I Company No: 920325-H I

3. RISK FACTORS

In evaluating an investment in the IPO Shares, you should carefully consider all the
information contained in this Prospectus, including but not limited to the following general
and specific risk factors.

3.1 RISKS RELATING TO OUR GROUP'S BUSINESS AND OPERATIONS

3.1.1 Reliance on major customers

For the FYEs 2008, 2009 and 2010, each of our top four (4) customers, Paul Hartmann
AG from Germany, Microflex Corporation and Medline Industries Inc. from the USA, and
Remesco Handelsges m.b.H from Austria contributed approximately 10.0% or more of
our total revenue respectively. There is a risk that losing one or more of these major
customers may adversely affect our financial performance.

Our dependency on Paul Hartmann AG from Germany, Microflex Corporation and

Medline Industries Inc. from the USA, and Remesco Handelsges m.b.H from Austria as
customers are partly mitigated by our long-standing business relationships with them with
dealings ranging from eight (8) to fifteen (15) years. This indicates a stable business
relationship and will provide the basis for continuing business growth.

In addition to our top four (4) major customers, the remainder 38.6% of our revenue for
the FYE 2010 were contributed by 136 customers. This provides some diversity in terms
of our customer base.

Nevertheless, there is no assurance that our dependency on these top four (4) customers
will not have any impact on our future business performance.

3.1.2 Reliance on major suppliers

Our business is dependent on our top suppliers, Chip Yoo Latex Co. Ltd from Thailand
and Revertex (Malaysia) Sdn Bhd, which represented 10.6% and 9.7% of our total
purchases for the FYE 2010 respectively.

Chip Yoo Latex Co Ltd from Thailand and Revertex (Malaysia) Sdn Bhd are suppliers of
natural latex, which are used as raw materials for our manufacturing operations. We have
been dealing with Chip Yoo Latex Co. Ltd from Thailand and Revertex (Malaysia) Sdn
Bhd for approximately five (5) and fifteen (15) years respectively. This indicates a
continuing business relationship with two (2) of our top major suppliers.

In August 2010, we signed a contract with Chip Yoo Latex Co. Ltd to secure the supply of
natural rubber latex for a period of twelve (12) months from January 2011 to December
2011. The contract specifies a yearly supply of 7,200 tonnes of natural rubber latex.

Apart from Chip Yoo Latex Co Ltd and Revertex (Malaysia) Sdn Bhd, we currently have an
additional seven (7) suppliers of natural rubber latex within our top twenty (20) suppliers
for the FYE 2010. Therefore we can easily source from other suppliers, if required.

As at LPD, we have secured seven (7) contracts with suppliers from Thailand and one (1)
contract with a supplier from Malaysia to secure an approximate supply of 2,220 tonnes of
natural rubber latex per month for a contractual period of at least twelve (12) months.

Nevertheless, there is no assurance that our dependency on our top two (2) suppliers will
not have any impact on our future business operations.

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I Company No: 920325-H I

3. RISK FACTORS (Conf'dj

3.1.3 Compliance with international quality standards

Our group places significant emphasis on product quality and adhere to stringent quality
standards. Our gloves are exported to over forty seven (47) countries worldwide, which
include the USA, Germany, Austria, United Kingdom, Italy and Japan. Canada, New
Zealand, United Arab Emirates to name a few. In view of that, we are required to ensure
our gloves meet the following international quality standards and/or regulations:-

• 8SI;
• ASTM International Standards;
• CE marking for the European market;
• AQL as determined by the FDA;
• SFDA in China;
• JIS;
• Therapeutic Products Directorate, Health Canada; and
• ISO Standards.

In the event that these standards or regulations imposed by the importing countries are
not met, this will impose negative perception to our products and brand names. Hence,
our Group's revenue and business operations may be severely affected. Our Group
mitigates this risk by ensuring that we adhere to stringent quality standards.

The adoption of stringent quality control procedures is also evidenced by the numerous
internationally recognised accreditions received by WRP Asia Pacific. Our Directors have
also confirmed that there have not been any such non compliance events which may
materially and adversely affect our business and financial performance for the period
under review.

We have the in-house expertise and capabilities to carry out a range of testing to ensure
compliance with the relevant standards. Product quality is not only critical in helping us to
maintain customer loyalty and continuing business patronage but serve as a reference
site for new customers.

