof unless either of the parties hereto notifies the other party by giving six (6)
months written notice prior to the expiry thereof, of its intention not to renew the employment. For
the avoidance of doubt, the employment renewed on different terms as provided herein upon
expiry shall not constitute termination of the employment. Any such variation of the terms herein
shall be subject to the approval of the Board, the Remuneration Committee and the Nominating
Committee, and/or (if necessary) the Shareholders.
Notwithstanding the other provisions of the Service Agreement, our Company shall be entitled to
terminate the appointment, but without prejudice to the rights and remedies of our Company for
any breach of the Service Agreement and to the Executives continuing obligations under the
Service Agreement, in any of the following cases:
(a)

if the Executive becomes bankrupt or makes any arrangement or composition with his
creditors generally;

(b)

if the Executive is convicted of any criminal offence (save for an offence under any road
traffic legislation for which he is not sentenced to any term of immediate or suspended
imprisonment) and sentenced to any term of immediate or suspended imprisonment;

(c)

if the Executive is or may be suffering from a mental disorder;

(d)

if the Executive becomes prohibited by law or any order from any regulatory body or
governmental authority from being, or ceases to be, an employee or director of our Company
for any reason whatsoever;

(e)

if the Executive becomes guilty of any wilful misconduct in the discharge of his duties; or

(f)

if the Executive breaches any material provision under the Service Agreement.

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DIRECTORS, MANAGEMENT AND STAFF


The Service Agreements provided for, inter alia, the salary payable to the Executives, annual
leave, medical benefits, grounds of termination and certain restrictive covenants (including
non-compete obligation).
Pursuant to the terms of the respective Service Agreements, the monthly salary of the respective
Executives will be as set out below. In addition, each of the Executives is also entitled to receive
an annual incentive bonus of a sum calculated based on the consolidated audited profit before tax
of our Company, subject to the terms and conditions in the Service Agreements. The remuneration
of the Executives is subject to review by our Board and the Remuneration Committee at the end
of each financial year of our Company. The relevant Executive shall abstain from voting in respect
of any resolution or decision to be made by our Board in relation to the terms and renewal of his
or her Service Agreement.
Monthly
salary (MYR)

Executives
Alex Loo

50,000

Pang Kim Chon

40,000

Under the Service Agreements, each Executive is entitled an incentive bonus based on the
consolidated audited profit before tax, the aforementioned incentive bonus and minority interests,
of the Group (PBT) for any financial year, is calculated as follows:
Alex Loo
PBT

Incentive bonus

(i)

For the first S$5 million

1.5% of the PBT

(ii)

More than S$5 million


but less than S$10 million

1.5% of the PBT for the first S$5 million plus 2.0% on the
excess amount of PBT from S$5,000,0001 onward

(iii) More than S$10 million

1.5% of the PBT for the first S$5 million plus 2.0% of the
PBT from S$5,000,0001 to S$10,000,000 plus 3.0% on
the excess amount of PBT from S$10,000,001 onward

Pang Kim Chon


PBT

Incentive bonus

(i)

For the first S$5 million

1.2% of the PBT

(ii)

More than S$5 million


but less than S$10 million

1.2% of the PBT for the first S$5 million plus 1.8% on the
excess amount of PBT from S$5,000,0001 onward

(iii) More than S$10 million

1.2% of the PBT for the first S$5 million plus 1.8% of the
PBT from S$5,000,0001 to S$10,000,000 plus 2.5% on
the excess amount of PBT from S$10,000,001 onward

Save as disclosed above, there are no bonus or profit-sharing plans or any other profit-linked
agreements or arrangements between our Company and any of our Directors, Executive Officers
or employees. The Executives shall not be entitled to further Directors fees under the Service
Agreements.

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DIRECTORS, MANAGEMENT AND STAFF


Subject to the approvals of the Shareholders, the SGX-ST and other regulatory authorities, where
necessary, the Executives shall be eligible to participate in any other employee scheme or plan
implemented by our Company on such terms as may be determined by our Remuneration
Committee at its sole and absolute discretion.
Pursuant to their respective Service Agreements, each Executive shall not, at any time during the
employment with our Company, be engaged or interested in any capacity in any business similar
to or competing with the business of the Group. Each Executive shall not, until 12 months after the
termination of his employment, persuade or attempt to persuade any potential customer or client
to which any of the Group Companies has made a presentation, or with which any of the Group
Companies has been in negotiations or having discussions, not to deal with or hire any of the
Group Companies or to deal with or hire another company; or solicit for himself or any person
other than the Group Companies the business of any customer or client of any of the Group
Companies, or was its customer or client within 12 months prior to the date of termination of his
employment; and solicit any employee of the Group Companies for the employment of himself,
any other person or any other company other than the Group Companies.
Each of the Executives shall keep secret and shall not at any time (whether during the
appointment or after the termination of the appointment for whatever reason) use for his or her
own or anothers advantage, business methods or information which the Executive knew or ought
reasonably to have known to be confidential concerning the business or affairs of our Company
or any member of our Company so far as they shall have come to his or her knowledge during the
appointment.
Save as disclosed above, there are no other existing or proposed service contracts entered or to
be entered into by our Directors or our Executive Officers with our Company. There are no existing
or proposed service agreements entered into or to be entered into by our Directors with our
Company which provide for benefits upon termination of employment.

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GCCP EMPLOYEE SHARE OPTION SCHEME
GCCP PERFORMANCE SHARE PLAN AND GCCP EMPLOYEE SHARE OPTION SCHEME
In conjunction with our listing on Catalist, we have adopted a performance share plan known as
the GCCP Performance Share Plan (the Performance Share Plan) and a share option scheme
known as the GCCP Employee Share Option Scheme (the ESOS), both of which were
approved by our Shareholders by way of written resolutions of our Shareholders passed on 26
February 2015. Please refer to Appendix I entitled Rules of the GCCP Performance Share Plan
and Appendix J entitled Rules of the GCCP Employee Share Option Scheme of this Offer
Document for further details.
Rationale
Both the Performance Share Plan and the ESOS will provide eligible participants (each a
Participant and collectively, the Participants) with an opportunity to participate in the equity
of our Company and to motivate them towards better performance through increased dedication
and loyalty. Both the Performance Share Plan and the ESOS form an integral component of our
compensation plan and are designed primarily to reward and retain employees whose services
are vital to the growth and performance of our Company and/or our Group.
The Performance Share Plan and ESOS are designed to complement each other. The aim of
implementing more than one incentive plan is to increase our Groups flexibility and effectiveness
in its continuing efforts to reward, retain and motivate employees to achieve better performance
by providing our Group with a more comprehensive set of remuneration tools and further
strengthen our competitiveness in attracting and retaining local and foreign talent.
Unlike the ESOS whereby Participants are required to pay for the exercise of the Options, the
Performance Share Plan allows our Group to provide an incentive for Participants to achieve
certain specific performance targets by awarding fully paid Shares to Participants after these
targets have been met.
In addition, the assessment criteria for granting Options under the ESOS are more general (for
example, based on length of service and general performance of our Group) and do not relate to
specific performance targets imposed by our Group. On the other hand, the assessment criteria
for granting of Awards (as described below) under the Performance Share Plan will be based on
specific performance targets or to impose time-based service conditions, or a combination of both.
As at the date of this Offer Document, no Options have been granted under the ESOS and no
Awards have been granted under the Performance Share Plan.
GCCP PERFORMANCE SHARE PLAN
1.

Objectives of the Performance Share Plan


The main objectives of the Performance Share Plan are as follows:
(a)

to attract potential employees with relevant skills to contribute to our Group and to
create value for Shareholders;

(b)

to instill loyalty to, and a stronger identification by the Participants with the long-term
prosperity of, our Group;

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2.

(c)

to motivate the Participants to optimise their performance standards and efficiency and
to maintain a high level of contribution to our Group;

(d)

to give recognition to the contributions made by the Participants to the success of our
Group; and

(e)

to retain key employees of our Group whose contributions are essential to the long-term
prosperity of our Group.

Summary Of Rules Of the Performance Share Plan


The following is a summary of the rules of the Performance Share Plan. Any capitalised term
as used throughout this section, unless otherwise defined, shall bear the meanings as
defined in Appendix I of this Offer Document.

2.1 Eligibility
The Performance Share Plan allows for participation by Group Employees (including Group
Executive Directors) and Non-Executive Directors (including Independent Directors) who
have attained the age of 21 years on or before the relevant date of Award provided that none
shall be an undischarged bankrupt at the relevant time, and who, in the absolute discretion
of the Remuneration Committee will be eligible to participate in the Performance Share Plan.
Controlling Shareholders or their Associates who meet the above eligibility criteria are
eligible to participate in the Performance Share Plan provided that (a) the participation of,
and (b) the terms of each grant and the actual number of Awards granted under the
Performance Share Plan to, a Participant who is a Controlling Shareholder or an Associate
of a Controlling Shareholder shall be approved by our independent Shareholders in separate
resolutions for each such person.
There shall be no restriction on the eligibility of any Participant to participate in any other
share incentive schemes or share plans implemented or to be implemented by our Company
or any other company within our Group.
Subject to the Cayman Companies Law and any requirement of the SGX-ST, the terms of
eligibility for participation in the Performance Share Plan may be amended from time to time
at the absolute discretion of the Remuneration Committee.
2.2 Awards
Awards represent the right of a Participant to receive fully paid Shares free of charge, upon
the Participant achieving the prescribed performance targets.
The selection of the Participants and the number of Shares which are the subject of each
Award to be granted to a Participant in accordance with the Performance Share Plan shall
be determined at the absolute discretion of the Remuneration Committee, which shall take
into account criteria such as, inter alia, the rank, scope of responsibilities, performance,
years of service and potential for future development and contribution to the success of our
Group.

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In the case of a performance-related Award, the performance targets will be set by the
Remuneration Committee depending on each individual Participants job scope and
responsibilities. The performance targets to be set shall take into account both the medium
and long-term corporate objectives of our Group and the individual performance of the
Participant and will be aimed at sustaining long-term growth. The corporate objectives shall
cover market competitiveness, business growth and productivity growth. The performance
targets could be based on criteria such as sales growth, growth in earnings and returns on
investment. In addition, the Participants length of service with our Group, achievements of
past performance targets, ability to value-add to our Groups performance and development
and overall enhancement to Shareholder value, amongst others, will be taken into account.
Awards may be granted at any time in the course of a financial year, provided that in the
event that an announcement on any matter of an exceptional nature involving unpublished
price sensitive information is imminent, Awards may only be vested and hence any Shares
comprised in such Awards may only be delivered on or after the second Market Day from the
date on which the aforesaid announcement is made.
An Award letter confirming the Award will be sent to each Participant as soon as reasonably
practicable after the Award is finalised by the Committee, specifying, inter alia, in relation to
the Award:
(a)

(in relation to a performance-related Award), the performance targets and the


performance period during which the prescribed performance targets are to be met;

(b)

the number of Shares to be vested on the Participant; and

(c)

the date by which the Award shall be vested.

The Remuneration Committee will take into account various factors when determining the
method to arrive at the exact number of Shares comprised in an Award. Such factors include,
but are not limited to, the current price of the Shares, the total issued share capital of our
Company and the pre-determined Singapore dollar amount which the Remuneration
Committee decides that a Participant deserves for meeting his performance targets. For
example, Shares may be awarded based on predetermined Singapore dollar amounts such
that the quantum of Shares comprised in the Award is dependent on the closing price of the
Shares transacted on the Market Day that such Award is vested. Alternatively, the
Remuneration Committee may decide for absolute numbers of Shares to be awarded to
Participants irrespective of the price of the Shares. The Remuneration Committee shall
monitor the grant of Awards carefully to ensure that the size of the Performance Share Plan
will comply with the relevant Catalist Rules.
2.3 Size and duration of the Performance Share Plan
The total number of Shares which may be delivered pursuant to the vesting of Awards on any
date, when added to the aggregate number of Shares issued and/or issuable in respect of (i)
all Awards granted under the Performance Share Plan; (ii) all Options granted under the
ESOS; and (iii) all other Shares issued and/or issuable under any other share-based
incentive schemes or share plans of our Company, shall not exceed 15.0% of the total
number of issued Shares (excluding treasury shares) of our Company from time to time.

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Our Directors believe that the size of the Performance Share Plan will give our Company
sufficient flexibility to decide the number of Shares to be offered under the Performance
Share Plan. However, it does not indicate that the Remuneration Committee will definitely
issue Shares up to the prescribed limit. The Remuneration Committee will exercise its
discretion in deciding the number of Shares to be granted to each Participant under the
Performance Share Plan. This, in turn, will depend on, and be commensurate with, the
performance and value of the Participant to our Group.
The aggregate number of Shares that are available to the Controlling Shareholders and their
Associates under the Performance Share Plan shall not exceed 25.0% of the total number of
Shares available under the Performance Share Plan. The number of Shares that are
available to each Controlling Shareholder or each of their Associates under the Performance
Share Plan shall not exceed 10.0% of the Shares available under the Performance Share
Plan.
The Performance Share Plan shall continue in force at the discretion of the Remuneration
Committee, subject to a maximum period of ten (10) years commencing on the date on which
the Performance Share Plan is adopted by our Company in by way of written resolutions,
provided always that the Performance Share Plan may continue beyond the above stipulated
period with the approval of our Shareholders by ordinary resolution in general meeting and
of any relevant authorities which may then be required.
Notwithstanding the expiry or termination of the Performance Share Plan, any Awards made
to Participants prior to such expiry or termination will continue to remain valid.
2.4 Operation of the Performance Share Plan
The Remuneration Committee shall have the discretion to determine whether performance
targets have been met (whether fully or partially) or exceeded and/or whether the
Participants performance and/or contribution to our Company and/or any of our subsidiaries
justifies the vesting of an Award. In making any such determination, the Remuneration
Committee shall have the right to make reference to the audited results of our Company or
our Group, as the case may be, to take into account such factors as the Remuneration
Committee may determine to be relevant, such as changes in accounting methods, taxes and
extraordinary events, and further, the right to amend the performance targets if the
Remuneration Committee decides that it would be a fairer measure of performance.
Awards may only be vested and consequently any Shares comprised in such Awards shall
only be delivered upon the Remuneration Committee being satisfied that the Participant has
achieved the performance targets.
Subject to the prevailing legislation and the provisions of the Catalist Rules, our Company
will be delivering Shares to Participants upon vesting of their Awards by way of an issue of
new Shares or the transfer of existing Shares held as treasury shares to the Participants. In
determining whether to issue new Shares or to purchase existing Shares for delivery to
Participants upon the vesting of their Awards, our Company will take into account factors
such as the number of Shares to be delivered, the prevailing market price of the Shares and
the financial effect on our Company of either issuing new Shares or purchasing existing
Shares.

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new Shares allotted and issued on the release of an Award shall rank in full for all
entitlements, including dividends or other distributions declared or recommended in respect
of the then existing Shares, the record date for which is on or after the date of issue of the
new Shares or the date of transfer of treasury shares pursuant to the vesting of the Award,
and shall in all other respects rank pari passu with other existing Shares then in issue.
2.5 Adjustments and alterations under the Performance Share Plan
(i)

Variation of Capital
If a variation in the issued ordinary share capital of our Company, whether by way of a
capitalisation issue or other circumstances (for example, rights issue, capital reduction,
subdivision, consolidation of shares or distribution) shall take place, then:
(A)

the class and/or number of Shares which are the subject of an Award to the extent
not yet vested; and/or

(B)

the class and/or number of Shares over which future Awards may be granted under
the Performance Share Plan,

shall be adjusted by the Remuneration Committee to give each Participant the same
proportion of the equity capital of our Company as that to which he was previously
entitled and, in doing so, the Remuneration Committee shall determine, at its own
discretion, the manner in which such adjustment shall be made.
Unless the Remuneration Committee considers an adjustment to be appropriate, the
following events shall not normally be regarded as a circumstance requiring adjustment:
(aa) the issue of securities as consideration for an acquisition or a private placement
of securities;
(bb) the cancellation of issued Shares purchased or acquired by our Company by way
of a market purchase of such Shares undertaken by our Company on the SGX-ST
during the period when a share purchase mandate granted by Shareholders
(including any renewal of such mandate) is in force;
(cc) the issue of Shares or other securities convertible into or with rights to acquire or
subscribe for Shares to its employees pursuant to any share option scheme or
share plan approved by Shareholders in general meeting, including the
Performance Share Plan; and
(dd) any issue of Shares arising from the exercise of any warrants or the conversion of
any convertible securities issued by our Company.
Notwithstanding the provisions of the rules of the Performance Share Plan:
(1)

the adjustment must be made in such a way that a Participant will not receive a
benefit that a Shareholder does not receive; and

(2)

any adjustment (except in relation to a capitalisation issue) must be confirmed in


writing by the Auditors (acting only as experts and not as arbitrators) to be in their
opinion, fair and reasonable.
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(ii)

Modifications to the Performance Share Plan


Any or all the provisions of the Performance Share Plan may be modified and/or altered
at any time and from time to time by resolution of the Remuneration Committee,
provided that:
(A)

any modification or alteration which would be to the advantage of the Participants


under the Performance Share Plan shall be subject to the prior approval of
Shareholders in a general meeting; and

(B)

no modification or alteration shall be made without due compliance with the


Catalist Rules and such other regulatory authorities as may be necessary.

2.6 Reporting requirements


Under the Catalist Rules, an immediate announcement must be made on the date of the
grant of an Award and provide details of the grant, including the following:
(i)

date of grant;

(ii)

market price of the Shares on the date of grant of the Award;

(iii) number of Shares granted under the Award;


(iv) number of Shares granted to Directors under the Award, if any; and
(v)

the vesting period in relation to the Award.

The following disclosures (as applicable) will be made by our Company in our annual report
for so long as the Performance Share Plan continues in operation:
(A)

the names of the members of the Remuneration Committee administering the


Performance Share Plan;

(B)

in respect of the following Participants:


(1)

Directors of our Company; and

(2)

Participants (other than those in paragraph (B)(1) above) who have received
Shares pursuant to the vesting of Awards granted under the Performance Share
Plan which, in aggregate, represent 5.0% or more of the total number of Shares
available under the Performance Share Plan,

the following information will be required:


(AA) the name of the Participant;
(BB) the aggregate number of Shares comprised in Awards which have been granted
to such Participant during the financial year under review;

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(CC) the aggregate number of Shares comprised in Awards which have been granted
to such Participant since the commencement of the Performance Share Plan to
the end of the financial year under review;
(DD) the aggregate number of Shares comprised in Awards which have been issued
and/or transferred to such Participants pursuant to the vesting of Awards under
the Performance Share Plan since the commencement of the Performance Share
Plan to the end of the financial year under review; and
(EE) the aggregate number of Shares comprised in Awards which have not been
vested as at the end of the financial year under review; and
(C) such other information as may be required by the Catalist Rules or the Cayman
Companies Law.
2.7 Role and composition of the Remuneration Committee
The Remuneration Committee shall be responsible for the administration of the Performance
Share Plan and shall consist of the Directors. As at the date of this Offer Document, the
Remuneration Committee comprises Dato Thomas Koh, Tan Eng Ann and Denys Collin
Munang.
The Remuneration Committee shall have the power, from time to time, to make and vary such
rules (not being inconsistent with the Performance Share Plan) for the implementation and
administration of the Performance Share Plan as they think fit including, but not limited to:
(i)

imposing restrictions on the number of Awards that may be vested within each financial
year; and

(ii)

amending performance targets, if by so doing it would be a fairer measure of


performance for a Participant or for the Performance Share Plan as a whole.

In compliance with the requirements of the Catalist Rules, any Participant of the Performance
Share Plan who is a member of the Remuneration Committee shall not be involved in the
deliberation or decision in respect of Awards granted to or to be granted to him.
2.8 Rationale for participation by the Controlling Shareholders and their Associates in the
Performance Share Plan
Our Company acknowledges that the services and contributions of employees who are
Controlling Shareholders or Associates of our Controlling Shareholders are important to the
development and success of our Group. The extension of the Performance Share Plan to
confirmed full-time employees who are Controlling Shareholders and Associates of our
Controlling Shareholders allows our Group to have a fair and equitable system to reward
employees who have actively contributed to the progress and success of our Group. The
participation of the Controlling Shareholders and their Associates in the Performance Share
Plan will serve both as a reward to them for their dedicated services to our Group and a
motivation for them to take a long-term view of our Group.

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Although Participants who are Controlling Shareholders or Associates of our Controlling
Shareholders may already have shareholding interests in our Company, the extension of the
Performance Share Plan to include them ensures that they are equally entitled, with the other
employees of our Group, who are not Controlling Shareholders or Associates of our
Controlling Shareholders, to take part and benefit from this system of remuneration. We are
of the view that a person who would otherwise be eligible should not be excluded from
participating in the Performance Share Plan solely by reason that he/she is a Controlling
Shareholder or an Associate of our Controlling Shareholders.
The specific approval of our independent Shareholders is required for the participation of
such persons as well as the actual number of and terms of such Awards. A separate
resolution must be passed for each such Participant. In seeking such approval from our
independent Shareholders, clear justification as to the participation of our Controlling
Shareholders and their Associates, the number of and terms of the Awards to be granted to
the Controlling Shareholders and their Associates shall be provided. Accordingly, we are of
the view that there are sufficient safeguards against any abuse of the Performance Share
Plan resulting from the participation of employees who are Associates of our Controlling
Shareholders.
2.9 Rationale for participation by Non-Executive Directors (including Independent
Directors)
While the Performance Share Plan caters principally to Group Employees, it is recognised
that there are other persons who make significant contributions to our Group through their
close working relationships with our Group, even though they are not employed within our
Group. Such persons include the Non-Executive Directors.
The Non-Executive Directors are persons from different professions and working
backgrounds, bringing to our Group their wealth of knowledge, experience, business
expertise and contacts in the business community. They play an important role in helping our
Group shape its business strategy by allowing our Group to draw on their diverse
backgrounds and working experience. It is crucial for our Group to attract, retain and
incentivise the Non-Executive Directors. By aligning the interests of the Non-Executive
Directors with the interests of our Shareholders, our Company aims to instill a sense of
commitment on the part of the Non-Executive Directors towards serving the short and
long-term objectives of our Group.
Our Directors are of the view that including the Non-Executive Directors in the Performance
Share Plan will show our Companys appreciation for them and further motivate them in their
contribution towards the success of our Group. However, as their services and contributions
cannot be measured in the same way as the full-time employees of our Group, while it is
desired that participation in the Performance Share Plan be made open to the Non-Executive
Directors, any Awards that may be granted to any such Non-Executive Director would be
intended only as a token of our Companys appreciation.

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For the purpose of assessing the contributions of the Non-Executive Directors, the
Remuneration Committee will propose a performance framework comprising mainly nonfinancial performance measurement criteria, such as the extent of involvement and
responsibilities shouldered by the Non-Executive Directors. In addition, the Remuneration
Committee will also consider the scope of advice given, the number of contacts and size of
deals which our Group is able to procure from those contacts and recommendations made
by the Non-Executive Directors. The Remuneration Committee may also decide that no
Awards shall be made in any financial year or no grant and/or Award may be made at all.
It is envisaged that the vesting of Awards, and hence the number of Shares to be delivered
to the Non-Executive Directors based on the criteria set out above will be relatively small, in
terms of the frequency and numbers. Based on this, the Directors are of the view that the
participation by the Non-Executive Directors in the Performance Share Plan will not
compromise the independent status of those who are Independent Directors.
2.10 Financial Effects of the Performance Share Plan
Cost of Awards
International Financial Reporting Standard 2 (IFRS 2) relating to share-based payment took
effect for all listed companies from 1 January 2005. Participants will receive Shares and the
Awards would be accounted for as equity-settled share-based transactions, as described in
the following paragraphs.
The fair value of employee services received in exchange for the grant of the Awards will be
recognised as a charge to profit or loss over the period between the grant date and the
vesting date of an Award. The total amount of the charge over the vesting period is
determined by reference to the fair value of each Award granted at the grant date and the
number of Shares vested at the vesting date, with a corresponding credit to reserve account.
Before the end of the vesting period, at each accounting year end, the estimate of the
number of Awards that are expected to vest by the vesting date is subject to revision, and the
impact of the revised estimate will be recognised in profit or loss with a corresponding
adjustment to the reserve account. After the vesting date, no adjustment to the charge to
profit or loss is made. This accounting treatment has been referred to as the modified grant
date method because the number of Shares included in the determination of the expense
relating to employee services is adjusted to reflect the actual number of Shares that
eventually vest but no adjustment is made to changes in the fair value of the Shares since
the grant date.
The amount charged to profit or loss would be the same whether our Company settles the
Awards by issuing new Shares or by purchasing existing Shares. The amount of the charge
to profit or loss also depends on whether or not the performance target attached to an Award
is measured by reference to the market price of the Shares. This is known as a market
condition. If the performance target is a market condition, the probability of the performance
target being met is taken into account in estimating the fair value of the Award granted at the
grant date, and no adjustments to amounts charged to profit or loss are made if the market
condition is not met. However, if the performance target is not a market condition, the fair
value per Share of the Awards granted at the grant date is used to compute the amount to
be charged to profit or loss at each accounting date, based on an assessment at that date
of whether the non-market conditions would be met to enable the Awards to vest. Thus,
where the vesting conditions do not include a market condition, there would be no charge to
profit or loss if the Awards do not ultimately vest.
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In the event that the Participants receive cash, our Company shall measure the fair value of
the liability at the grant date. Until the liability is settled, our Company shall re-measure the
fair value of the liability at each accounting date and at the date of settlement, with changes
in the fair value recognised in profit or loss.
Share capital
The Performance Share Plan will result in an increase in our Companys issued share capital
where new Shares are issued to Participants. The number of new Shares issued will depend
on, among others, the size of the Awards granted under the Performance Share Plan. In any
case, the Performance Share Plan provides that the number of shares to be issued under the
Performance Share Plan will be subject to a maximum limit of 15.0% of our total issued
Shares (excluding treasury shares). The aggregate number of Shares available under the
Performance Share Plan shall not exceed 15.0% of the total issued share capital of our
Company (excluding treasury shares) post-Placement and from time to time. If instead of
issuing new Shares to the Participants, treasury shares are transferred to Participants or our
Company pays the equivalent cash value, the Performance Share Plan would have no impact
on our Companys total number of issued Shares.
NTA
The Performance Share Plan will result in a charge to our Companys profit or loss over the
period from the grant date to the vesting date of the Awards. The amount of the charge will
be computed in accordance with IFRS 2. When the new Shares are issued under the
Performance Share Plan, there would be no effect on the NTA. However, if instead of issuing
new Shares to Participants, existing Shares are purchased for delivery to Participants, or our
Company pays the equivalent cash value, the NTA would be impacted by the cost of the
Shares purchased or the cash payment, respectively.
EPS
The Performance Share Plan will result in a charge to earnings equivalent over the period
from the grant date to the vesting date, computed in accordance with IFRS 2. It should again
be noted that the delivery of Shares to Participants of the Performance Share Plan will
generally be contingent upon the Participants meeting the prescribed performance targets
and conditions.
GCCP EMPLOYEE SHARE OPTION SCHEME
3.

Objectives of the ESOS


The objectives of the ESOS are as follows:
(a)

to motivate participants to optimise their performance standards and efficiency and to


maintain a high level of contribution to our Group;

(b)

to retain key employees and directors whose contributions are essential to the
long-term growth and profitability of our Group;

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4.

(c)

to instill loyalty to, and a stronger identification by participants with the long-term
prosperity of, our Group;

(d)

to attract potential employees with relevant skills to contribute to our Group and to
create value for our Shareholders; and

(e)

to align the interests of participants with the interests of our Shareholders.

Summary of the ESOS


The following is a summary of the rules of the ESOS. Any capitalised terms used herein shall,
unless otherwise defined, bear the same meanings as defined in Appendix J of this Offer
Document.

4.1 Participants
The ESOS allows for participation by Group Employees (including Group Executive
Directors) and Non-Executive Directors (including Independent Directors) who have attained
the age of 21 on or prior to the relevant date of grant of the Option, provided that none shall
be an undischarged bankrupt or have entered into a composition with his creditors.
Controlling Shareholders and their Associates who have contributed to the development and
success of the Group shall be eligible to participate in the ESOS, provided that (i) the
participation of; and (ii) the terms of any Options to be granted and the actual number of
Shares to be granted under the ESOS, to a Participant who is a Controlling Shareholder or
an associate of a Controlling Shareholder shall be approved by the independent
Shareholders in separate resolutions for each such person.
4.2 Administration
The ESOS shall be administered by the Remuneration Committee with powers to determine,
inter alia, the following:
(i)

persons to be granted Options;

(ii)

number of Options to be granted; and

(iii) recommendations for modifications to the ESOS.


As at the date of this Offer Document, our Remuneration Committee comprises Dato Thomas
Koh, Tan Eng Ann and Denys Collin Munang. The Remuneration Committee will consist of
Directors (including Directors or persons who may be participants of the ESOS). A member
of the Remuneration Committee who is also a Participant of the ESOS must not be involved
in any deliberation or decision in respect of Options granted or to be granted to him.

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4.3 Size of the ESOS
The total number of Shares over which the Remuneration Committee may grant Options on
any date, when added to the number of Shares issued and issuable in respect of (i) all
Options granted under the ESOS; (ii) all Awards granted under the Performance Share Plan;
and (iii) all outstanding options or awards granted under such other share-based incentive
schemes of our Company, shall not exceed 15.0% of the number of issued Shares (excluding
treasury shares) on the day immediately preceding the Offer Date of the Option.
Our Directors believe that this limit gives us sufficient flexibility to decide upon the number
of Option Shares to offer our existing and new employees. The number of eligible
Participants is expected to grow over the years. Our Company, in line with its goal of ensuring
sustainable growth, is constantly reviewing its position and considering the expansion of its
talent pool which may involve employing new employees. The employee base, and thus the
number of eligible Participants, will increase as a result. If the number of Options available
under the ESOS is limited, our Company may only be able to grant a small number of Options
to each eligible Participant which may not be a sufficiently attractive incentive. Our Company
is of the opinion that it should have a sufficient number of Options to offer to new employees
as well as to existing ones. The number of Options offered must also be significant to serve
as a meaningful reward for contributions to our Group. However, it does not necessarily
mean that the Remuneration Committee will definitely issue Option Shares up to the
prescribed limit. The Remuneration Committee shall exercise its discretion in deciding the
number of Option Shares to be granted to each employee, which will depend on the
performance and value of the employee to our Group.
4.4 Maximum entitlements
The aggregate number of Shares comprised in any Option to be offered to a Participant
under the ESOS shall be determined at the absolute discretion of the Remuneration
Committee, which shall take into account (where applicable) criteria such as rank, past
performance, years of service and potential development of that Participant.
The aggregate number of Shares in respect of which Options may be granted to Controlling
Shareholders and their Associates under the ESOS shall not exceed 25.0% of the total
number of Shares available under the ESOS. The aggregate number of Shares in respect of
which Options may be granted to any individual Controlling Shareholder or Associate of a
Controlling Shareholder under the ESOS shall not exceed 10.0% of the total number of
Shares available under the ESOS.
4.5 Options, exercise period and exercise price
The Options that are granted under the ESOS may have exercise prices that are, at the
Remuneration Committees discretion, set at a price (the Market Price) equal to the
average of the last dealt prices for the Shares on Catalist for five (5) consecutive Market
Days immediately preceding the relevant date of grant of the relevant Option; or at a discount
to the Market Price (subject to a maximum discount of 20.0%). Options which are fixed at the
Market Price (the Market Price Option) may be exercised after the first anniversary of the
date of grant of that Option while Options exercisable at a discount to the Market Price (the
Discounted Option) may only be exercised after the second anniversary from the date of
grant of that Option. Options granted under the ESOS will have a life span of ten (10) years.

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4.6 Grant of Options
Under the rules of the ESOS, there are no fixed periods for the grant of Employee Options.
As such, offers for the grant of Options may be made at any time at the discretion of the
Remuneration Committee. However, no Option shall be granted during the period of 30 days
immediately preceding the date of announcement of our Companys interim and/or final
results (as the case may be).
In addition, in the event that an announcement on any matter of an exceptional nature
involving unpublished price sensitive information is imminent, offers may only be made after
the second Market Day from the date on which the aforesaid announcement is made.
4.7 Termination of Options
Special provisions in the rules of the ESOS deal with the lapse or earlier exercise of Options
in circumstances which include the termination of the Participants employment in our Group,
the bankruptcy of the Participant, the death of the Participant, a take-over of our Company
and the winding-up of our Company.
4.8 Acceptance of Offer
The grant of Options shall be accepted within 30 days from the date of offer. Offers of Options
made to grantees, if not accepted by the closing date, will lapse. Upon acceptance of the
offer, the grantee must pay our Company a consideration of S$1.
4.9 Rights of Shares arising from the exercise of Options
Option Shares are subject to the provisions of the Memorandum and Articles. The Option
Shares so allotted will, upon issue, rank pari passu in all respects with the then existing
issued Shares, save for any dividend, rights, allotments or distributions, the record date for
which is prior to the relevant exercise date of the Option. For such purposes, record date
means the date as at the close of business on which our Shareholders must be registered
in order to participate in any dividends, rights, allotments or other distributions (as the case
may be).
4.10 Duration of the ESOS
The ESOS shall continue in operation for a maximum duration of ten (10) years commencing
on the date on which the ESOS is adopted by our Company by way of written resolution and
may be continued for any further period thereafter with the approval of our Shareholders by
ordinary resolution in general meeting and of any relevant authorities which may then be
required.

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4.11 Abstention from voting
Shareholders who are eligible to participate in the ESOS are to abstain from voting on any
Shareholders resolution relating to the GCCP Employee Share Option Scheme, including,
where applicable, (i) implementation of the ESOS; (ii) discount quantum; and (iii)
participation by, and Option granted to, Controlling Shareholders and their Associates and
should not accept nominations as proxies or otherwise for voting in respect of such resolution
unless specific instructions have been given in the proxy instrument on how the votes are to
be cast.
4.12 Grant of Discounted Options
Discounted Options will only be granted to deserving employees whose performances have
been consistently good and/or whose future contributions to our Group will be invaluable.
The ability to offer Discounted Options will operate as a means to recognise the performance
of participants as well as to motivate them to continue to excel while encouraging them to
focus on improving the profitability and return of our Group to a level that benefits our
Shareholders, when these are eventually reflected through an appreciation of our share
price. Discounted Options would be perceived in a more positive light by the Participants,
inspiring them to work hard and produce results in order to be offered Discounted Options as
only employees who have made significant contributions to the success and development of
our Group would be granted Discounted Options.
The flexibility to grant Discounted Options is also intended to cater to situations where the
stock market performance has overrun the general market conditions. In such events, the
Remuneration Committee will have absolute discretion to:
(a)

grant Options set at a discount to the Market Price of a Share (subject to a maximum
limit of 20.0%); and

(b)

determine the Participants to whom, and the Options to which, such reduction in
exercise prices will apply.

