HARN LEN CORPORATION BHD - Announcements - Bursa Malaysia

2.4 Benefits
This purchase of FFB from SCSB allows Harn Len to secure raw materials in the form
of FFB for its palm oil mill operations. This is beneficial to the Group in increasing its
turnover by allowing access to a ready source of FFB.
The payment of transport charges by Harn Len to PLNHSB allows Harn Len ready
access to a fleet of vehicles for the purposes of transporting its FFB to its own oil mill
crude, palm oil and palm kernel to its buyers and fertilizer from its suppliers to
plantations owned by Harn Len Group. This obviates the need for Harn Len to incur
fixed and maintenance costs involved in maintaining a fleet of vehicles for this
purpose.
2.5 Review Procedures
To ensure that 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 shareholders, the management will ensure, that
the transactions with the related party will only be entered into after taking into
account the pricing, level of service, quality of product and other related factors.
The management of Harn Len will also implement the following additional
procedures and guidelines to ensure that the recurrent related party transactions are
conducted at arm’s length and on normal commercial terms and on terms not more
favourable to the related party than those generally available to the public and hence
not detrimental to the interests of minority shareholders:-
i) management will be notified that all recurrent related party transactions that
are undertaken must be undertaken on an arm’s length basis and on normal
commercial terms and on terms not more favourable to the related party than
those generally available to the public and are not to the detriment of the
minority shareholders;
ii) records will be maintained by the Company to capture all recurrent related
party transactions which will be entered into pursuant to the Proposed
Shareholders’ Mandate;
iii) transaction prices are to be determined by the prevailing market prices for
which crude palm oil, crude and refined palm oil products and FFB are traded
at the time the transactions are entered into;
iv) recurrent related party transactions will be monitored through management
reports tendered to the Board and Audit Committee; and
v) the Board and the Audit Committee will review the management reports to
ascertain that the guidelines and procedures established to monitor the
recurrent related party transactions have been complied with.
7