GUIDELINES

The Financial Incentive for High Impact Project (HIP)is introduced to encourage domestic investment in

new production line(s) with modern technologies for upgrading of manufacturing facilities and business expansion. It also aims to drive the timber industry

towards implementing smart manufacturing and Industry 4.0 (I4.0) enabling technologies to

enhance the industry’s competitiveness witha more responsive and efficient operation.

MTC HIGHIMPACTPROJECT(HIP)

A member of any one (1) of the six (6) timber associations: Malaysian Wood Industries Association (MWIA); The Timber Exporters' Association of Malaysia (TEAM); The Malaysian Panel-Products Manufacturers' Association (MPMA); Malaysian Wood Moulding & Joinery Council (MWMJC); Malaysian Furniture Council (MFC); and Persatuan Pengusaha Kayu-Kayan & Perabot Bumiputra Malaysia (PEKA) [Association of Malaysian Bumiputera Timber & Furniture Entrepreneurs].

The company must be incorporated in Malaysia and based in Peninsular Malaysia, installed with wood-basedmanufacturing facilities, in operation for at least three (3) years;Must be involved in sawmilling or production of value-added timber products;Must be a majority Malaysian-owned company (i.e. with at least 51% of Malaysian shareholding);Companies with common shareholders, only one (1) company may apply; Each company is eligible for one (1) successful application; Ongoing project(s) where the production line/equipment/system has been installed/in-operation is not eligible to apply; andCompanies that have received any grants or subsidies for the proposed project from other government or government-linked agencies are not eligible for this incentive.

A) Eligibility Criteria

SMEs and Non-SMEs: Entitled to 10% of the total investment for the HIP (minimum investment at RM700,000.00),and up to RM150,000.00 per company/group of companies.

B) Reimbursement Rate

Investment in new production line for business expansion or diversification of products.Adoption of smart factory/Industry 4.0 technologies.The incentive does not cover duplication of the existing production line/ equipment/system.The technical proposal submitted will be evaluated on a case-to-case basis and the approval is at the sole discretion of MTC.Applying Company is encouraged to undergo MTC’s Smart Manufacturing Consulting Programme.

C) Project Scopes

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Register for an account at iap.mtc.com.my. Once the account registration is approved, the applicant will receive anemail notification and instruction to log into the Portal.Applying Company shall complete their company profile in the online application portal. Applying Company with existing account in the portal shall log in and update their company profile. The company profile can be updated at any time and should be kept up to date for MTC’s evaluation.Submit the Application Form online after the purchase has been confirmed.Certified true copies of documents1 to be submitted online include: Form 24 as per the Companies Act 1965 OR Section 78 as per the Companies Act 2016 Form 49 as per the Companies Act 1965 OR Section 58 as per the Companies Act 2016 Latest Form of Annual Return Purchase Order/Sales Contract Manufacturing process flow chart explaining existing major processes and new process Factory layout plan Latest three (3) years Audited Accounts Latest three (3) months bank statement Technical Proposal

D) Registration/Application •

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Note: 1To certify on the first page only. Hardcopies are not required. Verification would be carried out during on-site DDA. After receiving the acknowledgement from MTC of its application, the Applying Company must allow a remotedue diligence audit (DDA) to be carried out by MTC prior to the execution of the project (i.e. 1st DDA).The Applying Company is required to submit the Project Completion Report issued by its system integrator/solutionprovider/supplier online to MTC immediately after the project has been commissioned.A Conditional Approval Letter will then be issued and sent to the Applying Company if the application is approvedto progress to 2nd stage.

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Online submission for reimbursement (with full supporting documents) must reach MTC withintwo (2) months after commissioning of the project.Late submission for reimbursement after the aforementioned two (2) months period will not be considered and shall be rejected by MTC.Certified true copies of documents2 to be submitted online for the reimbursement include: Invoice from system integrator/solution provider/supplier Delivery Order Bill of Lading, Customs Declaration Form (K1) and Packing List (if purchased offshore) Proof of payment issued by local system integrator/solution provider/supplier Project Performance Report which includes the project outcomes and achievements, as well as to share the success story of the Applying Company.

Subsequently, MTC will conduct the 2nd DDA. MTC may go with a technical expert for the DDA.Approval for reimbursement is at the sole discretion of MTC. The financial incentive provided is on a first-come first-served basis, until the budgeted allocation is completely utilised in the particular year.

E) Reimbursement

In the event of non-compliance to the guidelines, the company must undertake to refund in full the disbursement'samount to MTC.

F) Non-compliance (Penalty)

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G) Process Workflow

Register online at iap.mtc.com.my and complete company profile

Company confirms the purchase of production line/machinery/ equipment/system for HIP (Purchase Order/Contract)

Submit Application online with supporting documents and Technical Proposal

Receive Conditional Approval Letter if the application is approved to progress to 2nd stage

Company to submit the Project Completion Report(within 1 month from project completion)

1st DDA (Remote DDA) by MTC before the execution of the project

Stage 1: Application Workflow

Execution and commissioningof the project

Stage 2: Reimbursement Workflow

STEP01 STEP02

STEP06 STEP04

STEP03

STEP05

Company to gather data to prepare Project Performance Report

Submit Project Performance Report and required supporting documents to MTC online portal within 2 months from the date of project completion

2nd DDA conducted by MTC

STEP07 STEP08 STEP09

Disbursement by MTC upon approval by IHWG

Table the report for reimbursement at the monthly IHWG Meeting for approval

STEP10STEP11MTC HIGHIMPACTPROJECT(HIP)

For further enquiries and information, please contact:

Ms. Ong Lay Lee (ext. 602, email: ong@mtc.com.my)

Note: 2To certify on the first page only.