In determining whether to give a discount and the quantum of the discount, the Remuneration
Committee shall be at liberty to take into consideration factors including the performance of
our Company and our Group, the performance of the Participant concerned, the contribution
of the Participant to the success and development of our Group and the prevailing market
conditions.
At present, our Company foresees that Discounted Options may be granted principally in the
following circumstances:
(a)

Firstly, where it is considered more effective to reward and retain talented employees
by way of a Discounted Option rather than a Market Price Option. This is to reward the
outstanding performers who have contributed significantly to our Groups performance
and the Discounted Option serves as additional incentives to such Group employees.
Options granted by our Company on the basis of Market Price may not be as attractive
and realistic in the event of an overly buoyant market and inflated share prices. Hence
during such period the ability to offer Discounted Options would allow our Company to
grant Options on a more realistic and economically feasible basis. Furthermore,
Discounted Options will give an opportunity to our Group employees to realise some
tangible benefits even if external events cause the Share price to remain largely static.

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(b)

Secondly, where it is more meaningful and attractive to acknowledge a Participants


achievements through a Discounted Option rather than paying him a cash bonus. For
example, Discounted Options may be used to compensate employees and to motivate
them during economic downturns when wages (including cash bonuses and annual
wage supplements) are frozen or cut, or they could be used to supplement cash
rewards in lieu of larger cash bonuses or annual wage supplements. Accordingly, it is
possible that merit-based cash bonuses or rewards may be combined with grants of
Market Price Options or Discounted Options, as part of eligible employees
compensation packages. The ESOS will provide our Group employees with an incentive
to focus more on improving the profitability of our Group thereby enhancing shareholder
value when these are eventually reflected through the price appreciation of our Shares
after the vesting period.

The Remuneration Committee will have the absolute discretion to grant Discounted Options,
to determine the level of discount (subject to a maximum discount of 20.0% of the Market
Price) and the grantees to whom, and the Options to which, such discount in the exercise
price will apply provided that our Shareholders in general meeting shall have authorised, in
a separate resolution, the making of offers and grants of Options under the ESOS, at a
discount not exceeding the maximum discount as aforesaid.
Our Company may also grant Options without any discount to the Market Price. Additionally,
our Company may, if it deems fit, impose conditions on the exercise of the Options (whether
such Options are granted at the Market Price or at a discount to the Market Price), such as
restricting the number of Option Shares for which the Option may be exercised during the
initial years following its vesting.
4.13 Rationale for participation by employees of our Group (including Group Executive
Directors) in the ESOS
The extension of the ESOS to employees of our Group (including Group Executive Directors)
allows us to have a fair and equitable system to reward employees and Executive Directors
of our Group who have made and who continue to make significant contributions to the
long-term growth of our Group.
We believe that the grant of Options to the employees and Executive Directors of our Group
will enable us to attract, retain and provide incentives to its participants to produce higher
standards of performance as well as encourage greater dedication and loyalty to our Group.
This would enable our Company to give recognition to past contributions and services as well
as to motivate participants generally to contribute towards the long-term growth of our Group.

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4.14 Rationale for participation by our Controlling Shareholders and the associates of our
Controlling Shareholders in the ESOS
Our Company acknowledges that the services and contributions of employees who are
Controlling Shareholders and the Associates of our Controlling Shareholders are important
to the development and success of our Group. The extension of the ESOS to confirmed
full-time employees who are Controlling Shareholders and the Associates of our Controlling
Shareholders allows our Group to have a fair and equitable system to reward employees who
have actively contributed to the progress and success of our Group. The participation of the
Controlling Shareholders and the Associates of the Controlling Shareholders in the ESOS
will serve both as a reward to them for their dedicated services to our Group and a motivation
for them to take a long-term view of our Group.
Although Participants who are Controlling Shareholders and the Associates of our
Controlling Shareholders may already have shareholding interests in our Company, the
extension of the ESOS to include them ensures that they are equally entitled as the other
employees of our Group who are Controlling Shareholders and the Associates of our
Controlling Shareholders, to take part and benefit from this system of remuneration. We are
of the view that a person who would otherwise be eligible should not be excluded from
participating in the ESOS solely by reason that he/she is a Controlling Shareholder or an
Associate of our Controlling Shareholders.
The specific approval of our independent Shareholders is required for the participation of
such persons as well as the actual number of and terms of such Options. A separate
resolution must be passed for each such Participant. In seeking such approval from our
independent Shareholders, clear justification as to the participation of Associates of our
Controlling Shareholders, the number of and terms (including the exercise price) of the
Options to be granted to the Controlling Shareholders and the Associates of our Controlling
Shareholders shall be provided. Accordingly, we are of the view that there are sufficient
safeguards against any abuse of the ESOS resulting from the participation of employees who
are Controlling Shareholders and the Associates of our Controlling Shareholders.
4.15 Rationale for participation by our Non-Executive Directors (including Independent
Directors) in the ESOS
Although our Non-Executive Directors are not involved in the day-to-day running of our
operations, they play an invaluable role in furthering the business interests of our Group by
contributing their experience and expertise. The participation by Non-Executive Directors in
the ESOS will provide our Company with a further avenue to acknowledge and recognise
their services and contributions to our Group as it may not always be possible to compensate
them fully or appropriately by increasing the directors fees or other forms of cash payment.
For instance, the Non-Executive Directors may bring strategic or other such value to our
Company which may be difficult to quantify in monetary terms. The grant of Options to
Non-Executive Directors will allow our Company to attract and retain experienced and
qualified persons from different professional backgrounds to join our Company as NonExecutive Directors, and to motivate existing Non-Executive Directors to take extra efforts to
promote the interests of our Company and/or our Group.

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In deciding whether to grant Options to the Non-Executive Directors, the Remuneration
Committee will take into consideration, among other things, the services and contributions
made to the growth, development and success of our Group and the years of service of a
particular Non-Executive Director. The Remuneration Committee may also, where it
considers relevant, take into account other factors such as the economic conditions and our
Companys performance.
It is envisaged that the granting of Options, and hence the number of Shares to be delivered
to the Non-Executive Directors based on the criteria set out above will be relatively small, in
terms of the frequency and numbers. Based on this, the Directors are of the view that the
participation by the Non-Executive Directors in the ESOS will not compromise the
independent status of those who are Independent Directors.
4.16 Cost of Options
Any options granted under the ESOS, whether such options are Market Price Options or
Discounted Options, would have a fair value. In the event that such Options are granted at
prices below the fair value of the Options, there will be a cost to our Company. Such costs
are higher in the case of Discounted Options, where such Options are granted with exercise
prices set at a discount to the prevailing Market Price of our Shares. The cost to our
Company of granting Options with a discounted exercise price under the ESOS would be as
follows:
(a)

the exercise of an Option at a discounted exercise price would translate into a reduction
of the proceeds from the exercise of such Options, as compared to the proceeds that
our Company would have received from such exercise had the exercise been made at
the prevailing Market Price of our Shares. Such reduction of the exercise proceeds
would represent the monetary cost to our Company of granting Options with a
discounted exercise price;

(b)

as the monetary cost of granting Options with a discounted exercise price is borne by
our Company, the earnings of our Company would effectively be reduced by an amount
corresponding to the reduced interest earnings that our Company would have received
from the difference in proceeds from an exercise price with no discount versus the
discounted exercise price. Such reduction would, accordingly, result in the dilution of
our Companys EPS; and

(c)

the effect of the issue and allotment of new Shares upon the exercise of Options on our
Companys NAV per Share is accretive if the exercise price is above the NAV per Share,
but dilutive otherwise.

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The costs as discussed above would only materialise upon the exercise of the relevant
Options. Share options have value because the option to buy a companys share for a fixed
price during an extended future time period is a valuable right, even if there are restrictions
attached to such an Option. As our Company is required to account for share-based awards
granted to our employees, the cost of granting Options will affect our financial results as this
cost to our Company would be required to be charged to our Companys profit or loss
commencing from the time Options are granted. Subject as aforesaid, as and when Options
are exercised, the cash inflow will add to the net tangible assets of our Company and its
share capital base will grow. Where Options are granted with subscription prices that are set
at a discount to the Market Prices for our Shares prevailing at the time of the grant of such
Options, the amount of the cash inflow to our Company on the exercise of such Options
would be diminished by the quantum of the discount given, as compared with the cash inflow
that would have been receivable by our Company had the Options been granted at the
Market Price of our Shares prevailing at the time of the grant.
The grant of Options will have an impact on our Companys reported profit under the
accounting rules in IFRS 2 Share base payment which is effective for annual periods
beginning or after 1 January 2015. It requires the recognition of an expense in respect of
Options granted. The expenses will be based on the fair value of the Options at the date of
grant (as determined by an option-pricing model) and will be recognised over the vesting
period.

160

CORPORATE GOVERNANCE
Corporate governance refers to the processes and structure by which the business and affairs of
a company are directed and managed, in order to enhance long-term shareholder value through
enhancing corporate performance and accountability. Good corporate governance therefore
embodies both enterprise (performance) and accountability (conformance).
Our Directors recognise the importance of corporate governance and the offering of high
standards of accountability to our Shareholders.
Our Board has formed three (3) committees: (i) the Nominating Committee; (ii) the Remuneration
Committee; and (iii) the Audit Committee.
NOMINATING COMMITTEE
Our Nominating Committee comprises Denys Collin Munang, Tan Eng Ann and Dato Thomas Koh.
The Chairman of the Nominating Committee is Denys Collin Munang.
Our Nominating Committee will be responsible for:
(a)

reviewing and recommending the nomination or re-nomination of our Directors having regard
to our Directors contribution and performance;

(b)

determining on an annual basis whether or not a Director is independent;

(c)

deciding whether or not a Director is able to and has been adequately carrying out his duties
as a director; and

(d)

reviewing and approving any new employment of related persons and the proposed terms of
their employment.

The Nominating Committee will decide how our Boards performance is to be evaluated and
propose objective performance criteria, subject to the approval of our Board, which address how
our Board has enhanced long-term shareholders value. Our Board will also implement a process
to be carried out by the Nominating Committee for assessing the effectiveness of our Board as a
whole and for assessing the contribution of each individual Director to the effectiveness of our
Board. Each member of the Nominating Committee shall abstain from voting on any resolutions
in respect of the assessment of his performance or re-nomination as Director.
REMUNERATION COMMITTEE
Our Remuneration Committee comprises Dato Thomas Koh, Tan Eng Ann, and Denys Collin
Munang.
The Chairman of the Remuneration Committee is Dato Thomas Koh.
Our Remuneration Committee will recommend to our Board a framework of remuneration for our
Directors and Executive Officers, and determine specific remuneration packages for each
Executive Director. The recommendations of our Remuneration Committee should be submitted
for endorsement by the entire Board. All aspects of remuneration, including but not limited to
directors fees, salaries, allowances, bonuses and other benefits-in-kind shall be covered by our
Remuneration Committee. Each member of the Remuneration Committee shall abstain from
voting on any resolutions in respect of his remuneration package.
161

CORPORATE GOVERNANCE
The remuneration of related employees will be reviewed annually by our Remuneration Committee
to ensure that their remuneration packages are in line with our staff remuneration guidelines and
commensurate with their respective job scope and level of responsibilities. Any bonuses, pay
increases and/or promotions for these related employees will also be subject to the review and
approval of our Remuneration Committee. In the event that a member of our Remuneration
Committee is related to the employee under review, he will abstain from participating in the review.
AUDIT COMMITTEE
Our Audit Committee comprises Tan Eng Ann, Dato Thomas Koh and Denys Collin Munang.
The Chairman of the Audit Committee is Tan Eng Ann.
Our Audit Committee does not have any existing business or professional relationship of a
material nature with our Group, our Directors or Substantial Shareholders.
Our Audit Committee will assist our Board in discharging their responsibilities to safeguard our
assets, maintain adequate accounting records and develop and maintain effective systems of
internal control, with the overall objective of ensuring that our management creates and maintains
an effective control environment in our Group.
Our Audit Committee will provide a channel of communication between our Board, our
management and our external auditors on matters relating to audit.
Our Audit Committee shall meet periodically to perform the following functions:
(a)

consider the appointment or re-appointment of the external auditors, the level of their
remuneration and matters relating to resignation or dismissal of the external auditors, and
review with the external auditors the audit plans, their evaluation of the system of internal
accounting controls, their audit reports, their management letter and our managements
response before submission of the results of such review to our Board for approval;

(b)

consider the appointment or re-appointment of the internal auditors, the level of their
remuneration and matters relating to resignation or dismissal of the internal auditors, and
review with the internal auditors the internal audit plans and their evaluation of the adequacy
of our system of internal accounting controls and accounting system before submission of
the results of such review to our Board for approval prior to the incorporation of such results
in our annual report (where necessary);

(c)

review the system of internal accounting controls and procedures established by


management and discuss problems and concerns, if any, arising from the interim and final
audits, and any matters which the auditors may wish to discuss (in the absence of our
management where necessary);

(d)

review the assistance and co-operation given by our Companys officers to the internal and
external auditors;

(e)

review the half yearly and annual, and quarterly if applicable, financial statements and
results announcements before submission to our Board for approval, focusing in particular,
on changes in accounting policies and practices, major areas of judgement, significant
adjustments resulting from the audit, the going concern statement, compliance with
accounting standards as well as compliance with any stock exchange and
statutory/regulatory requirements;
162

CORPORATE GOVERNANCE
(f)

review and discuss with the external auditors any suspected fraud or irregularity, or
suspected infringement of any relevant laws, rules or regulations, which has or is likely to
have a material impact on our Groups operating results or financial position, and consider
the adequacy of our managements response;

(g)

review transactions falling within the scope of Chapter 9 and Chapter 10 of the Catalist Rules
(if any);

(h)

review and approve the review procedures Interested Person Transactions on a quarterly
basis;

(i)

maintain an Interested Person Transactions register and review the same on a quarterly
basis;

(j)

review potential conflicts of interest (if any) and to set out a framework to resolve or mitigate
any potential conflicts of interests;

(k)

review the effectiveness and adequacy of our administrative, operating, internal accounting
and financial control procedures;

(l)

review our key financial risk areas, with a view to providing an independent oversight on our
Groups financial reporting, the outcome of such review to be disclosed in the annual reports
or the findings are material, immediately announced via SGXNET;

(m) undertake such other reviews and projects as may be requested by our Board and report to
our Board its findings from time to time on matters arising and requiring the attention of our
Audit Committee;
(n)

generally to undertake such other functions and duties as may be required by statute or the
Catalist Rules, and by such amendments made thereto from time to time;

(o)

review arrangements by which our staff may, in confidence, raise concerns about possible
improprieties in matters of financial reporting and to ensure that arrangements are in place
for the independent investigations of such matter and for appropriate follow-up; and

(p)

review our Groups compliance with such functions and duties as may be required under the
relevant statutes or the Catalist Rules, including such amendments made thereto from time
to time.

Apart from the duties listed above, our Audit Committee shall commission and review the findings
of internal investigations into matters where there is any suspected fraud or irregularity, or failure
of internal controls or suspected infringement of any law, rule or regulation of the jurisdictions in
which our Group operates, which has or is likely to have a material impact on our Companys
operating results and/or financial position. In the event that a member of our Audit Committee is
interested in any matter being considered by our Audit Committee, he will abstain from reviewing
and deliberating on that particular transaction or voting on that particular resolution.

163

CORPORATE GOVERNANCE
Our Audit Committee, after having conducted an interview with Ian Lim and considered:
(a)

the qualifications and his past working experiences (as described in the section entitled
Directors, Management and Staff Executive Officers of this Offer Document) which are
compatible with his position as CFO of our Group;

(b)

his demonstration of the requisite competency in finance-related matters in connection with


the preparation of the listing of our Company;

(c)

the absence of negative feedback on Ian Lim from the representatives of the Independent
Auditors and Reporting Accountants, Ernst & Young LLP, and our internal auditors, RSM
Ethos Pte Ltd; and

(d)

the absence of internal control weakness attributable to Ian Lim identified during the internal
control review conducted by our internal auditors, RSM Ethos Pte Ltd,

is of the view that Ian Lim is suitable for the position of CFO of our Group.
Further, after making all reasonable enquiries, and to the best of their knowledge and belief,
nothing has come to the attention of our Audit Committee to cause them to believe that Ian Lim
does not have the competence, character and integrity expected of a CFO of a listed issuer.
In addition, Ian Lim shall be subject to performance appraisal by our Audit Committee on an
annual basis to ensure satisfactory performance.
Our Audit Committee shall also commission an annual internal control audit until such time as our
Audit Committee is satisfied that our Groups internal controls are robust and effective enough to
mitigate our Groups internal control weaknesses (if any). Prior to the decommissioning of such an
annual audit, our Board is required to report to the SGX-ST and the Sponsor on how the key
internal control weaknesses have been rectified, and the basis for the decision to decommission
the annual internal control audit. Thereafter, such audits may be initiated by the Audit Committee
as and when it deems fit to satisfy itself that our Groups internal controls remain robust and
effective. Upon completion of the internal control audit, appropriate disclosure must be made via
SGXNET on any material, price-sensitive internal control weaknesses and any follow-up actions
to be taken by our Board.
Based on the foregoing, our Board, to the best of its knowledge and belief, with the concurrence
of our Audit Committee, based on the internal controls established and maintained by our Group,
work performed by the external and internal auditors, and reviews by our Board and our Audit
Committee, is of the opinion that our internal controls of our Group are adequate to address the
financial, operational and compliance risks.

164

CORPORATE GOVERNANCE
BOARD PRACTICES
Each of our Directors has served in office in our Company since the following dates:
Name

Date of commencement

Alex Loo

2 December 2013

Pang Kim Chon

2 December 2013

Tan Eng Ann

30 September 2014

Dato Thomas Koh

30 September 2014

Denys Collin Munang

30 September 2014

Our Directors are appointed by our Shareholders at a general meeting. Each Director shall retire
from office at least once every three (3) years. However, a retiring Director is eligible for
re-election at the meeting at which he retires. Further details on the appointment and retirement
of Directors can be found in the section entitled Description of Ordinary Shares and Appendix D
entitled Selected Extracts of our Articles of Association of this Offer Document.

165

INTERESTED PERSON TRANSACTIONS


In general, transactions between our Group and any of our Interested Persons (namely, our
Directors, Controlling Shareholders or the Associates of such persons) would constitute Interested
Person Transactions for the purposes of Chapter 9 of the Catalist Rules.
This section sets out the Interested Person Transactions entered into by our Group for the Period
Under Review and the period from 1 October 2014 up to the Latest Practicable Date (the
Relevant Period) on the basis of each member of our Group (namely, our Company and our
subsidiaries) being an Entity at Risk and with Interested Persons being construed accordingly.
Save as disclosed in this section and in the section entitled Restructuring Exercise of this Offer
Document, there have been no Interested Person Transactions over the Relevant Period.
PAST INTERESTED PERSON TRANSACTIONS
Transactions entered into between Gridland and ACJ Green Resources (ACJ)
ACJ was a sole proprietorship owned by our Executive Chairman and CEO, Alex Loo that ceased
operations on 30 December 2012. Accordingly, ACJ was an Interested Person.
Purchase of iron ore
Gridland had purchased iron ore from ACJ during the Relevant Period, the details of which are as
follows:

(MYR000)
Purchase of iron ore

FY2011

FY2012

FY2013

9M2014

1 October 2014
up to the Latest
Practicable Date

1,514

5,651

Such transactions were not conducted on an arms length basis or on normal commercial terms
having regard that the iron ore was purchased at a cost-plus basis without any reference to the
prevailing market rate of iron ore.
Advances granted to ACJ
Our Group had in the past extended advances to ACJ for the purposes of securing the iron ore
purchases from ACJ. These advances were not on an arms length basis or on normal commercial
terms as they were interest-free, unsecured and had no fixed terms of repayment.
The details of the aggregate amounts owing from ACJ to our Group for the Relevant Period are
as follows:

(MYR000)
Advances to ACJ

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

As at the Latest
Practicable Date

1,003

682

The largest amount outstanding during the Relevant Period is approximately MYR1.7 million.
All outstanding amounts were fully settled by December 2013. Our Group does not intend to enter
into such transactions following the Listing.

166

INTERESTED PERSON TRANSACTIONS


Loans from Alex Loo and Pang Kim Chon to our Group
Alex Loo is our Executive Chairman and CEO, Pang Kim Chon is our Executive Director and COO
and each of them is accordingly an Interested Person.
Alex Loo and Pang Kim Chon had each during the Relevant Period extended loans to our Group
for the purposes of working capital and made payments on behalf of our Group. Details of the
aggregate amounts owing from our Group to Alex Loo and Pang Kim Chon for the Relevant Period
are as follows:
Alex Loo

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

As at the Latest
Practicable Date

Company

5,000

869

Gridland

2,381

12

12

158

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

As at the Latest
Practicable Date

Company

732

Gridland

Hyper Act

(MYR000)

Hyper Act

Pang Kim Chon

(MYR000)

The aforesaid loans were made on an interest-free basis with no fixed terms of repayment.
Accordingly these transactions were not on an arms length basis nor were they on normal
commercial terms.
The largest amount outstanding in relation to such loans from Alex Loo and Pang Kim Chon during
the Relevant Period was MYR7.5 million and MYR0.7 million respectively. As at the Latest
Practicable Date, all outstanding loans were fully repaid to Alex Loo and Pang Kim Chon by our
Company.
Our Group does not intend to enter into such transactions following the Listing.

167

INTERESTED PERSON TRANSACTIONS


Loans from Gridland to Alex Loo
Alex Loo is our Executive Chairman and CEO and is accordingly an Interested Person.
Gridland had during the Relevant Period extended loans and made payments on behalf of Alex
Loo. Details of the aggregate amounts owing from Gridland to Alex Loo for the Relevant Period
are as follows:

(MYR000)
Loans to Alex Loo

As at
31 December
2011

As at
31 December
2012

As at
31 December
2013

As at
30
September
2014

As at the Latest
Practicable Date

3,328

718

The aforesaid loans were made on an interest-free basis with no fixed terms of repayment.
Accordingly, these transactions were not on an arms length basis nor were they on normal
commercial terms.
The largest amount outstanding in relation to such loans to Alex Loo during the Relevant Period
was MYR3.3 million. As at the Latest Practicable Date, all outstanding loans were fully repaid to
Gridland by Alex Loo.
Our Group does not intend to enter into such transactions following the Listing.
Provision of legal services by Isharidah Ho Chong & Menon
Dato Thomas Koh is our Independent Director and a practising advocate and solicitor in Malaysia
and a senior partner holding approximately 33.0% of the equity interest in Isharidah Ho Chong &
Menon (IHCM), a law firm in Malaysia. IHCM is accordingly an Interested Person.
Legal services were provided by IHCM to our Group during the Relevant Period. Such
transactions were carried out on an arms length basis and based on normal commercial terms
and market prices which are charged to other clients by IHCM for similar services.
The details of the aggregate amounts of fees incurred for legal services provided by IHCM during
the Relevant Period are as set out below:

(MYR000)
Fees for legal
services

FY2011

FY2012

FY2013

9M2014

1 October 2014
up to the Latest
Practicable Date

27

11

11

22

22

As at the Latest Practicable Date, all such fees have been fully paid. Our Group does not intend
to enter into such transactions following the Listing.

168

INTERESTED PERSON TRANSACTIONS


The Directors, save for Dato Thomas Koh, are of the view that Dato Thomas Kohs ability to
discharge his duties as an Independent Director of the Company would not be compromised due
to the following reasons:
(i)

the legal services provided by IHCM to the Company was in the ordinary course of business;

(ii)

the fees charged by IHCM to the Group were on an arms length basis and were based on
normal commercial terms and market prices which are charged to other clients by IHCM for
similar services;

(iii) the aggregate amount of fees incurred over any financial year by the Group for the legal
services provided by IHCM was not a significant amount and did not exceed the Guideline
2.3(d) of Principle 2 in the Code of Corporate Governance of S$200,000;
(iv) Dato Thomas has no personal present on-going transactions with the Group; and
(v)

the Group does not intend to enter into such transactions following the Listing.

PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS


Provision of Guarantees by Alex Loo and Tan Swee Tiang to our Group
Alex Loo is our Executive Chairman and CEO. Tan Swee Tiang is his spouse. Accordingly, both
Alex Loo and Tan Swee Tiang are Interested Persons.
Alex Loo and Tan Swee Tiang (the Guarantors) have provided personal guarantees and a legal
charge (Guarantees) to secure the following bank facilities and hire purchase facilities, the
details of which are set out in the table below:

As at 31
December
2013

As at 30
September
2014

Largest
Amount
Outstanding
for the
Relevant
Period

Amount
Outstanding
as at
the Latest
Practicable
Date

As at 31
December
2011

As at 31
December
2012

Letter of guarantee dated 17


February 2012 by Tan Swee
Tiang in respect of a hire
purchase facility for a vehicle
given to Malayan Bank Berhad

445

294

228

445

191

Legal charge pursuant to a


facilities agreement dated 19
March 2013 by Alex Loo in
respect of a term loan used to
finance purchase of plant and
machinery, given to Hong Leong
Bank Berhad

1,650

1,289

1,650

1,185

160

168

147

(MYR000)
Details of Guarantee/charge

Details of Guarantee/charge
Letter of guarantee dated 19
March 2014 by Alex Loo in
respect of a hire purchase facility
for a vehicle given to Public Bank
Berhad

169

INTERESTED PERSON TRANSACTIONS

(MYR000)

As at 31
December
2011

As at 31
December
2012

As at 31
December
2013

As at 30
September
2014

Largest
Amount
Outstanding
for the
Relevant
Period

Amount
Outstanding
as at
the Latest
Practicable
Date

Details of Guarantee/charge
Letter of guarantee dated 4
August 2014 by Alex Loo in
respect of a hire purchase facility
for a vehicle given to Public Bank
Berhad

87

88

80

Joint and several guarantee


dated 17 August 2010 by Alex
Loo and Tan Swee Tiang in
respect of an overdraft facility for
working capital given to UOB
Bank Berhad

738

2,000

2,000

27

2,000

Letter of guarantee dated 19


September 2014 by Alex Loo in
respect of a hire purchase facility
for a vehicle given to Affin Bank
Berhad

193

179

Letter of guarantee dated 17


December 2014 executed by Alex
Loo in respect of a hire purchase
facility for a vehicle given to Affin
Bank Berhad

Letter of guarantee dated 17


December 2014 executed by Alex
Loo in respect of a hire purchase
facility for a vehicle given to Affin
Bank Berhad

86

Letter of guarantee dated 17


December 2014 executed by Alex
Loo in respect of a hire purchase
facility for a vehicle given to
Public Bank Berhad

155

Letter of guarantee dated 30


December 2014 executed by Alex
Loo in respect of a hire purchase
facility for a vehicle given to
Public Bank Berhad

86

134

As no consideration was paid to the Guarantors for the provision of the Guarantees such
transactions were not on an arms length basis and not on normal commercial terms but beneficial
to the Company.
Subsequent to the listing of our Shares on Catalist, our Company and/or the Guarantors intend to
request the respective banks to release and/or discharge the Guarantees by substituting or
replacing the same with corporate guarantees from our Company. Should the terms and
conditions of the existing facilities be affected by the withdrawal of the Guarantees, we are
confident that after the listing of our Shares on Catalist, we should be able to secure alternative
bank facilities on terms similar to those applicable to the existing facilities. In the event the banks
do not agree to release the Guarantors from the Guarantees and we are unable to secure
alternative bank facilities on similar terms, the Guarantors will continue to provide the Guarantees,
for so long as Alex Loo remains a Controlling Shareholder or Director, until such time when we are
able to secure alternative facilities from other financial institutions.

170

INTERESTED PERSON TRANSACTIONS


GUIDELINES AND REVIEW PROCEDURES FOR ONGOING AND FUTURE INTERESTED
PERSON TRANSACTIONS
To ensure that future transactions with Interested Persons are undertaken on normal commercial
terms and are consistent with the Groups usual business practices and policies, which are
generally no more favourable than those extended to unrelated third parties, the following
procedures and Chapter 9 of the Catalist Rules will be implemented by our Group:
(a)

The CFO will maintain a register of Interested Person Transactions which will be updated
regularly and disclosed to the relevant personnel to enable identification of Interested
Persons. The register will record the basis on which Interested Person Transactions are
entered into and the approval or review by the Audit Committee, CFO or any duly appointed
Director as the case may be. The register shall also record the basis for entry into the
transactions, including the quotations and other evidence obtained to support such basis.
This register of Interested Person Transactions shall be reviewed by the Audit Committee at
least on a quarterly basis;

(b)

In relation to any purchase of products or procurement of services from Interested Persons,


quotes from at least two (2) unrelated third parties in respect of the same or substantially the
same type of transactions will be used as comparison wherever possible. The purchase price
or procurement price shall not be higher than the most competitive price of the two (2)
comparative prices from the two (2) unrelated third parties. The Audit Committee will review
the comparables, taking into account, the suitability, quality and cost of the product or
service, and the experience and expertise of the supplier;

(c)

In relation to any sale of products to Interested Persons, the price and terms of two (2) other
completed transactions of the same or substantially the same type of transactions to
unrelated third parties are to be used as comparison wherever possible. The Interested
Persons shall not be charged at rates lower than the lowest price of that charged to the
unrelated third parties;

(d)

All Interested Persons Transactions above S$100,000 are to be approved by a Director who
shall not be an Interested Person in respect of the particular transaction. Any contracts to be
made with an Interested Person shall not be approved unless the pricing is determined in
accordance with the Groups usual business practices and policies, consistent with the usual
margin given or price received by the Group for the same or substantially similar type of
transactions between the Group and unrelated parties and the terms are no more favourable
than those extended to or received from unrelated parties;

(e)

For the purposes above, where applicable, contracts for the same or substantially similar
type of transactions entered into between the Group and unrelated third parties will be used
as a basis for comparison to determine whether the price and terms offered to or received
from the Interested Person are no more favourable than those extended to unrelated parties;

171

INTERESTED PERSON TRANSACTIONS


(f)

In addition, the Group shall monitor all Interested Person Transactions entered into by
categorising the transactions as follows:
(i)

a category one Interested Person Transaction is one where the value thereof is in
excess of 3.0% of the NTA of our Group; and

(ii)

a category two Interested Person Transaction is one where the value thereof is below
or equal to 3.0% of the NTA of our Group.

All category one Interested Person Transactions must be approved by the Audit Committee
prior to entry whereas category two Interested Person Transactions need not be approved
by the Audit Committee prior to entry but shall be reviewed on a quarterly basis by the Audit
Committee; and
(g)

When renting properties from or to an Interested Person, the Directors shall take appropriate
steps to ensure that such rent is commensurate with the prevailing market rates, including
adopting measures such as making relevant enquiries with landlords of similar properties
and obtaining suitable reports or reviews published by property agents (as necessary),
including independent valuation report by property valuer, where appropriate. The rent
payable shall be based on the most competitive market rental rate of similar property in terms
of size and location, based on the results of the relevant enquiries. Such transactions shall
be subject to review by the Audit Committee on a half-yearly basis.

Our Group will prepare relevant information to assist the Audit Committee in its review.
Before any agreement or arrangement with an Interested Person that is not in the ordinary course
of business of our Group is transacted, prior approval must be obtained from the Audit Committee.
The Audit Committee will review all Interested Person Transactions, if any, on a quarterly basis to
ensure that they are carried out on an arms length basis and in accordance with the procedures
outlined above. It will take into account all relevant non-qualitative factors. In the event that a
member of the Audit Committee is interested in any Interested Person Transactions, he will
abstain from reviewing that particular transaction. Any decision to proceed with such an
agreement or arrangement would be recorded for review by the Audit Committee.
Disclosure will be made in our Groups annual report of the aggregate value of Interested Person
Transactions during the relevant financial year under review and in the subsequent annual reports
for the subsequent financial years of our Group.
Internal auditors will be appointed and their internal audit plan will incorporate a review of all the
Interested Person Transactions at least on an annual basis. The internal audit report will be
reviewed by the Audit Committee to ascertain whether the guidelines and procedures established
to monitor Interested Person Transactions have been complied with.
The Audit Committee shall also review from time to time such guidelines and procedures to
determine if they are adequate and/or commercially practicable in ensuring that Interested Person
Transactions are conducted on normal commercial terms, on an arms length basis and do not
prejudice the interests of our Group and our Shareholders. Further, if during these periodic
reviews by the Audit Committee, the Audit Committee is of the opinion that the guidelines and
procedures as stated above are not sufficient to ensure that Interested Person Transactions will
be on normal commercial terms, on an arms length basis and not prejudicial to the interests of our
Group and our Shareholders, the Audit Committee will adopt such new guidelines and review
procedures for future Interested Person Transactions as may be appropriate.
172

INTERESTED PERSON TRANSACTIONS


In addition, the Audit Committee will include the review of Interested Person Transactions as part
of the standard procedures while examining the adequacy of the internal controls of our Group.
The Audit Committee will also review all Interested Person Transactions to ensure that the
prevailing rules and regulations of the SGX-ST (in particular, Chapter 9 of the Catalist Rules) are
complied with.
Our Group will also comply with the provisions in Chapter 9 of the Catalist Rules in respect of all
future Interested Person Transactions, and if required under the Catalist Rules, the Cayman
Companies Law or the SFA, we will seek independent Shareholders approval for such
transactions.
All the Independent Directors, who are members of the Audit Committee, are of the view that the
review procedures and systematic monitoring mechanism of all Interested Person Transactions as
mentioned above, are adequate in ensuring that such transactions will be on normal commercial
terms and will not be prejudicial to the interests of Shareholders in any way.
POTENTIAL CONFLICT OF INTERESTS
INTERESTS OF DIRECTORS, THE CHIEF
SHAREHOLDERS OR THEIR ASSOCIATES

EXECUTIVE

OFFICER,

CONTROLLING

In general, a conflict of interest arises when any of our Directors, the CEO, Controlling
Shareholders or their Associates are carrying on or have any interest in any other corporation
carrying on the same business or dealing in similar products as our Company.
All of our Directors and key executive staff, including the CEO, have a duty to disclose their
interests in respect of any transaction in which they have any personal material interest or any
actual or potential conflicts of interest (including a conflict that arises from their directorship or
employment or personal investment in any corporation). Upon such disclosure, such Directors will
not participate in any proceedings of the Board and shall abstain from voting in respect of any
such transaction where the conflict arises.
Exponential Quarry Sdn Bhd
Exponential Quarry Sdn Bhd (Exponential) is a Malaysia incorporated company which is 95.0%
held by our Executive Chairman and CEO, Alex Loo. The remaining 5.0% shareholding interests
in Exponential is held by his spouse, Tan Swee Tiang. Exponential acquired a limestone quarry of
nine (9) acres at Perak, Malaysia in January 2013 (Exponential Quarry) and is not within the
Groups future business plans. Since the acquisition of the Exponential Quarry, which is not
operational, there has been no capital expenditure used for the development of the Exponential
Quarry. Furthermore, no capital expenditure is planned for the quarrying of limestone or
processing or production of limestone from Exponential Quarry. The Exponential Quarry acquired
by Exponential is held for investment purposes due to its strategic location adjacent to other
quarry owners. We understand that our Groups Executive Chairman and CEO, Alex Loo, intends
to sell Exponential in the future. Based on the foregoing, the Directors are of the view that there
is no conflict of interest between our Group and Exponential.

