TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
111
LETTER TO SHAREHOLDERS
4.4 Categories of IPTs
The categories of IPTs which will be covered by the IPT Mandate are as set out below:
(a)
Purchase of raw materials, semi-processed products or certain finished products from Interested Persons
(i)
T&T as an Entity at Risk
Since April 2005, T&T has from time to time made joint purchases with the TYJ Group and its associated
companies (other than T&T) for purchases of certain raw materials, such as flour, salt and egg powder,
required for their day-to-day operations from third party suppliers.
The said arrangement enables T&T to tap on the network of suppliers of the TYJ Group and its associated
companies (other than T&T), so as to take advantage of the existing goodwill enjoyed by the TYJ Group
and its associated companies, as well as any preferential rates, rebates or discounts accorded for bulk
purchases by T&T and the TYJ Group and its associated companies (other than T&T).
(ii)
T&T as one of the Interested Persons
In addition, the Group and its associated companies (other than T&T) may from time to time purchase
other raw materials, semi-processed products or certain finished products from the TYJ Group and its
associated companies.
(b)
Purchase of dim sum and mooncakes from Interested Persons
(i)
T&T as an Interested Person
Since April 2005, the Group and its associated companies (other than T&T) have been purchasing certain
types of dim sum and mooncakes from T&T. T&T has its own production facilities and is in the business of
manufacturing and selling various food products.
(ii)
T&T as an Entity at Risk
In addition, the TYJ Group and its associated companies (other than T&T) may from time to time source
for certain products from third party suppliers. In the event that the prices of dim sum procured by T&T
through the TYJ Group and its associated companies (other than T&T) from third party suppliers are
lower than T&T’s own cost of production, T&T may procure such dim sum from the TYJ Group and its
associated companies (other than T&T).
(c)
Sale of dim sum and mooncakes to Interested Persons
T&T as one of the Entities at Risk
Since April 2005, T&T has been selling dim sum and mooncakes (for the purposes of export) to the TYJ Group
and its associated companies (other than T&T). Such sales will enable T&T to tap on the contacts and distribution
network of the TYJ Group and its associated companies (other than T&T), and allow T&T to enjoy economies of
scale in its production as a result of the increase in production volume.
The Group and its associated companies (other than T&T) also tap on the local distribution network of the TYJ
Group and its associated companies (other than T&T) by selling its Tung Lok brand of mooncakes to them.
