TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
116
LETTER TO SHAREHOLDERS
(b)
Threshold for aggregate value of IPTs
(i)
Where the aggregate value of the IPTs in the same financial year is less than 10% of the latest audited
NTA of the Group, all IPTs will be reviewed on a monthly basis by the finance manager and the financial
controller of the Company to ensure that they have been carried out on normal commercial terms and in
accordance with the procedures set out in the IPT Mandate; and
(ii)
Where the aggregate value of the IPTs in the same financial year is equal to or in excess of 10% of the
latest audited NTA of the Group, the Audit and Risk Committee will also have to review the Interested
Person Transaction Register (defined in paragraph 4.8.1 below) to ensure that they have been carried
out on normal commercial terms and in accordance with the procedures set out in the IPT Mandate. In
addition, all IPTs will be reviewed on a monthly basis by the financial controller and the chief financial
officer of the Company.
The threshold limits set out above are adopted by the Company taking into account,
inter alia
, the nature, volume,
frequency and size of the transactions as well as the Group’s day-to-day operations, administration and businesses. The
threshold limits are arrived at as a result of a balancing exercise after considering the operational efficiency for the day-
to-day business operations of the Group and the internal controls for the IPTs.
4.8 Additional procedures to be taken by the Company in respect of all IPTs
4.8.1 The finance department of the Entities at Risk will maintain a register of transactions carried out with the Interested
Persons pursuant to the IPT Mandate (recording the basis, including the quotations obtained to support such basis,
on which they were entered into) (the “
Interested Person Transactions Register
”). Any discrepancies or significant
variances (as determined by the Audit and Risk Committee), from the Group’s usual business practices and pricing
policies will be highlighted to the Audit and Risk Committee.
4.8.2 The financial controller of the Company will obtain signed letters of confirmation from key management personnel and
the Directors on a periodic basis (of not more than half-year intervals) with respect to their interest in any transactions
with the Group or its Associated Companies.
4.8.3 The financial controller of the Company will maintain a list of the Directors, Executive Chairman and Controlling
Shareholders and their Associates (which is to be updated immediately if there are any changes) to enable identification
of Interested Persons. The master list of Interested Persons which is maintained shall be reviewed by the chief financial
officer of the Company at least half-yearly and subject to such verifications or declarations as required by the Audit and
Risk Committee from time to time or for such periods as determined by them.
4.8.4 The Company’s annual internal audit plan shall incorporate a review of all IPTs, including the established review
procedures for monitoring of such IPTs, entered into during the current financial year pursuant to the IPT Mandate.
The Group’s internal auditor shall, on at least a half-yearly basis, subject to adjustment in frequency, and depending on
factors such as,
inter alia,
substantial increment of aggregate transactional value, report to the Audit and Risk Committee
on all IPTs, and the basis of such transactions, entered into with the Interested Persons during the preceding period.
4.8.5 The Audit and Risk Committee shall periodically review the Interested Person Transactions Register, at least on a half-
yearly basis, to ensure that they are carried out on normal commercial terms and in accordance with the guidelines and
review procedures under the IPT Mandate. In its review and/or approval of the IPTs under paragraph 4.7 (where relevant)
and in this paragraph 4.8, the Audit and Risk Committee will generally only approve an IPT if the terms of the transaction
are no less favourable to the Group and its Associated Companies than the terms offered by unrelated third parties or
in accordance with usual business practices and pricing policies or industry norms (as the case may be). All relevant
non-quantitative factors will also be taken into account. Such review includes the examination of the transaction and
its supporting documents or such other data deemed necessary by the Audit and Risk Committee. The Audit and Risk
Committee shall, when it deems fit, have the right to require the appointment of independent advisers and/or valuers to
provide additional information or review of controls and its implementation pertaining to the transactions under review.