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INTERESTED PERSON TRANSACTIONS


With a view to mitigating any potential conflict of interests between our Group and Exponential,
our Executive Chairman and CEO, Alex Loo has entered into an agreement dated 24 October
2014 with our Company (Non-Compete Agreement), pursuant to which he has, among others,
irrevocably and unconditionally undertaken to our Company that for so long as he is a Director
and/or Controlling Shareholder, among others, he shall:
(a)

procure that Exponential shall not engage in any business that is similar to or which is in
competition with the business of the Company and its subsidiaries and associated
companies (to the extent applicable) (Group), as the Groups business may be from time
to time;

(b)

not have any interest, directly or indirectly, in, and/or provide any assistance, financial,
technical or otherwise, to, any person or entity to carry on any business which is in
competition with the Groups business;

(c)

not be a director and/or hold an executive management position (including but not limited to
board membership) in any entity whose business competes with the Groups business;

(d)

ensure that no company or business in which he and/or any of his Associates, is in the
position to control, dominate or influence decision making shall engage in any business that
is similar to or which is in competition with the Groups business, as the Groups business
may be from time to time;

(e)

not solicit, market to or entice away, whether directly or indirectly, from the Group any
customer of the Group; and

(f)

disclose to the Audit Committee of our Company his and/or any of his Associates interests
in respect of any contract, arrangement, proposal, transaction or any other matter
whatsoever in which he and/or any of his Associates has any personal material interest,
directly or indirectly, or any actual or potential conflicts of interest (including conflicts of
interest that arise from his or his Associates directorship(s). Upon such disclosure, he and/or
any of his Associates shall abstain from voting in respect of any such contract, arrangement,
proposal, transaction or matter in which the conflict of interest arises, unless and until our
Audit Committee has determined that no such conflict of interest exists.

Our Company has also entered into an agreement with our Executive Chairman and CEO, Alex
Loo and Exponential on 24 October 2014 (the ROFR Agreement) pursuant to which:
(i)

Alex Loo granted our Company a right of first refusal in respect of any sale of his shares in
Exponential; and

(ii)

Exponential granted our Company a right of first refusal in respect of any sale of the
Exponential Quarry,

for so long as Alex Loo is a Director or Controlling Shareholder.

174

INTERESTED PERSON TRANSACTIONS


Save as disclosed above and in the sections entitled Interested Person Transactions, Directors,
Management and Staff Service Agreements and Restructuring Exercise of this Offer
Document, none of our Directors, Executive Officers, Controlling Shareholders or any of their
Associates has an interest, direct or indirect:
(a)

in any transaction to which our Group was or is to be a party;

(b)

in any entity carrying on the same business or dealing in similar services which competes
materially and directly with the existing business of our Group; and

(c)

in any enterprise or company that is our Groups customer or supplier of goods and services.

Save as disclosed in the sections entitled Interested Person Transactions and Directors,
Management and Staff Service Agreements of this Offer Document, none of our Directors has
any interest in any existing contract or arrangement which is significant in relation to the business
of our Company and our subsidiaries, taken as a whole.
INTERESTS OF EXPERTS
No expert is:
(a)

employed on a contingent basis by our Company or our subsidiaries;

(b)

has a material interest, whether direct or indirect, in our Shares or the shares of our
subsidiaries; or

(c)

has a material economic interest, whether direct or indirect, in our Company, including an
interest in the success of the Placement.

INTERESTS OF ISSUE MANAGER, SPONSOR AND PLACEMENT AGENT


In the reasonable opinion of our Directors, save as disclosed below and in the section entitled
General and Statutory Information Management and Placement Arrangements of this Offer
Document, our Company does not have any material relationship with the Issue Manager,
Sponsor and Placement Agent, in relation to the Placement:
(a)

PPCF is the Issue Manager, Sponsor and Placement Agent in relation to the Listing; and

(b)

PPCF will be the Continuing Sponsor of our Company for a period of at least three (3) years
from the date our Company is admitted and listed on Catalist.

175

DESCRIPTION OF ORDINARY SHARES


SHARE CAPITAL
The following statements are brief summaries of the more important rights and privileges of
Shareholders conferred by the laws of the Cayman Islands, our Memorandum and Articles. These
statements are only a summary and are qualified in their entirety by reference to our Memorandum
and Articles and the Cayman Companies Law.
A copy of Memorandum of Association and Articles is available for inspection at our Share
Registrars office at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 during
normal business hours for a period of six (6) months from the date of this Offer Document.
Ordinary Shares
There are no founder, management, deferred or unissued shares reserved for issue for any
purpose. We have only one class of shares, namely, our ordinary shares which have identical
rights in all respects and rank equally with one another. All of our Shares are in registered form.
New Shares
Subject to the Cayman Companies Law, no shares may be issued by our Board without the prior
approval of our Company in general meeting but subject thereto and to our Articles and without
prejudice to any special rights or restrictions for the time being attached to any shares or any class
of shares, the unissued shares of our Company shall be at the disposal of our Board of Directors
which may offer, allot, grant options over or otherwise dispose of them to such persons, at such
times and for such consideration and upon such terms and conditions as the Board of Directors
may in its absolute discretion determine but so that no Shares shall be issued at a discount,
provided always that subject to any direction to the contrary that may be given by our Company
in general meeting or except as permitted under the rules or regulations of the Designated Stock
Exchange (as defined in the Articles), all new shares shall before issue be offered to such
members in proportion as nearly as may be to the number of shares of such class then held by
them and the provisions of the second sentence of Article 12(2) shall apply with such adaptations
as are necessary shall apply.
Our Articles provide that subject to Cayman law and, where applicable, the rules or regulations of
the Designated Stock Exchange, our Company in general meeting may by ordinary resolution
grant to our Directors a general authority, either unconditionally or subject to such conditions as
may be specified in the said ordinary resolution (including, but not limited to, the aggregate
number of Shares which may be issued and the duration of the general authority), to issue shares
in the capital of our Company whether by way of rights, bonus or otherwise; and/or make or grant
offers, agreements or options (collectively, Instruments) that might or would require shares to
be issued, including but not limited to the creation and issue of (as well as adjustments to)
warrants, debentures or other instruments convertible into shares; provided that unless otherwise
specified in the ordinary resolution or required by any applicable rules or regulations of the
Designated Stock Exchange, such general authority will continue (notwithstanding the authority
conferred by the said ordinary resolution may have ceased to be in force) in relation to the issue
of shares pursuant to any Instrument made or granted by the Directors while the said ordinary
resolution was in force.

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DESCRIPTION OF ORDINARY SHARES


Shareholders
We maintain a register of members which contains the particulars as required under the Cayman
Companies Law, and only recognise as members of our Company such persons who are holders
or Shares and who are registered on the register of members. Except as required by law, no
person shall be recognised by the Company as holding any share upon any trust, and we will not
be bound by or required in any way to recognise (even when having notice thereof) any equitable,
contingent, future or partial interest in any share or any fractional part of a share or (except only
as otherwise provided by these Articles or by law) any other rights in respect of any share except
an absolute right to the entirety thereof in the registered holder. If any Share stands jointly in the
names of two or more persons, the person first named in the register shall as regards service of
notices and, subject to the provisions of our Articles, all or any other matters connected with our
Company, except with respect to the transfer of Shares, be deemed the sole holder thereof.
Subject to the terms and conditions of any application of Shares, we may allot Shares applied for
within ten (10) market days of the closing date of any such application (or such other period as
may be approved by the Designated Stock Exchange).
Transfer of Shares
Subject to our Articles, any member may transfer all or any of his Shares by a duly signed
instrument of transfer in the form acceptable to the Board provided always that the Company shall
accept for registration an instrument of transfer in a form approved by the Designated Stock
Exchange (which includes the SGX-ST). Save as provided in our Articles, there shall be no
restriction on the transfer of fully paid up shares (except where required by law or the rules or
regulations of the Designated Stock Exchange). The Board may decline to register a transfer of
any share which is not fully paid or on which the Company has a lien. The Board may also decline
to recognise any instrument of transfer unless, among other things, it is duly stamped and is
presented for registration together with the share certificate and such other evidence as the Board
may reasonably require, and a fee of such sum (not exceeding two Singapore dollars (S$2) or
such other maximum sum as the Designated Stock Exchange may determine to be payable) as
the Board may from time to time require is paid to the Company in respect thereof. The registration
of transfers of shares may, after notice has been given by advertisement in an appointed
newspaper and in accordance with the requirements of the Designated Stock Exchange be
suspended at such times and for such periods (not exceeding in the whole 30 days in any year)
as the Board may determine.
General Meetings of Shareholders
Under the Cayman Companies Law, there is no distinction between annual general meetings and
other general meetings.
Under our Articles, our Company may in each year hold a general meeting as its annual general
meeting and the Directors may, whenever they think fit, convene an extraordinary general
meeting. In addition, for so long as the shares of our Company are listed on the Designated Stock
Exchange (which includes the SGX-ST), the interval between the close of our Companys financial
year and the date of our Companys annual general meeting shall not exceed four months or such
period as may be prescribed or permitted by the Designated Stock Exchange.

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DESCRIPTION OF ORDINARY SHARES


Subject to the Cayman Companies Law, members holding at the date of deposit of the requisition
not less than one-tenth of the paid up capital of our Company carrying the right of voting at general
meetings of our Company shall at all times have the right, by written requisition to the Board of
Directors or the Secretary of the Company, to require an extraordinary general meeting to be
called by the Board of Directors for the transaction of any business specified in such requisition;
and such meeting shall be held within two (2) months after the deposit of such requisition. If within
21 days of such deposit the Board of Directors fails to proceed to convene such meeting the
requisitionists themselves may do so in the same manner, and all reasonable expenses incurred
by the requisitionist(s) as a result of the failure of the Board of Directors shall be reimbursed to
the requisitionist(s) by the Company.
At least 14 days notice of a general meeting shall be given to each member entitled to attend and
vote thereat. A general meeting at which the passing of a special resolution is to be considered
shall be called by not less than 21 days notice. For so long as the shares of the Company are
listed on the Designated Stock Exchange, at least 14 days notice of any general meeting shall be
given by advertisement in an English daily newspaper in circulation in Singapore and in writing to
the Designated Stock Exchange.
Under the Cayman Companies Law, only persons who agree to become members of a company
and whose names are entered on the register of members of such company are considered
members, with rights to attend and vote at general meetings. Depositors holding Shares through
CDP are not recognised as members of our Company, and do not under the Cayman Companies
Law have a right to attend and to vote at general meetings of our Company. In the event that
Depositors wish to attend and vote at general meetings of our Company, CDP will have to appoint
them as proxies, pursuant to our Articles and the Cayman Companies Law.
In accordance with Article 77(1), unless CDP specifies otherwise in a written notice to our
Company, CDP shall be deemed to have appointed as CDPs proxies each of the Depositors who
are individuals and whose names are shown in the records of CDP, as at a time not earlier than
48 hours prior to the time of the relevant general meeting, supplied by CDP to our Company.
Therefore, Depositors who are individuals can attend and vote at the general meetings of our
Company without the lodgment of any proxy form. Depositors who cannot attend a meeting
personally may enable their nominees to attend as CDPs proxies by completing and returning
appropriate proxy forms. Depositors who are not individuals can only be represented at a general
meeting of our Company if their nominees are appointed by CDP as CDPs proxies. Proxy forms
appointing nominees of Depositors as proxies of CDP would need to be executed by CDP as
member and must be deposited at the place and within the time frame specified by our Company
to enable the nominees to attend and vote at the relevant general meeting of our Company.
Voting Rights
Subject to any special rights or restrictions as to voting for the time being attached to any shares
by or in accordance with our Articles, at any general meeting (i) on a show of hands every member
present in person (or being a corporation, is present by a representative duly authorised under
Article 83) or by proxy shall have one vote and the chairman of the meeting shall determine which
proxy shall be entitled to vote where a member (other than CDP) is represented by two proxies;
and (ii) on a poll every member present in person or by proxy or, in the case of a member being
a corporation, by its duly authorised representative shall have one vote for every fully paid share
of which he is the holder or which he represents and in respect of which all calls due to the
Company have been paid, but so that no amount paid up or credited as paid up on a share in
advance of calls or instalments is treated for the foregoing purposes as paid up on the share. If

178

DESCRIPTION OF ORDINARY SHARES


the member is CDP, CDP may appoint more than two (2) proxies to attend and vote at the same
general meeting and each proxy shall be entitled to exercise the same powers on behalf of CDP
as CDP could exercise, including the right to vote individually on a show of hands.
Dividends
Subject to the Cayman Companies Law, our Company in general meeting may from time to time
declare dividends in any currency to be paid to the members but no dividend shall be declared in
excess of the amount recommended by the Board of Directors. Dividends may be declared and
paid out of the profits of our Company, realised or unrealised, or from any reserve set aside from
profits which the Directors determine is no longer needed. With the sanction of an ordinary
resolution, dividends may also be declared and paid out of the share premium account or any
other fund or account which may be authorised for this purpose in accordance with the Cayman
Companies Law, provided that no distribution or dividend may be paid to members out of the share
premium account unless, immediately following the date on which the distribution or dividend is
proposed to be paid, our Company shall be able to pay its debts as they fall due in the ordinary
course of business.
Whenever the Board of Directors or our Company in general meeting has resolved that a dividend
be paid or declared, the Board of Directors may further resolve that such dividend be satisfied
wholly or in part by the distribution of specific assets of any kind and in particular of paid up
shares, debentures or warrants to subscribe securities of our Company or any other company, or
in any one or more of such ways.
Capitalisation and Rights Issues
Upon the recommendation of the Board of the Directors, our Company in general meeting may
resolve to capitalise any reserves and distribute the same amongst the members who would be
entitled thereto if it were distributed by way of dividend and in the same proportions, on the footing
that the same is not paid in cash but is applied either in or towards paying up the amounts for the
time being unpaid on any shares in our Company held by such members respectively or in paying
up in full unissued shares, debentures or other obligations of our Company, to be allotted and
distributed credited as fully paid up among such members, or partly in one way and partly in the
other, subject always to the provisions of the Cayman Companies Law.
Takeovers
There are presently no Cayman Islands laws or regulations of general application which will
require persons who acquire significant holdings in our Shares to make take-over offers for our
Shares or to notify us.
However, pursuant to the SFA, Sections 138, 139 and 140 of the SFA and the Singapore Code on
Take-overs and Mergers (collectively the Singapore Take-over and Merger Laws and
Regulations) apply to take-over offers of companies which are incorporated outside Singapore
and all or any of the shares of which are listed for quotation on a securities exchange (as defined
in the SFA). Accordingly, the Singapore Take-over and Merger Laws and Regulations will apply to
take-over offers for our Shares for so long as our Shares are listed on a securities exchange,
which includes the SGX-ST.

179

DESCRIPTION OF ORDINARY SHARES


Article 167 of our Articles provides that for so long as our Shares are listed on the Designated
Stock Exchange, the Singapore Take-over and Merger Laws and Regulations, including any
amendments, modifications, revisions, variations or re-enactments thereof, shall apply, as far as
possible, to all take-over offers in respect of our Shares.
The Cayman Companies Law does not require disclosure of shareholder ownership beyond a
certain threshold. However, Article 167 contains provisions to the effect that for so long as the
shares of the Company are listed on the Designated Stock Exchange (which includes the
SGX-ST), Directors and substantial shareholders (having the meaning ascribed to it in the
Singapore Companies Act) of the Company will have to disclose particulars of their interest in the
Company and any change in the percentage level of such interest. Article 167 does not apply to
CDP.
Under the Singapore Code on Take-overs and Mergers (Singapore Take-over Code), issued by
the Authority pursuant to Section 321 of the SFA, any person acquiring an interest, either on his
own or together with parties acting in concert with him, in 30.0% or more of the voting shares must
extend a takeover offer for the remaining voting shares in accordance with the provisions of the
Singapore Takeover Code. In addition, a mandatory takeover offer is also required to be made if
a person holding, either on his own or together with parties acting in concert with him, between
30.0% and 50.0% of the voting rights acquires additional voting shares representing more than
1.0% of the voting shares in any six month period. Under the Singapore Take-over Code, the
following individuals and companies will be presumed to be persons acting in concert with each
other unless the contrary is established:
(a)

the following companies:


(i)

a company;

(ii)

the parent company of (i);

(iii) the subsidiaries of (i);


(iv) the fellow subsidiaries of (i);
(v)

the associated companies of (i), (ii), (iii) or (iv);

(vi) companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); and
(vii) any person who has provided financial assistance (other than a bank in the ordinary
course of business) to any of the above for the purchase of voting rights;
(b)

a company with any of its directors (together with their close relatives, related trusts as well
as companies controlled by any of the directors, their close relatives and related trusts);

(c)

a company with any of its pension funds and employee share schemes;

(d)

a person with any investment company, unit trust or other fund whose investment such
person manages on a discretionary basis, but only in respect of the investment account
which such person manages;

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DESCRIPTION OF ORDINARY SHARES


(e)

a financial or other professional adviser, including a stockbroker, with its customer in respect
of the shareholdings of:
(i)

the adviser and persons controlling, controlled by or under the same control as the
adviser; and

(ii)

all the funds which the adviser manages on a discretionary basis, where the
shareholdings of the adviser and any of those funds in the customer total 10.0% or more
of the customers equity share capital;

(f)

directors of a company (together with their close relatives, related trusts and companies
controlled by any of such directors, their close relatives and related trusts) which is subject
to an offer or where the directors have reason to believe a bona fide offer for their company
may be imminent;

(g)

partners; and

(h)

the following persons and entities:


(i)

an individual;

(ii)

the close relatives of (i);

(iii) the related trusts of (i);


(iv) any person who is accustomed to act in accordance with the instructions of (i);
(v)

companies controlled by any of (i), (ii), (iii) or (iv); and

(vi) any person who has provided financial assistance (other than a bank in the ordinary
course of business) to any of the above for the purchase of voting rights.
Under the Singapore Take-over Code, a mandatory offer made with consideration other than cash
must be accompanied by a cash alternative at not less than the highest price paid by the offeror
or any person acting in concert within the preceding six (6) months.
Liquidation or Other Return of Capital
Our Shareholders are entitled to the surplus assets of our Company in the event that it is wound
up.
Indemnity
Cayman Islands law does not limit the extent to which a companys articles of association may
provide for indemnification of officers and directors, except to the extent any such provision may
be held by the court to be contrary to public policy (for example, for purporting to provide
indemnification against the consequences of committing a crime).
Our Articles provide that our Directors and officers shall be indemnified from and against all
liability which they incur in executing of their duty in their respective offices, provided that this
indemnity shall not extend to any matter in respect of any negligence, fraud, breach of fiduciary
obligations or dishonesty which may attach to any of the said persons.
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DESCRIPTION OF ORDINARY SHARES


Limitations on Rights to Hold or Vote Shares
There are no limitations, either under Cayman Islands law or our Articles, on the rights of owners
of our Companys shares to hold or vote their shares solely by reason that they are nonCaymanians.
Minority Rights
The Cayman Islands courts would ordinarily be expected to follow English case law precedents
which permit a minority shareholder to commence a representative action against or derivative
actions in the name of the company to challenge (a) an act which is ultra vires the company or
illegal; (b) an act which constitutes a fraud against the minority and the wrongdoers are
themselves in control of the company; and (c) an irregularity in the passing of a resolution which
requires a qualified (or special) majority.
Purchase of Shares/Treasury Shares
Under the laws of the Cayman Islands, a company may, if authorised by its articles of association,
purchase its own shares. Our Company has such power to purchase our own Shares under Article
3(2) of our Articles. Such power of our Company to purchase our own Shares shall, subject to the
Cayman Companies Law and our Articles (and, if applicable, the rules and regulations of the
SGX-ST and other regulatory authorities), be exercisable by the Directors upon such terms and
subject to such conditions as they think fit, in accordance with Article 3(2).
Under the laws of the Cayman Islands, such purchases may be effected out of profits of our
Company, out of the share premium account or out of the proceeds of a fresh issue of Shares
made for that purpose or, subject to Section 37 of the Cayman Companies Law and in the manner
authorised by our Articles, by a payment out of capital. At no time may our Company purchase our
Shares if, as a result of the purchase, there would no longer be any issued Shares other than
Shares held as treasury shares. Only fully paid Shares may be purchased by our Company. A
payment out of capital by our Company for the purchase of our Shares is not lawful unless
immediately following the date on which the payment out of capital is proposed to be made, our
Company shall be able to pay its debts as they fall due in the ordinary course of business.
Shares purchased by our Company shall be treated as cancelled on purchase unless, subject to
our memorandum of association and Articles, the Directors resolve, prior to the purchase, to hold
such Shares in the name of the Company as treasury shares. Where the purchased Shares are
treated as cancelled, the amount of our Companys issued share capital shall be diminished by the
nominal value of those Shares. However, such purchase of Shares shall not be taken as reducing
the amount of our Companys authorised share capital.
Under Cayman Islands law, where Shares are held as treasury shares, our Company shall be
entered in the register of members as holding those Shares. However, notwithstanding the
foregoing, our Company shall not be treated as a member for any purpose and shall not exercise
any right in respect of the treasury shares, and any purported exercise of such a right shall be
void. A treasury share shall not be voted, directly or indirectly, at any meeting of our Company and
shall not be counted in determining the total number of issued Shares at any given time, whether
for the purposes of our Articles or the Cayman Companies Law. Further, no dividend may be
declared or paid, and no other distribution (whether in cash or otherwise) of our Companys assets
(including any distribution of assets to members on a winding up) may be made to our Company,
in respect of a treasury share.

182

TAXATION
The following is a discussion of certain tax matters arising under the current tax laws in Singapore
and Malaysia and is not intended to be and does not constitute legal or tax advice.
While this discussion is considered to be a correct interpretation of existing laws in force as at the
date of this Offer Document, no assurance can be given that the courts or fiscal authorities
responsible for the administration of such laws will agree with this interpretation or that changes
in such law, which may be retrospective, will not occur. The discussion is limited to a general
description of certain tax consequences in Singapore and Malaysia with respect to ownership of
the Shares by Singapore investors, and does not purport to be a comprehensive or exhaustive
description of all of the tax considerations that may be relevant to a Shareholders decision with
regard to the ownership of the Shares.
Prospective investors should consult their tax advisers regarding Singapore and Malaysia
tax and other tax consequences of owning and disposing the Shares. It is emphasised that
neither our Company, the Directors nor any other persons involved in this Placement
accepts responsibility for any tax effects or liabilities resulting from the subscription,
purchase, holding or disposal of our Shares.
SINGAPORE TAXATION
The following discussion describes the material Singapore income tax, stamp duty, goods and
services tax and estate duty consequences of the purchase, ownership and disposal of the
Shares.
Singapore Income Tax
Individual income tax
Individual taxpayers who are Singapore tax residents are subject to tax on income accrued or
derived from Singapore. All foreign-sourced income (except for income received through a
partnership in Singapore) received on or after 1 January 2004 in Singapore by tax resident
individuals will be exempt from tax. Certain Singapore-sourced investment income (such as
interest from debt securities) derived by tax resident individuals on or after 1 January 2004 from
certain financial instruments (other than income derived through a partnership in Singapore or
from the carrying on of a trade, business or profession) will be exempt from tax.
A Singapore tax resident individual is taxed at progressive rates ranging from 2 per cent. to a
maximum rate of 20 per cent. with effect from the year of assessment 2012.
Non-resident individuals, subject to certain exceptions, are generally subject to income tax on
income accrued in or derived from Singapore at a flat rate of 20 per cent. However, Singapore
does not tax capital gains. A non-resident individual (other than a director) exercising a short-term
employment in Singapore for not more than 60 days may be exempt from tax in Singapore.
An individual is regarded as a tax resident in Singapore if in the calendar year preceding the year
of assessment, he was physically present in Singapore or exercised an employment in Singapore
(other than as a director of a company) for 183 days or more, or if he ordinarily resides in
Singapore.

183

TAXATION
Corporate income tax
A Singapore tax resident corporate taxpayer is subject to Singapore income tax on:

income accrued in or derived from Singapore; and

foreign sourced income received or deemed received in Singapore, unless otherwise


exempted.

Foreign income in the form of branch profits, dividends and service fee income (specified
foreign income) received or deemed received in Singapore by a Singapore tax resident
corporate taxpayer on or after 1 June 2003 are exempted from Singapore tax subject to meeting
the qualifying conditions.
A non-Singapore tax resident corporate taxpayer, subject to certain exceptions, is subject to
Singapore income tax on income accrued in or derived from Singapore, and on foreign income
received or deemed received in Singapore.
A company is regarded as tax resident in Singapore if the control and management of the
companys business is exercised in Singapore. Normally, control and management of the
company is vested in its board of directors and therefore if the board of directors meets and
conducts the companys business in Singapore, the company will be regarded as tax resident in
Singapore.
The corporate tax rate in Singapore is 17.0% with effect from the Year of Assessment 2010 after
allowing partial tax exemption on the first S$300,000 of a companys chargeable income as
follows:
(i)

75 per cent. of up to the first S$10,000 of a companys chargeable income (excluding


Singapore franked dividends); and

(ii)

50 per cent. of up to the next S$290,000 of a companys chargeable income (excluding


Singapore franked dividends).

Further, companies will, subject to certain conditions, be eligible for full tax exemption on their
normal chargeable income (other than Singapore dividends) of up to S$100,000 and 50.0% tax
exemption on up to the next S$200,000 of normal chargeable income in each of the companys
first three consecutive years of assessment. The remaining chargeable income (after the tax
exemption) will be taxed at the applicable corporate tax rate.
Dividend Distributions
As the Company will be tax resident in Singapore, dividends paid by the Company would be
considered as sourced from Singapore. Dividends received in respect of the Shares by either
Singapore tax resident or non-Singapore tax resident taxpayers are not subject to Singapore
withholding tax, even if paid to non-Singapore resident shareholders.

184

TAXATION
Prior to 1 January 2003, Singapore operated an imputation system of taxation. Under the
imputation system, the income tax paid by a Singapore tax resident company on its taxable
income was imputed to and deemed to be paid on behalf of its shareholders, upon distribution.
Where these profits were distributed as dividends (commonly known as franked dividends) to
shareholders, the dividends received by the shareholders were net of the corporate income tax
paid by the Company. Shareholders were taxed on the gross amount of dividends (that is, the
amount of net proceeds received plus an amount which the Company had deducted from the gross
proceeds and paid as corporate income tax). The income tax paid effectively becomes available
to shareholders as a tax credit for set-off against their Singapore income tax liabilities.
With effect from 1 January 2003 (subject to certain transitional rules), Singapore has adopted the
One-Tier Corporate Tax System (One-Tier System). Under this One-Tier System, the tax
collected from corporate profits is the final tax and the Company can pay tax exempt (1-tier)
dividends which are tax exempt in the hands of the shareholder, regardless of the tax residence
status or the legal form of the shareholder.
During a five-year transitional period expiring on 31 December 2007, companies with unutilised
dividend franking credits may remain under the imputation system for the purpose of paying
franked dividends. Such companies will automatically move to the One-Tier System when the
dividend franking credits are fully utilised.
Companies, however, have the irrevocable option to move to the One-Tier System at an earlier
date before the dividend franking credits are exhausted. The imputation credit system is available
only up to year of assessment 2008. Thereafter, the One-Tier System will take effect for all
companies.
Where a company has income that is exempt from tax or taxed at concessionary tax rates or utilise
investment allowances or are granted tax rebates or receive foreign dividends for which a foreign
tax credit (obtained pursuant to a double taxation treaty with one of Singapores treaty partners
or unilaterally granted under the Singapore Income Tax Act, Chapter 134 of Singapore) has been
allowed and pay dividends out of these sources of income, the company may pay tax exempt
dividends (referred to as normal exempt dividends) out of such income. Normal exempt dividends
paid to shareholders of shares which are not of a preferential nature are free from Singapore
income tax. In the case of a company which is in the One-Tier System, such a company can pay
tax exempt (one-tier) dividends (instead of normal exempt dividends) out of their exempt profits
to shareholders. Hence, dividends paid by such companies as tax exempt (one-tier) dividends to
all their shareholders, including shareholders of shares of a preferential nature, will not be subject
to tax in the hands of these shareholders.
Capital Gains Tax
Singapore does not impose a tax on capital gains. However, there are no specific laws or
regulations which deal with the characterisation of capital gains, and hence, gains may be
construed to be of an income nature and therefore be subject to tax if they arise from activities
which the IRAS regards as the carrying on of a trade or business in Singapore. Any profits from
the disposal of the Shares are not taxable in Singapore unless the seller is regarded as having
derived gains of a trading nature in Singapore, in which case, the disposal profits would be taxable
as trading income.

185

TAXATION
Bonus Shares
Under current Singapore tax law and practice, a capitalisation of profits followed by the issue of
new shares, credited as fully paid, pro-rata to shareholders (bonus issue) does not represent
a distribution of dividends by a company to its shareholders. Therefore, a Singapore resident
shareholder receiving shares by way of a bonus issue should not have a liability to Singapore tax.
When a dividend is to be satisfied wholly or in part in the form of an allotment of ordinary shares
credited as fully paid, the dividend declared will be treated as income to its shareholders.
However, as the Company will move to the One-Tier System after 31 December 2007, any
dividend paid on or after 1 January 2008 will be exempt from Singapore tax. Similarly, when
shareholders are given the right to elect to receive an allotment of ordinary shares credited as fully
paid in lieu of cash, the dividend declared will be treated as exempt (one-tier) dividend income and
will not be subject to Singapore tax.
Adoption of FRS 39 treatment for Singapore income tax purposes
On 30 December 2005, the IRAS issued a circular entitled Income Tax Implications arising from
the adoption of FRS 39-Financial Instruments: Recognition and Measurement (the FRS 39
Circular). Legislative amendments to give effect to the FRS 39 Circular have been enacted via
the Income Tax (Amendment) Act 2006, with such amendments having been deemed to come into
operation on 1 January 2005. The FRS 39 Circular generally applies, subject to the tax treatment
under the FRS 39 Circular should consult their own accounting and tax advisers regarding the
Singapore income tax consequences of their acquisition, holding or conversion of the Shares.
Stamp Duty
There is no stamp duty payable on the subscription, allotment or holding of our Shares.
Stamp duty is payable on the instrument of transfer of our Shares at the rate of S$2 for every
S$1,000 or any part thereof, computed on the consideration paid or market value of our Shares
registered in Singapore, whichever is higher.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty
is payable if no instrument of transfer is executed (such as in the case of scripless shares, the
transfer of which does not require instruments of transfer to be executed) or if the instrument of
transfer is executed outside Singapore. However, stamp duty may be payable if the instrument of
transfer which is executed outside Singapore is subsequently received in Singapore.
However, as our Shares will be listed on Catalist and their transfers will be scripless transfers
via the CDP, no stamp duty will be imposed on the transfers of our Shares via the CDP.
Goods and Services Tax (GST)
The sale of the Shares by an investor belonging to Singapore through a SGX-ST member or to
another person belonging in Singapore is an exempt sale not subject to GST. Any GST directly or
indirectly incurred by the investor in respect of this exempt sale will become an additional cost to
the investor.

186

TAXATION
Where our Shares are sold by a GST-registered investor in the course of a business to a person
belonging outside Singapore, and that person is outside Singapore when the sale is executed, the
sale should generally, subject to satisfaction of certain conditions, be considered a taxable supply
subject to GST at zero-rate. Any GST incurred by a GST-registered investor in the making of this
supply in the course of furtherance of a business may, subject to the provisions of the Goods and
Services Tax Act, be offset against the investors GST liability and, in the event of an excess input
tax credit, recovered from the Comptroller of GST of Singapore.
Services such as brokerage, handling and clearing services rendered by a GST-registered person
to an investor belonging in Singapore in connection with the investors purchase, sale or holding
of our Shares will be subject to GST at the current rate of 7.0%. Similar services rendered to an
investor belonging outside Singapore is generally subject to GST at zero-rate, provided that the
investor is outside Singapore when the services are performed and the services provided do not
benefit any Singapore persons.
Estate duty
With effect from 15 February 2008, Singapore estate duty has been abolished.
Individuals, whether or not domiciled in Singapore, should consult their own tax advisers
regarding the Singapore tax and estate duty consequences of their ownership of the
Shares.
CAYMAN ISLANDS TAXATION
Pursuant to Section 6 of the Tax Concessions Law (Revised) of the Cayman Islands, the Company
has obtained an undertaking from the Governor-in-Council:
(1)

that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits
or income or gains or appreciation shall apply to the Company or its operations; and

(2)

that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be
payable on the shares, debentures or other obligations of the Company.

The undertaking for the Company is for a period of 20 years from 4 November 2014.
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits,
income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate
duty. There are no other taxes likely to be material to the Company levied by the Government of
the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on
certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The
Cayman Islands are not party to any double tax treaties.
MALAYSIAN TAXATION
The following discussion describes the material Malaysian tax on dividend and tax on gains from
sale.
Dividend Distributions
Under Malaysian tax law, income tax is charged for each year of assessment on income accruing
in or derived from Malaysia or received in Malaysia from outside Malaysia.
187

TAXATION
However, the income of any person, other than a Malaysian resident company carrying on the
business of banking, insurance or sea or air transport, for the basis year for a year of assessment
derived from sources outside Malaysia and received in Malaysia, is tax-exempt under the
Malaysian Income Tax Act.
Dividends paid, credited or distributed by a company which is tax resident in Malaysia
(Malaysian resident company) would be deemed to be derived from Malaysia.
A company is resident in Malaysia for tax purposes if the management and control of its business
are exercised in Malaysia.
Subject to certain exceptions, the prevailing corporate tax rate for the year of assessment 2014
is 25.0%. With effect from the year of assessment 2016, the corporate tax rate will be reduced to
24.0%.
Gains on Disposal of the Shares in a Malaysian company
There is no capital gains tax in Malaysia except for real property gains tax (RPGT) which is
charged upon gains arising from the disposal of real property in Malaysia or shares in a real
property company incorporated in Malaysia. As such, any gains from the subsequent sale of the
shares in a Malaysian company not being a real property company would not be subject to RPGT
in Malaysia.
However, any gains from the subsequent sales of shares in a Malaysian company by a person who
deals in shares may be regarded as income that is subject to income tax under the Malaysian
Income Tax Act.
Single Tier System
The single tier system has replaced the imputation system with effect from 1 January 2014.
Under the single tier system, income tax payable on the chargeable income of a company is a final
tax in Malaysia. There is no further need for the dividend paying company to deduct tax when
paying dividends. The dividend paying company can freely distribute dividends without having to
keep track of a dividend franking account.
Dividends received by the shareholders are tax-exempted in their hands. Expenses incurred by
the shareholder in the production of the dividend income will not be deductible.

