Sunny Tew

APPENDIX2.4 CATEGORIES OF INTERESTED PERSON TRANSACTIONSThe Mandate covers the sale and purchase of steel products to the Interested Persons (the “Interested Persons Transactions”).The Mandate does not cover any Interested Person Transaction which has a value below $100,000 as the threshold and aggregation requirements of Chapter 9 of theListing Manual do not apply to transactions below $100,000 each. Transactions with Interested Persons which are not covered by the Mandate will be subject to the relevantprovisions of Chapter 9 of the Listing Manual and the current review procedures adopted by the Company as disclosed on page 62 of the Company’s prospectus dated 13March 2002 (Reproduced in Annexure 1 to the Appendix).2.5 RATIONALE FOR THE MANDATEThe Mandate and the annual renewal thereof would obviate the need to make separate announcements and/or convene separate general meetings each time an InterestedPersons Transaction which crosses the relevant thresholds under Rules 905 and 906 of the Listing Manual is contemplated. The Mandate would therefore result in savingsin administrative time, inconveniences and expenses, while the review procedures to be implemented as set out below would enable the Interested Persons Transactions tobe entered into on arm’s length basis and normal commercial terms, without compromising Shareholders’ interests, the corporate objective of the HG Metal Group or theability of the HG Metal Group to respond to business opportunities.The review procedures to be implemented pursuant to the Mandate seek to ensure that the Interested Persons Transactions will comply with the review criteria set outbelow.Pursuant to Chapter 9 of the Listing Manual, the aggregate value of all Interested Persons Transactions conducted pursuant to the Mandate in each financial year will bedisclosed in the Company’s annual report for that year. In addition, the Company will announce the aggregate value of the Interested Persons transactions conductedpursuant to the Mandate for the financial periods which it is required to report on (in accordance with Rule 705 of the Listing Manual) within the time required for theannouncement of such report. These disclosures will be in the form set out in Rule 907 of the Listing Manual.The Mandate will continue to be in force subject to renewal by Shareholders at each annual general meeting of the Company.The Company will seek a fresh Mandate if the review procedures outlined below to be adopted for the Interested Persons transactions should become inappropriate, or if theaudit committee of the Company (the “Audit Committee”) is unable to ensure that such transactions are on normal commercial terms and are not prejudicial to the interestsof the Company and its minority Shareholders.104 HG METAL MANUFACTURING LIMITED ANNUAL REPORT 2007