The following are the objectives of this RPT Policy (“Policy”).

• To assist the Audit and Risk Management Committee (“ARMC”) and the Board of Directors (“Board”) in the review of any RPTs that may arise within POWERTECHNIC GROUP BERHAD (“Powertechnic” or the “Company”) and its subsidiaries (collectively referred to as ( “Group”).
• To ensure that all RPTs are made at arm’s length and on normal commercial terms which are not more favourable to the related parties than those available to the public and on terms that are not detrimental to the minority shareholders of the Company.
• To ensure compliance with the ACE LR of Bursa Securities and other applicable laws.

The Company recognizes that RPTs can present potential or actual conflicts of interest and may raise questions on the management’s integrity and whether such transactions are consistent with the Company’s and its stakeholders’ best interests.

As a general rule, the Group will refrain and avoid entering into any RPTs unless:

• the transaction is deemed necessary and beneficial for the Group’s business and commercial interest (adequate supporting rationale and justifications to be furnished); and
• The ARMC shall be entrusted and authorized to review all RPTs in accordance with the procedures and guidelines set forth in this Policy and thereafter to report and make its recommendations to the Board and where appropriate the shareholders of the Company.

This Policy applies to the Group.

The following definitions are applicable to facilitate an understanding of this Policy:

• “Related Party” means a Director, Major Shareholder or Person Connected with such Director or Major Shareholder including any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a Director or a Major Shareholder or chief executive of the Company and/or its subsidiaries or holding company.

• “Director” has the meaning given in Section 2(1) of the Capital Markets and Services Act (CMSA) 2007 and includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon:
  1. a director of the Company, its subsidiaries or holding company; or
  2. a chief executive of the Company, its subsidiaries or holding

• “Major Shareholder” has the meaning given in Rule 1.01 of the ACE LR which means a person who has an interest or interests in one or more voting shares in Powertechnic and the number or aggregate number of those shares is:
  1. 10% or more of the total number of voting shares in the Company; or
  2. 5% or more of the total number of voting shares in the Company where such person is the largest shareholder of the Company; and

includes any person who is or was within the preceding six (6) months of the date on which the terms of the transaction were agreed upon, a major shareholder of the Company or its subsidiary or holding company.

• “Family” has the meaning given in Rule 1.01 of the ACE LR which means such person who falls within any one of the following categories:
  (a) spouse;

  (b) parent;

  (c) child including an adopted child and step-child;

  (d) brother or sister; and

  (e) spouse of the person referred to in sub-Rules (c) and (d) above.

• “Partner” in relation to any person (referred to as “said Person”) means such person who falls within any one of the following categories:
  (a) a person with whom the said Person, is in or proposes to enter into partnership with. “Partnership” for this purpose refers to a “partnership” as defined in Section 3 of the Partnership Act 1961 or “limited liability partnership” as defined in Section 2 of the Limited Liability Partnerships Act 2012, as the case may be; or

  (b) a person with whom the said Person has entered or proposes to enter into a joint venture, whether incorporated or not.

• “Person Connected” in relation to any person (referred to as, “said Person”) has the meaning given in Rule 1.01 of the ACE LR which means such person who falls under any one of the following categories:
  (a) a Family member of the said Person;

  (b) a trustee of a trust (other than a trustee for a share scheme for employees or pension scheme) under which the said Person, or a family member of the said Person, is the sole beneficiary;

  (c) a partner of the said Person;

  (d) a person, or where the person is a body corporate, the body corporate or its directors, who is / are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the said Person;

  (e) a person, or where the person is a body corporate, the body corporate or its directors, in accordance with whose directions, instructions or wishes the said Person is accustomed or is under an obligation, whether formal or informal, to act;

  (f) a body corporate in which the said Person or persons connected with the said Person are entitled to exercise, or control the exercise of, not less than 20% of the votes attached to voting shares in the body corporate; or

  (g) a body corporate which is a related corporation of the said Person.

• “Related Corporation’ means a corporation which is –
  (a) the holding company of another corporation;

  (b) a subsidiary of another corporation; or

  (c) a subsidiary of the holding company of another corporation.

• “Transaction” means the acquisition, disposal or leasing of assets; the establishment of joint ventures; the provision of financial assistance; the provision or receipt of services; or any business transaction or arrangement entered into by the Company or its subsidiaries; and excludes transactions entered into between the Company (or any of its wholly-owned subsidiaries) and its wholly-owned subsidiary, and has the same meaning and scope under Chapter 10 of the ACE LR of Bursa Securities.
• “Related Party Transaction” (“RPT”) means a Transaction entered into by the Company or any of its subsidiaries which involves the interest, direct or indirect, of a Related Party pursuant to Chapter 10 of the ACE LR of Bursa Securities.
• “Recurrent Related Party Transaction” (“RRPT”) means a RPT which is recurrent and of a revenue and/or trading nature which is necessary for the day-to-day operations of the Group.

The provisions in relation to transactions as set out under Chapter 10 of the ACE LR of Bursa Securities is relevant and applicable to this Policy and all directors and key senior management are required to be proficient with the applicable provisions.