188

CLEARANCE AND SETTLEMENT


Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement
system of the CDP, and all dealings in and transactions of the Shares through Catalist will be
effected in accordance with the terms and conditions for the operation of securities accounts with
the CDP, as amended from time to time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on
behalf of persons who maintain, either directly or through depository agents, securities accounts
with CDP. Persons named as direct securities account holders and depository agents in the
Depository Register maintained by the CDP will not be treated, under the Cayman Companies
Law and our Articles, as members of our Company in respect of the number of our Shares credited
to their respective securities accounts. The Depositors and Depository Agents on whose behalf
CDP holds Shares for may not be accorded the full rights of membership such as voting rights, the
right to appoint proxies, or the right to receive shareholders circulars, proxy forms, annual reports,
prospectuses and takeover documents. In such an event, Depositors and Depository Agents will
be accorded only such rights as CDP may make available to them pursuant to CDPs terms and
conditions to act as depository for foreign securities.
Persons holding the Shares in Securities Account with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certificates. Such
share certificates will, however, not be valid for delivery pursuant to trades transacted on Catalist
although they will be prima facie evidence of title and may be transferred in accordance with our
Articles. A fee of S$10 for each withdrawal of 1,000 Shares or less and a fee of S$25 for each
withdrawal of more than 1,000 Shares is payable upon withdrawing the Shares from the
book-entry settlement system and obtaining physical share certificates. In addition, a fee of S$2
or such other amount as our Directors may decide, is payable to the share registrar for each share
certificate issued and a stamp duty of 0.2% of the last-transacted price where it is withdrawn in
the name of a third party. Persons holding physical share certificates who wish to trade on Catalist
must deposit with CDP their share certificates together with the duly executed and stamped
instruments of transfer in favour of CDP, and have their respective Securities Accounts credited
with the number of Shares deposited before they can effect the desired trades. A fee of S$10 is
payable upon the deposit of each instrument of transfer with CDP. The above fees may be subject
to such changes as may be in accordance with CDPs prevailing policies or the current tax policies
that may be in force in Singapore from time to time. Pursuant to announced rules effective from
2 May 2014, transfers and settlements pursuant to on-exchange trades will be charged a fee of
S$30 and transfers and settlements pursuant to off-exchange trades will be charged a fee of
0.015% of the value of the transaction, subject to a minimum of S$75.
Transactions in the Shares under the book-entry settlement system will be reflected by the sellers
Securities Account being debited with the number of Shares sold and the buyers Securities
Account being credited with the number of Shares acquired. No transfer of stamp duty is payable
for the Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of 0.04% of the
transaction value subject to a maximum of S$600 per transaction. The clearing fee, instrument of
transfer deposit fee and share withdrawal fee may be subject to Singapore goods and services tax
at 7.0% (or such other rate prevailing from time to time).

189

CLEARANCE AND SETTLEMENT


Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement
on CDP on a scripless basis. Settlement of trades on a normal ready basis on Catalist generally
takes place on the third Market Day following the transaction date, and payment for the securities
is generally settled on the following business day. CDP holds securities on behalf of investors in
Securities Accounts. An investor may open a direct account with CDP or a sub-account with a CDP
agent. The CDP agent may be a member company of the SGX-ST, bank, merchant bank or trust
company.

190

GENERAL AND STATUTORY INFORMATION


INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
(1)

Save as disclosed below, none of our Directors, Executive Officers and Controlling
Shareholders:
(a)

has, at any time during the last ten (10) years, had an application or a petition under any
bankruptcy laws of any jurisdiction filed against him or against a partnership of which
he was a partner at the time he was a partner or at any within two (2) years from the
date he ceased to be a partner;

(b)

has, at any time during the last ten (10) years, had an application or a petition under any
law of any jurisdiction filed against an entity (not being a partnership) of which he was
a director or an equivalent person or key executive at the time when he was a director
or an equivalent person or a key executive of that entity or at any time within two (2)
years from the date he ceased to be a director or an equivalent person or a key
executive of that entity, for the winding up or dissolution of that entity or, where that
entity is the trustee of a business trust, that business trust, on the ground of insolvency;

(c)

has any unsatisfied judgement against him;

(d)

has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or
dishonesty which is punishable with imprisonment, or has been the subject of any
criminal proceedings (including any pending criminal proceedings of which he is aware)
for such purpose;

(e)

has ever been convicted of any offence, in Singapore or elsewhere, involving a breach
of any law or regulatory requirement that relates to the securities or futures industry in
Singapore or elsewhere, or has been the subject of any criminal proceedings (including
any pending criminal proceedings of which he is aware) for such breach;

(f)

has, at any time during the last ten (10) years, had judgement entered against him in
any civil proceedings in Singapore or elsewhere involving a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, nor has he
been the subject of any civil proceedings (including any pending civil proceedings of
which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on
his part;

(g)

has ever been convicted in Singapore or elsewhere of any offence in connection with
the formation or management of any entity or business trust;

(h)

has ever been disqualified from acting as a director or equivalent person of any entity
(including the trustee of a business trust), or from taking part directly or indirectly in the
management of any entity or business trust;

(i)

has ever been the subject of any order, judgement or ruling of any court, tribunal or
governmental body, permanently or temporarily enjoining him from engaging in any type
of business practice or activity;

191

GENERAL AND STATUTORY INFORMATION


(j)

has ever, to his knowledge, been concerned with the management or conduct, in
Singapore or elsewhere, of the affairs of:
(i)

any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;

(ii)

any entity (not being a corporation) which has been investigated for a breach of
any law or regulatory requirement governing such entities in Singapore or
elsewhere;

(iii) any business trust which has been investigated for a breach of any law or
regulatory requirement governing business trusts in Singapore or elsewhere; or
(iv) any entity or business trust which has been investigated for a breach of any law
or regulatory requirement that relates to the securities or futures industry in
Singapore or elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the corporation or partnership entity or business trust; and
(k)

has ever been the subject of any current or past investigation or disciplinary
proceedings, or has been reprimanded or issued any warning, by the Authority or any
other regulatory authority, exchange, professional body or government agency, whether
in Singapore or elsewhere.

Disclosure pertaining to Alex Loo


Alex Loo borrowed an aggregate sum of MYR1.25 million from Loh Yuen Keong (LYK) in
December 2009.
On 10 June 2013, LYK issued a writ of summons against Alex Loo claiming that Alex Loo
failed to refund the sum of MYR0.15 million to LYK.
A judgement dated 11 December 2013 was made by the Ipoh Sessions Courts of Malaysia
against Alex Loo requiring him to pay to LYK the judgement sum of MYR0.15 million with an
interest rate of 5% per year from 11 December 2013 until the date of settlement, together with
the cost of action of MYR3,318.00.
By virtue of the Notice of Appeal (against the judgement) dated 24 December 2013, Alex Loo
appealed to the High Court of Malaya in Ipoh, against the judgement entered on
11 December 2013, and subsequently made written submissions to High Court of Malaya,
Ipoh dated 30 June 2014. The appeal was dismissed on 24 July 2014.
LYK subsequently issued a notice of bankruptcy dated 10 March 2014 to Alex Loo claiming
for the sum of MYR155,146.77 (Judgement Sum) as the sum due on final judgement held
on 11 December 2013.
Alex Loo paid the Judgement Sum to LYK and a notice of withdrawal was issued on
9 September 2014 by LYK to completely discontinue the action against Alex Loo.

192

GENERAL AND STATUTORY INFORMATION


(2)

There is no shareholding qualification for Directors under the Articles.

(3)

No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any
firm in which such Director or expert is a partner or any corporation in which such Director
or expert holds shares or debentures, in cash or shares or otherwise, by any person to
induce him to become, or to qualify him as, a Director, or otherwise for services rendered by
him or by such firm or corporation in connection with the promotion or formation of our
Company.

(4)

Save as disclosed in the section entitled Directors, Management and Staff Service
Agreements of this Offer Document, there are no existing or proposed service contracts
between our Directors and our Company.

SHARE CAPITAL
(5)

As at the Latest Practicable Date, there is only one class of shares in the capital of our
Company, being ordinary shares. There are no founder, management or deferred shares.
The rights and privileges attached to our Shares are stated in the Articles.

(6)

Save as disclosed below and in the sections entitled Share Capital and Restructuring
Exercise of this Offer Document, there are no changes in the issued and paid-up share
capital of our Company and our subsidiaries within the last three (3) years preceding the date
of this Offer Document.

(7)

Save as disclosed below and in the sections entitled Share Capital and Restructuring
Exercise of this Offer Document, no shares in, or debentures of, our Company or any of our
subsidiaries has been issued, or are proposed to be issued, as fully or partially paid for cash
or for a consideration other than cash, during the last three (3) years preceding the date of
lodgement of this Offer Document.

(8)

No option to subscribe for shares in, or debentures of, our Company or our subsidiaries has
granted to, or was exercised by, any of our Directors or Executive Officers within the two (2)
financial years.

(9)

Apart from the GCCP Performance Share Plan and the GCCP Employee Share Option
Scheme, our Company does not have any arrangement that involves the issue or grant of
shares in our Company to the employees of our Group.

(10) The interests of our Directors and Substantial Shareholders in our Shares as at the Latest
Practicable Date are set out in the section entitled Share Capital Shareholding and
Ownership Structure of this Offer Document.
MEMORANDUM AND ARTICLES OF ASSOCIATION
(11) Memorandum of Association
The Memorandum states, among others, that the liability of members of our Company is
limited.
Our Companys objects and purposes are set out in full in the Memorandum which is
available for inspection at our Share Registrars office as stated in the section entitled
General and Statutory Information Documents for Inspection of this Offer Document.
193

GENERAL AND STATUTORY INFORMATION


(12) Articles of Association
An extract of the relevant provisions of the Articles, providing, inter alia, the issue of shares,
directors voting rights, borrowing powers of directors and dividend rights, are set out in
Appendix D entitled Selected Extracts of our Articles of Association of this Offer Document.
The complete Articles are available for inspection by Shareholders at our Share Registrars
office as stated in the section entitled General and Statutory Information Documents for
Inspection of this Offer Document.
MATERIAL CONTRACTS
(13) The dates of, parties to and general nature of the material contracts, being contracts entered
into out of the ordinary course of business, which any member of our Group is a party to
within two (2) years preceding the date of lodgement of this Offer Document, are as follows:
(a)

the convertible loan facility agreement dated 9 January 2014 (as amended by a
supplemental agreement dated 6 February 2014 and further amended by a second and
third supplemental agreement dated 3 April 2014 and 20 August 2014 respectively and
letters of extension dated 20 October 2014 and 26 January 2015) entered into by our
Company, Gridland, Hyper Act, GPF (Delta), Alex Loo, Chung Man Chong and Pang
Kim Chon;

(b)

the convertible loan facility agreement dated 3 April 2014 (as amended by a
supplemental agreement dated 20 August 2014 and letters of extension dated 20
October 2014 and 26 January 2015) entered into by our Company, Gridland, Hyper Act,
Woodburn, Alex Loo, Chung Man Chong and Pang Kim Chon;

(c)

the convertible loan facility agreement dated 20 August 2014 (as amended by letters of
extension dated 20 October 2014 and 26 January 2015) entered into by our Company,
Gridland, Hyper Act, Woodburn, Alex Loo, Chung Man Chong and Pang Kim Chon;

(d)

the convertible loan facility agreement dated 20 August 2014 (as amended by letters of
extension dated 20 October 2014 and 26 January 2015) entered into by our Company,
Gridland, Hyper Act, GPF (Falcon), Alex Loo, Chung Man Chong and Pang Kim Chon;

(e)

the convertible loan facility agreement dated 20 August 2014 (as amended by letters of
extension dated 20 October 2014 and 26 January 2015) entered into by our Company,
Gridland, Hyper Act, Soo Kee Wee, Ng Han Meng, Ciliandra Fangiono, Fong Kim Chit,
Lee Chun Fun, Alex Loo, Chung Man Chong and Pang Kim Chon;

(f)

the convertible loan facility agreement dated 20 August 2014 (as amended by letters of
extension dated 20 October 2014 and 26 January 2015) entered into by our Company,
Gridland, Hyper Act, Wang Yu Huei, Teo Khiam Chong, Chang Wei Chian Benjamin,
Alex Loo, Chung Man Chong and Pang Kim Chon;

(g)

the ROFR Agreement dated 24 October 2014;

(h)

the Non-Compete Agreement dated 24 October 2014;

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GENERAL AND STATUTORY INFORMATION


(i)

the sale and purchase agreement dated 30 December 2013 entered into between Hyper
Act and YBU Holdings Sdn Bhd in relation to acquisition of vacant quarry land
measuring approximately 3.5618 hectares in area held under Title No. HS(D) 217328
PT 24226 Mukim Sungai Raya by Hyper Act;

(j)

the sale and purchase agreement dated 30 December 2013 entered into between Hyper
Act and Virgo-Up Ventures Sdn Bhd in relation to the acquisition of vacant quarry land
measuring approximately 3.3252 hectares in area held under Title No. HS(D) 215515
PT 24149 Mukim Sungai Raya by Hyper Act;

(k)

the sale and purchase agreement dated 30 December 2013 entered into between Hyper
Act and Konsep Tuah Sdn Bhd in relation to the acquisition of vacant quarry land
measuring approximately 3.9252 hectares in area held under Title No. HS(D) 214644
PT 24116 Mukim Sungai Raya by Hyper Act;

(l)

the sale and purchase agreement dated 30 December 2013 entered into between Hyper
Act and Shafarra Trade, Travel and Services Sdn Bhd in relation to the acquisition of
vacant quarry land measuring approximately 4.047 hectares in area held under Title No.
HS(D) 212118 PT 23164 Mukim Sungai Raya by Hyper Act;

(m) the sale and purchase agreement dated 30 December 2013 entered into between Hyper
Act and Yayasan Bina Upaya Darul Ridzuan in relation to acquisition of vacant quarry
land measuring approximately 80938 square meters in area held under Title No. HS(D)
199908 PT 23014 Mukim Sungai Raya by Hyper Act;
(n)

the contract entered into between Hyper Act, Sri Sarana Timber Enterprise Sdn Bhd and
Pulai Rock Quarry Sdn Bhd (the Contractor) dated 1 August 2014 in relation to the
appointment of the Contractor for the provision of services relating to the construction
of an access road;

(o)

the sale and purchase agreement entered into between Gridland and Hua Lay Realty
Sdn Bhd dated 1 October 2014 in relation to the purchase of Unit 21-01 in a mixed
development known as Cascades (Corporate) erected on part of all that piece of
leasehold land held under PN 97694, Lot 53298 (formerly held under HS(D) 237769, PT
9793), Pekan Baru Sungai Buloh, Daerah Petaling, Negeri Selangor by Gridland;

(p)

the sale and purchase agreement entered into between Gridland and Hua Lay Realty
Sdn Bhd dated 1 October 2014 in relation to the purchase of Unit 21-02 in a mixed
development known as Cascades (Corporate) erected on part of all that piece of
leasehold land held under PN 97694, Lot 53298 (formerly held under HS(D) 237769, PT
9793), Pekan Baru Sungai Buloh, Daerah Petaling, Negeri Selangor by Gridland;

(q)

the sale and purchase agreement entered into between Gridland and Hua Lay Realty
Sdn Bhd dated 1 October 2014 in relation to the purchase of Unit 21-03 in a mixed
development known as Cascades (Corporate) erected on part of all that piece of
leasehold land held under PN 97694, Lot 53298 (formerly held under HS(D) 237769, PT
9793), Pekan Baru Sungai Buloh, Daerah Petaling, Negeri Selangor by Gridland;

(r)

the sale and purchase agreement entered into between Gridland and Hua Lay Realty
Sdn Bhd dated 1 October 2014 in relation to the purchase of Unit 21-3A in a mixed

195

GENERAL AND STATUTORY INFORMATION


development known as Cascades (Corporate) erected on part of all that piece of
leasehold land held under PN 97694, Lot 53298 (formerly held under HS(D) 237769, PT
9793), Pekan Baru Sungai Buloh, Daerah Petaling, Negeri Selangor by Gridland;
(s)

the tenancy agreement entered into between Chai Sen Hoo and Gridland dated
28 March 2014 in relation to the lease of unit 1D, Persiaran Rapat Baru, Medan
Lapangan Lagenda, 31350, Ipoh, Perak by Gridland;

(t)

the tenancy agreement entered into between Serene Diane A/P Santhana Dass and
Gridland dated 1 April 2014 in relation to the lease of unit A-1-3, Block A (Azalea)
Damaipuri Condominium, Cheateau Garden, 30250, Ipoh, Perak by Gridland;

(u)

the tenancy agreement entered into between Phoon Kah Leong and Gridland dated
1 October 2013 in relation to the lease of 64, Jalan Rapat Baru 16, Lapangan Melodi,
31350 Ipoh, Perak by Gridland;

(v)

the tenancy agreement entered into between Yap Kwee Chin and Gridland dated
17 January 2014 in relation to the lease of 106, BLK J, Riana Green Condo, Jalan PJU
3/1 C, Tropicana Golf & Country Resort 47410, Petaling Jaya by Gridland;

(w) the tenancy agreement entered into between Pretty Beauty Zone and Gridland dated
1 May 2014 in relation to the lease of First Floor, 30, Medan Lapangan Lagenda 2,
Medan Lapangan Lagenda, 31350, Ipoh, Perak by Gridland; and
(x)

the tenancy agreement entered into between Yeong Kwok Seng and Gridland dated
1 January 2014 in relation to the lease of 56-2 & 56-M, Jalan PJU 5/21, The Strand,
Kota Damansara, 47810, Petaling Jaya by Gridland.

MATERIAL LITIGATION
(14) Save as disclosed below, to the best of our knowledge and belief, having made all
reasonable enquiries, neither our Company nor any of our subsidiaries is engaged in any
legal or arbitration proceedings as plaintiff or defendant, including those which are pending
or known to be contemplated, which may have or which have had in the 12 months
immediately preceding the date of lodgement of the Offer Document, a material effect on our
Groups financial position or profitability of our Company or our subsidiaries or associated
companies.
Gridland was served with a writ of summons filed on 6 February 2015 by Ujiteknik Geoenviro
Sdn Bhd (UGSB), a service provider that Gridland had engaged for the provision of drilling
exploration and extraction of limestone samples for the purposes of preparing the
Independent Qualified Persons Report (UGSB Services). UGSB is claiming for, among
others, MYR321,367.76 (Claim Amount) in damages in relation to sums that are allegedly
unpaid by Gridland for the UGSB Services, interest accruing from the Claim Amount and
legal cost. The matter was fixed for mention on 11 March 2015. Gridlands counsel has filed
Statement of Defence and Counter Claim on 8 April 2015 claiming for, among others,
MYR162,222,222.00 in damages for depreciation to Gridlands drilling project which was
discontinued due to delay by UGSB, MYR618,411.82 for interest payable by Gridland due to
the delay by UGSB, all interest accruing and legal cost. Further, Gridlands counsel is
preparing the relevant application to transfer the matter to the High Court at Ipoh, as the
amount claimed by Gridland has exceeded the monetary jurisdiction of the Sessions Court
at Ipoh.
196

GENERAL AND STATUTORY INFORMATION


MANAGEMENT AND PLACEMENT ARRANGEMENTS
(15) Pursuant to the Management Agreement dated 20 April 2015 entered into between our
Company and PPCF as the Sponsor and Issue Manager, our Company has appointed PPCF
to manage the Listing. PPCF will receive a management fee from our Company for such
services rendered in connection with the Placement.
(16) Pursuant to the Placement Agreement dated 20 April 2015 entered into between our
Company and PPCF as the Placement Agent, the Placement Agent has agreed to procure
subscribers for the Placement Shares for a placement commission of 3.5% of the Placement
Price for each Placement Share, to be paid by our Company. PPCF may, at its absolute
discretion, appoint one (1) or more sub-placement agents for the Placement Shares.
(17) Subject to the consent of the SGX-ST being obtained, the Management Agreement may be
terminated by PPCF at any time before the close of the Application List on the occurrence of
certain events including the following:
(a)

PPCF becomes aware of any material breach by our Company and/or its agents(s) of
any warranties, representations, covenants or undertakings given by our Company to
PPCF in the Management Agreement; or

(b)

there shall have been, since the date of the Management Agreement, any change or
prospective change in or any introduction or prospective introduction of any legislation,
regulation, policy, directive, guideline, rule or byelaw by any relevant government or
regulatory body, whether or not having the force of law, or any other occurrence of
similar nature that would materially change the scope of work, responsibility or liability
required of PPCF; or

(c)

there is a conflict of interest for PPCF, or any dispute, conflict or disagreement with our
Company or our Company wilfully fails to comply with any advice from or
recommendation of PPCF.

(18) The Placement Agreement and the obligation of the Placement Agent under the Placement
Agreement is conditional upon, inter alia, the following:
(a)

the Offer Document having been registered with the SGX-ST, acting as agent on behalf
of the Authority, by the Issue Date (as defined in the Placement Agreement) in
accordance with the Catalist Rules;

(b)

the registration notice being issued or granted by the SGX-ST, acting as agent on behalf
of the Authority and such registration notice not being revoked or withdrawn on or prior
to the Closing Date (as defined in the Placement Agreement);

(c)

the compliance by our Company to the satisfaction of the SGX-ST with all the conditions
imposed by the SGX-ST in issuing the registration notice (if any), where such conditions
are required to be complied with by the Closing Date;

(d)

the SGX-ST not having withdrawn or changed the terms and conditions for its letter of
eligibility for Admission (as defined in the Placement Agreement) and our Company
having complied with any conditions contained therein required to be complied with
prior to the Listing;

197

GENERAL AND STATUTORY INFORMATION


(e)

such approvals as may be required for the transactions described in the Placement
Agreement and in the Offer Document in relation to the Listing and the Placement being
obtained, and not withdrawn or amended, on or before the date on which our Company
is admitted to Catalist (or such other date as our Company and Placement Agent may
agree in writing);

(f)

there having been, in the reasonable opinion of the Placement Agent, no material
adverse change or any development likely to result in a material adverse change in the
financial or other condition of our Group between the date of the Placement Agreement
and the Closing Date nor the occurrence of any event nor the discovery of any fact
rendering untrue or incorrect in any respect, as at the Closing Date, any of the
warranties or representations nor any breach by our Company of any of its obligations
under the Placement Agreement;

(g)

the compliance by our Company with all applicable laws and regulations concerning the
Placement, admission to Catalist and the transactions contemplated in the Placement
Agreement and the Offer Document and no new laws, regulations and directives having
been promulgated, published and/or issued and/or having taken effect or any other
similar matter having occurred which, in the reasonable opinion of the Placement Agent,
has or may have an adverse effect on the Placement and the Listing;

(h)

the delivery by our Company to the Placement Agent on the Closing Date of a
certificate, in the form set out in the Schedule to the Placement Agreement, signed by
the authorised signatories for and on behalf of our Company respectively;

(i)

the delivery to the Placement Agent of all legal due diligence reports in relation to the
Listing and the Placement Agent being satisfied with the results, findings, advice,
opinions and/or conclusions set out in such reports;

(j)

the letters of undertaking referred to in the Offer Document in the section entitled
Shareholders Moratorium being executed and delivered to the Issue Manager,
Sponsor and Placement Agent before the date of registration of the Offer Document with
the SGX-ST, acting as agent on behalf of the Authority; and

(k)

the Management Agreement not being terminated or rescinded pursuant to the


provisions of the Management Agreement, on or before one (1) Market Day immediately
following the Closing Date.

(19) In the reasonable opinion of our Directors, save as disclosed below and in the section
entitled Plan of Distribution of this Offer Document, PPCF, the Issue Manager, Sponsor and
Placement Agent does not have a material relationship with our Group:
(a)

PPCF is the Issue Manager, Sponsor and Placement Agent of the Listing and the
Placement; and

(b)

PPCF will be the Continuing Sponsor of our Company for a period of at least three (3)
years from the date our Company is admitted and listed on Catalist.

198

GENERAL AND STATUTORY INFORMATION


MISCELLANEOUS
(20) The nature of the business of our Company has been stated earlier in this Offer Document.
(21) Save as disclosed in the section entitled Restructuring Exercise of the Offer Document,
there has been no previous issue of Shares by our Company or offer for sale of our Shares
to the public within the two (2) years preceding the date of this Offer Document.
(22) There has not been any public takeover offer by a third party in respect of our Shares or by
our Company in respect of shares of another corporation or units of a business trust which
has occurred between the beginning of the most recent completed financial year and the
Latest Practicable Date.
(23) Application monies received by our Company in respect of successful applications (including
successful applications which are subsequently rejected) will be placed in a separate
non-interest bearing account with the Receiving Banker. In the ordinary course of business,
the Receiving Banker will deploy these monies in the inter-bank money market. All profits
derived from the deployment of such monies will accrue to the Receiving Banker. Any refund
of all or part of the application monies to unsuccessful or partially successful applicants will
be made without any interest or any share of revenue or any other benefit arising therefrom.
(24) As at the Latest Practicable Date, there have been no material changes since the effective
date of the Independent Qualified Persons Report. Please refer to Appendix F entitled
Independent Qualified Persons Report of this Offer Document for further details.
(25) Greater China Mineral & Energy Consultants Limited, the Independent Geologist, has
reviewed the information contained in this Offer Document, which relates to the Independent
Qualified Persons Report and confirms that the information presented is accurate, balanced,
complete and not inconsistent with the Independent Qualified Persons Report.
(26) Greater China Mineral & Energy Consultants Limited, the Independent Geologist, has
confirmed that the Independent Qualified Persons Report does not include blanket
disclaimers or contain indemnities for fraud and gross negligence.
(27) Greater China Appraisal Limited, the Independent Valuer, has reviewed the information
contained in this Offer Document, which relates to the Independent Valuation Report and
confirms that the information presented is accurate, balanced, complete and not inconsistent
with the Independent Valuation Report.
(28) Greater China Appraisal Limited, the Independent Valuer, has confirmed that the
Independent Valuation Report does not include blanket disclaimers or contain indemnities for
fraud and gross negligence.
(29) Save as disclosed in this Offer Document, our Directors are not aware of any relevant
material information including trading factors or risks which are unlikely to be known or
anticipated by the general public and which could materially affect the profits of our Company
and our subsidiaries.

199

GENERAL AND STATUTORY INFORMATION


(30) Save as disclosed in this Offer Document, the financial condition and operations of our Group
are not likely to be affected by any of the following:
(a)

known trends or demands, commitments, events or uncertainties that will result in or are
reasonably likely to result in our Groups liquidity increasing or decreasing in any
material way;

(b)

material commitments for capital expenditure;

(c)

unusual or infrequent events or transactions or any significant economic changes that


may materially affect the amount of reported income from operations; and

(d)

the business and financial prospects and any significant recent trends in production,
sales and inventory, and in the costs and selling prices of products and services and
known trends or uncertainties that have had or that we reasonably expect will have a
material favourable or unfavourable impact on revenues, profitability, liquidity, capital
resources or operating income or that would cause financial information disclosed to be
not necessarily indicative of the future operating results or financial condition of our
Company.

(31) Save as disclosed in this Offer Document, our Directors are not aware of any event which has
occurred since the end of 9M2014 (being the end of the period covered by the most recent
financial statements of our Group included in the Offer Document) to the Latest Practicable
Date which may have a material effect on the financial position and results of our Group or
the financial information provided in this Offer Document.
(32) Save as disclosed in the Section entitled Restructuring Exercise of this Offer Document, no
amount of cash or securities or benefit has been paid or given to any promoter within the two
(2) years preceding the Latest Practicable Date or is proposed or intended to be paid or given
to any promoter at any time.
(33) Save as disclosed in the section entitled General and Statutory Information Management
and Placement Agreements of this Offer Document, no commission, discount or brokerage
has been paid or other special terms granted within the two (2) years preceding the Latest
Practicable Date or is payable to any Director, promoter, expert, proposed director or any
other person for subscribing or agreeing to subscribe or procuring or agreeing to procure
subscriptions for any Shares in, or debentures of, our Company or our subsidiaries.
(34) Details, including the name, address and professional qualifications including membership in
a professional body of the auditors of our Company for the period under review are as
follows:
Name, professional
qualification and
address
Ernst & Young LLP
One Raffles Quay
North Tower Level 18
Singapore 048583

Professional body
Institute of Singapore
Chartered Accountants

Partner-in-charge/
Professional qualification
Adrian Koh/A member of the
Institute of Singapore Chartered
Accountants

We currently have no intention of changing our auditors after the listing of our Company on
Catalist.

200

GENERAL AND STATUTORY INFORMATION


CONSENTS
(35) The Independent Auditors and Reporting Accountants, Ernst & Young LLP, has given and has
not withdrawn its written consent to the issue of this Offer Document with the inclusion herein
of the Audited Consolidated Financial Statements for the financial years ended
31 December 2011, 2012 and 2013 as set out in Appendix A of this Offer Document, the
Audited Interim Consolidated Financial Statements for the nine-month period ended 30
September 2014 as set out in Appendix B of this Offer Document and the Unaudited Pro
Forma Financial Information for the financial year ended 31 December 2013 and the
nine-month period ended 30 September 2014 as set out in Appendix C of this Offer
Document in the form and context in which they are included and references to its name in
the form and context in which it appears in this Offer Document and to act in such capacity
in relation to this Offer Document.
(36) The Legal Adviser to our Company on Malaysia Law, Jeff Leong, Poon & Wong, has given
and has not withdrawn its written consent to the issue of this Offer Document with the
inclusion herein of the legal opinion as set out in Appendix D entitled Legal Opinion from Jeff
Leong, Poon & Wong in the form and context in which it appears in this Offer Document and
all references to its name in the form and context in which it appears in this Offer Document
and to act in such capacity in relation to this Offer Document.
(37) The Independent Geologist, Greater China Mineral & Energy Consultants Limited, has given
and has not withdrawn its written consent to the issue of this Offer Document with the
inclusion herein of the information and analysis found in the section entitled Independent
Qualified Persons Report as set out in Appendix F of this Offer Document in the form and
context in which it appears in this Offer Document and references to its name in the form and
context in which it appears in this Offer Document and to act in such capacity in relation to
this Offer Document.
(38) The Independent Valuer, Greater China Appraisal Limited, has given and has not withdrawn
its written consent to the issue of this Offer Document with the inclusion herein of the
information and analysis found in the section entitled Independent Valuation Report as set
out in Appendix G of this Offer Document in the form and context in which it appears in this
Offer Document and references to its name in the form and context in which it appears in this
Offer Document and to act in such capacity in relation to this Offer Document.
(39) LCS Consultants Sdn. (1974), has given and has not withdrawn its consent to the issue of
this Offer Document with the inclusion herein of the information and analysis found in the
section entitled General Information on our Company and our Group Licences, Permits
and Approvals and references to its name in the form and context in which it appears in this
Offer Document and to act in such capacity in relation to this Offer Document.
(40) The Issue Manager, Sponsor and Placement Agent, PPCF, the Solicitors to the Placement
and Legal Adviser to our Company on Singapore Law, Rodyk & Davidson LLP, the Legal
Adviser to our Company on Cayman Islands Law, Conyers Dill & Pearman Pte. Ltd., the
Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., the Principal Banker,
United Overseas Bank (Malaysia) Bhd and Receiving Banker, The Bank of East Asia, Limited
has each given and has not withdrawn its written consent to the issue of this Offer Document
with the inclusion herein of its name and references thereto in the form and context in which
it appears in this Offer Document and to act in such capacity in relation to this Offer
Document.

201

GENERAL AND STATUTORY INFORMATION


(41) Each of the Solicitors to the Placement and Legal Adviser to our Company on Singapore Law,
Rodyk & Davidson LLP, the Legal Adviser to our Company on Cayman Islands Law, Conyers
Dill & Pearman Pte. Ltd., the Share Registrar, Boardroom Corporate & Advisory Services Pte.
Ltd., the Principal Banker, United Overseas Bank Limited, and Receiving Banker, The Bank
of East Asia, Limited do not make or purport to make any statement in this Offer Document
or any statement upon which a statement in this Offer Document is based and each of them
makes no representation regarding any statement in this Offer Document and to the
maximum extent permitted by law, expressly disclaims and takes no responsibility for any
liability to any persons which is based on, or arises out of, any statement, information or
opinions in, or omission from, this Offer Document.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS
(42) This Offer Document has been seen and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this Offer
Document and confirm, after making all reasonable enquiries, that to the best of their
knowledge and belief, this Offer Document constitutes full and true disclosure of all material
facts about the Listing, the Company and its subsidiaries, and the Directors are not aware of
any facts the omission of which would make any statement in this Offer Document
misleading. Where information in this Offer Document has been extracted from published or
otherwise publicly available sources or obtained from a named source, the sole responsibility
of the Directors has been to ensure that such information has been accurately and correctly
extracted from those sources and/or reproduced in the Offer Document in its proper form and
context.
DOCUMENTS FOR INSPECTION
(43) The following documents or copies thereof may be inspected at our Share Registrars office
at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 during normal
business hours for a period of six (6) months from the date of registration of this Offer
Document by the SGX-ST, acting as agent on behalf of the Authority:
(a)

the Memorandum and the Articles;

(b)

the Audited Consolidated Financial Statements for the financial years ended
31 December 2011, 2012 and 2013 as set out in Appendix A entitled Audited
Consolidated Financial Statements for the financial years ended 31 December 2011,
2012 and 2013;

(c)

the Audited Interim Consolidated Financial Statements for the nine-month period ended
30 September 2014 as set out in Appendix B entitled Audited Interim Consolidated
Financial Statements for the nine-month period ended 30 September 2014;

(d)

the Unaudited Pro Forma Financial Information for the financial year ended
31 December 2013 and the nine-month period ended 30 September 2014 as set out in
Appendix C entitled Unaudited Pro Forma Financial Information for the financial year
ended 31 December 2013 and the nine-month period ended 30 September 2014;

(e)

the legal opinion from Jeff Leong, Poon & Wong set out in Appendix E entitled Legal
Opinion from Jeff Leong, Poon & Wong of this Offer Document;

(f)

the Independent Qualified Persons Report set out in Appendix F entitled Independent
Qualified Persons Report of this Offer Document;
202

GENERAL AND STATUTORY INFORMATION


(g)

the Independent Valuation Report set out in Appendix G entitled Independent Valuation
Report of this Offer Document;

(h)

the material contracts referred to in the section entitled General and Statutory
Information Material Contracts of this Offer Document;

(i)

the letters of consent referred to in the section entitled General and Statutory
Information Consents this Offer Document; and

(j)

the Service Agreements referred to in Directors, Management and Staff Service


Agreements this Offer Document.

203

This page has been intentionally left blank.

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013

Company Registration No. OI-282405

GCCP Resources Limited and its subsidiaries

Audited consolidated financial statements


For the financial years ended 31 December 2011, 2012 and 2013

A-1

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Index

Page

Statement by directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-3

Independent auditors report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-4

Consolidated statements of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-6

Consolidated statements of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-7

Consolidated statements of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-8

Consolidated statements of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-9

Notes to the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-11

A-2

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Statement by directors
We, Loo An Swee and Pang Kim Chon, being two of the directors of GCCP Resources Limited,
do hereby state that, in the opinion of the directors,
(i)

the accompanying consolidated statements of financial position, consolidated statements of


comprehensive income, consolidated statements of changes in equity, and consolidated
statements of cash flows together with notes thereto are drawn up so as to present fairly, the
state of affairs of the Group as at 31 December 2011, 2012 and 2013, and the results of the
business, changes in equity and cash flows of the Group for the years ended on those dates,
and

(ii)

at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.