Hence, we will strive to comply with the international quality standards and/or regulations
of which we export our gloves to by constantly sending our personnel for annual seminars
in order to update and educate our personnel on any new developments and progress in
the fields of quality standards and regulatory requirements.

However, there can be no assurance that our Group will be able to comply with the
international quality standards and/or requirements in the future.

3.1.4 Foreign exchange exposure and translation losses

For the FYE 2010, 99.6% of our total revenue and 21.8% of our total purchases were
denominated in foreign currencies. For the FYE 2010, our revenue which were transacted in
foreign currencies include USD, EUR, JPY and SGD and purchases that were transacted in
foreign currencies include USD, ELiR and ,IPY. As such, we may be vulnerable to
fluctuations in foreign exchange rates through sales derived from exports and purchases of
imported materials.

We maintain a foreign currency account where we are able to match some of the foreign
purchases with foreign earnings to provide a natural hedge. In addition, we also
undertake forward hedging for a period of not more than three (3) months for some of our
imported materials and export sales.

Notwithstanding the above, there is no assurance that fluctuations in foreign exchange

will not adversely affect our future business performance.

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I Company No: 920325-H I
3. RISK FACTORS (Conf'd)

3.1.5 Dependency on major markets

For the FYE 2010, the USA represented the largest export market, contributing 42.6% of
our total revenue. This was followed by Germany and Austria at 25.0% and 12.9% of our
total revenue respectively. Therefore any decline in the demand of latex gloves from
these three (3) major countries will have an impact on our Group's revenue.

Our major export markets are also in line with Malaysia's major export markets for latex
gloves whereby the USA and Germany accounted for 35.8% and 8.1 % of Malaysia's total
exports of latex gloves in the first six (6) months of 2010 respectively. This indicates that
the USA and Germany are major consumers of latex gloves. Thus, any decline in demand
from these two (2) countries will affect most, if not all manufacturers of latex gloves in
Malaysia.

Apart from the USA, Germany and Austria, we also exported to forty four (44) other
countries globally for the FYE 2010. The coverage of different markets provides us with
the platform to optimise on business opportunities in various countries, and diversify risks
from over-dependency on anyone or a small number of consumer countries.

Nevertheless, there can be no assurance that our dependency on these three (3) major
countries will not have any adverse impact on our business.

3.1.6 Dependency on imports of synthetic latex

For the production of synthetic latex gloves, we are dependent on imports of certain types
of synthetic latex including acrylonitrile-butadiene rubber (nitrile), polychloroprene, and
polyisoprene latex. For the FYE 2010, revenue derived from our synthetic latex gloves
accounted for RM68.1 million or 13.9% of our total revenue.

As at March 2011, there are only two (2) manufacturers of synthetic latex in Malaysia.
Consequently, manufacturers of synthetic latex products in Malaysia are mainly
dependent on imports for the supply of synthetic latex. As such, any interruptions in the
supply of synthetic latex will impact on the production of synthetic latex gloves.

In 2010, import value of synthetic rubber, reclaimed rubber, and waste, parings and scrap
of unhardened rubber grew by 48.2% to reach RM1.9 billion.

(Source: Independent Assessment of the Latex Glove Industry in Malaysia prepared by Vital
Factor Consulting Sdn Bhd)

Thus far, we have not encountered any material problem in sourcing synthetic latex.
Notwithstanding that presently there is ample overseas supply, there is no assurance that
we will not experience any shortages of synthetic latex in the future.

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I Company No: 920325-H I
3. RISK FACTORS (Cont'd)

3.1.7 Risk of manufacturing production may be disrupted

All business may face the risk of losses arising from system disruptions due to among
others, blackouts, natural disasters such as fire and flood, disruptions in water and
electricity supply and civil unrest. We are aware of such risks and have taken adequate
steps and measures to reduce such risks by implementing adequate safety and fire
fighting equipment. In addition, we also have a system in place to educate our employees
on relevant safety measures.

Save as disclosed in Sections 4.3.10, 13.6 (e) and 13.6 (f) of this Prospectus, we have
not encountered such risks. Notwithstanding the measures taken to address the
disruption of operations, there is no assurance that emergency crisis would not cause
interruptions in our operations and have adverse material effect on our financial
performance.

