SCB Prospectus - Announcements - Bursa Malaysia

Company No. 462648-V
4. RISK FACTORS (CONT'D)
making progress in an effort to widen our customer base so as to reduce our
dependence on any single customer.
Our Group has a number of business alliances with third parties and affiliates to
provide marketing and support activities for our Group's products and services. Our
Group relies to a certain extent upon some of our agents to provide marketing and
sales opportunities for our Group's products and services. Our Group's strategy in
entering into these relationships is to present a best of breed approach where our
Group and our agents present a solutions approach to their customers, leverage the
marketing and sales efforts of our agents, and gain additional exposure and market
visibility for our products. These relationships also assist our Group in keeping pace
with technological and marketing developments, and in certain instances, provide our
Group with technical assistance for our Group's product development efforts.
The agents that our Group is working with are SCADA Systems & Services Ltd from
the United Kingdom and Total Solutions from Abu Dhabi, UAE respectively. Our
Group's appointment of these agents supplements our marketing efforts and as such
is not expected to have any adverse effect on our sales growth.
However, there can be no assurance that these companies will not develop or market
products which compete with our Group's products in the future or will not otherwise
discontinue their relationships with or support of our Group. The failure of our Group
to maintain our existing relationships, or to establish new relationships in the future
for any reason, could have a material adverse effect on our Group's business,
operating results and financial condition.
4.1.6 Protection of Group and Third Party Proprietary Technology / Intellectual
Property Rights
Our Group's success is also dependent upon our ability to use industry standard third
party proprietary technology, and our ability to protect our proprietary technology. The
necessary recording and documentation has been properly implemented to protect
our Group’s copyright on our products. The directors believe that risks are relatively
low due to the nature of our Group's products, as SCADA systems involve
innumerable aspects which are complex and require time to develop and integrate.
Moreover, we have implemented the key lock protection system in SysLink 3 to
protect our products from unauthorised usage and duplication. Our Group will also
procure our employees to sign an agreement which will effectively limit the possibility
of the direct copying of our products by employees who resign.
4.1.7 Litigation Risks
Our Group's agreements with our customers typically contain provisions designed to
limit our Group's exposure to potential product liability claims. We have not
experienced any material product liability claims. It is possible, however, that the
limitation of liability provisions contained in our Group's customer agreements may
not be effective as a result of existing or future laws or unfavourable judicial
decisions. Furthermore, some of our Group's agreements with our customers are
governed by foreign laws, and there are no assurances that the purported limitation
on liability clauses in those agreements would be enforced.
4.1.8 Change in MSC Status
Willowglen was granted the MSC status on 31 March 1998 by MDC. By virtue of this,
our Company has been granted full pioneer status which accords our Company with
five (5) years of income tax exemption on our statutory income commencing on 4
June 2002 and was further extended to 3 June 2012 for the maximum allowable
period of ten (10) years.
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