On behalf of the board of directors:

Loo An Swee
Director

Pang Kim Chon


Director
4 March 2015

A-3

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Independent auditors report on audited consolidated financial statements of GCCP
Resources Limited
For the financial years ended 31 December 2011, 2012 and 2013
4 March 2015
The Board of Directors
GCCP Resources Limited
Floor 4, Willow House
PO Box 2804
Grand Cayman KY1-1112
Cayman Islands
Dear Sirs
Report on the financial statements
We have audited the accompanying financial statements of GCCP Resources Limited (the
Company) and its subsidiaries (collectively, the Group) set out on pages A-6 to A-44, which
comprise the consolidated statements of financial position as at 31 December 2011, 2012 and
2013, and the consolidated statements of comprehensive income, consolidated statements of
changes in equity and consolidated statements of cash flows for the financial years ended
31 December 2011, 2012 and 2013, and a summary of significant accounting policies and other
explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Singapore Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.

A-4

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Independent auditors report on audited consolidated financial statements of GCCP
Resources Limited
For the financial years ended 31 December 2011, 2012 and 2013
Auditors responsibility (contd)
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group present fairly, in all material
respects, the financial position of the Group as at 31 December 2011, 2012 and 2013, and of its
financial performance and cash flows for the years then ended in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board.
Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the Offer Document to be
issued in relation to the proposed listing of the shares of the Company in connection with the
Companys listing on the Singapore Exchange Securities Trading Limited.

Ernst & Young LLP


Public Accountants and
Chartered Accountants
Singapore
4 March 2015
Partner-in-charge: Adrian Koh

A-5

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Consolidated statements of comprehensive income
For the financial years ended 31 December 2011, 2012 and 2013

Revenue

Note

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

2,294,356

7,668,290

(1,591,134)

(7,118,172)

Cost of sales
Gross profit

Year ended
31.12.13
MYR

703,222

550,118

49,475

10,690

26,102

12,711

Other items of income


Interest income

Gain on disposal of property,


plant and equipment
Other items of expense
General and administrative
expense

(677,280)

(1,814,077)

(1,919,605)

Finance costs

(427,858)

(328,595)

(448,221)

Loss before tax

(352,441)

(1,569,153)

(2,341,724)

Income tax expense

(37,248)

(5,436)

(389,689)

(1,574,589)

Loss for the year, representing


total comprehensive income for
the year attributable to owners
of the Company

(2,341,724)

Loss per share attributable to


owners of the Company
Basic and diluted loss per share

1,948

7,873

The accompanying accounting policies and explanatory notes form an integral part of
the consolidated financial statements.

A-6

11,709

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Consolidated statements of financial position
As at 31 December 2011, 2012 and 2013

ASSETS
Non-current assets
Property, plant and equipment
Prepayments for property, plant and
equipment

Current assets
Trade and other receivables
Prepayments
Pledged deposits
Cash at banks and on hand
Income tax recoverable

Note

2011
MYR

2012
MYR

10

4,890,955

5,162,808

9,304,960

20

3,482,000

4,890,955

5,162,808

12,786,960

4,769,623
3,799
363,747
3,234

2,352,942
3,411
621,938
3,623
1,200

57,359
11,397
833,245
149,926
1,168

5,140,403

2,983,114

1,053,095

10,031,358

8,145,922

13,840,055

103,762
27,432
4,756,057
29,777

150,257
17,169
4,165,998

11,671,011
181,862
4,432,316

4,917,028

4,333,424

16,285,189

11
12
13

Total assets
EQUITY AND LIABILITIES
Current liabilities
Other payables
Accrued operating expenses
Loans and borrowings
Income tax payable

14
15

Net current asset/(liabilities)


Non-current liabilities
Deferred tax liabilities
Loans and borrowings

223,375

(1,350,310) (15,232,094)

7,471
72,119

352,347

1,435,796

79,590

352,347

1,435,796

Total liabilities

4,996,618

4,685,771

17,720,985

Net assets/(liabilities)

5,034,740

3,460,151

(3,880,930)

5,000,002
34,738

5,000,002
(1,539,851)

645
(3,881,575)

5,034,740

3,460,151

(3,880,930)

10,031,358

8,145,922

13,840,055

Equity attributable to owners of the


Company
Share capital
Accumulated earnings/(losses)

16
15

2013
MYR

17

Total equity/(deficit)
Total equity and liabilities

The accompanying accounting policies and explanatory notes form an integral part of
the consolidated financial statements.

A-7

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Consolidated statements of changes in equity
For the financial years ended 31 December 2011, 2012 and 2013

Share capital
(Note 17)
MYR
Balance at 1 January 2011

5,000,002

Loss for the year, representing total


comprehensive income for the year

Balance as at 31 December 2011 and


1 January 2012

5,000,002

Loss for the year, representing total


comprehensive income for the year
Balance as at 31 December 2012 and
1 January 2013
Loss for the year, representing total
comprehensive income for the year

Accumulated
earnings/
(losses)
MYR
424,427
(389,689)

34,738

Total equity
MYR
5,424,429
(389,689)

5,034,740

(1,574,589)

(1,574,589)

5,000,002

(1,539,851)

3,460,151

(2,341,724)

(2,341,724)

Contributions by and distributions to


owners:
Issuance of shares pursuant to the
Restructuring Exercise

645

645

Adjustment arising from the Restructuring


Exercise

(5,000,002)

(5,000,002)

Total transactions with owners in their


capacity as owners

(4,999,357)

(4,999,357)

Balance as at 31 December 2013

645

(3,881,575)

The accompanying accounting policies and explanatory notes form an integral part of
the consolidated financial statements.

A-8

(3,880,930)

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Consolidated statements of cash flows
For the financial years ended 31 December 2011, 2012 and 2013

Note

Operating activities
Loss before tax, total
Adjustment for:
Depreciation of property, plant and equipment
Gain on disposal of property, plant and equipment
Write-off of property, plant and equipment
Exploration expenditure
Interest income
Finance costs
Total adjustments
Operating cash flows before changes in working
capital
Changes in working capital:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
Increase in trade and other payables
Increase/(decrease) in accrued operating expenses

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

(352,441)

(1,569,153)

(2,341,724)

332,277

(49,475)
427,858

448,233
(12,711)

(10,690)
328,595

458,259

59,920
653,516
(26,102)
448,221

710,660

753,427

358,219

(815,726)

(747,910)

2,416,681
388
46,495
(10,263)

2,295,583
(7,986)
6,520,752
164,693

(1,020,394)
(3,798)
89,905
71

1,593,814

Total changes in working capital

(934,216)

2,453,301

8,973,042

Cash flow from operations


Exploration expenditure
Interest received
Interest paid
Income taxes (paid)/refunded

(575,997)

49,475
(427,858)
(962)

1,637,575

10,690
(328,595)
(43,885)

8,225,132
(653,516)
26,102
(448,221)
32

Net cash flows (used in)/from operating activities

(955,342)

1,275,785

7,149,529

Investing activities
Purchases of property, plant and equipment
Prepayments for purchase of property, plant and
equipment
Proceeds from disposal of property, plant and
equipment

(196,812)

(271,315)

94,940

(4,660,331)
(3,482,000)

Net cash flows used in investing activities

(196,812)

(176,375)

(8,142,331)

Financing activities
Proceeds from issuance of ordinary shares
Proceeds from term loans
Repayment of term loans
Repayment of hire purchase
Placement of pledged deposits

626,137
(209,747)
(5,552)
(9,891)

2,000,000
(4,000,000)
(167,865)
(258,190)

645
1,579,500
(131,401)
(91,689)
(211,308)

400,947

(2,426,055)

1,145,747

(751,207)
15,713

(1,326,645)
(735,494)

152,945
(2,062,139)

(735,494)

(2,062,139)

(1,909,194)

Net cash flows from/(used in) financing activities


Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December

13

A-9

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Consolidated statements of cash flows (contd)
For the financial years ended 31 December 2011, 2012 and 2013
A.

Purchases of property, plant and equipment

Note

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

10

291,812

802,315

4,660,331

Less: Purchase under hire


purchase

(95,000)

(531,000)

Net cash outflow for purchases of


property, plant and equipment

196,812

271,315

Additions to property, plant and


equipment

The accompanying accounting policies and explanatory notes form an integral part of
the consolidated financial statements.

A-10

4,660,331

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
1.

Corporate information

1.1

The Company
The Company was incorporated in Cayman Islands on 1 November 2013 as a company
limited by shares under the name of Ultimate Prime Ventures Limited.
The registered office of the Company is located at Floor 4, Willow House, PO Box 2804,
Grand Cayman KY1-1112, Cayman Islands and the principal place of business of the Group
is located at No. 56-2, Jalan PJU 5/21, The Strand Kota Damansara, 47810, Petaling Jaya,
Selangor, Malaysia.
The principal activity of the Company is investment holding. The principal activities of its
subsidiaries are quarry master and sale of related products.
The Company changed its name to GCCP Resources Limited on 10 July 2014.

1.2

The Restructuring Exercise


The Group undertook the transactions described below as part of a corporate
reorganisation implemented in preparation for its listing on the Catalist Board of Singapore
Exchange Securities Trading Limited (The Restructuring Exercise).
The details of the Restructuring Exercise are as follows:
(a)

Incorporation of the Company


The Company was incorporated by the shareholder of Gridland Sdn. Bhd. (GSB) and
Hyper Act Marketing Sdn. Bhd. (HAM) in Cayman Islands on 1 November 2013 as a
company limited by shares, with an initial subscriber share capital of USD200, for the
purpose of becoming the holding company of the Group.

(b)

Acquisition of GSB and HAM


In accordance with the terms of a Term Sheet agreement dated 6 December 2013
entered into between the Company and the shareholders of GSB and HAM
(Shareholders), the entire issued share capital of GSB and HAM were transferred
from the Shareholders to the Company for a consideration of MYR5,000,000 and
MYR2 respectively, based on the respective issued share capital of GSB and HAM as
at 3 December 2013.
Pursuant to the completion of the Restructuring Exercise, GSB and HAM became
wholly owned subsidiaries of the Company.

A-11

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies

2.1

Basis of preparation
Pursuant to the Restructuring Exercise as more fully explained in Note 1.2, the Company
became the holding company of the companies now comprising the Group in December
2013. The companies now comprising the Group were under the common control of the
Controlling Shareholder before and after the Restructuring Exercise. Accordingly, for the
purpose of this report, the Restructuring Exercise has been accounted for by applying the
pooling of interest method of accounting as if the Restructuring Exercise had been
completed on 1 January 2011.
The consolidated statements of financial position of the Group as at 31 December 2011,
2012 and 2013 have been prepared to present the assets and liabilities of the subsidiaries
using the existing book values of the subsidiaries. No adjustments are made to reflect fair
values, or recognise any new assets or liabilities as a result of the Restructuring Exercise.
All intra-group transactions and balances have been eliminated on combination.
The consolidated financial statements of the Group have been prepared in accordance with
the pooling of interest method. The assets and liabilities of the Company and its
subsidiaries are reflected at their carrying amounts reported in the consolidated financial
statements. Any difference between the consideration and the share capital of the
subsidiary acquired is reflected within equity as merger reserve. The statement of
comprehensive income reflects the results of the Company and its subsidiaries for the
entire periods under review.
The consolidated financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
The consolidated financial statements have been prepared on the historical cost basis
except as disclosed in the accounting policies below.
The consolidated financial statements are presented in Malaysian Ringgit (MYR) except
when otherwise stated.

2.2

Fundamental accounting concept


Going concern
The Group incurred a net loss of MYR389,689, MYR1,574,589 and MYR2,341,724 during
the financial years ended 31 December 2011, 2012 and 2013 respectively. As at
31 December 2012 and 2013, the Groups total current liabilities exceeded its total current
assets by MYR1,350,310 and MYR15,232,094 respectively.

A-12

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.2

Fundamental accounting concept (contd)


Going concern (contd)
In January, April and August 2014, the Company entered into Convertible Loan Agreements
for a total aggregate principal amount of Singapore Dollars (S$) 18.8 million at an interest
rate of 16% per annum that converts into ordinary fully paid shares when the Company
receives approval to list on the Singapore Stock Exchange. The term of the Convertible
Loan Agreements is 24 months from the drawdown date. The holders have the right to
demand repayment if the Company does not complete an initial public offering on the
Singapore Stock Exchange after 24 months from the drawdown date or abort the process
for the application of the initial public offering.
On 2 May 2014, one of the convertible loan holders has converted the convertible loan with
nominal value of S$4 million into new ordinary shares of the Company.
In the Directors opinion there is a reasonable expectation that adequate funding will
become available when necessary. Otherwise the Group will attempt to renegotiate the
repayment terms of the term loans. Accordingly, the directors are of the view that the use
of the going concern assumption is appropriate for the preparation of the consolidated
financial statements of the Group.

2.3

Changes in accounting policies


The accounting policies adopted are consistent throughout the financial years presented.
The Group has adopted all the new and revised standards that are effective for annual
periods beginning on or after 1 January 2013. The adoption of these standards did not have
any effect on the financial performance or position of the Group.

2.4

Standards issued but not yet effective


The Group has not adopted the following standards and interpretations that have been
issued but not yet effective:
Effective date
(annual periods
beginning on or after)

Description
Amendments to IFRS 10, IFRS 12 and IAS 27 Investment
Entities
Amendments to IAS 32 Offsetting Financial Assets and
Financial Liabilities

A-13

1 January 2014
1 January 2014

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.4

Standards issued but not yet effective (contd)


Effective date
(annual periods
beginning on or after)

Description
Amendments to IAS 36 Recoverable Amount Disclosures for
Non-Financial Assets
IFRIC Interpretation 21 Levies
Annual Improvements to IFRS 2010-2012 Cycle
Annual Improvements to IFRS 2011-2013 Cycle
Annual Improvements to IFRS 2012-2014 Cycle
Amendments to IAS 1: Disclosure Initiative
IFRS 15 Revenue from Contracts with Customers
IFRS 9 Financial Instruments

1 January 2014
1 January
1 July
1 July
1 January
1 January
1 January
1 January

2014
2014
2014
2016
2016
2017
2018

The directors expect that the adoption of the standards above will have no material impact
on the financial statements in the period of initial application except for the following:
IFRS 15 establishes a new five-step model that will apply to revenue arising from contracts
with customers. Under IFRS 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods
or services to a customer. The new revenue standard is applicable to all entities and will
supersede all current revenue recognition requirements under IFRS. Either a full or
modified retrospective application is required for annual periods beginning on or after
1 January 2017 with early adoption permitted. The Group is currently assessing the impact
of IFRS 15 and plans to adopt the new standard on the required effective date.
2.5

Basis of consolidation and business combinations


Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at
the end of the reporting period. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Specifically, the Group controls an
investee if, and only if, the Group has all of the following:

Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)

Exposure, or rights, to variable returns from its involvement with the investee

The ability to use its power over the investee to affect its returns

A-14

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.5

Basis of consolidation and business combinations (contd)


Basis of consolidation (contd)
The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and
expenses of a subsidiary acquired or disposed during the year are included in the
consolidated statement of profit or loss and other comprehensive income from the date the
Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the
equity holders of the parent of the Group. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the
Groups accounting policies. All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.
The consolidated financial statements of the Group for the years ended 31 December 2011,
2012 and 2013 have been presented as if the Group had been in existence for all periods
presented and the assets and liabilities are brought into the consolidated financial
statements at the existing carrying amounts. The retained earnings recognised in the
consolidated financial statements are the retained earnings of Gridland Sdn. Bhd. and
Hyper Act Marketing Sdn. Bhd. as at 31 December 2011 and 2012, and the retained
earnings of Gridland Sdn. Bhd., Hyper Act Marketing Sdn. Bhd. and the Company as at
31 December 2013.
Under this method, the Company has been treated as the holding company of Gridland Sdn.
Bhd. and Hyper Act Marketing Sdn. Bhd. for the financial years presented rather than from
the date of completion of the Restructuring Exercise. Accordingly, the consolidated results
of the Group for the respective years include the results of the subsidiaries for the entire
years under review.
Pursuant to this,

Assets, liabilities, reserves, revenue and expense of Gridland Sdn. Bhd. and Hyper Act
Marketing Sdn. Bhd. are consolidated at their existing carrying amounts;

No amount is recognised for goodwill; and

For the purpose of the preparation of the consolidated financial statements, the share
capital as at 31 December 2011 and 2012 represented the issue and paid up share
capital of Gridland Sdn. Bhd. and Hyper Act Marketing Sdn. Bhd. The issued share
capital as at 31 December 2013 represented the share capital of the Company.
A-15

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.6

Functional and foreign currency


The consolidated financial statements are presented in Malaysian Ringgit, which is also the
parent entitys functional currency and the Groups presentation currency. The Group does
not have any foreign operations.
Transactions in foreign currencies are initially recorded in the functional currency at the rate
of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated to the spot
rate of exchange ruling at the reporting date. All differences are taken to profit or loss.

2.7

Property, plant and equipment


All items of property, plant and equipment are initially recorded at cost. Subsequent to
recognition, property, plant and equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses. The cost includes the cost of
replacing part of the property, plant and equipment and borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying property, plant and
equipment. The accounting policy for borrowing costs is set out in Note 2.12. The cost of
an item of property, plant and equipment is recognised as an asset if, and only if, it is
probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably.
When significant parts of property, plant and equipment are required to be replaced in
intervals, the Group recognises such parts as individual assets with specific useful lives and
depreciation, respectively. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in
profit or loss as incurred.
Depreciation is computed on a straight-line basis over the estimated useful lives of the
assets as follows:

Leasehold land

31 to 44 years

Office equipment

10 years

Furniture and fittings

10 years

Renovation

10 years

Motor vehicles

5 years

Water tank and pump

10 years

A-16

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.7

Property, plant and equipment (contd)

Tool and utensil

10 years

Sign board

10 years

Plant and machinery

5 years

The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be
recoverable.
The assets useful life and depreciation method are reviewed at each reporting period and
adjusted prospectively, if appropriate.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss when the asset is derecognised.
2.8

Impairment of non-financial assets


The Group assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset
is required, the Group estimates the assets recoverable amount. An assets recoverable
amount is the higher of an assets or cash-generating units fair value less costs of disposal
and its value in use. Recoverable amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired
and is written down to its recoverable amount.
Impairment losses are recognised in profit or loss in expense categories consistent with the
function of the impaired asset.
An assessment is made at each reporting date to determine whether there is any indication
that previously recognised impairment losses no longer exist or have decreased. If such
indication exists, the Group estimates the assets or cash-generating units recoverable
amount. A previously recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the assets recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the

A-17

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.8

Impairment of non-financial assets (contd)


asset does not exceed its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised in the statement of profit or loss.

2.9

Financial instruments initial recognition and subsequent measurement


A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
(a)

Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition as loans and receivables. There
are no other categories of financial assets. Financial assets are recognised initially at
fair value plus transaction costs that are attributable to the acquisition of the financial
asset.
Subsequent measurement
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. After initial measurement, such
financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method, less impairment. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in interest income in profit or
loss. The losses arising from impairment are recognised in the profit or loss in other
operating expenses.
De-recognition
A financial asset is derecognised when the rights to receive cash flows from the asset
have expired. On de-recognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in profit or loss.

A-18

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.9

Financial instruments initial recognition and subsequent measurement (contd)


(b)

Impairment of financial assets


The Group assesses, at each reporting date, whether there is objective evidence that
a financial asset or a group of financial assets is impaired. An impairment exists if one
or more events that has occurred since the initial recognition of the asset (an incurred
loss event), has an impact on the estimated future cash flows of the financial asset
or the group of financial assets that can be reliably estimated. Evidence of impairment
may include indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganisation and
observable data indicating that there is a measurable decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether
impairment exists individually for financial assets that are individually significant, or
collectively for financial assets that are not individually significant. If the Group
determines that no objective evidence of impairment exists for an individually
assessed financial asset, whether significant or not, it includes the asset in a group of
financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be, recognised are not included in a collective
assessment of impairment.
The amount of any impairment loss identified is measured as the difference between
the assets carrying amount and the present value of estimated future cash flows
(excluding future expected credit losses that have not yet been incurred). The present
value of the estimated future cash flows is discounted at the financial assets original
effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account
and the loss is recognised in profit or loss. Interest income continues to be accrued on
the reduced carrying amount and is accrued using the rate of interest used to discount
the future cash flows for the purpose of measuring the impairment loss. Loans
together with the associated allowance are written off when there is no realistic
prospect of future recovery and all collateral has been realised or has been transferred
to the Group. If, in a subsequent year, the amount of the estimated impairment loss
increases or decreases because of an event occurring after the impairment was

A-19

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.9

Financial instruments initial recognition and subsequent measurement (contd)


(b)

Impairment of financial assets (contd)


Financial assets carried at amortised cost (contd)
recognised, the previously recognised impairment loss is increased or reduced by
adjusting the allowance account. If a write-off is later recovered, the recovery is
credited to other operating expenses in the statement of profit or loss.

(c)

Financial liabilities
Initial recognition and measurement
Financial liabilities are classified at initial recognition as loans and borrowings and
payables, as appropriate. The Group has not designated any financial liabilities upon
initial recognition at fair value through profit or loss. Financial liabilities are recognised
initially at fair value and net of directly attributable transaction costs.
The Groups financial liabilities include other payables, loans and borrowings including
bank overdrafts, term loans and obligations under finance leases.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included as finance costs in profit or loss.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled, or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the
de-recognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of profit
or loss.

A-20

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.9

Financial instruments initial recognition and subsequent measurement (contd)


(d)

Offsetting of financial instruments


Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an intention to settle on a net basis,
to realise the assets and settle the liabilities simultaneously.

2.10 Cash and cash equivalents


Cash and cash equivalents comprise cash at banks and on hand and demand deposits
which are subject to an insignificant risk of changes in value. These also include bank
overdrafts that form an integral part of the Groups cash management.
2.11

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of economic resources will
be required to settle the obligation, the provision is reversed. If the effect of the time value
of money is material, provisions are discounted using a current pre-tax rate that reflects,
where appropriate, the risks specific to the liability. When discounting is used, the increase
in the provision due to the passage of time is recognised as a finance cost.

2.12 Borrowing costs


Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or
sale (a qualifying asset) are capitalised as part of the cost of the respective asset.
Borrowing costs consist of interest and other costs that an entity incurs in connection with
the borrowing of funds.
Where funds are borrowed specifically to finance a project, the amount capitalised
represents the actual borrowing costs incurred. Where surplus funds are available for a
short term from funds borrowed specifically to finance a project, the income generated from
the temporary investment of such amounts is also capitalised and deducted from the total

A-21

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.12 Borrowing costs (contd)


capitalised borrowing cost. Where the funds used to finance a project form part of general
borrowings, the amount capitalised is calculated using a weighted average of rates
applicable to relevant general borrowings of the Group during the period.
All other borrowing costs are recognised in the statement of profit or loss and other
comprehensive income in the period in which they are incurred.
2.13 Employee benefits
Defined contribution plans
The Group makes contributions to the Employees Provident Fund scheme in Malaysia, a
defined contribution pension scheme. Contributions to defined contribution pension
schemes are recognised as an expense in the period in which the related service is
performed.
2.14 Leases
The determination of whether an arrangement is, or contains, a lease is based on the
substance of the arrangement at the inception date. The arrangement is assessed to
determine whether fulfilment of the arrangement is dependent on the use of a specific asset
or assets or the arrangement conveys a right to use the asset or assets, even if that right
is not explicitly specified in an arrangement.
Group as a lessee
Finance leases that transfer substantially all the risks and benefits incidental to ownership
of the leased item to the Group, are capitalised at the commencement of the lease at the
fair value of the leased property or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are recognised as finance costs in profit or loss.

A-22

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.14 Leases (contd)


Group as a lessee (contd)
A leased asset is depreciated over the useful life of the asset. However, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term, the
asset is depreciated over the shorter of the estimated useful life of the asset and the lease
term.
Operating lease payments are recognised as an operating expense in profit or loss on a
straight-line basis over the lease term.
2.15 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Group and the revenue can be reliably measured, regardless of when the payment
is being made. Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment and excluding taxes
or duty. The Group has concluded that it is the principal in all of its revenue arrangements.
The specific recognition criteria described below must also be met before revenue is
recognised:
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, usually on delivery of the goods.
Revenue is not recognised to the extent where there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of goods.
Interest income
Interest income is recognised using the effective interest method.

A-23

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.16 Taxes
(a)

Current income tax


Current income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the Group operates and generates
taxable income.
Current income tax relating to items recognised directly in other comprehensive
income or equity is recognised in equity and not in profit or loss. Management
periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

(b)

Deferred tax
Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except
when the deferred tax liability arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except when the deferred tax asset
relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.

A-24

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.16 Taxes (contd)


(b)

Deferred tax (contd)


Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current income tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation authority.

(c)

Sales tax
Revenue, expenses and assets are recognised net of the amount of sales tax except:

When the sales tax incurred on a purchase of assets or services is not


recoverable from the taxation authority, in which case, the sales tax is recognised
as part of the cost of acquisition of the asset or as part of the expense item, as
applicable; and

Receivables and payables are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the consolidated statement of financial
position.
2.17 Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.
2.18 Exploration and evaluation expenditure
Exploration and evaluation activity involves the search for mineral resources, the
determination of technical feasibility and the assessment of commercial viability of an
identified resource.

A-25

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
2.

Summary of significant accounting policies (contd)

2.18 Exploration and evaluation expenditure (contd)


Exploration and evaluation activity includes:

Researching and analysing historical exploration data

Gathering exploration data through geophysical studies

Exploratory drilling and sampling

Determining and examining the volume and grade of the resource

Surveying transportation and infrastructure requirements

Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are
capitalised and amortised over the term of the permit.
Once the legal right to explore has been acquired, exploration expenditure is charged to
profit or loss as incurred, unless the directors conclude that a future economic benefit is
more likely than not to be realised. These costs include directly attributable employee
remuneration, materials and fuels used, surveying costs, drilling costs and payments made
to contractors.
In evaluating whether the expenditures meet the criteria to be capitalised, several different
sources of information are used. The information that is used to determine the probability
of future benefits depends on the extent of exploration that has been performed.
2.19 Segment reporting
For management purposes, the Group is organised into operating segments based on their
products and services. In 2011 and 2012, the Group was engaged in the business of trading
minerals. The Group ceased the business in trading minerals in the end of 2012 and moving
on to the business of exploration and mining of limestone. In 2013, the Group is in the
business of exploration and mining of limestone representing the only operating segment
for the year. No operating segment was reported as there is no revenue generated for the
year ended 31 December 2013.

A-26

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
3.

Significant accounting judgments and estimates


Judgments made in applying accounting policies and key sources of estimation
uncertainty
No critical judgments were made by management in the process of applying the Groups
accounting policies that have a significant effect on the amounts recognised in the
consolidated financial statements. There are also no key sources of estimation uncertainty
at the end of the reporting date that have a significant risk of causing a material adjustment
to the carrying amount of assets and liabilities within the next financial year.

4.

Revenue
Revenue represents invoiced sales after allowance for goods returned and trade discounts.

5.

Interest income

Interest income from deposits

6.

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

49,475

10,690

26,102

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

346,270

226,045

254,937

1,640

22,808

18,852

79,948

79,742

174,432

427,858

328,595

448,221

Finance costs

Interest expense on:


Term loan
Obligations under finance leases
Bank overdraft

A-27

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
7.

Loss before tax


The following items have been included in arriving at loss before tax:
Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

332,277

448,233

458,259

Director fee

50,000

50,000

Exploration expenditure

653,516

Write-off of plant and equipment

59,920

38,778

343,114

469,383

172,235

205,142

Depreciation of property, plant and


equipment

Employee benefit expense (Note 18)


Operating lease expense

8.

Income tax expense


Major components of income tax expense
The major components of income tax expense for the years ended 31 December 2011, 2012
and 2013 are:
Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

Current income tax


Current taxation
Under provision in respect of prior year

29,777

12,907

29,777

12,907

7,471

(7,471)

7,471

(7,471)

37,248

5,436

Deferred income tax


Origination and reversal of temporary
differences

Income tax expense recognised in


profit or loss

A-28

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
8.

Income tax expense (contd)


Relationship between tax expense and loss before tax
A reconciliation between tax expense and the product of loss before tax multiplied by the
applicable corporate tax rate for the years ended 31 December 2011, 2012 and 2013 is as
follows:
Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

(352,441)

(1,569,153)

(2,341,724)

(88,110)

(392,288)

(585,431)

125,358

147,578

500,282

Deferred tax assets not recognised

237,239

85,149

Under provision in respect of previous year

12,907

37,248

5,436

Loss before tax


Tax at applicable tax rate
Adjustments:
Non-deductible expenses

Income tax expense recognised in


profit or loss

Unrecognised tax losses


At the end of the reporting period, the Group has tax losses of approximately MYR
1,342,484 (2012: MYR 1,075,237, 2011: nil) that are available for offset against future
taxable profit of the Company in which the losses arose, for which no deferred tax asset is
recognised due to uncertainty of its recoverability. The use of these tax losses is subject to
the agreement of the tax authority and compliance with certain provisions of the tax
legislation of the country in which the Company operates.
9.

Loss per share


Loss per share was calculated by dividing the Groups loss for the year attributable to
owners of the Company for the respective years by the pre-invitation share capital of the
Company. For illustrative purposes, the Companys pre-invitation share capital of 200
shares was assumed to be in issue throughout the entire years presented on the
assumption that the Restructuring Exercise had been completed on 1 January 2011.
Diluted loss per share is the same as basic loss per share as there were no potential dilutive
ordinary shares existing during the respective years.

A-29

A-30

10.

5,226,520
53,889

5,280,409
152,348

5,432,757
4,459,351

9,892,108

Group
Cost:
At 1 January 2011
Additions

At 31 December 2011
and 1 January 2012
Additions
Disposals

At 31 December 2012
and 1 January 2013
Additions
Write-off

At 31 December 2013

34,004

32,574
1,430

12,655
19,919

12,655

Leasehold
Office
land
equipment
MYR
MYR

Property, plant and equipment

41,172

36,622
4,550

25,035
11,587

25,035

20,607

20,607

20,607

20,607

Furniture
and
fittings Renovation
MYR
MYR

Notes to the consolidated financial statements


For the financial years ended 31 December 2011, 2012 and 2013

GCCP Resources Limited and its subsidiaries

617,961

617,961

102,786
617,961
(102,786)

102,786

Motor
vehicles
MYR

1,940

67,640

(65,700)

67,640

67,640

Water tank
and pump
MYR

9,200

(9,200)

9,200

9,200

Tool and
utensil
MYR

500

500

500

Sign
board
MYR

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013

6,217,861
4,660,331
(74,900)

5,518,332
802,315
(102,786)

5,226,520
291,812

Total
MYR

195,000 10,803,292

195,000

Plant
and
machinery
MYR

A-31

10.

295,100
298,469

593,569
308,159

901,728
286,628

1,188,356

4,686,840

4,531,029

8,703,752

Group
Accumulated depreciation:
At 1 January 2011
Charge for the year

At 31 December 2011
and 1 January 2012
Charge for the year
Disposals

At 31 December 2012
and 1 January 2013
Charge for the year
Write-off

At 31 December 2013

Net carrying amount:


At 31 December 2011

At 31 December 2012

At 31 December 2013

26,081

28,051

11,389

7,923

4,523
3,400

1,266
3,257

1,266

Leasehold
Office
land
equipment
MYR
MYR

Property, plant and equipment (contd)

32,166

30,951

22,794

9,006

5,671
3,335

2,241
3,430

2,241

14,425

16,486

18,547

6,182

4,121
2,061

2,060
2,061

2,060

Furniture
and
fittings Renovation
MYR
MYR

Notes to the consolidated financial statements


For the financial years ended 31 December 2011, 2012 and 2013

GCCP Resources Limited and its subsidiaries

370,778

494,369

82,229

247,183

123,592
123,591

20,557
123,592
(20,557)

20,557

Motor
vehicles
MYR

1,358

54,112

60,876

582

13,528
194
(13,140)

6,764
6,764

6,764

Water tank
and pump
MYR

7,360

8,280

1,840

(1,840)

920
920

920

Tool and
utensil
MYR

400

450

100

50
50

50

Sign
board
MYR

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013

156,000

39,000

39,000

Plant
and
machinery
MYR

9,304,960

5,162,808

4,890,955

1,498,332

1,055,053
458,259
(14,980)

627,377
448,233
(20,557)

295,100
332,277

Total
MYR

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
10.

Property, plant and equipment (contd)


Assets held under finance leases
During the financial years ended 31 December 2011 and 2012, the Group acquired motor
vehicles with an aggregate cost of MYR102,786 and MYR617,961 respectively by means of
finance leases. The cash outflow on acquisition of property, plant and equipment amount to
MYR196,812, MYR271,315 and MYR4,660,331 for the financial years ended 31 December
2011, 2012 and 2013 respectively.
The carrying amount of motor vehicles held under finance leases at 31 December 2011,
2012 and 2013 were MYR82,229, MYR494,369 and MYR370,778 respectively.
Leased assets are pledged as security for the related finance lease liabilities.
Assets pledged as security
In addition to assets held under finance leases, the Groups leasehold land with a carrying
amount of MYR4,686,840, MYR4,531,029 and MYR8,703,752 as at 31 December 2011,
2012 and 2013 respectively, are mortgaged to secure the Groups bank loans.

11.

Trade and other receivables


2011
MYR

2012
MYR

2013
MYR

Trade receivables

438,724

Other receivables

7,294

Amounts due from related companies

1,002,617

723,540

5,765

Amounts due from directors

3,328,282

717,502

911,900

44,300

4,769,623

2,352,942

57,359

3,234

3,623

149,926

363,747

621,938

833,245

5,136,604

2,978,503

1,040,530

Deposits
Total trade and other receivables
Add:
Cash at banks and on hand (Note 13)
Pledged deposits (Note 12)
Total loans and receivables

A-32

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
11.

Trade and other receivables (contd)


Trade receivables
Trade receivables are non-interest bearing and are generally on 30 days terms. They are
recognised at their original invoice amounts which represent their fair value on initial
recognition.
Amounts due from related companies
Amounts due from related companies are non-trade related, unsecured, non-interest
bearing, repayable upon demand and are to be settled in cash.
Amounts due from directors
Amounts due from directors are non-trade related, unsecured, non-interest bearing,
repayable upon demand and are to be settled in cash.

12.

Pledged deposits
Pledged deposits are short-term deposits made for varying periods of between one month
and twelve months, and earn interests at the respective short-term deposit rates.

13.

Cash at banks and on hand


Cash at banks earns interest at floating rates based on daily bank deposit rates.
Cash at banks and on hand denominated in foreign currencies at 31 December are as
follows:
2011
MYR

Singapore Dollar
United States Dollar

2012
MYR

2013
MYR
9,598
3,439

For the purpose of the consolidated statements of cash flows, cash and cash equivalents
comprise the following at the end of the reporting period:

Cash at banks and on hand


Bank overdrafts (Note 15)

2011
MYR
3,234
(738,728)

2012
MYR
3,623
(2,065,762)

2013
MYR
149,926
(2,059,120)

Cash and cash equivalents

(735,494)

(2,062,139)

(1,909,194)

A-33

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
14.