3.1.8 Reliance on our Directors and key management personnel

To a large extent, our continued success will depend on the abilities and continued efforts
of our existing Directors and key management team who include Dato' Lee Son Hong,
Leong Wai Leong and Peng Tiang Wooi. Further details of our Directors and key
management are set out in Sections 5.2 and 5.6 of this Prospectus.

Our key management personnel are experienced in various disciplines such as sales and
marketing, chemical engineering, accounting and finance and business development in
the latex glove industry. The loss of any of our Directors or key management could
adversely affect our ability to compete effectively in the latex glove industry and in turn,.
our operational and financial performance.

We strive to retain our existing Directors, key management and skilled staffs as well as
attract new talents to join our Group. This can be achieved by having in place human
resource strategies and developing a human resource plan that includes suitable
compensation packages, career development and human resource training and
development for our key management. We place significant emphasis on succession
planning and developing and retaining management talent.

Although we seek to limit our dependence on our Directors or key management, there
can be no assurance that the above measures will always be successful in retaining our
Directors or key management or in ensuring a smooth transition or management
succession plan should such key persons no longer be able to serve our Group.

3.1.9 Financial risks

Our working capital requirements are funded by internally generated funds and external
funds. Given that we have borrowings and payment of interest thereon is dependent on
the prevailing interest rates, future fluctuations of interest rates could have material
effects on our Group's interest and principal repayment. Presently, we enjoy good credit
standing with our bankers and have adequate credit facilities.

Our total borrOWings as at LPD amounted to approximately RM75.3 million as disclosed

in Section 8.5.3 of this Prospectus.

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I Company No: 920325-H I

3. RISK FACTORS (Cont'dj

Notwithstanding the above, our Directors are confident of our ability to meet our financial
obligations when they become due and payable with internally generated funds and/or
external borrowings. In addition, our Listing will enable us to tap the capital markets in
the future to meet long term funding requirements when the need arises. The effective
use of the capital markets will result in relatively cheaper sources of funds which may
enhance our profitability due to interest savings and enable us to further expand our
operations and lessen our exposure to fluctuations of interest rate. However, there is no
assurance that future fluctuations of interest rates will not adversely impact our ability to
meet financial obligations when they become due and payable.

3.1.10 Insurance coverage on assets

Our Group is aware of the adverse consequences arising from inadequate insurance
coverage that could materially affect our business operations. In ensuring such risks are
maintained to the minimum, our Group reviews and ensures adequate coverage for our
major assets such as production factories, plant and equipment and our employees on a
continuous basis.

As such, we maintain general insurance policies where practicable, covering both our
assets and employees in line with general business practices in the latex glove
manufacturing industry, with policy specifications and insured limits which our Group
believes is reasonable. However, in the event that the amount of such claims exceed the
coverage of general insurance policies which we have taken up, we may be liable for the
shortfalls in the amounts claimed. In such events, our business and financial position will
be materially affected,

Although our Group has taken necessary measures to ensure that our equipment and all
of our other assets are adequately covered by insurance, there can be no assurance that
the insurance coverage can be adequate for the replacement cost of the other assets of
our Group, including but not limited to the equipment or any consequential cost arising
there from.

There are also other risks such as natural disasters, riots, general strikes, acts of
terrorism and any other risks that cannot reasonably be insured against, which may
adversely affect our operations. However, we wish to highlight that our operations have
not been materially affected by such events which could severely impact our financial
position.

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I Company No: 920325-H I
3. RISK FACTORS (Cont'd)

3.2 RISKS RELATING TO OUR INDUSTRY

3.2.1 Competition

Our business faces competition from other manufacturers of latex gloves in Malaysia and
overseas. We face competition from existing competitors as well as new entrants into the
industry.

As for overseas competitors, the main threat comes from operators in Thailand and
Indonesia, which are the top two (2) largest producers of natural rubber in the world.
However, the existence of barriers to entry provides some mitigation against potential
competition from new entrants. The barriers to entry include track record, market
reputation and the need to possess the right skills and knowledge base.

In addition, Malaysia continues to command a reputation for producing and supplying

high quality latex gloves. Between 2006 and 2010, export value of rubber gloves
increased at an average annual rate of 13.4% while in 2010, it grew by 24.8% to reach
RM8.9 billion.

