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2.3 Guidelines and Review Procedures for Recurrent Related Party Transactions
To ensure that such Recurrent Related Party Transactions are conducted at arm’s length and on normal commercial terms consistent with
the Group’s usual business practices and policies and will not be prejudicial to the Company’s shareholders, the management will ensure
that the transactions with the Related Parties will only be entered into after taking into account the pricing, level of service, quality of
product, market forces and other related factors on terms not more favourable to the Related Parties than those generally available to the
public and not detrimental to the minority shareholders of the Company.
Transactions with Related Parties will only be entered into under similar commercial terms for transactions with unrelated third parties,
which depend on the demand and supply of the products and subject to the availability of the products in the domestic market. Should a
cost plus basis of pricing be used, the appropriate mark-up to cost shall be determined on an arm’s length price based on a percentage
earned by the Company on unrelated party transactions which are the same or very similar to the related party transactions.
At least two (2) other contemporaneous transactions with unrelated third parties for similar products / services and / or quantities will
be used as comparison, wherever possible, to determine whether the price and terms offered to / by the Related Parties are fair and
reasonable and comparable to those offered to / by other unrelated third parties for the same or substantially similar type of products /
services and /or quantities. For certain products / services of which quotation or comparative pricing from unrelated third parties cannot be
obtained (for instance, if there are no unrelated third party vendors / customers of similar products or services, or if the product / service
is a proprietary item), the transaction price will be determined by the Group based on those offered by / to other related parties for the
same or substantially similar type of transaction to ensure that the price and terms of the Recurrent Related Party Transaction are fair and
reasonable to the Group. There is no specific threshold for approval of Recurrent Related Party Transactions within the Group.
The Group has established the following procedures to ensure that the transactions with Related Parties are undertaken on arm’s length
basis and on normal commercial terms, and on transaction prices and terms not more favourable to the Related Parties than those
generally available to the public:
i) A list of Related Parties will be circulated to the companies within the Group to notify that all transactions with Related Parties
are required to be undertaken on an arm’s length basis and independent of undue influence from Related Parties and on normal
commercial terms and on terms not more favourable to the Related Parties than those generally available to the public;
ii) All transactions with Related Parties, regardless of the transaction value, will be reviewed by the sub-committee which is appointed
and authorised by the Audit Committee of the Company;
iii) A register will be maintained by the Group to record all transactions with Related Parties which are entered into pursuant to the
Proposed Shareholders’ Mandate;
iv) The internal audit will conduct periodic reviews of all identified and reported transactions with Related Parties to determine whether
internal guidelines and procedures have been complied with. The internal audit will also conduct an annual review of the system of
controls to ensure that all Recurrent Related Party Transactions are identified and reported.
v) The Board and the Audit Committee will review the internal audit reports and/or any other reports required from time to time to
determine whether established guidelines and procedures have been adhered to and if there is a need for further review or to improve
the procedures.