Other payables

Other payables
Amounts due to directors
Amounts due to shareholders

2011
MYR
91,745
12,017

2012
MYR
138,240
12,017

2013
MYR
838,877
8,472,134
2,360,000

Total other payables


Add:
Accrued operating expenses
Loans and borrowings (Note 15)

103,762

150,257

11,671,011

27,432
4,828,176

17,169
4,518,345

181,862
5,868,112

Total financial liabilities carried at


amortised cost

4,959,370

4,685,771

17,720,985

Amounts due to directors


Amounts due to directors are non-trade related, unsecured, non-interest bearing, repayable
upon demand and are to be settled in cash.
Amount due to shareholders
Amounts due to shareholders are non-trade related, unsecured, non-interest bearing,
repayable upon demand and are to be settled in cash.
15.

Loans and borrowings


2011
MYR

2012
MYR

2013
MYR

17,329

100,236

104,877

MYR loan at BLR + 2.25% per annum (3)

4,000,000

2,000,000

1,972,593

(4)

295,726

738,728

2,065,762

2,059,120

4,756,057

4,165,998

4,432,316

Current:
Obligations under finance leases (1)
(Note 21)
Term loans:

MYR loan at BLR + 1.00% per annum


Bank overdrafts

(2)

A-34

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
15.

Loans and borrowings (contd)


2011
MYR

2012
MYR

2013
MYR

72,119

352,347

256,016

1,179,780

72,119

352,347

1,435,796

4,828,176

4,518,345

5,868,112

Non-current:
Obligations under finance leases (1)
(Note 21)
Term loan:
MYR loan at BLR + 1.00% per annum (4)

Total loans and borrowings


(1)

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 10). The discount
rate implicit in the leases ranges from 4.50% to 5.11% (2012: 4.60% to 5.21%, 2011: 5.28%
to 5.31%) per annum. These obligations are denominated in MYR.
(2)

Bank overdrafts

Bank overdrafts are denominated in MYR, bear interest at 8.85% (2012: 8.85%, 2011:
8.85%) per annum and are secured by a first party first and second legal charge on the
leasehold quarry lands as disclosed in Note 10, charge on pledged deposits as disclosed
in Note 12, and jointly and severally guaranteed by the directors of the Group.
(3)

MYR loan at BLR + 2.25% per annum

The loan is secured by a first party first and second legal charge on the leasehold quarry
lands as disclosed in Note 10, charge on pledged deposits as disclosed in Note 12, and
jointly and severally guaranteed by the directors of the Group.
(4)

MYR loan at BLR + 1.00% per annum

The loan is secured by a third party second legal charge on a freehold residential land with
a 2-storey bungalow held by a director of the Group.

A-35

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
16.

Deferred tax liabilities

Differences in depreciation for tax purpose

17.

2011
MYR

2012
MYR

2013
MYR

7,471

Share capital
2011
Number of
shares
Issued and fully
paid ordinary
shares
At 1 January
Issuance of shares
pursuant to
Restructuring
Exercise
Adjustment arising
from the
Restructuring
Exercise
At 31 December

2012
Number of
shares

MYR

2013
Number of
shares

MYR

MYR

5,000,002

5,000,002

5,000,002

5,000,002

5,000,002

5,000,002

200

645

5,000,002

5,000,002

5,000,002

5,000,002

(5,000,002) (5,000,002)
200

645

Pursuant to the Restructuring Exercise disclosed in Note 1.2, the Company acquired the
entire equity in Gridland Sdn. Bhd. and Hyper Act Marketing Sdn. Bhd. for MYR5,000,000
and MYR2 respectively.
The holders of ordinary shares are entitled to receive dividends as and when declared by
the Company. All ordinary shares carry one vote per share without restrictions.
18.

Employee benefits

Employee benefits expense:


Salaries and bonuses
Employees Provident Fund
Social Security Organisation (SOCSO)

A-36

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

34,738
3,581
459

306,866
33,183
3,065

417,180
47,387
4,816

38,778

343,114

469,383

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
19.

Related party transactions


(a)

Purchase of goods
In addition to the related party information disclosed elsewhere in the consolidated
financial statements, the following significant transactions between the Group and
related parties took place during the financial years on terms agreed between the
parties during the financial year:

Purchases from a director related


company

(b)

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

1,513,798

5,651,188

Year ended
31.12.11
MYR

Year ended
31.12.12
MYR

Year ended
31.12.13
MYR

50,000

50,000

Compensation of key management personnel

Director fee

20.

Year ended
31.12.11
MYR

Commitments
(a)

Capital commitments
Capital expenditure contracted for as at the end of the reporting period but not
recognised in the consolidated financial statements are as follows:

Capital commitments in respect of


property, plant and equipment

2011
MYR

2012
MYR

2013
MYR

3,596,200

As at 31 December 2013, the Company made prepayment amounted to


MYR3,482,000 for the purchase of leasehold land, building and plant and machinery.

A-37

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
20.

Commitments (contd)
(b)

Operating lease commitments as lessee


The Group has entered into commercial leases for the rental of office premises and
employees accommodations. These leases have an average life of between 2 and
9 months (2012: 9 and 14 months, 2011: Nil months). There are no restrictions placed
upon the Group by entering into these leases. Future minimum rentals payable under
non-cancellable operating leases at the end of the reporting are as follows:
2011
MYR

Not later than one year


Later than one year but not
later than five years

(c)

2012
MYR
36,900

2013
MYR
5,400

900

37,800

5,400

Finance lease commitments


The Group has finance leases for certain items of motor vehicles. Future minimum
lease payments under finance leases together with the present value of the net
minimum lease payments are as follows:
2011
2012
2013
Present
Present
Present
value of
Minimum
value of
Minimum
value of
Minimum
payments
lease
payments
lease
payments
lease
payments (Note 15) payments (Note 15) payments (Note 15)
MYR
MYR
MYR
MYR
MYR
MYR
Not later than
one year
Later than one
year but not later
than five years
Total minimum
lease payments
Less: Amounts
representing
finance charges
Present value of
minimum lease
payments

21,576

17,329

119,088

100,236

119,088

104,877

79,057

72,119

378,646

352,347

269,482

256,016

100,633

89,448

497,734

452,583

388,570

360,893

(11,185)

89,448

89,448

A-38

(45,151)

452,583

452,583

(27,677)

360,893

360,893

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
21.

Fair value of assets and liabilities


(a)

Fair value hierarchy


The Group categorises fair value measurements using a fair value hierarchy that is
dependent on the valuation inputs used as follows:
Level 1 Quoted prices (unadjusted) in active market for identical assets or liabilities
that the Group can access at the measurement date,
Level 2 Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly, and
Level 3 Unobservable inputs for the asset or liability.
Fair value measurements that use inputs of different hierarchy levels are categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.

(b)

Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not a reasonable approximation of fair value
The fair value of financial assets and liabilities by classes that are not carried at fair
value and whose carrying amounts are not reasonable approximation of fair value are
as follows:
2011

2012

Carrying
amount
MYR

Fair
value
(Level 3)
MYR

72,119

79,057

2013

Carrying
amount
MYR

Fair
value
(Level 3)
MYR

Carrying
amount
MYR

Fair
value
(Level 3)
MYR

352,347

378,646

256,016

269,482

Financial
liabilities
Loans and
borrowings
(non-current)
Obligations
under finance
leases

The obligations under finance leases have been categorised as Level 3 significant
unobservable inputs under the fair value hierarchy.

A-39

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
21.

Fair value of assets and liabilities (contd)


(b)

Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not a reasonable approximation of fair value
(contd)

Valuation
technique
Discounted
cashflow

Obligations under finance leases

Significant
unobservable
input
Discount rate

Determination of fair value


The fair value of the financial lease obligations has been determined using discounted
estimated cash flow. The discount rates used are the current incremental lending rates
for similar types of leasing arrangements.
22.

Financial risk management objectives and policies


The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risk is liquidity risk. The board of directors reviews and
agrees policies and procedures for the management of these risks. It is, and has been
throughout the years under review, the Groups policy that no trading in derivatives for
speculative purposes shall be undertaken. The Group does not apply hedge accounting.
There has been no change to the Groups exposure to this financial risk or the manner in
which it manages and measures the risk.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Groups exposure to liquidity risk arises primarily
from mismatches of the maturities of financial assets and liabilities. The Groups objective
is to maintain a balance between continuity of funding and flexibility through the use of
stand-by credit facilities.
The Groups liquidity risk management policy is to maintain sufficient liquid financial assets
and stand-by credit facilities with various banks. In addition, the Group monitors and
maintains a level of cash and cash equivalents deemed adequate by the management to
finance the Groups operation and mitigate the effect of fluctuations in cash flows.
The Group assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. Access to sources of funding is sufficiently available and debts
maturity within 12 months can be rolled over with existing lenders, if necessary.
A-40

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
22.

Financial risk management objectives and policies (contd)


Liquidity risk (contd)
Analysis of financial instruments by remaining contractual maturities
The table below summarise the maturity profile of the Groups financial assets and liabilities
at the end of the reporting period based on contractual undiscounted repayment
obligations.
One year
or less
MYR

One to
five years
MYR

Total
MYR

2011
Financial assets:
Trade and other receivables
Cash at banks and on hand
Pledged deposits

4,769,623
3,234
363,747

4,769,623
3,234
363,747

Total undiscounted financial assets

5,136,604

5,136,604

Financial liabilities:
Other payables
Accrued operating expenses
Loans and borrowings

103,762
27,432
4,848,208

79,057

103,762
27,432
4,927,265

Total undiscounted financial liabilities

4,979,402

79,057

5,058,459

Total net undiscounted financial


assets/(liabilities)

157,202

(79,057)

78,145

2012
Financial assets:
Trade and other receivables
Cash at banks and on hand
Pledged deposits

2,352,942
3,623
621,938

2,352,942
3,623
621,938

Total undiscounted financial assets

2,978,503

2,978,503

Financial liabilities:
Other payables
Accrued operating expenses
Loans and borrowings

150,257
17,169
4,366,448

378,646

150,257
17,169
4,745,094

Total undiscounted financial liabilities

4,533,874

378,646

4,912,520

(1,555,371)

(378,646)

(1,934,017)

Total net undiscounted financial liabilities

A-41

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
22.

Financial risk management objectives and policies (contd)


Liquidity risk (contd)
Analysis of financial instruments by remaining contractual maturities (contd)
One year
or less
MYR
2013
Financial assets:
Trade and other receivables
Cash at banks and on hand
Pledged deposits

Total
MYR

57,359
149,926
833,245

57,359
149,926
833,245

1,040,530

1,040,530

Financial liabilities:
Other payables
Accrued operating expenses
Loans and borrowings

11,671,011
181,862
4,556,636

1,610,630

11,671,011
181,862
6,167,266

Total undiscounted financial liabilities

16,409,509

1,610,630

18,020,139

(15,368,979)

(1,610,630)

(16,979,609)

Total undiscounted financial assets

Total net undiscounted financial liabilities

23.

One to
five years
MYR

Capital management
The primary objective of the Groups capital management is to ensure that it maintains a
sufficient cash in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes
in economic conditions. To maintain or adjust the capital structure, the Group may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares.
No changes were made in the objectives, policies or processes during the financial years
ended 31 December 2013, 2012 and 2011.
The Groups capital comprises of issued capital add loans and borrowings less
accumulated losses. As at 31 December 2011, 2012 and 2013, the Group has capital of
MYR 9,862,916, MYR 7,978,496 and MYR 1,987,182. The Group manages its capital to
ensure its ability to continue as a going concern and to optimise returns to its shareholders.

A-42

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
24.

Segment information
For management purposes, the Group is organised into business units based on their
products and services, and has two reportable segments as follows:
(i)

Trading

(ii)

Mining

No operating segments have been aggregated to form the above reportable operating
segments.
In 2011 and 2012, the Group was engaged in the business of trading minerals. The Group
ceased the business in trading minerals in the end of 2012 and moving on to the business
of mining of limestone. In 2013, the Group is in the business of exploration and mining of
limestone representing the only operating segment for the year.
Accordingly, in 2011 and 2012 all significant operating decisions are based upon analysis
of Group as one trading segment. The financial results from this segment are equivalent to
the financial statements of the Group as a whole. Total expenditure incurred by the Group
arises in MYR and all of the Groups non-current assets reside in Malaysia. No operating
segment was reported as there is no revenue generated for the year ended 31 December
2013.
Information about major customers
There was no revenue during the financial year ended 31 December 2013 as the Company
has ceased its trading operations. During the financial years ended 31 December 2012 and
2011 revenue from two (2011: one) customers amount to MYR7,668,290 (2011:
MYR2,294,356) arising from sale of iron ore and coal.
25.

Subsequent events
(a)

In January, April and August 2014, the Company entered into Convertible Loan
Agreements for a total aggregate principal amount of Singapore Dollars (S$) 18.8
million each at an interest rate of 16% per annum that converts into ordinary fully paid
shares when the Company receives approval to list on the Singapore Stock Exchange.
The term of the Convertible Loan Agreements is 24 months from the drawdown date.
The holders have the right to demand repayment if the Company does not complete
an initial public offering on the Singapore Stock Exchange after 24 months from the
drawdown date or abort the process for the application of the initial public offering.
On 2 May 2014, one of the convertible loan holders has converted the convertible loan
with nominal value of S$4 million into new ordinary shares of the Company.

A-43

APPENDIX A AUDITED CONSOLIDATED FINANCIAL STATEMENTS


FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
GCCP Resources Limited and its subsidiaries
Notes to the consolidated financial statements
For the financial years ended 31 December 2011, 2012 and 2013
25.

Subsequent events (contd)


(b)

26.

One of its subsidiaries, Gridland Sdn. Bhd. was served with a writ of summons filed on
6 February 2015 by Ujiteknik Geoenviro Sdn Bhd (UGSB), a service provider that
was engaged for the provision of drilling exploration and extraction of limestone
samples for the purposes of preparing the Independent Qualified Persons Report
(UGSB Services). UGSB is claiming for, among others, MYR 321,368 in damages in
relation to sums arising from allegedly unpaid invoices issued in respect of the UGSB
Services, interest accruing from the damages and legal cost.

Authorisation of financial statements for issue


The consolidated financial statements of the Group for the years ended 31 December 2011,
2012 and 2013 were authorised for issue in accordance with a resolution of the directors on
4 March 2015.

A-44

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014

Company Registration No. OI-282405

GCCP Resources Limited and its subsidiaries

Audited interim consolidated financial statements


For the nine-month period ended 30 September 2014

B-1

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
Index

Page

Statement by directors

B-3

Independent auditors report

B-4

Interim consolidated statement of comprehensive income

B-6

Interim consolidated statement of financial position

B-7

Interim consolidated statement of changes in equity

B-8

Interim consolidated statement of cash flows

B-9

Notes to the interim consolidated financial statements

B-2

B-11

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
Statement by directors
We, Loo An Swee and Pang Kim Chon, being two of the directors of GCCP Resources Limited,
do hereby state that, in the opinion of the directors,
(i)

the accompanying interim consolidated statement of financial position, interim consolidated


statement of comprehensive income, interim consolidated statement of changes in equity,
and interim consolidated statement of cash flows together with notes thereto are drawn up
so as to present fairly, the state of affairs of the Group as at 30 September 2014, and the
results of the business, changes in equity and cash flows of the Group for the nine-month
period ended 30 September 2014, and

(ii)

at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.

On behalf of the board of directors:

Loo An Swee
Director

Pang Kim Chon


Director
4 March 2015

B-3

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Independent auditors report on audited interim consolidated financial statements of
GCCP Resources Limited
For the nine-month period ended 30 September 2014
4 March 2015
The Board of Directors
GCCP Resources Limited
Floor 4, Willow House
PO Box 2804
Grand Cayman KY1-1112
Cayman Islands
Dear Sirs
Report on the interim consolidated financial statements
We have audited the accompanying interim consolidated financial statements of GCCP Resources
Limited (the Company) and its subsidiaries (collectively, the Group) set out on pages B-6 to
B-48, which comprise the interim consolidated statement of financial position as at 30 September
2014, and the interim consolidated statement of comprehensive income, interim consolidated
statement of changes in equity and interim consolidated statement of cash flows for the
nine-month period ended 30 September 2014, and a summary of significant accounting policies
and other explanatory information.
Managements responsibility for the interim consolidated financial statements
Management is responsible for the preparation and fair presentation of these interim consolidated
financial statements in accordance with International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these interim consolidated financial statements
based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing.
Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the interim consolidated financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the interim consolidated financial statements. The procedures selected depend on
the auditors judgment, including the assessment of the risks of material misstatement of the
interim consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation and fair
presentation of the interim consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
B-4

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Independent auditors report on audited interim consolidated financial statements of
GCCP Resources Limited
For the nine-month period ended 30 September 2014
Auditors responsibility (contd)
effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the interim consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the interim consolidated financial statements of the Group present fairly, in all
material respects, the financial position of the Group as at 30 September 2014, and of its financial
performance and cash flows for the nine-month period then ended in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.
Other matters
The interim consolidated statement of comprehensive income, interim consolidated statement of
changes in equity and interim consolidated statement of cash flows of the Group for the
nine-month period ended 30 September 2013 were not audited and our opinion does not relate to
the interim consolidated financial statements for that period.
Restriction on Distribution and Use
This report is made solely to you as a body and for the inclusion in the Offer Document to be
issued in relation to the proposed listing of the shares of the Company in connection with the
Companys listing on the Singapore Exchange Securities Trading Limited.

Ernst & Young LLP


Public Accountants and
Chartered Accountants
Singapore
4 March 2015
Partner-in-charge: Adrian Koh

B-5

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Interim consolidated statement of comprehensive income
For the nine-month period ended 30 September 2014

Note

Revenue

Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

432,990

Cost of sales

(344,412)

Gross profit

88,578

13,353

13,225

164,024

Other items of income


Interest income

Foreign exchange gain


Other items of expense
General and administrative expense

(1,275,007)

(8,221,511)

Finance costs

(338,606)

(2,750,102)

Loss before tax

(1,600,260)

(10,705,786)

Income tax expense

Loss for the period, representing total


comprehensive income for the period
attributable to owners of the Company

(1,600,260)

(10,705,786)

Loss per share attributable to owners of


the Company
Basic and diluted loss per share

8,001

The accompanying accounting policies and explanatory notes form an integral part of
the interim consolidated financial statements.

B-6

1,092

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Interim consolidated statement of financial position
As at 30 September 2014
Note

ASSETS
Non-current assets
Property, plant and equipment
Prepayments for property, plant and equipment

30.09.14
MYR
Audited

9,304,960
3,482,000

27,096,756

12,786,960

27,096,756

57,359
11,397
833,245
149,926
1,168

417,950
1,544,332
789,305
1,062,188
18,301,712
2,096

1,053,095

22,117,583

13,840,055

49,214,339

11,671,011
181,862
4,432,316

3,797,519
2,326,109
470,613
20,465,398

16,285,189

27,059,639

(15,232,094)

(4,942,056)

1,435,796

20,722,402

Total liabilities

17,720,985

47,782,041

Net (liabilities)/assets

(3,880,930)

1,432,298

645
(3,881,575)

16,019,659
(14,587,361)

Total (deficit)/equity

(3,880,930)

1,432,298

Total equity and liabilities

13,840,055

49,214,339

Current assets
Inventories
Trade and other receivables
Prepayments
Pledged deposits
Cash at banks and on hand
Income tax recoverable

10

31.12.13
MYR
Audited

11
12
13
14

Total assets
EQUITY AND LIABILITIES
Current liabilities
Other payables
Accrued operating expenses
Loans and borrowings
Derivative financial instruments

15
16
17

Net current liabilities


Non-current liabilities
Loans and borrowings

16

Equity attributable to owners of the Company


Share capital
Accumulated losses

18

The accompanying accounting policies and explanatory notes form an integral part of
the interim consolidated financial statements.

B-7

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Interim consolidated statement of changes in equity
For the nine-month period ended 30 September 2014
Attributable to owners of the Company
Share capital
(Note 18)
MYR

Accumulated
losses
MYR

Total
MYR

Unaudited
Balance as at 1 January 2013
Loss for the period, representing total
comprehensive income for the period
Balance as at 30 September 2013

5,000,002

(1,539,851)

3,460,151

(1,600,260)

(1,600,260)

5,000,002

(3,140,111)

1,859,891

645

(3,881,575)

(3,880,930)

(10,705,786)

(10,705,786)

Audited
Balance as at 1 January 2014
Loss for the period, representing total
comprehensive income for the period
Contributions by owners:
Issuance of new ordinary shares

5,000,000

5,000,000

Conversion of convertible loans

11,019,014

11,019,014

Total transactions with owners in their


capacity as owners

16,019,014

16,019,014

Balance as at 30 September 2014

16,019,659

(14,587,361)

The accompanying accounting policies and explanatory notes form an integral part of
the interim consolidated financial statements.

B-8

1,432,298

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Interim consolidated statement of cash flows
For the nine-month period ended 30 September 2014

Note

Operating activities
Loss before tax, total
Adjustments for:
Depreciation of property, plant and equipment
Write-off of property, plant and equipment
Exploration expenditure
Interest income
Finance costs
Unrealised exchange gain
Total adjustments

Period ended Period ended


30.09.13
30.09.14
MYR
MYR
Unaudited
Audited
(1,600,260)

(10,705,786)

273,068

295,377
(13,353)
338,606

893,698

815,960
1,239
291,120
(13,225)
2,750,102
(164,024)
3,681,172

Operating cash flows before changes in working


capital
Changes in working capital
Increase in trade and other receivables
Increase in inventories
Decrease/(increase) in prepayments
Increase/(decrease) in trade and other payables
(Decrease)/increase in accrued operating expenses
Total changes in working capital

(706,562)

(7,024,614)

(239,690)

3,411
5,059,377
(14,489)
4,808,609

(1,486,973)
(417,950)
(777,908)
(2,873,492)
2,144,247
(3,412,076)

Cash flow used in operations


Exploration expenditure
Interest received
Interest paid
Income taxes refunded

4,102,047
(295,377)
13,353
(338,606)
(1,112)

(10,436,690)
(291,120)
13,225
(134,225)
(928)

Net cash flows from/(used in) operating activities

3,480,305

(10,849,738)

(4,533,109)

(14,870,995)

Net cash flows used in investing activity

(4,533,109)

(14,870,995)

Financing activities
Proceeds from issuance of convertible loans
Proceeds from term loans
Repayment of term loans
Repayment of hire purchase
Placement of pledged deposits

1,650,0000
(86,625)
(64,778)
(178,353)

48,306,137

(2,192,274)
(103,336)
(228,943)

1,320,244

45,781,584

267,440

20,060,851

Investing activity
Purchases of property, plant and equipment

Net cash flows generated from financing activities


Net increase in cash and cash equivalents
Effect of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 30 September

14

B-9

(2,062,139)

150,055
(1,909,194)

(1,794,699)

18,301,712

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Interim consolidated statement of cash flows
For the nine-month period ended 30 September 2014
A.

Purchases of property, plant and equipment


Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

Current period additions to property,


plant and equipment

4,533,109

18,608,995

Less: Proceeds from hire purchase

(256,000)

Less: Prepayments for purchase of property,


plant and equipment

(3,482,000)

4,533,109

14,870,995

Net cash outflow for purchases of property


plant and equipment

The accompanying accounting policies and explanatory notes form an integral part of
the interim consolidated financial statements.

B-10

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
1.

Corporate information

1.1

The Company
The Company was incorporated in Cayman Islands on 1 November 2013 as a company
limited by shares under the name of Ultimate Prime Ventures Limited.
The registered office of the Company is located at Floor 4, Willow House, PO Box 2804,
Grand Cayman KY1-1112, Cayman Islands and the principal place of business of the Group
is located at No 56-2, Jalan PJU 5/21, The Strand Kota Damansara, 47810, Petaling Jaya,
Selangor, Malaysia.
The principal activity of the Company is investment holding. The principal activities of its
subsidiaries are quarry master and sale of related products.
The Company changed its name to GCCP Resources Limited on 10 July 2014.

1.2

The Restructuring Exercise


The Group undertook the transactions described below as part of a corporate
reorganisation implemented in preparation for its listing on the Catalist Board of Singapore
Exchange Securities Trading Limited (The Restructuring Exercise).
The details of the Restructuring Exercise are as follows:
(a)

Incorporation of the Company


The Company was incorporated by the shareholders of Gridland Sdn. Bhd. (GSB)
and Hyper Act Marketing Sdn. Bhd. (HAM) in Cayman Islands on 1 November 2013
as a company limited by shares, with an initial subscriber share capital of USD200, for
the purpose of becoming the holding company of the Group.

(b)

Acquisition of GSB and HAM


In accordance with the terms of a Term Sheet agreement dated 6 December 2013
entered into between the Company and the shareholders of GSB and HAM
(Shareholders), the entire issued share capital of GSB and HAM were transferred
from the Shareholders to the Company for a consideration of MYR5,000,000 and
MYR2 respectively, based on the respective issued share capital of GSB and HAM as
at 3 December 2013.
Pursuant to the completion of the Restructuring Exercise, GSB and HAM became
wholly owned subsidiaries of the Company.

B-11

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies

2.1

Basis of Preparation
Pursuant to the Restructuring Exercise as more fully explained in Note 1.2, the Company
became the holding company of the companies now comprising the Group in December
2013. The companies now comprising the Group were under the common control of the
Controlling Shareholder before and after the Restructuring Exercise. Accordingly, for the
purpose of this report, the Restructuring Exercise has been accounted for by applying the
pooling of interest method of accounting as if the Restructuring Exercise had been
completed on 1 January 2013.
The interim consolidated financial statements for the nine-month period ended 30
September 2014 have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
The interim consolidated financial statements have been prepared on the historical cost
basis except as disclosed in the accounting policies below.
The interim consolidated financial statements are presented in Malaysian Ringgit (MYR)
except when otherwise stated.

2.2

Changes in accounting policies


The accounting policies adopted are consistent throughout the financial period presented.
The Group has adopted all the new and revised standards that are effective for annual
periods beginning on or after 1 January 2014. The adoption of these standards did not have
any effect on the financial performance or position of the Group.

2.3

Standards issued but not yet effective


The Group has not adopted the following standards and interpretations that have been
issued but not yet effective:
Effective date
(annual periods
beginning on or after)

Description
Annual Improvements to IFRS 2010-2012 Cycle
Annual Improvements to IFRS 2011-2013 Cycle
Annual Improvements to IFRS 2012-2014 Cycle
Amendments to IAS 1: Disclosure Initiative
IFRS 15 Revenue from Contracts with Customers
IFRS 9 Financial Instruments

B-12

1
1
1
1

1 July
1 July
January
January
January
January

2014
2014
2016
2016
2017
2018

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.3

Standards issued but not yet effective (contd)


The directors expect that the adoption of the standards above will have no material impact
on the financial statements in the period of initial application except for the following:
IFRS 15 establishes a new five-step model that will apply to revenue arising from contracts
with customers. Under IFRS 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods
or services to a customer. The new revenue standard is applicable to all entities and will
supersede all current revenue recognition requirements under IFRS. Either a full or
modified retrospective application is required for annual periods beginning on or after 1
January 2017 with early adoption permitted. The Group is currently assessing the impact of
IFRS 15 and plans to adopt the new standard on the required effective date.

2.4

Basis of consolidation and business combinations


Basis of consolidation
The interim consolidated financial statements comprise the financial statements of the
Group as at the end of the reporting period. Control is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. Specifically, the Group controls
an investee if, and only if, the Group has all of the following:

Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)

Exposure, or rights, to variable returns from its involvement with the investee

The ability to use its power over the investee to affect its returns

The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and
expenses of a subsidiary acquired or disposed during the period are included in the interim
consolidated statement of profit or loss and other comprehensive income from the date the
Group gains control until the date the Group ceases to control the subsidiary.

B-13

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.4

Basis of consolidation and business combinations (contd)


Basis of consolidation (contd)
Profit or loss and each component of other comprehensive income are attributed to the
equity holders of the parent of the Group. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the
Groups accounting policies. All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.

2.5

Functional and foreign currency


The interim consolidated financial statements are presented in Malaysian Ringgit, which is
also the parent entitys functional currency and the Groups presentation currency. The
Group does not have any foreign operations.
Transactions in foreign currencies are initially recorded in the functional currency at the rate
of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated to the spot
rate of exchange ruling at the reporting date. All differences are taken to profit or loss.

2.6

Property, plant and equipment


All items of property, plant and equipment are initially recorded at cost. Subsequent to
recognition, property, plant and equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses. The cost includes the cost of
replacing part of the property, plant and equipment and borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying property, plant and
equipment. The accounting policy for borrowing costs is set out in Note 2.12. The cost of
an item of property, plant and equipment is recognised as an asset if, and only if, it is
probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably.
When significant parts of property, plant and equipment are required to be replaced in
intervals, the Group recognises such parts as individual assets with specific useful lives and
depreciation, respectively. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in
profit or loss as incurred.

B-14

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.6

Property, plant and equipment (contd)


Depreciation is computed on a straight-line basis over the estimated useful lives of the
assets as follows:

Leasehold land:

31 to 44 years

Building:

10 years

Office equipment:

10 years

Furniture and fittings

10 years

Renovation

10 years

Motor vehicles

5 years

Water tank and pump:

10 years

Tool and utensil:

10 years

Sign board:

10 years

Plant and machinery

5 years

Crusher plant

15 years

The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be
recoverable.
The assets useful life and depreciation method are reviewed at each reporting period and
adjusted prospectively, if appropriate.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss when the asset is derecognised.

B-15

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.7

Impairment of non-financial assets


The Group assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset
is required, the Group estimates the assets recoverable amount. An assets recoverable
amount is the higher of an assets or cash-generating units fair value less costs of disposal
and its value in use. Recoverable amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired
and is written down to its recoverable amount.
Impairment losses are recognised in profit or loss in expense categories consistent with the
function of the impaired asset.
An assessment is made at each reporting date to determine whether there is any indication
that previously recognised impairment losses no longer exist or have decreased. If such
indication exists, the Group estimates the assets or cash-generating units recoverable
amount. A previously recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the assets recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss been recognised for the
asset in prior periods. Such reversal is recognised in the statement of profit or loss.

2.8

Financial instruments initial recognition and subsequent measurement


A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
(a)

Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition as loans and receivables. There
are no other categories of financial assets. Financial assets are recognised initially at
fair value plus transaction costs that are attributable to the acquisition of the financial
asset.

B-16

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.8

Financial instruments initial recognition and subsequent measurement (contd)


(a)

Financial assets (contd)


Subsequent measurement
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. After initial measurement, such
financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method, less impairment. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in interest income in profit or
loss. The losses arising from impairment are recognised in the profit or loss in other
operating expenses.
De-recognition
A financial asset is derecognised when the rights to receive cash flows from the asset
have expired. On de-recognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in profit or loss.

(b)

Impairment of financial assets


The Group assesses, at each reporting date, whether there is objective evidence that
a financial asset or a group of financial assets is impaired. An impairment exists if one
or more events that has occurred since the initial recognition of the asset (an incurred
loss event), has an impact on the estimated future cash flows of the financial asset
or the group of financial assets that can be reliably estimated. Evidence of impairment
may include indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganisation and
observable data indicating that there is a measurable decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with
defaults.

B-17

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.8

Financial instruments initial recognition and subsequent measurement (contd)


(b)

Impairment of financial assets (contd)


Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether
impairment exists individually for financial assets that are individually significant, or
collectively for financial assets that are not individually significant. If the Group
determines that no objective evidence of impairment exists for an individually
assessed financial asset, whether significant or not, it includes the asset in a group of
financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be, recognised are not included in a collective
assessment of impairment.
The amount of any impairment loss identified is measured as the difference between
the assets carrying amount and the present value of estimated future cash flows
(excluding future expected credit losses that have not yet been incurred). The present
value of the estimated future cash flows is discounted at the financial assets original
effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account
and the loss is recognised in profit or loss. Interest income continues to be accrued on
the reduced carrying amount and is accrued using the rate of interest used to discount
the future cash flows for the purpose of measuring the impairment loss. Loans
together with the associated allowance are written off when there is no realistic
prospect of future recovery and all collateral has been realised or has been transferred
to the Group. If, in a subsequent period, the amount of the estimated impairment loss
increases or decreases because of an event occurring after the impairment was
recognised, the previously recognised impairment loss is increased or reduced by
adjusting the allowance account. If a write-off is later recovered, the recovery is
credited to other operating expenses in the statement of profit or loss.

B-18

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.8

Financial instruments initial recognition and subsequent measurement (contd)


(c)

Financial liabilities
Initial recognition and measurement
Financial liabilities are classified at initial recognition as loans and borrowings and
payables, as appropriate. The Group has not designated any financial liabilities upon
initial recognition at fair value through profit or loss. Financial liabilities are recognised
initially at fair value and net of directly attributable transaction costs.
The Groups financial liabilities include other payables, loans and borrowings including
bank overdrafts, term loans and obligations under finance leases.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included as finance costs in profit or loss.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled, or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference
in the respective carrying amounts is recognised in the statement of profit or loss.

(d)

Offsetting of financial instruments


Financial assets and financial liabilities are offset and the net amount is reported in the
interim consolidated statement of financial position if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.

B-19

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.9

Cash and cash equivalents


Cash and cash equivalents comprise cash at banks and on hand and demand deposits
which are subject to an insignificant risk of changes in value. These also include bank
overdrafts that form an integral part of the Groups cash management.

2.10 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of economic resources will
be required to settle the obligation, the provision is reversed. If the effect of the time value
of money is material, provisions are discounted using a current pre-tax rate that reflects,
where appropriate, the risks specific to the liability. When discounting is used, the increase
in the provision due to the passage of time is recognised as a finance cost.
2.11

Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in
bringing the inventories to their present location and condition are accounted for as follows:

Finished goods and work-in-progress: costs of direct materials and labour and a
proportion of manufacturing overheads based on normal operating capacity. These
costs are assigned on a weighted average cost basis.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to
adjust the carrying value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale.
2.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or
sale (a qualifying asset) are capitalised as part of the cost of the respective asset.
Borrowing costs consist of interest and other costs that an entity incurs in connection with
the borrowing of funds.

B-20

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.12 Borrowing costs (contd)


Where funds are borrowed specifically to finance a project, the amount capitalised
represents the actual borrowing costs incurred. Where surplus funds are available for a
short term from funds borrowed specifically to finance a project, the income generated from
the temporary investment of such amounts is also capitalised and deducted from the total
capitalised borrowing cost. Where the funds used to finance a project form part of general
borrowings, the amount capitalised is calculated using a weighted average of rates
applicable to relevant general borrowings of the Group during the period.
All other borrowing costs are recognised in the statement of profit or loss and other
comprehensive income in the period in which they are incurred.
2.13 Employee benefits
Defined contribution plans
The Group makes contributions to the Employees Provident Fund scheme in Malaysia, a
defined contribution pension scheme. Contributions to defined contribution pension
schemes are recognised as an expense in the period in which the related service is
performed.
2.14 Leases
The determination of whether an arrangement is, or contains, a lease is based on the
substance of the arrangement at the inception date. The arrangement is assessed to
determine whether fulfilment of the arrangement is dependent on the use of a specific asset
or assets or the arrangement conveys a right to use the asset or assets, even if that right
is not explicitly specified in an arrangement.
Group as a lessee
Finance leases that transfer substantially all the risks and benefits incidental to ownership
of the leased item to the Group, are capitalised at the commencement of the lease at the
fair value of the leased property or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are recognised as finance costs in profit or loss.