(Source: Independent Assessment of the Latex Glove Industry in Malaysia prepared by Vital Factor
Consulting Sdn Bhd)

Furthermore, our competitive advantages and key strengths provide us with a strong
platform to compete against other business operators, and also to facilitate business
sustenance and growth. Our competitive advantages and key strengths are as follows:-

• Diverse product range;

• Wide market coverage;
• In-house research and development capabilities;
• Economies of scale;
• Compliance with local and international quality standards;
• Ability to handle large volume; and
• Proven track record.

Nonetheless, there is no assurance that our Group will be able to continue to be

competitive in the future in light of competition from existing players and/or potential
entrants into the industry.

3.2.2 Fluctuations in price of raw materials

For the FYE 2010, our purchases of latex accounted for RM243.6 million or 63.1 % of our
total purchases of raw materials, finished products and services, which included natural
rubber and synthetic latex..

As both natural rubber and synthetic latex are commodities, the costs of sourcing these
commodities as raw materials for the production of latex gloves are subjected to fluctuations
in world prices. Although Malaysia is a producer of natural rubber, local production of natural
rubber is still subjected to world prices as a commodity. Between 2006 and 2010, the
average monthly price of natural rubber latex concentrate increased at an average
annual rate of 9.9%. In 2010, the average monthly price of natural rubber latex
concentrate grew by 66.1 % to reach RM7.43 per kilogram. Operators may not be
competitive if their prices are set too high, or may obtain a low profit margin if their prices
are set too low. The price of synthetic latex is also dependent on the price of petroleum.
This is because petroleum products are used as feedstock for the manufacture of raw
materials to produce synthetic latex.

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I Company No: 920325-H I
3. RISK FACTORS (Cont'd)

Manufacturers with strong financial positions may be able to purchase and maintain
stocks of key raw materials to create a cushion against price fluctuations. Natural rubber
and synthetic latex are widely traded and used raw materials in the latex glove Industry.
Hence, any fluctuations in their prices will affect all latex glove manufacturers equally.

(Source: Independent Assessment of the Latex Glove Industry in Malaysia prepared by Vital Factor
Consulting Sdn Bhd)

Notwithstanding the above, there can be no assurance that any increases in the price of raw
materials will not adversely affect our future business performance.

3.2.3 Natural rubber protein allergy

The natural rubber protein allergy problem will continue to be a major issue for
manufacturers of natural rubber latex gloves.

To overcome this problem, local manufacturers, together with the relevant authorities
have put in place various strategies, including the following:-

• Introduction of the Standard Malaysian Glove ("SMG") certification would provide

users with some comfort level that approved manufacturers would produce latex
gloves below 200 microgram of extractable protein per gram of latex and residual
powder content of powdered glove with 150 microgram per glove. The SMG
programme was launched in 1998 and revised in 1999.

• This certification programme will, over ,time, reduce the maximum allowable
extractable protein for compliance.

• Alternative materials, for example nitrile gloves, made from synthetic latex,
effectively remove the problem of latex allergy.

• Processing methods including chlorination that produces powder-free latex

gloves that has low extractable natural rubber protein.

• Polymer coating of the surface of latex glove helps to further reduce the amount
of extractable rubber protein. The polymer coating creates a barrier to ensure that
the skin does not come in contact with the latex.

• Reduction of cornstarch powder in latex glove through various processes.

• To counter the nitrosamine issue, which is caused by using accelerators and

other chemicals in the manufacturing process, formulations have been developed
to produce low nitrosamine or nitrosamine-free latex products.

• Marketing and promotional campaigns undertaken by, among others, the

Malaysian Rubber Export Promotion Council to allay some of the fears of natural
rubber protein allergy.

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I Company No: 920325-H I
3. RISK FACTORS (Cont'dj

In 2006, the Malaysian Rubber Board introduced a new ruling, whereby Malaysian made
natural rubber latex gloves with a protein content of more than 400 microgram per gram
will be barred from exports. This new ruling is not applicable for industrial and household
gloves.

(Source: Independent Assessment of the Latex Glove Industry in Malaysia prepared by Vital Factor
Consulting Sdn Bhd)

We are continuously striving to meet the requirements of our customers and this is
demonstrated in our future plans, which includes developing a new range of synthetic
latex gloves to reduce the protein allergy problem.

