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Review Procedures for Mandated Interested Person Transactions
We have implemented the following procedures to ensure that mandated Interested Person
Transactions are undertaken on an arm’s length basis and on normal commercial terms:-
(a) General Transactions
SHAREHOLDERS’ MANDATE
In general, there are procedures established by us to ensure that general mandated Interested
Persons Transactions with Interested Persons are undertaken on an arm’s length basis and on
normal commercial terms consistent with our usual business practices and policies, which are
generally no more favourable to the Interested Persons than those extended to unrelated third
parties.
Procedures relating to purchases from Interested Persons
Our Board of Directors will ensure that all future purchases from Interested Persons will be
conducted on an arm’s length basis by undertaking, inter alia, the following procedures:-
(i) a range of prices will be determined as the benchmark for Interested Person Transactions
by obtaining at least two other quotations from unrelated third parties, to the extent that
there are such quotations available from unrelated third parties;
(ii) where quotations cannot be obtained due to the specialty or confidentiality of services or
products or a consistent refusal/failure by unrelated third parties to provide such quotations,
a report supporting the recommended range of price margins will be prepared by the relevant
department and submitted to our Board of Directors for approval. The phrase “confidentiality
of services or products” refers to such services or products in respect of which we may be
under a duty of confidentiality not to disclose any details or specifications (either due to the
sensitive nature of the product or the market or otherwise). In such instances, it may not
be possible to procure price quotations for such products in the market;
(iii) should any future Interested Person Transactions be on less preferential terms then the
stipulated range of price margins, prior approval from our Board of Directors must be
obtained; and
(iv) the range of price margins will be reviewed by the Board of Directors annually or as and
when it is deemed necessary.
The purpose of obtaining at least two independent quotations referred to in paragraph (a)
above is to enable our Board of Directors to have access to an objective range of prices
available in the market which would be used as a benchmark for Interested Person Transactions
as pricing is not the sole determining factor in a commercial transaction and our Board of
Directors will need to take into consideration all relevant factors in determining the commercial
viability of the transaction. In such deliberations, the Directors have a duty at law to act in our
interest at all times. However, it must be noted that there are certain transactions whereby
competitive quotations cannot be obtained because SPH is the sole supplier of certain products
or services which we obtain from them. In the Board’s deliberation on such Interested Person
Transactions, the Director interested in the transaction (whether in his personal capacity or in
his capacity as representative of an interested person) will abstain from voting at such Directors’
meeting.
The following review and approval procedures have been established to monitor such purchases
from Interested Persons:-
(i) transactions in value less than 3% of the latest audited net tangible asset value of our
Company will be reviewed and approved by a senior member of our management team
designated for such purpose by our Chief Executive Officer (“CEO”);
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