B-21

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.14 Leases (contd)


Group as a lessee (contd)
A leased asset is depreciated over the useful life of the asset. However, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term, the
asset is depreciated over the shorter of the estimated useful life of the asset and the lease
term.
Operating lease payments are recognised as an operating expense in profit or loss on a
straight-line basis over the lease term.
2.15 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Group and the revenue can be reliably measured, regardless of when the payment
is being made. Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment and excluding taxes
or duty. The Group has concluded that it is the principal in all of its revenue arrangements.
The specific recognition criteria described below must also be met before revenue is
recognised:
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, usually on delivery of the goods.
Revenue is not recognised to the extent where there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of goods.
Interest income
Interest income is recognised using the effective interest method.
2.16 Taxes
(a)

Current income tax


Current income tax assets and liabilities for the current period are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the Group operates and generates
taxable income.

B-22

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.16 Taxes (contd)


(a)

Current income tax (contd)


Current income tax relating to items recognised directly in other comprehensive
income or equity is recognised in equity and not in profit or loss. Management
periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

(b)

Deferred tax
Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except
when the deferred tax liability arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except when the deferred tax asset
relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.

B-23

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.16 Taxes (contd)


(b)

Deferred tax (contd)


Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the period when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the reporting
period.
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current income tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation authority.

(c) Sales tax


Revenue, expenses and assets are recognised net of the amount of sales tax except:

When the sales tax incurred on a purchase of assets or services is not


recoverable from the taxation authority, in which case, the sales tax is recognised
as part of the cost of acquisition of the asset or as part of the expense item, as
applicable; and

Receivables and payables are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the interim consolidated statement of
financial position.
2.17 Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.

B-24

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
2.

Summary of significant accounting policies (contd)

2.18 Exploration and evaluation expenditure


Exploration and evaluation activity involves the search for mineral resources, the
determination of technical feasibility and the assessment of commercial viability of an
identified resource.
Exploration and evaluation activity includes:

Researching and analysing historical exploration data

Gathering exploration data through geophysical studies

Exploratory drilling and sampling

Determining and examining the volume and grade of the resource

Surveying transportation and infrastructure requirements

Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are
capitalised and amortised over the term of the permit.
Once the legal right to explore has been acquired, exploration expenditure is charged to
profit or loss as incurred, unless the directors conclude that a future economic benefit is
more likely than not to be realised. These costs include directly attributable employee
remuneration, materials and fuels used, surveying costs, drilling costs and payments made
to contractors.
In evaluating whether the expenditures meet the criteria to be capitalised, several different
sources of information are used. The information that is used to determine the probability
of future benefits depends on the extent of exploration that has been performed.
2.19 Segment reporting
For management purposes, the Group is organised into one main operating segment, which
involves exploration for limestone. All of the Groups activities are interrelated, and discrete
financial information is reported to the Board as a single segment.
Accordingly, all significant operating decisions are based upon analysis of the Group as one
segment. The financial results from this segment are equivalent to the financial statements
of the Group as a whole. Total expenditure incurred by the Group arises in Malaysia Ringgit
(MYR) and all of the Groups non-current assets reside in Malaysia.
B-25

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
3.

Significant accounting judgments and estimates


Judgments made in applying accounting policies and key sources of estimation
uncertainty
No critical judgments were made by management in the process of applying the Groups
accounting policies that have a significant effect on the amounts recognised in the interim
consolidated financial statements. There are also no key sources of estimation uncertainty
at the end of the reporting date that have a significant risk of causing a material adjustment
to the carrying amount of assets and liabilities within the next financial period.

4.

Revenue
Revenue represents invoiced sales after allowance for goods returned and trade discounts.

5.

Interest income

Interest income from deposits

6.

Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

13,353

13,225

Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

Finance costs

Interest expense on:


Term loan
Obligations under finance leases
Bank overdraft
Convertible loan

B-26

180,181

70,756

29,228

15,972

129,197

47,497

2,615,877

338,606

2,750,102

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
7.

Loss before tax


The following items have been included in arriving at loss before tax:
Period ended
30.09.13
MYR
Unaudited
Depreciation of property, plant and equipment

273,068

815,960

Exploration expenditure

295,377

291,120

50,000

10,000

270,000

399,415

1,061,902

344,412

155,442

101,884

4,223,870

Director fee
Director remuneration
Employee benefits expense (Note 19)
Inventories recognised as an expense in cost of
sales (Note 11)
Operating lease expense
Initial public offering expenses

8.

Period ended
30.09.14
MYR
Audited

Income tax expense


Relationship between tax expense and loss before tax
A reconciliation between tax expense and the product of loss before tax multiplied by the
applicable corporate tax rate for the nine-month period ended 30 September 2014 and 2013
is as follows:
Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

(1,600,260)

(10,705,786)

(316,392)

(714,650)

Non-deductible expenses

124,647

164,965

Deferred tax assets not recognised

191,745

549,685

Loss before tax


Tax at applicable tax rate
Adjustments:

Income tax expense recognised in profit or loss

B-27

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
8.

Income tax expense (contd)


Relationship between tax expense and loss before tax (contd)
Unrecognised tax losses
At the end of the reporting period, the Group has tax losses of approximately MYR
3,165,000 (As at 30 September 2013: MYR 1,843,000) that are available for offset against
future taxable profit of the company in which the losses arose, for which no deferred tax
asset is recognised due to uncertainty of its recoverability. The use of these tax losses is
subject to the agreement of the tax authority and compliance with certain provisions of the
tax legislation of the country in which the company operates.

9.

Loss per share


Loss per share was calculated by dividing the Groups loss for the nine-month period ended
30 September 2014 attributable to owners of the Company by the weighted average
pre-invitation share capital of 9,801 shares.
For illustrative purposes, as at 30 September 2013, 200 shares were assumed to be issued
throughout the entire periods presented on the assumption that the Restructuring Exercise
had been completed on 1 January 2013.
The calculation of diluted loss per share amounts is based on the loss for the period
attributable to equity holder of the Company, adjusted to reflect the interest on convertible
loans and the fair value gain/loss on the derivative component of the convertible loans,
where applicable.
No adjustment has been made to the basic loss per share amounts presented for the
nine-month period ended 30 September 2014 in respect of a dilution as the impact of the
convertible loans outstanding had an anti-dilutive effect on the basic loss per share
amounts presented.

B-28

10.

1,188,356

8,703,752

At 31 December 2013

Net carrying amount:


At 31 December 2013

901,728
286,628

9,892,108

At 31 December 2013

Accumulated depreciation:
At 1 January 2013
Charge for the year
Write-off

5,432,757
4,459,351

Audited
Group
Cost:
At 1 January 2013
Additions
Write-off

26,081

7,923

4,523
3,400

34,004

32,574
1,430

Leasehold
Office
land
equipment
MYR
MYR

Property, plant and equipment

Notes to the interim consolidated financial statements


For the nine-month period ended 30 September 2014

GCCP Resources Limited and its subsidiaries

32,166

9,006

5,671
3,335

41,172

36,622
4,550

B-29

14,425

6,182

4,121
2,061

20,607

20,607

Furniture
and
fittings
Renovation
MYR
MYR

370,778

247,183

123,592
123,591

617,961

617,961

Motor
vehicles
MYR

1,358

582

13,528
194
(13,140)

1,940

67,640

(65,700)

Water tank
and pump
MYR

1,840

(1,840)

9,200

(9,200)

Tool and
utensil
MYR

400

100

50
50

500

500

Sign
board
MYR

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014

156,000

39,000

39,000

195,000

195,000

Plant and
machinery
MYR

9,304,960

1,498,332

1,055,053
458,259
(14,980)

10,803,292

6,217,861
4,660,331
(74,900)

Total
MYR

10.

At 30 September 2014

Net carrying amount:

At 30 September 2014

Write-off

Charge for the period

At 1 January 2014

18,635,777

1,518,519

330,163

1,188,356

Accumulated depreciation:

20,154,296

Write-off

At 30 September 2014

10,262,188

9,892,108

165,393

5,607

5,607

171,000

171,000

MYR

MYR

Additions

At 1 January 2014

Cost:

Group

Audited

Building

Leasehold
land

27,186

9,648

(191)

1,916

7,923

36,834

(1,430)

4,260

34,004

MYR

Office
equipment

Property, plant and equipment (contd)

Notes to the interim consolidated financial statements


For the nine-month period ended 30 September 2014

GCCP Resources Limited and its subsidiaries

29,560

12,892

3,886

9,006

42,452

1,280

41,172

MYR

Furniture
and
fittings

B-30

19,177

7,780

1,598

6,182

26,957

6,350

20,607

MYR

Renovation

855,971

399,943

152,760

247,183

1,255,914

637,953

617,961

MYR

Motor
vehicles

504

1,436

854

582

1,940

1,940

MYR

Water
tank and
pump

17,000

17,000

17,000

MYR

Tool and
utensil

362

138

38

100

500

500

MYR

Sign
board

1,374,412

222,424

183,424

39,000

1,596,836

1,401,836

195,000

MYR

Plant and
machinery

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014

5,971,414

135,714

135,714

6,107,128

6,107,128

MYR

Crusher
plant

27,096,756

2,314,101

(191)

815,960

1,498,332

29,410,857

(1,430)

18,608,995

10,803,292

MYR

Total

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
10.

Property, plant and equipment (contd)


Assets held under finance leases
During the period ended 30 September 2014, the Group acquired motor vehicles with an
aggregate cost of MYR256,000 (31.12.13: nil) by means of finance leases. The cash
outflow on acquisition of property, plant and equipment amount to MYR14,870,995
(31.12.13: MYR4,660,331) for the period ended 30 September 2014.
The carrying amount of motor vehicles held under finance leases at the end of the interim
period 30 September 2014 were MYR557,554 (31.12.13: MYR370,778).
Leased assets are pledged as security for the related finance lease liabilities.
Assets pledged as security
In addition to assets held under finance leases, the Groups leasehold land with a carrying
amount of MYR8,703,752 as at 31 December 2013 are mortgaged to secure the Groups
bank loans. The leasehold land was subsequently discharged from the mortgage when the
bank loan was fully repaid during the period ended 30 September 2014.

11.

Inventories
30.09.14
MYR
Audited
Interim consolidated statement of financial position:
Work-in-progress (at cost)

59,429

Finished goods (at cost)

358,521
417,950

Interim consolidated statement of comprehensive income


Inventories recognised as an expense in cost of sales

B-31

344,412

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
12.

Trade and other receivables


31.12.13
MYR
Audited

30.09.14
MYR
Audited

Trade receivables

235,283

Other receivables

7,294

28,453

642,500

5,765

Deposits

44,300

638,096

Total trade and other receivables

57,359

1,544,332

Pledged deposits (Note 13)

833,245

1,062,188

Cash at banks and on hand (Note 14)

149,926

18,301,712

1,040,530

20,908,232

Amount due from convertible loan holder


Amounts due from related companies

Add:

Total loans and receivables

Trade receivables
Trade receivables are non-interest bearing and are generally on 30 days terms. They are
recognised at their original invoice amounts which represent their fair value on initial
recognition.
Amount due from convertible loan holder
In August 2014, the Company entered into Convertible Loan Agreements for a total
aggregate principal amount of Singapore Dollars (S$) 8.8 million at an interest rate of 16%
per annum that converts into ordinary fully paid shares when the Company receives
approval to list on the Singapore Stock Exchange.
As at the end of the reporting period, an amount of S$250,000 remained outstanding by one
of the convertible loan holder. The amount was fully settled subsequent to the period end.

B-32

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
12.

Trade and other receivables (contd)


Receivables that are past due but not impaired
The Group has trade receivables amounting to $62,076 that are past due at the end of
reporting period but not impaired. These receivables are unsecured and the analysis of their
aging at the end of reporting period is as follows:
30.09.14
MYR
Audited
Trade receivables past due but not impaired:
Less than 30 days

62,076

Receivables that are impaired


During the financial period ended 30 September 2014, there has been no impairment loss
on trade receivables or trade receivables written off.
13.

Pledged deposits
Pledged deposits are made for varying periods of between one month and twelve months,
and earn interests at the respective short-term deposit rates.

14.

Cash at banks and on hand


Cash at banks earns interest at floating rates based on daily bank deposit rates.
Cash at banks and on hand denominated in foreign currencies at 31 December 2013 and
30 September 2014 are as follows:
31.12.13
MYR
Audited

30.09.14
MYR
Audited

Singapore Dollar

9,598

16,473,831

United States Dollar

3,439

3,440

B-33

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
14.

Cash at banks and on hand (contd)


For the purpose of the interim consolidated statement of cash flows, cash and cash
equivalents comprise the following at the end of the reporting period:
31.12.13
MYR
Audited
Cash at banks and on hand

15.

149,926

30.09.14
MYR
Audited
18,301,712

Bank overdrafts (Note 16)

(2,059,120)

Cash and cash equivalents

(1,909,194)

18,301,712

31.12.13
MYR
Audited

30.09.14
MYR
Audited

Trade and other payables

Other payables

838,877

2,196,499

Amounts due to directors

8,472,134

1,601,020

Amounts due to shareholders

2,360,000

Total trade and other payables

11,671,011

3,797,519

181,862

2,326,109

5,868,112

21,193,015

17,720,985

27,316,643

Add:
Accrued operating expenses
Loans and borrowings (Note 16)
Total financial liabilities carried at amortised cost

Trade payables
These amounts are non-interest bearing and generally settled on 30 to 60-day terms.
Amounts due to directors
Amounts due to directors are non-trade related, unsecured, non-interest bearing, repayable
upon demand and are to be settled in cash.

B-34

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
16.

Loans and borrowings


31.12.13
MYR
Audited
Current:
Obligations under finance leases (1)
Term loans:
MYR loan at BLR + 2.25% per annum (3)
MYR loan at BLR + 1.00% per annum (4)
Bank overdrafts (2)

Non-current:
Obligations under finance leases (1)
Term loan:
MYR loan at BLR + 1.00% per annum (4)
Convertible loans (5)

Total loans and borrowings


(1)

30.09.14
MYR
Audited

104,877

157,598

1,972,593
295,726
2,059,120

313,016

4,432,316

470,613

256,016

355,959

1,179,780

942,810
19,423,633

1,435,796

20,722,402

5,868,112

21,193,015

Obligations under finance leases


These obligations are secured by a charge over the leased assets (Note 10). The
discount rate implicit in the leases ranges from 4.42% to 4.99% (31.12.13: 4.50% to
5.11%) per annum. These obligations are denominated in MYR.

(2)

Bank overdrafts
Bank overdrafts are denominated in MYR, bear interest at 8.85% per annum and are
secured by a first party first and second legal charge on the leasehold quarry lands as
disclosed in Note 10, charge on pledged deposits as disclosed in Note 13, and jointly
and severally guaranteed by the directors of the Group.

(3)

MYR loan at BLR + 2.25% per annum


The loan is secured by a first party first and second legal charge on the leasehold
quarry lands as disclosed in Note 10, charge on pledged deposits as disclosed in Note
13, and jointly and severally guaranteed by the directors of the Group.

(4)

MYR loan at BLR + 1.00% per annum


The loan is secured by a third party second legal charge on a freehold residential land
with a 2-storey bungalow held by a director of the Group.

B-35

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
16.

Loans and borrowings (contd)


(5)

Convertible loans
In January and April 2014, the Company entered into Convertible Loan Agreements for
a principal amount of Singapore Dollars (S$) 5 million each at an interest rate of 16%
per annum that converts into ordinary fully paid shares when the Company receives
approval to list on the Singapore Stock Exchange. The term of the Convertible Loan
Agreements is 24 months from the drawdown date. The holders have the right to
demand repayment if the Company does not complete an initial public offering on the
Singapore Stock Exchange after 24 months from the drawdown date or abort the
process for the application of the initial public offering.
In August 2014, the Company entered into another Convertible Loan Agreements for
a total aggregate principal amount of Singapore Dollars (S$) 8.8 million at an interest
rate of 16% per annum that converts into ordinary fully paid shares when the Company
receives approval to list on the Singapore Stock Exchange. The term of the
Convertible Loan Agreements is 24 months from the drawdown date. The holders have
the right to demand repayment if the Company does not complete an initial public
offering on the Singapore Stock Exchange after 24 months from the drawdown date or
abort the process for the application of the initial public offering.
The Convertible loans are extended to the Company on the condition that pledge
documents are duly executed by the Company. The Company shall pledge its shares
in GSB and HAM to the convertible loan holders as security for the fulfilment of the
Companys obligations to the loan holders. The pledge documents contain a term to
the effect that the pledge shall be discharged within seven business days of the
conversion or the repayment of all outstanding payments under the convertible loan
agreements.
As at 30 September 2014, part of a convertible loan with nominal value of S$4 million
have been converted into new ordinary shares of the Company.
The carrying amount of the liability component of the convertible loan at the statement
of financial position date is arrived at as follows:
30.09.14
MYR
Audited
Face value of convertible loans
Fair value of derivative financial instruments at the date of
drawdown (Note 17)

(20,465,398)

Liability component of convertible loan at initial recognition


Interest expense recognised during the financial period
Exchange loss

16,821,725
2,615,877
(13,969)

Liability component of convertible loan at period end

19,423,633

B-36

37,287,123

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
17.

Derivative financial instruments


30.09.14
MYR
Audited
Derivative financial instrument at initial recognition

20,465,398

Fair value adjustment

Derivative financial instrument at period end

20,465,398

Derivative component of the convertible loan relates to the investors right to convert into
ordinary fully paid shares at a conversion price which ranges from 50% to 65% of the target
valuation of S$200 million divided by the number of shares prior to conversion.
The fair value of the derivative financial instrument as at 30 September 2014 approximates
the value at initial recognition, hence no fair value adjustments is made.
18.

Share capital
31.12.13
Number of
shares
MYR
Audited
Audited

30.09.14
Number of
shares
MYR
Audited
Audited

Issued and fully paid ordinary


shares
At 1 January
Issuance of shares pursuant to
Restructuring Exercise
Adjustment arising from the
Restructuring Exercise

5,000,002

5,000,002

200

645

200

645

(5,000,002)

(5,000,002)

200

645

200

645

9,400

645

Issuance of new ordinary shares

200

5,000,000

(2)

400

11,019,014

200

645

10,000

16,019,659

Subdivision of shares
(1 share to 47 shares) (1)

Conversion of convertible loan


At 31 December 2013/30
September 2014

B-37

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
18.

Share capital (contd)


Pursuant to the Restructuring Exercise disclosed in Note 1.2, the Company acquired the
entire equity in Gridland Sdn. Bhd. and Hyper Act Marketing Sdn. Bhd. for MYR5,000,000
and MYR2 respectively.
The holders of ordinary shares are entitled to receive dividends as and when declared by
the Company. All ordinary shares carry one vote per share without restrictions.

19.

(1)

On 2 May 2014, the shareholders approved the subdivision of every one (1) share into
47 shares, whereupon the issued and paid-up share capital was enlarged from 200 to
9,400 shares.

(2)

On 2 May 2014, S$4 million of the convertible loan was converted into 400 fully paid
ordinary shares of the Company.

Employee benefits
Period ended
30.09.13
MYR
Unaudited
Employee benefits expense:
Salaries and bonuses
Employees Provident Fund
Social Security Organisation (SOCSO)

20.

Period ended
30.09.14
MYR
Audited

360,611
35,230
3,574

958,818
98,187
4,897

399,415

1,061,902

Period ended
30.09.13
MYR
Unaudited

Period ended
30.09.14
MYR
Audited

50,000

450,000
54,000
177
10,000

50,000

514,177

50,000

312,488
201,689

50,000

514,177

Related party transactions


Compensation of key management personnel

Salaries and bonuses


Employees Provident Fund
Social Security Organisation (SOCSO)
Director fee
Comprise amounts paid to:
Director of the Company
Other key management personnel

B-38

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
21.

Commitments
(a)

Capital commitments
Capital expenditure contracted for as at the end of the reporting period but not
recognised in the interim consolidated financial statements are as follows:

Capital commitments in respect of property,


plant and equipment

31.12.13
MYR
Audited

30.09.14
MYR
Audited

3,596,200

As at 30 September 2014, the Company made prepayment amounted to MYR Nil


(31.12.13: MYR3,482,000) for the purchase of leasehold land, building and plant and
machinery.
(b)

Operating lease commitments as lessee


The Group has entered into commercial leases for the rental of office premises and
employees accommodations. These leases have an average life of between 3 and 7
months (31.12.13: 2 and 9 months). There are no restrictions placed upon the Group
by entering into these leases. Future minimum rentals payable under non-cancellable
operating leases at the end of the reporting are as follows:

Not later than one year


Later than one year but not later than five years

B-39

31.12.13
MYR
Audited

30.09.14
MYR
Audited

5,400

34,000

5,400

34,000

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
21.

Commitments (contd)
(c)

Finance lease commitments


The Group has finance leases for certain items of motor vehicles. Future minimum
lease payments under finance leases together with the present value of the net
minimum lease payments are as follows:
31.12.13
Audited
Present
Minimum
value of
lease
payments
payments
(Note 16)
MYR
MYR

22.

30.09.14
Audited
Present
Minimum
value of
lease
payments
payments
(Note 16)
MYR
MYR

Not later than one year

119,088

104,877

177,886

157,598

Later than one year but not


later than five years

269,482

256,016

378,058

355,959

Total minimum lease


payments

388,570

360,893

555,944

513,557

Less: Amounts representing


finance charges

(27,677)

Present value of minimum


lease payments

360,893

360,893

(42,387)
513,557

513,557

Fair value of assets and liabilities


(a)

Fair value hierarchy


The Group categorises fair value measurements using a fair value hierarchy that is
dependent on the valuation inputs used as follows:
Level 1 Quoted prices (unadjusted) in active market for identical assets or liabilities
that the Group can access at the measurement date,
Level 2 Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly, and
Level 3 Unobservable inputs for the asset or liability.
Fair value measurements that use inputs of different hierarchy levels are categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.

B-40

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
22.

Fair value of assets and liabilities (contd)


(b)

Liabilities measured at fair value


The following table shows an analysis of financial instruments carried at fair value by
level of fair value hierarchy:

Note

Significant
unobservable
inputs
(Level 3)
30.09.14
MYR
Audited

17

20,465,398

Financial liabilities:
Derivative financial instruments
Embedded derivative within the convertible
loans

There have been no transfers between Level 1 and Level 2 or Level 2 and Level 3
during the financial period ended 30 September 2014.
As at 30 September 2014, the Group does not have any financial instruments which
are classified under Level 1 and Level 2 of the fair value hierarchy.
(i)

Information about significant unobservable inputs used in Level 3 fair value


measurements
The following table shows information about fair value measurements using
significant unobservable inputs (Level 3)

Embedded derivative within


the convertible loans

Valuation
technique

Significant
unobservable
input

Discounted
cash flow

Probability of IPO
being successful

B-41

Value
31%

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
22.

Fair value of assets and liabilities (contd)


(b)

Liabilities measured at fair value (contd)


(i)

Information about significant unobservable inputs used in Level 3 fair value


measurements (contd)
The fair value of the embedded derivative within the convertible loans has been
determined by estimating the probability that the listing will occur and applying
this probability to the value of the free shares being provided to the convertible
loan holders. In performing this valuation, it is noted that the value of the free
shares does not change irrespective of the listing price of the Company. The
maximum theoretical value of free shares issued to the convertible loan holders
upon conversion is worth S$33,758,000 (MYR 86,758,000). The exchange rate at
30 September 2014 was used to convert the instrument into Malaysia Ringgit.
The following table shows the impact on the Level 3 fair value measurement of
assets and liabilities that are sensitive to changes in unobservable inputs that
reflect reasonably possible alternative assumptions.

Carrying
amount

Effect of reasonably
possible alternative
assumptions
Profit or loss
30.09.14
MYR

Recurring fair value measurements


Liabilities
Derivative financial liability

33,098,634

12,633,236

In order to determine the effect of the above reasonably possible alternative


assumptions, the Company adjusted the following key unobservable inputs used
in the fair value measurement:

(ii)

For derivative financial liability, the Company adjusted the fair value
measurement based on managements assumption on the success rate of
the IPO by increasing the adjustments to 50%.

Valuation policies and procedures


The Groups Chief Financial Officer (CFO) oversees the Groups financial
reporting valuation process and is responsible for setting and documenting the
Groups valuation policies and procedures.

B-42

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
22.

Fair value of assets and liabilities (contd)


(b)

Liabilities measured at fair value (contd)


(ii)

Valuation policies and procedures (contd)


For all significant financial reporting valuations using valuation models and
significant unobservable inputs, it is the Groups policy to engage external
valuation experts to perform the valuation. The CFO is responsible for selecting
and engaging valuation experts that possess the relevant credentials and
knowledge on the subject of valuation, valuation methodologies, and IFRS 13 fair
value measurement guidance.
For valuations performed by external valuation experts, the CFO reviews the
appropriateness of the valuation methodologies and assumptions adopted. The
CFO also evaluates the appropriateness and reliability of the inputs (including
those developed internally by the Group) used in valuations.
Significant changes in fair value measurements from period to period are
evaluated by the CFO for reasonableness. Key drivers of the changes are
identified and assessed for reasonableness against relevant information from
independent sources., or internal sources if necessary and appropriate.

(c)

Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not a reasonable approximation of fair value
The fair value of financial assets and liabilities by classes that are not carried at fair
value and whose carrying amounts are not reasonable approximation of fair value are
as follows:

Financial liabilities:
Loans and borrowings
(non-current)
Obligations under finance
leases

31.12.13
Carrying
Fair Value
amount
(Level 3)
MYR
MYR
Audited
Audited

30.09.14
Carrying
Fair Value
amount
(Level 3)
MYR
MYR
Audited
Audited

256,016

355,959

B-43

269,482

378,058

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
22.

Fair value of assets and liabilities (contd)


(c)

Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not a reasonable approximation of fair value
(contd)
The obligation under finance leases have been categorised as Level 3 significant
unobservable inputs under the fair value hierarchy.

Obligation under finance lease

Valuation technique

Significant
unobservable input

Discounted cash flow

Discount rate

Determination of fair value


The fair value of the financial lease obligations has been determined using discounted
estimated cash flow. The discount rates used are the current incremental lending rates
for similar types of leasing arrangements.
23.

Financial risk management objectives and policies


The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include credit risk and liquidity risk. The board of
directors reviews and agrees policies and procedures for the management of these risks.
It is, and has been throughout the periods, the Groups policy that no trading in derivatives
for speculative purposes shall be undertaken. The Group does not apply hedge accounting.
There has been no change to the Groups exposure to these financial risks or the manner
in which it manages and measures the risk.
(a)

Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should
a counterparty default on its obligations. The Groups exposure to credit risk arises
primarily from trade and other receivables. For other financial assets (including cash
and bank balances), the Group minimises credit risk by dealing exclusively with high
credit rating counterparties.
Exposure to credit risk
At the end of the reporting period, the Groups maximum exposure to credit risk is
represented by the carrying amount of each class of financial assets recognised in the
statement of financial position.

B-44

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
23.

Financial risk management objectives and policies (contd)


(a)

Credit risk (contd)


Credit risk concentration
At the end of the reporting period, 100% of the Groups trade receivables was due from
a customer.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are with
creditworthy debtors with good payment record with the Group. Cash and bank
balances that are neither past due nor impaired are placed with reputable financial
institutions with high credit ratings.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed
in Note 12.

(b)

Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Groups exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The
Groups objective is to maintain a balance between continuity of funding and flexibility
through the use of stand-by credit facilities.
The Groups liquidity risk management policy is to maintain sufficient liquid financial
assets and stand-by credit facilities with various banks. In addition, the Group
monitors and maintains a level of cash and cash equivalents deemed adequate by the
management to finance the Groups operation and mitigate the effect of fluctuations in
cash flows.
The Group assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. Access to sources of funding is sufficiently available and debts
maturity within 12 months can be rolled over with existing lenders, if necessary.

B-45

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
23.

Financial risk management objectives and policies (contd)


(b)

Liquidity risk (contd)


Analysis of financial instruments by remaining contractual maturities
The table below summarise the maturity profile of the Groups financial assets and
liabilities at the end of the reporting period based on contractual undiscounted
repayment obligations.
One year
or less
MYR

One to
five years
MYR

Total
MYR

Audited
31.12.2013
Financial assets:
Trade and other receivables

57,359

57,359

Cash at banks and on hand

149,926

149,926

Pledged deposits

833,245

833,245

1,040,530

1,040,530

11,671,011

11,671,011

181,862

181,862

4,556,636

1,610,630

6,167,266

16,409,509

1,610,630

18,020,139

(15,368,979)

(1,610,630)

(16,979,609)

Total undiscounted financial assets


Financial liabilities:
Other payables
Accrued operating expenses
Loans and borrowings
Total undiscounted financial liabilities
Total net undiscounted financial
liabilities

B-46

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
23.

Financial risk management objectives and policies (contd)


(b)

Liquidity risk (contd)


Analysis of financial instruments by remaining contractual maturities (contd)
One year
or less
MYR

One to
five years
MYR

Total
MYR

Audited
30.09.2014
Financial assets:
Trade and other receivables

1,544,332

1,544,332

Cash at banks and on hand

18,301,712

18,301,712

1,062,188

1,062,188

20,908,232

20,908,232

Other payables

3,797,519

3,797,519

Accrued operating expenses

2,326,109

2,326,109

575,590

20,844,560

21,420,150

Derivative financial instrument

20,465,398

20,465,398

Total undiscounted financial liabilities

27,164,616

20,844,560

48,009,176

Total net undiscounted financial


liabilities

(6,256,384)

(20,844,560)

(27,100,944)

Pledged deposits
Total undiscounted financial assets
Financial liabilities:

Loans and borrowings

24.

Capital management
The primary objective of the Groups capital management is to ensure that it maintains a
sufficient cash in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes
in economic conditions. To maintain or adjust the capital structure, the Group may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares.
No changes were made in the objectives, policies or processes during the financial year
ended 31 December 2013 and nine-month period ended 30 September 2014.

B-47

APPENDIX B AUDITED INTERIM CONSOLIDATED FINANCIAL


STATEMENTS FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the interim consolidated financial statements
For the nine-month period ended 30 September 2014
24.

Capital management (contd)


The Groups capital comprises of issued capital add loans and borrowings less
accumulated losses. As at 31 December 2013 and 30 September 2014, the Group has
capital of MYR1,987,182 and MYR22,625,313. The Group manages its capital to ensure its
ability to continue as a going concern and to optimise returns to its shareholders.

25.

Segment information
For management purposes, the Group is organised into one main operating segment, which
involves exploration for limestone. All of the Groups activities are interrelated, and discrete
financial information is reported to the Board as a single segment.
Accordingly, all significant operating decisions are based upon analysis of the Group as one
segment. The financial results from this segment are equivalent to the financial statements
of the Group as a whole. Total expenditure incurred by the Group arises in Malaysia Ringgit
(MYR) and all of the Groups non-current assets reside in Malaysia. The Groups revenue
is also sourced from Malaysia.
Information about a major customer
Revenue from one major customer amount to MYR 212,665, arising from sale of limestone.

26.

Subsequent event
One of its subsidiaries, Gridland Sdn. Bhd. was served with a writ of summons filed on 6
February 2015 by Ujiteknik Geoenviro Sdn Bhd (UGSB), a service provider that was
engaged for the provision of drilling exploration and extraction of limestone samples for the
purposes of preparing the Independent Qualified Persons Report (UGSB Services).
UGSB is claiming for, among others, MYR321,368 in damages in relation to sums arising
from allegedly unpaid invoices issued in respect of the UGSB Services, interest accruing
from the damages and legal cost.

27.

Authorisation of financial statements for issue


The interim consolidated financial statements of the Group for the nine-month period ended
30 September 2014 were authorised for issue in accordance with a resolution of the
directors on 4 March 2015.

B-48

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014

Company Registration No. OI-282405

GCCP Resources Limited and its subsidiaries

Unaudited pro forma financial information


For the financial year ended 31 December 2013 and
the nine-month period ended 30 September 2014

C-1

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
Index

Page

Report on examination of unaudited pro forma financial information

C-3

Unaudited pro forma consolidated statement of comprehensive income

C-6

Unaudited pro forma interim consolidated statement of comprehensive income

C-7

Unaudited pro forma consolidated statement of financial position

C-8

Unaudited pro forma interim consolidated statement of financial position

C-9

Unaudited pro forma consolidated statement of cash flows

C-10

Unaudited pro forma interim consolidated statement of cash flows

C-12

Notes to the unaudited pro forma financial information

C-14

C-2

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Independent practitioners assurance report on the compilation of pro forma financial
information included in the offer document
4 March 2015
The Board of Directors
GCCP Resources Limited
Floor 4, Willow House
PO Box 2804
Grand Cayman KY1-1112
Cayman Islands
Dear Sirs
We have completed our assurance engagement to report on the compilation of pro forma financial
information of GCCP Resources Limited (the Company) and its subsidiaries (collectively, the
Group) by management. The pro forma financial information consists of the pro forma
consolidated statements of financial position as at 31 December 2013 and 30 September 2014,
the pro forma consolidated statements of comprehensive income for the year ended 31 December
2013 and the nine-month period ended 30 September 2014, the pro forma consolidated
statements of cash flows for the year ended 31 December 2013 and the nine-month period ended
30 September 2014, and related notes as set out in pages C-14 to C-17 of the Offer Document
issued by the Group. The applicable criteria on the basis of which management has compiled the
pro forma financial information are described in Note 3.
The pro forma financial information has been compiled by management to illustrate the impact of
the events set out in Note 2 on the Groups financial position as at 31 December 2013 and 30
September 2014 and its financial performance and cash flows for the year ended 31 December
2013 and the nine-month period ended 30 September 2014 as if the events had taken place at 1
January 2013 and 1 January 2014 respectively. As part of this process, information about the
Groups financial position, financial performance and cash flows has been extracted by
management from the Groups audited financial statements for the year ended 31 December 2013
and the nine-month period ended 30 September 2014.
Managements responsibility for the pro forma financial information
Management is responsible for compiling the pro forma financial information on the basis as
described in Note 3.
Practitioners responsibilities
Our responsibility is to express an opinion about whether the pro forma financial information has
been compiled, in all material respects, by management on the basis as described in Note 3.
We conducted our engagement in accordance with Singapore Standard on Assurance
Engagements (SSAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the Institute of Singapore Chartered
Accountants. This standard requires that the practitioner comply with ethical requirements and
plan and perform procedures to obtain reasonable assurance about whether management has
compiled, in all material respects, the pro forma financial information on the basis as described in
Note 3.
C-3

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Independent practitioners assurance report on the compilation of pro forma financial
information included in the offer document
Practitioners responsibilities (contd)
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the pro forma financial
information, nor have we, in the course of this engagement, performed an audit or review of the
financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in a preliminary offer document is solely
to illustrate the impact of a significant event or transaction on unadjusted financial information of
the entity as if the event had occurred or the transaction had been undertaken at an earlier date
selected for purposes of the illustration. Accordingly, we do not provide any assurance that the
actual outcome of the event or transaction at 1 January 2013 and 1 January 2014 would have
been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by management in the compilation of
the pro forma financial information provide a reasonable basis for presenting the significant effects
directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about
whether:
(i)

The related pro forma adjustments give appropriate effect to those criteria; and

(ii)

The pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information.