Furthermore, we also manufacture synthetic latex gloves, which minimises the natural
rubber protein allergy risk.

3.2.4 Local environmental protection laws

Our Group is involved in the manufacturing of latex gloves which are subjected to the
following environmental regulations:-

Through our manufacturing operations, we generate scheduled waste, which is

classified under the category of "SW 321 Rubber or latex wastes or sludge
containing organic solvents or heavy metals" of the Environmental Quality Act
1974 under Environmental Quality (Scheduled Wastes) Regulations 2005. Our
management has appointed Kualiti Alam Sdn Bhd to collect and dispose our
scheduled waste.

According to the Department of Environment, any discharge of effluent has to

comply with the parameters required under the Regulation of Environmental
Quality (Industrial Effluents) Regulations 2009. Our Group has installed an in-
house wastewater treatment system to ensure that the discharged water is
adequately treated.

Our Group strives to adhere to all applicable laws and regulations through providing
environmental safety training programmes as well as through the establishment of a
safety committee to establish, implement and review safety measures.

Any breach or non-compliance with these laws and regulations may result in the
imposition of penalties by the relevant authorities, including the suspension, withdrawal or
termination of our Group's manufacturing or business licenses, which may cause us to
cease our production, hence possibly affecting our business and financial performance
adversely.

Our Directors have confirmed that, saved as disclosed in Section 4.4.4 of this Prospectus,
we are not in breach or in non-compliance with regards to the local laws and regulations,
which may materially and adversely affect our business and financial performance.

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I Company No: 920325-H I

3. RISK FACTORS (Cont'd)

3.2.5 Shortage of foreign workers

Our Group is also highly dependent on foreign workers. As at 30 June 2010, we have
employed 2,631 foreign factory workers mainly from Bangladesh, Nepal, Vietnam, India,
Indonesia and Myanmar. These foreign workers can be only be sourced from certain
specific countries as determined by the Malaysian government. In general, approval is
granted based on the merits of each case and is subject to conditions determined by the
relevant authorities from time to time. Generally, applications to employ foreign workers
will only be considered when efforts to find qualified local citizens and permanent
residents have failed.

In the event there is a shortage in supply of foreign workers, or increase in levy for foreign
workers or any other costs to be paid to the Malaysian government, our business
operations and financial performance will be adversely affected.

To mitigate the risk of possible disruptions to the operations due to shortages of labour,
we have constantly reviewed our processes and have ventured into some form of
automation to reduce our dependency on manual labour. We have also incorporated
several technological innovations into our production lines. This level of automation
mitigates to a certain extent, the need for labour intensive operations.

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I Company No: 920325-H I
3. RISK FACTORS (Cont'd)

3.3 RISKS RELATING TO INVESTMENT IN OUR SHARES

3.3.1 There is no prior market for our Company's Shares, and an active market for our
Shares may not develop

Prior to this invitation, there has been no public market for our Shares. There can be no
assurance that an active and liquid market for our Shares will develop and continue to
develop subsequent to our Listing or, if developed, that such a market is sustained. The
issue price has been determined after taking into consideration a number of factors,
including but not limited to, our Company's financial and operating history and conditions,
the prospects of the industry in which our Company operates, the management of our
Company, the market price for shares of companies engaged in similar businesses and
the prevailing market conditions at the time of the application for Listing of our Company
was submitted to the SC.

There is no assurance that the market price may not decline below the issue price. Hence
there can be no assurance of the ability of the shareholders or the prices at which they
would be able to sell their shares.

3.3.2 Capital market risks

The performance of the local bourse is very much dependent on external factors such as
the performance of regional and world bourses and the flows of foreign funds. Sentiments
are also largely driven by internal factors including political and economic conditions of
the country as well as growth potential of the various sectors of the economy. These
factors invariably contribute to the volatility of trading volumes witnessed on Bursa
Securities, thus adding risk to the market price, which may already fluctuate significantly
and rapidly as a result, inter alia, of the following factors:-

• Differences between our actual financial and operating results and those
expected by investors and analysts;

• Announcements by us or our competitors of significant contracts, acquisitions,

strategic alliances, joint ventures or capital commitments;

• Fluctuations in stock market prices and volume;

• Changes in our operating results;

• Changes in securities analysts' estimates of our financial performance and

recommendations;

• Changes in market valuation of similar companies;

• Our involvement in litigation, arbitration or other forms of dispute resolution;

• Additions or departures of key personnel; and

• Changes in general economic and stock market conditions.

