Sunny Tew

APPENDIXANNEXURE 2 TO THE APPENDIXCONTROL AND VERIFICATION PROCEDURES TO BE UNDERTAKEN BY THE AUDIT COMMITTEEThe General Mandate requires the Audit Committee to review all Interested Person Transactions to ensure that they are made on normal commercial terms and not prejudicial tothe interests of the Company and its minority Shareholders. The following control and verification procedures will be adopted:-(i)(ii)(iii)(iv)(v)(vi)(vii)(viii)the HG Metal Group shall maintain a register to record all Interested Person Transactions entered into pursuant to the General Mandate, with details on the nature ofthe transaction, the amount of and basis for fees and charges;the Audit Committee shall be provided with the register of Interested Person Transactions and such other relevant information which it may reasonably require, andit shall review the information at least half-yearly to ensure that they are carried out at arm’s length and in accordance with the procedures set out in Section 2.6 ofthe Appendix and this Annexure 2;the Audit Committee shall review the credit terms in relation to the Interested Person Transactions on a half-yearly basis to ensure that they are no more favourableto the Interested Persons than those in relation to unrelated third parties for similar transactions;the HG Metal Group undertakes to give its full co-operation to provide the Audit Committee with any further information which it requires to discharge its responsibilities,including providing the Audit Committee access to its books and records for the purpose of the review of the Interested Person Transactions;the HG Metal Group’s annual internal audit plan shall incorporate a review of all Interested Person Transactions entered into pursuant to the General Mandate;the Audit Committee shall, when it deems necessary, have the right to require the appointment of auditors or any independent professionals to review the terms andconditions outlined in Section 2.6 of the Appendix and this Annexure 2;if during its periodic reviews, the Audit Committee believes that the guidelines and procedures as stated above have become inappropriate and are no longersufficient to ensure that the interests of the Company and its minority Shareholders are not prejudiced and that the Interested Person Transactions are on normalcommercial terms, a fresh mandate based on new guidelines and procedures shall be sought from Shareholders; andif any member of the Audit Committee has an interest in an Interested Person Transaction, he shall abstain from participating in the review and approval process inrelation to that transaction.HG METAL MANUFACTURING LIMITED ANNUAL REPORT 2007111