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usiness, provided that all such transactions are carried out on normal commercial terms and are not
prejudicial to the Company or the minority Shareholders of the Company.
Pursuant to Chapter 9 of the Listing Manual, transactions entered into by the Group with an
interested person that is below S$100,000 in value for each of such transaction are not subject to the
requirements of Chapter 9. Therefore, the Shareholders’ Mandate does not relate to any such Interested
Person Transactions. In addition, the Shareholders’ Mandate will cover only recurrent transactions of a
revenue or trading nature or those necessary for the day-to-day operations of the Group (such as the
purchase and sale of supplies and materials) and will not cover transactions relating to the purchase or
sale of assets, undertakings or businesses.
Transactions with Interested Persons that do not fall within the ambit of the Shareholders’ Mandate
shall be subject to the relevant provision of Chapter 9 and/or any other applicable provisions of the
Listing Manual.
3.2 Rationale for and Benefits of the Shareholders’ Mandate
The full text of the Directors’ rationale for, and the benefits of adopting, the Shareholders’ Mandate
can be found in the section “Interested Person Transactions and Conflicts of Interest” of the Prospectus
under the sub-section “Rationale for and Benefits of the Shareholders’ Mandate” on page 167 of the
Prospectus.
We note, inter alia, the following:
(a) the transactions with Rimalco entered into or to be entered into by the Group are in the
ordinary course of business. They are recurring transactions that are likely to occur with some
degree of frequency and arise at any time and from time to time. Having taken into
consideration pertinent factors including, but not limited to the quality and reliability of
product, pricing terms, delivery time and the track record of Rimalco, the Directors are of the
view that it will be beneficial to the Group to transact or continue to transact with Rimalco;
(b) the Shareholders’ Mandate and the renewal of the Shareholders’ Mandate on an annual basis
will eliminate the need to convene separate general meetings from time to time to seek
Shareholders’ approval as and when potential interested person transactions with Rimalco
arise, thereby reducing substantially the administrative time and expenses in convening such
meetings, without compromising the corporate objectives or adversely affecting the business
opportunities available to the Group; and
(c) the Shareholders’ Mandate is intended to facilitate transactions in the Group’s normal course
of business which are transacted from time to time with the Interested Person, provided that
they are carried out on normal commercial terms and are not prejudicial to the interests of the
Company or the minority Shareholders of the Company.
3.3 Guidelines and Review Procedures for Interested Person Transactions
In general, there are procedures established by the Group to ensure that the Mandated Transactions
with Rimalco are undertaken on an arm’s length basis and on normal commercial terms consistent with
the Group’s usual business practices and policies, and on terms which are generally no more favourable
to Rimalco than those extended to unrelated third parties.
In particular, the following review procedures have been implemented:
When purchasing sawn timber from Rimalco, the Group will obtain two other quotations from
unrelated third party suppliers for comparison to ensure Rimalco’s quotations are fair and
reasonable so as not to compromise the interests of minority Shareholders. The purchase price shall
not be higher than the most competitive price of the two other quotations from unrelated third party
suppliers. In determining the most competitive purchase price, all pertinent factors, including but
not limited to quality, reliability, delivery time, credit and payment terms and track record will be
taken into consideration.
Each of the transactions with Rimalco in relation to the purchase of sawn timber will be
monitored as an individual transaction and, based on the value of the transaction, will require the
prior approval of the corresponding approving authority who shall be a Director or management
employee of the Group (but not an interested person or his Associate) and who does not have any
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