1. Identification/Record keeping

The finance department overseen by the Group Accountant shall maintain:

1. 1. a)Register/database of:-
      • all Related Parties;
      • all Persons Connected to Related Parties.

(Prescribed Disclosure Form under Appendix 1 to be completed by Related Party)

1. 2. a)Register/database of:-
      • all accounts payable comprised of vendors, suppliers, consultants, service providers providing supply of goods and services to the Group listing out ownership/partners/shareholders of the respective entities. (Disclosure format under Appendix AP 1)
      • all accounts receivables comprised of customers, clients, users, consumers etc. listing out ownership/partners/shareholders of the respective entities. (Disclosure format under Appendix AR 1)

1. Review Procedures
   1. a)The finance department is entrusted with the responsibility to ensure that any:
      • acquisitions, disposal or leasing of assets;
      • the establishment of joint ventures;
      • the provision of financial assistance;
      • the provision or receipt of services; or
      • any business transaction or arrangement to be entered into by the Company or its subsidiaries

is reviewed, vetted and screened against the Related Party register/database to determine whether any Related Party is involved.

All accounts payable and accounts receivable will be cross checked and screened against the RPT register/database. Where any account has been identified to have linkage with a Related Party the relevant details will then be furnished to the Group Accountant and Managing Director (“MD”) for review.

1. 1. b)After review by the Group Accountant and MD, any proposed RPT will then be:
      • terminated if deemed not necessary or beneficial or in the Company’s best interest; or
      • escalated to the ARMC for review with the proper supporting rationale and justification in accordance with this Policy together with the management’s recommendations. Any Related Party or employee who has any Conflict of Interest (“COI”) in respect of the proposed RPT will be required to comply with the Board’s COI policy and declaration guidelines where applicable.

1. c)The ARMC will determine whether the Transaction does, in fact, constitute a RPT or
2. d)The ARMC and Board may engage the services of a competent professional or seek third-party opinion on the matter, if deem necessary.
3. e)Notwithstanding the procedures set out under paragraph 5 (II) (a to d) above, it is the responsibility of the relevant Related Party to disclose and bring to the attention of the management and the ARMC on any RPT that they become aware of as soon as it comes to their knowledge.
4. f)The ARMC shall ensure that the Group’s internal audit plan includes a review of the guidelines and procedures established to monitor RPT and RRPT to ensure that they have been complied with.

Where a shareholders’ mandate for RRPT has been obtained, the annual internal audit plan shall include a review of all RRPT entered into pursuant to the shareholders’ mandate to ensure that the relevant approvals have been obtained and the review procedures in respect of such Transactions have been adhered to.

The management shall not enter into any proposed RPT or RRPT irrespective of the amount unless such proposed Transaction has been reviewed and approved by the ARMC and the Board.

1. All Related Parties of the Group are responsible for providing written notice to the finance department of any potential RPT and RRPT involving him or Person Connected to him, including any additional information about the Transaction that the finance department may reasonably request as and when the Transaction arises at the earliest opportunity, i.e., as soon as the Related Parties becomes aware of the Transactions.
2. Any director interested in the Transaction shall not be involved in any discussion, evaluation, consideration and recommendation of the Transaction. The interested director will abstain from voting on the approval of the RPT at all meetings of the Board and Board Committees where the Transaction is being considered.
3. The ARMC shall be provided with all relevant details and facts of any RPTs that requires the ARMC’s review and approval including the terms of the Transaction, the rationale and justification for the Transaction and such other additional information that may be required to enable the ARMC to form an opinion on the following:
   • that the terms of the Transaction are at arm’s length and on terms that are not more favourable than those generally available to the public, and are not detrimental to the interest of minority shareholders.
   • the relevant percentage ratios for the Transaction in accordance with Chapter 10 of the ACE LR of Bursa Securities.
   • the nature and extent of the Related Parties interest in the RPT.
   • the justification for the market value of the Transaction together with supporting valuation reports or evidence of last transacted prices for similar Transactions.
   • in respect of RRPTs, the basis of justification on competitive prices of similar products and services in the open market having regard to the flexibility needed in terms of delivery and pricing options. (at least two other competitive quotes from unrelated parties for similar products/services and/or quantities will be used for comparison where ever possible to determine whether it is fair and reasonable)
   • due consideration will be taken in respect of the proprietary nature of the products/services and where comparative pricing cannot be obtained the terms of the Transaction and pricing will be in accordance with the Group’s usual business practices in order to ensure that the RRPT is not detrimental to the Group.
   • Any decision or intention to seek a mandate for RRPTs will require the prior approval of the ARMC and Board.

The ARMC is vested with the following authority to:

• have the authority to investigate any matter or activity within its terms of reference;
• have the adequate resources which it needs to perform its duties;
• have full and unrestricted access to any information pertaining to the Group which it requires in the course of performing its duties;
• have direct communication channels with the directors, executive officers and major shareholder, the employees and any persons, as the case may be, to obtain information and feedback in performing its duties;
• be able to obtain the services or advice of an independent professional with relevant experience and expertise, whenever deemed necessary, at the expense of the Company in carrying out its duties; and
• request periodic RRPT monitoring reports and / or any supporting documents from the Finance Department.