Nevertheless, the profitability of our Group is not dependent on the performance of Bursa
Securities as our Group's business activities have no direct correlation with the
performance of the other securities listed on Bursa Securities.

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I Company No: 920325-H I
3. RISK FACTORS (Conf'd)

3.3.3 There may be a delay in our Listing or our Listing may be aborted

The occurrence of anyone or more of the following events, which may not be exhaustive,
may cause a delay in our Listing or our Listing to be aborted:-

(a) the Sole Underwriter exercising its rights pursuant to the Underwriting Agreement
to discharge itself from its obligations thereunder;

(b) we are unable to meet the public spread requirement as determined by Bursa
Securities Le. at least 25% of our enlarged issued and paid-up share capital must
be held by a minimum number of 1,000 public shareholders holding not less than
100 Shares each at the point of our Listing; or

(c) the identified investors fail to subscribe to the portion of IPO Shares intended to
be placed to them although they have furnished their irrevocable undertaking
letters to subscribe for such Shares.

In such event, our Company will return in full without interest, all Application monies
received in compliance with the provisions of sub-section 243(2) of the CMSA.

Nevertheless, our Directors will endeavour to ensure compliance with the various
requirements for our successful Listing.

3.3.4 Delay between admission and trading of the IPO Shares

Delays in the admission and the commencement of trading in shares on Bursa Securities
have occurred in the past. In respect of the Public Issue Shares comprised in the IPO
Shares, following their allotment and issue to investors, a return of monies to such
investors may be affected by way of either a repurchase by us of those shares at the IPO
Price, or by way of a reduction of our share capital.

Further, such capital reduction shall not be effected if on the date the reduction is to be
effected, there are reasonable grounds for believing that we are, or after the reduction
would be, unable to pay our liabilities as they become due.

There can be no assurance that monies can be recovered within a short period of time. If
Bursa Securities does not admit our Shares for Listing, the market for our Shares will be
illiquid and it may not be possible to trade our Shares. This may also have a materially
adverse effect on the value of our Shares.

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I Company No: 920325-H I

3. RISK FACTORS (Cont'd)

3.3.5 We may not be able to pay dividends to shareholders

We are principally an investment holding company and our core operations are carried
out through our subsidiaries. Therefore, our major source of income comprises dividends
and other distributions received from our subsidiaries.

If our subsidiaries incur debts or losses, such indebtedness or losses may impair our
subsidiaries' ability to pay dividends or other distributions to us. As a result, our ability to
pay dividends will be restricted. In addition, restrictive convenants in bank credit facilities
or other agreements that we or our subsidiaries may enter into in the future may also
restrict the ability of our subsidiaries to make contributions to us and our ability to receive
distributions. Therefore, these restrictions on the availability and usage of our major
source of funding may impact our ability to pay dividends to our shareholders.

Our ability to pay dividends or make other distributions to our shareholders is also subject
to the future financial performance and cash flow position of our Group. There is no
assurance that we will be able to distribute dividends to our shareholders as a result of
the abovementioned factors. Accordingly, our historical dividend distribution should not be
used as a reference or basis to determine the level of dividends that may be declared and
paid by us in the future. There is also no assurance that we will be able to record profits
and have sufficient funds above our funding requirements, other obligations and business
plans to declare dividends to our shareholders.

Please refer to Section 8.7 of this Prospectus for details on our dividend policy.

3.3.6 Disclosure regarding forward looking statements

Certain information in this Prospectus is based on the historical experience of the Group
and may not be reflective of future results. Whilst the interpretation of this information may
be forward-looking, the contingencies and inherent uncertainties underlying this
information should be carefully considered by investors and should not be regarded as a
representation by our Group and our advisers that the objectives and the future plans of
the Group will be achieved. Any differences in the expectation of the Group from its actual
performance may result in the Group's financial and business performances and plans to
be either, materially or immaterially, different from those anticipated.

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