The procedures selected depend on the practitioners judgment, having regard to the
practitioners understanding of the nature of the Group, the event or transaction in respect of
which the pro forma financial information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

C-4

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Independent practitioners assurance report on the compilation of pro forma financial
information included in the offer document
Opinion
In our opinion,
(a)

(b)

The unaudited pro forma financial information has been compiled:


(i)

in a manner consistent with the accounting policies adopted by GCCP Resources


Limited and its subsidiaries in its latest audited financial statements, which are in
accordance with International Financial Reporting Standards;

(ii)

on the basis of the applicable criteria stated in Note 3 to the pro forma financial
information; and

Each material adjustment made to the information used in the preparation of the pro forma
consolidated financial information is appropriate for the purpose of preparing such unaudited
financial information.

Restriction on distribution and use


This report is made solely to you as a body and for the inclusion in the Offer Document to be
issued in relation to the proposed listing of the shares of the Company in connection with the
Companys listing on the Singapore Exchange Securities Trading Limited.

Ernst & Young LLP


Public Accountants and
Chartered Accountants
Singapore
4 March 2015
Partner-in-charge: Adrian Koh

C-5

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma consolidated statement of comprehensive income
For the financial year ended 31 December 2013

Year ended
31.12.13
MYR
Audited

Pro forma
Year ended
31.12.13
MYR
Unaudited

Pro forma
adjustments
MYR

Other income
Interest income

26,102

26,102

Other expense
General and administrative expense
Finance costs

(1,919,605)
(448,221)

Loss on conversion of convertible loan


Loss before tax

(6,795,542)

(A)

(7,243,763)

(42,577,040)

(B)

(42,577,040)

(2,341,724)

Income tax expense


Loss for the year, representing total
comprehensive income for the year
attributable to owners of the
Company

(1,919,605)

(2,341,724)

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-6

(51,714,306)

(51,714,306)

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma interim consolidated statement of comprehensive income
For the nine-month period ended 30 September 2014

Period ended
30.09.14
MYR
Audited
Revenue

Pro forma
Period ended
30.09.14
MYR
Unaudited

Pro forma
adjustments
MYR

432,990

432,990

Cost of sales

(344,412)

(344,412)

Gross profit

88,578

88,578

13,225

13,225

164,024

164,024

Other items of income


Interest income
Foreign exchange gain
Other items of expense
General and administrative expense

(8,221,511)

Finance costs

(2,750,102)

Loss on conversion of convertible loan


Loss before tax

(4,141,262)

(A)

(6,891,364)

(42,129,516)

(B)

(42,129,516)

(10,705,786)

Income tax expense


Loss for the period, representing
total comprehensive income for the
period attributable to owners of the
Company

(8,221,511)

(10,705,786)

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-7

(56,976,564)

(56,976,564)

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma consolidated statement of financial position
As at 31 December 2013

Note

ASSETS
Non-current assets
Property, plant and equipment
Prepayments for property, plant
and equipment

Current assets
Other receivables
Prepayments
Pledged deposits
Cash at banks and on hand
Income tax recoverable

31.12.13
MYR
Audited

Pro forma
adjustments
MYR

Pro forma
31.12.13
MYR
Unaudited

9,304,960

9,304,960

3,482,000

3,482,000

12,786,960

12,786,960

57,359
11,397
833,245
149,926
1,168

57,359
11,397
833,245
48,979,166
1,168

48,829,240

(C)

1,053,095

49,882,335

Total assets

13,840,055

62,669,295

EQUITY AND LIABILITIES


Current liabilities
Other payables
Accrued operating expenses
Loans and borrowings

11,671,011
181,862
4,432,316

(5,000,000)

(D)

6,671,011
181,862
4,432,316

16,285,189

11,285,189

(15,232,094)

38,597,146

1,435,796

1,435,796

Total liabilities

17,720,985

12,720,985

Net (liabilities)/assets

(3,880,930)

49,948,310

Net current (liabilities)/assets


Non-current liabilities
Loans and borrowings

Equity attributable to owners


of the Company
Share capital

645

98,201,822
(C)
5,000,000
(D)
(49,372,582) (A,B)

103,202,467

Accumulated losses

(3,881,575)

Total (deficit)/equity

(3,880,930)

49,948,310

Total equity and liabilities

13,840,055

62,669,295

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-8

(53,254,157)

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma interim consolidated statement of financial position
As at 30 September 2014

30.09.14
MYR
Audited

Pro forma
adjustments
MYR

Pro forma
30.09.14
MYR
Unaudited

ASSETS
Non-current asset
Property, plant and equipment

27,096,756

27,096,756

Current assets
Inventories
Trade and other receivables
Prepayments
Pledged deposits
Cash at banks and on hand
Income tax recoverable

417,950
1,544,332
789,305
1,062,188
18,301,712
2,096

417,950
1,544,332
789,305
1,062,188
18,301,712
2,096

22,117,583

22,117,583

Total assets

49,214,339

49,214,339

EQUITY AND LIABILITIES


Current liabilities
Trade and other payables
Accrued operating expenses
Loans and borrowings
Derivative financial instruments

3,797,519
2,326,109
470,613
20,465,398

3,797,519
2,326,109
470,613

(20,465,398)

(C)

27,059,639

6,594,241

Net current (liabilities)/assets

(4,942,056)

15,523,342

Non-current liabilities
Loans and borrowings

20,722,402

Total liabilities

47,782,041

7,893,010

1,432,298

41,321,329

Net assets
Equity attributable to owners of the
Company
Share capital
Accumulated losses
Total equity
Total equity and liabilities

16,019,659
(14,587,361)

(19,423,633)

(C)

1,298,769

86,159,809
(C) 102,179,468
(46,270,778) (A,B) (60,858,139)

1,432,298

41,321,329

49,214,339

49,214,339

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-9

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma consolidated statement of cash flows
For the financial year ended 31 December 2013

Year ended
31.12.13
MYR
Audited

Pro forma
Year ended
31.12.13
MYR
Unaudited

Pro forma
adjustments
MYR

Operating activities
Loss before tax, total

(2,341,724)

(51,714,306)

Adjustment for:
Depreciation of property, plant and equipment

458,259

458,259

59,920

59,920

Exploration expenditure

653,516

653,516

Interest income

(26,102)

(26,102)

Finance costs

448,221

6,795,542

(A)

7,243,763

42,577,040

(B)

42,577,040

Write off of property, plant and equipment

Loss from conversion of convertible loan


Total adjustments

1,593,814

Operating cash flows before changes in


working capital

(747,910)

50,966,396
(747,910)

Changes in working capital


Decrease in other receivables

2,295,583

Increase in prepayments
Increase in trade and other payables

(7,986)

2,295,583
(7,986)

6,520,752

6,520,752

164,693

164,693

Total changes in working capital

8,973,042

8,973,042

Cash flow from operations

8,225,132

8,225,132

Increase in accrued operating expenses

Exploration expenditure
Interest received
Interest paid
Income taxes refunded

(653,516)

(653,516)

26,102

26,102

(448,221)

(448,221)

32

32

7,149,529

7,149,529

Purchases of property, plant and equipment

(4,660,331)

(4,660,331)

Prepayments for purchase of property, plant


and equipment

(3,482,000)

(3,482,000)

Net cash flows used in investing activities

(8,142,331)

(8,142,331)

Net cash flows from operating activities


Investing activities

C-10

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma consolidated statement of cash flows (contd)
For the financial year ended 31 December 2013

Year ended
31.12.13
MYR
Audited

Pro forma
Year ended
31.12.13
MYR
Unaudited

Pro forma
adjustments
MYR

Financing activities
Proceeds from issuance of ordinary shares

645

Proceeds from issuance of convertible loan

Proceeds from term loans

645
48,829,240

(C)

1,579,500

Repayment of term loans


Repayment of hire purchase
Placement of pledged deposits

48,829,240
1,579,500

(131,401)

(131,401)

(91,689)

(91,689)

(211,308)

(211,308)

Net cash flows from financing activities

1,145,747

Net increase in cash and cash equivalents

152,945

49,974,987
48,829,240

(C)

48,982,185

Cash and cash equivalents at 1 January

(2,062,139)

(2,062,139)

Cash and cash equivalent at 30 December

(1,909,194)

46,920,046

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-11

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma interim consolidated statement of cash flows
For the nine-month period ended 30 September 2014
Pro forma
Period ended
30.09.14
MYR
Unaudited

Period ended Pro forma


30.09.14
adjustments
MYR
MYR
Audited
Operating activities
Loss before tax, total
Adjustment for:
Depreciation of property, plant and equipment
Write off of property, plant and equipment
Exploration expenditure
Interest income
Finance costs
Unrealised exchange gain
Loss from conversion of convertible loan
Total adjustments
Operating cash flows before changes in
working capital
Changes in working capital
Increase in trade and other receivables
Increase in inventories
Increase in prepayments
Decrease in trade and other payables
Increase in accrued operating expenses
Total changes in working capital

(10,705,786)

(56,976,564)

815,960
1,239
291,120
(13,225)
2,750,102
(164,024)

3,681,172

815,960
1,239
291,120
(13,225)
6,891,364
(164,024)
42,129,516
49,951,950

4,141,262

(A)

42,129,516

(B)

(7,024,614)

(7,024,614)

(1,486,973)
(417,950)
(777,908)
(2,873,492)
2,144,247
(3,412,076)

(1,486,973)
(417,950)
(777,908)
(2,873,492)
2,144,247
(3,412,076)

Cash flow used in operations


Exploration expenditure
Interest received
Interest paid
Income taxes refunded

(10,436,690)
(291,120)
13,225
(134,225)
(928)

(10,436,690)
(291,120)
13,225
(134,225)
(928)

Net cash flows used in operating activities

(10,849,738)

(10,849,738)

Investing activity
Purchases of property, plant and equipment

(14,870,995)

(14,870,995)

Net cash flows used in investing activity

(14,870,995)

(14,870,995)

C-12

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Unaudited pro forma interim consolidated statement of cash flows (contd)
For the nine-month period ended 30 September 2014

Period ended Pro forma


30.09.14
adjustments
MYR
MYR
Audited

Pro forma
Period ended
30.09.14
MYR
Unaudited

Financing activities
Proceeds from issuance of convertible loans
Repayment of term loans
Repayment of hire purchase
Placement of pledged deposits

48,306,137
(2,192,274)
(103,336)
(228,943)

48,306,137
(2,192,274)
(103,336)
(228,943)

Net cash flows from financing activities

45,781,584

45,781,584

Net increase in cash and cash equivalents


Effect of exchange rate changes on cash and
cash equivalents
Cash and cash equivalents at 1 January

20,060,851

20,060,851

150,055
(1,909,194)

150,055
(1,909,194)

Cash and cash equivalent at 30 September

18,301,712

18,301,712

The accompanying accounting policies and explanatory notes form an integral part of
the unaudited pro forma financial information.

C-13

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the unaudited pro forma financial information
For the financial year ended 31 December 2013 and the nine-month period ended
30 September 2014
Notes to the pro forma adjustments
The unaudited pro forma financial information is arrived at based on the assumptions that the
significant events as disclosed in Note 2 have taken place on 1 January 2013 for the year ended
31 December 2013 and 1 January 2014 for the nine months ended 30 September 2014.
(A)

The pro forma adjustment reflects the interest accrual of convertible loan issued as disclosed
in Note 2 (a) and (b). The finance cost relates to the accretion of carrying amount of liability
component to the principal amount of convertible loan.

(B)

The pro forma adjustment reflects the accounting treatment for loss on conversion of the
convertible loan into new ordinary shares of the Company as disclosed in Note 2 (a) and (b)
at a conversion price which ranges from 50% to 65% of the target valuation of S$200 million
divided by the number of shares prior to conversion.

(C) The pro forma adjustment reflects the Convertible Loan Agreements entered by the
Company as disclosed in Note 2 (a) and (b). It is assumed that the Listing Approval was
obtained in March 2015, and all convertible loans with total aggregate principal amount of
Singapore Dollars (S$) 14.8 million (31.12.2013: S$18.8 million) are converted into
ordinary fully paid shares accordingly. The accounting treatment for loss on conversion of the
convertible loan is accounted for under pro forma adjustment (B).
(D) The pro forma adjustment reflects an issuance of ordinary shares pursuant to a capitalisation
of loans owing to the Director on 2 May 2014 as disclosed in Note 2 (c).

C-14

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the unaudited pro forma financial information
For the financial year ended 31 December 2013 and the nine-month period ended
30 September 2014
The unaudited pro forma financial information should be read in conjunction with the Audited
Consolidated Financial Statements of GCCP Resources Limited (the Company) and its
subsidiaries (collectively, the Group) for the financial years ended 31 December 2011, 2012 and
2013 and the Audited Interim Consolidated Financial Statements for the nine-month period ended
30 September 2014.
1.

Corporate Information
The Company was incorporated in Cayman Islands on 1 November 2013 as a company
limited by shares under the name of Ultimate Prime Ventures Limited.
The registered office of the Company is located at Floor 4, Willow House, PO Box 2804,
Grand Cayman KY1-1112, Cayman Islands and the principal place of business of the Group
is located at No 56-2, Jalan PJU 5/21, The Strand Kota Damansara, 47810, Petaling Jaya,
Selangor, Malaysia.
The principal activity of the Company is investment holding. The principal activities of its
subsidiaries are quarry master and sale of related products.
The Company changed its name to GCCP Resources Limited on 10 July 2014.

2.

Subsequent events
(a)

In January and April 2014, the Company entered into Convertible Loan Agreements for
a principal amount of S$5 million each at an interest rate of 16% per annum that
converts into ordinary fully paid shares when the Company receives approval to list on
the Singapore Stock Exchange. The term of the Convertible Loan Agreements is 24
months from the drawdown date. The holders have the right to demand repayment if the
Company does not complete an initial public offering on the Singapore Stock Exchange
after 24 months from the drawdown date or abort the process for the application of the
initial public offering.
On 2 May 2014, one of the convertible loan holders has converted the convertible loan
with nominal value of S$4 million into new ordinary shares of the Company. For the
purpose of the pro forma adjustments, the Company is assumed to receive approval to
list on the Catalist of the Singapore Exchange Security Trading Limited in March 2015
and the remaining convertible loans with total aggregate principal amount of S$14.4
million are assumed to convert into ordinary fully paid shares.

C-15

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the unaudited pro forma financial information
For the financial year ended 31 December 2013 and the nine-month period ended
30 September 2014
2.

Subsequent events (contd)


(b)

In August 2014, the Company entered into Convertible Loan Agreements for a total
aggregate principal amount of S$8.8 million at an interest rate of 16% per annum that
converts into ordinary fully paid shares when the Company receives approval to list on
the Singapore Stock Exchange. The term of the Convertible Loan Agreements is 24
months from the drawdown date. The holders have the right to demand repayment if the
Company does not complete an initial public offering on the Singapore Stock Exchange
after 24 months from the drawdown date or abort the process for the application of the
initial public offering.
For the purpose of the pro forma adjustments, the Company is assumed to receive
approval to list on the Catalist of the Singapore Exchange Security Trading Limited in
March 2015 and the convertible loans are assumed to convert into ordinary fully paid
shares. This results in a loss on conversion of S$16,392,808.

(c)

3.

On 2 May 2014, the Company issued an aggregate of 200 ordinary shares for MYR 5
million pursuant to a capitalisation of loans owing to the Director.

Basis of preparation of unaudited pro forma financial information


The unaudited pro forma financial information has been prepared for illustrative purposes
only. It has been prepared to illustrate what:
(i)

the financial results and cash flows of the Group for the financial year ended 31
December 2013 and the nine-month period ended 30 September 2014 would have been
if the significant change to the capital structure of the Group as disclosed in Note 2 had
occurred on 1 January 2013 and 1 January 2014, respectively; and

(ii)

the financial position of the Group would have been, as at 31 December 2013 and 30
September 2014 if the significant change to the capital structure of the Group as
disclosed in Note 2 had occurred on 31 December 2013 and 30 September 2014.

The unaudited pro forma financial information has been prepared based on the audited
consolidated financial statements of the Group for the financial year ended 31 December
2013 and the audited interim consolidated financial statements for the nine-month period
ended 30 September 2014 which were prepared in accordance with the International
Financial Reporting Standards (IFRS), as issued by the International Accounting Standards
Board.
The audited consolidated financial statements of the Group for the financial year ended 31
December 2013 and audited interim consolidated financial statements for the nine-month
period ended 30 September 2014 were audited by Ernst & Young LLP Singapore, Public
Accountants and Chartered Accountants.
C-16

APPENDIX C UNAUDITED PRO FORMA FINANCIAL INFORMATION


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AND
THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2014
GCCP Resources Limited and its subsidiaries
Notes to the unaudited pro forma financial information
For the financial year ended 31 December 2013 and the nine-month period ended
30 September 2014
3.

Basis of preparation of unaudited pro forma financial information (contd)


The auditors report on the above financial statements was not subject to any qualification,
modification or disclaimer.
The objective of the unaudited pro forma financial information is to show what the historical
information might have been had the transaction above taken place on the respective dates.
However, the unaudited pro forma financial information of the Group, by its nature, may not
give a true picture of the Groups actual financial position and results and is not necessarily
indicative of the results of operations or the related effects on the financial position that
would have been attained had the above mentioned existed earlier.

4.

Significant accounting policies


The unaudited pro forma financial information is prepared using the same accounting
policies as the audited financial statements of the Group as disclosed in Note 2 to the Audited
Consolidated Financial Statements of GCCP Resources Limited and its subsidiaries for the
financial years ended 31 December 2011, 2012 and 2013 and the audited interim
consolidated financial statements for the nine-month period ended 30 September 2014.

C-17

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APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION
This appendix provides information about certain provisions of our Memorandum of Association
and Articles and certain aspects of Cayman Islands company law. The description below is only
a summary and is qualified in its entirety by reference to our Memorandum of Association and
Articles and the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the
Cayman Islands (the Cayman Companies Law).
1.

Registration number and Memorandum of Association


The registration number with which the Company was incorporated is OI-282405. Our
Companys certificate of incorporation states that our Company is an exempted company as
defined in the Cayman Companies Law.
Our Memorandum of Association states, inter alia, that the liability of each member of our
Company is limited to the amount from time to time unpaid on such members shares.
Paragraph 3 of the Memorandum states that the objects for which our Company is formed are
unrestricted. Its powers are set out in paragraph 4, which provides that our Company shall
have full power and authority to carry out any object and shall have and be capable of from
time to time and at all times exercising any and all of the powers at any time or from time to
time exercisable by a natural person or body corporate.

2.

Directors
(a)

Ability of interested directors to vote (Articles 101 and 102)


A Director who to his knowledge is in any way, whether directly or indirectly, interested
in a contract or arrangement or proposed contract or arrangement with the Company
shall declare the nature of his interest at the meeting of the Board at which the question
of entering into the contract or arrangement is first considered, if he knows his interest
then exists, or in any other case at the first meeting of the Board after he knows that he
is or has become so interested.
A Director shall not vote on any resolution of the Board in respect of any contract or
arrangement or proposed contract or arrangement in which he has directly or indirectly
a personal material interest. Certain matters in which a Director will not be considered
to have a personal material interest are set out in the Articles.
A Director, whose remuneration (including pension or other benefits) for himself is the
subject of a resolution tabled at a meeting of the Board, shall not be entitled to vote on
the resolution as he shall be taken have a personal material interest in the matter. Other
Directors will not be prohibited by the Articles from voting on that resolution so long as
they do not have any direct or indirect personal material interest in the subject matter
of the said resolution.

D-1

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


(b)

Remuneration (Articles 90, 95, 97(1) and 98)


The ordinary remuneration of the Directors shall from time to time be determined by the
Company in general meeting, shall not be increased except pursuant to an ordinary
resolution passed at a general meeting where notice of the proposed increase shall
have been given in the notice convening the general meeting, and shall (unless
otherwise directed by the resolution by which it is voted) be divided amongst the Board
in such proportions and in such manner as the Board may agree or, failing agreement,
equally, except that any Director who shall hold office for part only of the period in
respect of which such remuneration is payable shall be entitled only to rank in such
division for a proportion of remuneration related to the period during which he has held
office.
Any Director who, by request, goes or resides abroad for any purpose of the Company
or who performs services which in the opinion of the Board go beyond the ordinary
duties of a Director may be paid such extra remuneration (whether by way of salary,
commission, participation in profits or otherwise) as the Board may determine and such
extra remuneration shall be in addition to or in substitution for any ordinary
remuneration provided for by or pursuant to any other Article. A Director appointed to be
a managing director, joint managing director, deputy managing director or other
executive officer shall receive such remuneration (whether by way of salary,
commission, participation in profits or otherwise or by all or any of those modes) and
such other benefits (including pension and/or gratuity and/or other benefits on
retirement) and allowances as the Board may from time to time determine, and either
in addition to or in lieu of his remuneration as a Director, but he shall not in any
circumstances be remunerated by a commission on or a percentage of turnover.
Payments to any Director or past Director of any sum by way of compensation for loss
of office or as consideration for or in connection with his retirement from office (not
being a payment to which the Director is contractually entitled) must be approved by the
Company in general meeting.

(c)

Borrowing powers (Article 109)


The Board may exercise all the powers of the Company to raise or borrow money and
to mortgage or charge all or any part of the undertaking, property and assets (present
and future) and uncalled capital of the Company and, subject to the Cayman
Companies Law, to issue debentures, bonds and other securities, whether outright or as
collateral security for any debt, liability or obligation of the Company or of any third
party.
These powers conferred on the Board may be varied by amending the relevant Articles
of the Company.

(d)

Retirement age limit


There are no provisions relating to retirement of Directors upon reaching any age limit.

(e)

Shareholding qualification (Article 85(3))


Neither a Director nor an alternate Director is required to hold any shares of the
Company by way of qualification.
D-2

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


3.

Share rights and restrictions


The Company currently has only one class of shares, namely ordinary shares.
(a)

Dividends and distribution (Articles 136, 137, 138, 140 and 143)
Subject to the Cayman Companies Law, the Company in general meeting may from time
to time declare dividends in any currency to be paid to the members but no dividend
shall be declared in excess of the amount recommended by the Board. Dividends may
be declared and paid out of the profits of the Company, realised or unrealised, or from
any reserve set aside from profits which the Directors determine is no longer needed.
With the sanction of an ordinary resolution, dividends may also be declared and paid
out of the share premium account or any other fund or account which may be authorised
for this purpose in accordance with the Cayman Companies Law, provided that no
distribution or dividend may be paid to Members out of the share premium account
unless, immediately following the date on which the distribution or dividend is proposed
to be paid, the Company shall be able to pay its debts as they fall due in the ordinary
course of business.
Except in so far as the rights attaching to, or the terms of issue of, any share otherwise
provide (i) all dividends shall be declared and paid according to the amounts paid up on
the shares in respect of which the dividend is paid, but no amount paid up on a share
in advance of calls shall be treated as paid up on the share; and (ii) all dividends shall
be apportioned and paid pro rata according to the amounts paid up on the shares during
any portion or portions of the period in respect of which the dividend is paid. The Board
may deduct from any dividend or other moneys payable to a member by the Company
on or in respect of any shares all sums of money (if any) presently payable by him to
the Company on account of calls or otherwise.
All dividends or bonuses unclaimed for one year after having been declared may be
invested or otherwise made use of by the Board for the benefit of the Company until
claimed. Any dividend or bonuses unclaimed after a period of six years from the date
of declaration shall be forfeited and shall revert to the Company.

(b)

Voting rights (Articles 65 and 77(1))


Subject to any special rights or restrictions as to voting for the time being attached to
any shares by or in accordance with the Articles, at any general meeting (i) on a show
of hands every member present in person (or being a corporation, is present by a
representative duly authorised under Article 83) or by proxy shall have one vote and the
chairman of the meeting shall determine which proxy shall be entitled to vote where a
member (other than CDP) is represented by two proxies, and (ii) on a poll every member
present in person or by proxy or, in the case of a member being a corporation, by its duly
authorised representative shall have one vote for every fully paid share of which he is
the holder or which he represents and in respect of which all calls due to the Company
have been paid, but so that no amount paid up or credited as paid up on a share in
advance of calls or instalments is treated for the foregoing purposes as paid up on the
share. If the member is CDP, CDP may appoint more than two proxies to attend and
vote at the same general meeting and each proxy shall be entitled to exercise the same
powers on behalf of CDP as CDP could exercise, including the right to vote individually
on a show of hands.

D-3

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


The Articles do not provide for cumulative voting in relation to election or re-election of
Directors.
(c)

Share in profits
Holders of shares shall be entitled to share in the Companys profits by way of dividends
declared or distribution approved by the Company in general meeting in accordance
with the Cayman Companies Law.

(d)

Share in surplus upon liquidation (Article 163)


Shareholders are entitled to the surplus assets of the Company in the event that it is
wound up. If the Company shall be wound up (whether the liquidation is voluntary or by
the court) the liquidator may, with the authority of a special resolution and any other
sanction required by the Cayman Companies Law, divide among the members in specie
or kind the whole or any part of the assets of the Company and whether or not the
assets shall consist of properties of one kind or shall consist of properties to be divided
as aforesaid of different kinds, and may for such purpose set such value as he deems
fair upon any one or more class or classes of property and may determine how such
division shall be carried out as between the members or different classes of members.
The liquidator may, with the like authority, vest any part of the assets in trustees upon
such trusts for the benefit of the members as the liquidator with the like authority shall
think fit, and the liquidation of the Company may be closed and the Company dissolved,
but so that no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability.

(e)

Redemption provisions
The shares do not have redemption rights.

(f)

Sinking fund
The Articles do not contain sinking fund provisions.

(g)

Calls on shares (Articles 25, 26, 28 and 33)


Subject to the Articles and to the terms of allotment, the Board may from time to time
make calls upon the members in respect of any moneys unpaid on their shares (whether
on account of the nominal value of the shares or by way of premium). A call may be
made payable either in one lump sum or by instalments. If a sum called in respect of a
share is not paid before or on the day appointed for payment thereof, the person from
whom the sum is due shall pay interest on the amount unpaid from the day appointed
for payment thereof to the time of actual payment at such rate (not exceeding twenty per
cent. (20%) per annum) as the Board may determine, but the Board may in its absolute
discretion waive payment of such interest wholly or in part. The Board may, if it thinks
fit, receive from any member willing to advance the same, and either in money or
moneys worth, all or any part of the moneys uncalled and unpaid or instalments
payable upon any shares held by him and upon all or any of the moneys so advanced
(until the same would, but for such advance, become presently payable) pay interest at
such rate (if any) as the Board may decide.

D-4

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


The Memorandum of Association states that the liability of members of the Company is
limited to the amount, if any, for the time being unpaid on the shares respectively held
by them.
(h)

Discriminatory provisions against substantial shareholder (Article 167)


The Articles do not contain any provision discriminating against any existing or
prospective holder of shares as a result of such shareholder owning a substantial
number of shares save that for so long as the shares of the Company are listed on the
Designated Stock Exchange (which includes the SGX-ST), substantial shareholders
(having the meaning ascribed to it in the Singapore Companies Act) have to disclose
particulars of their interest in the Company and of any change in the percentage level
of such interest. Such requirement to disclose does not apply to CDP.

(i)

Transfer of shares (Articles 19 and 46 to 51)


A shareholder may transfer all or any of his shares by an instrument of transfer in the
form acceptable to the Board provided always that the Company shall accept for
registration an instrument of transfer in a form approved by the Designated Stock
Exchange (which includes the SGX-ST). The instrument of transfer of any share shall
be executed by or on behalf of both the transferor and the transferee and be witnessed,
except that an instrument of transfer in respect of which the transferee is CDP shall be
effective although not signed or witnessed by or on behalf of CDP, and provided further
that when a corporation executes an instrument of transfer under seal, the affixation
and attestation of the corporations seal may be accepted as compliance with the
requirements of the Articles.
Save as provided in the Articles, there shall be no restriction on the transfer of fully paid
up shares (except where required by law, or the rules or regulations of the Designated
Stock Exchange).
The Articles provide that no transfer shall be made to an infant or to a person of
unsound mind or under other legal disability. Further, under the Articles, the Board may
decline to recognise any instrument of transfer unless: (a) a fee of such sum (not
exceeding S$2.00 or such other maximum sum as the Designated Stock Exchange may
determine to be payable) as the Board may from time to time require is paid to the
Company in respect thereof; (b) the instrument of transfer is in respect of only one class
of share; (c) the instrument of transfer is presented to the Company together with the
relevant share certificate(s) and such other evidence as the Board may reasonably
require to show the right of the transferor to make the transfer (and, if the instrument of
transfer is executed by some other person on his behalf, the authority of that person so
to do); and (d) if applicable, the instrument of transfer is duly and properly stamped.
If the Board refuses to register a transfer of any share, it shall, within one (1) month after
the date on which the transfer was lodged with the Company, send to each of the
transferor and transferee notice of the refusal.
The registration of transfers of shares or of any class of shares may, after notice has
been given in accordance with the applicable requirements of the Designated Stock
Exchange, be suspended at such times and for such periods as the Board may
determine.

D-5

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


The Board in so far as permitted by any applicable law may, in its absolute discretion,
at any time and from time to time transfer any share upon the Register of Members of
the Company to any branch register or any share on any branch register to the Register
of Members of the Company or any other branch register. In the event of any such
transfer, the shareholder requesting such transfer shall bear the cost of effecting the
transfer unless the Board otherwise determines.
Unless the Board otherwise agrees (which agreement may be on such terms and
subject to such conditions as the Board in its absolute discretion may from time to time
determine, and which agreement the Board shall, without giving any reason therefor, be
entitled in its absolute discretion to give or withhold), no shares upon the Register of
Members of the Company shall be transferred to any branch register nor shall shares
on any branch register be transferred to the Register of Members of the Company or
any other branch register and all transfers and other documents of title shall be lodged
for registration, and registered, in the case of any shares on a branch register, at the
relevant registration office, and, in the case of any shares on the Register of Members
of the Company, at the registered office of the Company or such other place at which
the Register of Members is kept in accordance with the Cayman Companies Law.
Upon every transfer of shares the certificate held by the transferor shall be given up to
be cancelled, and a new certificate shall be issued to the transferee in respect of the
shares transferred to him. Where a shareholder transfers part only of the shares
comprised in a certificate, the old certificate or certificates shall be cancelled and a new
certificate or certificates for the balance of such shares issued in lieu thereof and such
Member shall pay all or any part of the stamp duty payable (if any) on each share
certificate prior to the delivery thereof which the Board in its absolute discretion may
require and such fee as is provided in the Articles.
4.

Variation of rights of existing shares or classes of shares (Article 10)


The special rights attached to any class of shares may be varied or abrogated either with the
consent in writing of the holders of three-quarters in nominal value of the issued shares of
the class or with the sanction of a special resolution passed at a separate general meeting
of the holders of the shares of the class (but not otherwise) and may be so repaid, varied or
abrogated either whilst the Company is a going concern or during or in contemplation of a
winding-up. To every such separate general meeting and all adjournments thereof all the
provisions of the Articles relating to general meetings of the Company and to the proceedings
thereat shall mutatis mutandis apply, except that the necessary quorum (other than at an
adjourned meeting) shall be two persons at least holding or representing by proxy at least
one-third in nominal value of the issued shares of the class and at any adjourned meeting of
such holders, two holders present in person or by proxy (whatever the number of shares held
by them) shall be a quorum and that any holder of shares of the class present in person or
by proxy may demand a poll and that every such holder shall on a poll have one vote for
every share of the class held by him.
The Cayman Companies Law does not contain provisions determining the action necessary
to change the rights of holders of shares, and thus the Articles impose more significant
conditions than the Cayman Companies Law in this regard.

D-6

APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


5.

General meetings (Articles 2, 55, 56, 57, 58, 75 and 79)


Under the Cayman Companies Law, there is no distinction between annual general meetings
and other general meetings. Under the Articles, the Company may in each year hold a
general meeting as its annual general meeting and the Directors may, whenever they think
fit, convene an extraordinary general meeting.
Article 2 defines an ordinary resolution as one passed by a simple majority of votes cast by
members at general meetings, and a special resolution as a resolution requiring a 75 per
cent. (75%) majority vote of members at general meetings of which (pursuant to Article 58)
not less than 21 days notice shall be given.
All registered shareholders of the Company are entitled to attend general meetings of the
Company (provided that all calls or other sums presently payable by such shareholders in
respect of shares in the Company have been paid). The Cayman Companies Law does not
contain provisions as to any documentary evidence to be produced by proxies and corporate
representatives. However, such provisions may be contained in the Articles. Where, for
example, it is stated that the instrument of proxy must be deposited a specified number of
hours before the meeting (see Article 79), an instrument of proxy deposited after that time
cannot be accepted.
Corporate representatives are different from proxies and unless specifically required by the
Articles, a letter of appointment does not need to be lodged before the meeting. There are
currently no such provisions in the Articles.

6.

No limitation on non-Caymanian shareholders


There are no limitations, either under Cayman Islands law or the Articles, on the rights of
owners of the Companys shares to hold or vote their shares solely by reason that they are
non-Caymanians.

7.

Shareholding disclosure requirement (Article 167)


The Cayman Companies Law does not require disclosure of shareholder ownership beyond
a certain threshold. However, Article 167 contains provisions to the effect that for so long as
the shares of the Company are listed on the Designated Stock Exchange (which includes the
SGX-ST), Directors and substantial shareholders (having the meaning ascribed to it in the
Singapore Companies Act) of the Company will have to disclose particulars of their interest
in the Company and any change in the percentage level of such interest. Article 167 does not
apply to CDP.

8.

Changes in capital (Articles 4 and 6)


Under the Cayman Companies Law, certain changes in the capital of a company such as an
increase, consolidation or sub-division are permitted if authorised by its articles of
association. Article 4 provides that an ordinary resolution is required for an increase to, or
consolidation or sub-division of, the Companys share capital. With regard to a reduction of
share capital, Article 6, following the requirement of the Cayman Companies Law, requires
a special resolution to be passed.

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APPENDIX D SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION


9.

Applicability of the Singapore Take-over and Merger Laws and Regulations (Article
167(4))
For so long as the shares of the Company are listed on the Designated Stock Exchange
(which includes the SGX-ST), the provisions of sections 138, 139 and 140 of the Singapore
Securities and Futures Act (Cap. 289) and the Singapore Code on Take-overs and Mergers
shall apply, mutatis mutandis, to all take-over offers for shares of the Company.

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APPENDIX E LEGAL OPINION FROM JEFF LEONG, POON & WONG

20 April 2015

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