CORPORATE GOVERNANCE POLICIES, PRINCIPLES & GUIDELINES

IPT PROCEDURES

MAPCO has resolved to adopt the IPT Procedures with a view to ensuring that Interested Person Transactions are on normal commercial terms and are transacted on an arm’s length basis on terms and prices not more favorable to their Interested Persons than if they were transacted with a third party and are not prejudicial to the interests of MAPCO and our minority Shareholders. MAPCO may from time to time revise the IPT Procedures in such manner as may be considered appropriate by the Board.

1. Definitions

For the purpose of the IPT Procedures, unless the context otherwise requires:

“associate” means :

(a) in relation to any Director, the Managing Director or controlling shareholder of MAPCO (being an individual):

  1. his immediate family
  2. the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and
  3. any company in which he and his immediate family together (directly or indirectly) have an interest of 25% or more.

(b) in relation to a controlling shareholder of MAPCO (being a company), any other company which is it subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 25% or more;

“associated company” means a company in which at least 10% but not more than 50% of its shares are held by MAPCO or our Group;

“control” means, in relation to a company, the capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of that company;

“controlling shareholder” means a person who:

  1. holds directly or indirectly 15% or more of the total issued and paid-up share capital of our Company, unless the Board reasonably determines that a person who satisfies this paragraph is not a controlling shareholders; or
  2. n fact exercise control over our Company;

“Entity at Risk” means

  1. MAPCO;
  2. a subsidiary of MAPCO that is not listed on a stock or securities exchange recognized by our Board for this purpose; or
  3. an associated company of our Board for this purpose, provide that our Group, or our Group and its Interested Person(s), has control over the associated company;

“Group” means MAPCO and our subsidiaries (if any);

“Immediate family” means, in relation to a person, the person’s spouse, child, adopted child, step-child, sibling and parent;

“Interested Person” means:

  1. a Director, an Executive Director, the Managing Director or controlling shareholder of our Company; or
  2. an associate of such Director, an Executive Director, Managing Director or controlling shareholder;

“Interested Person Transaction” means a transaction between an Entity at Risk and an Interested Person; and

“transaction” includes, without limitation:

  1. the provision or receipt of financial assistance;
  2. the acquisition, disposal or leasing of assets;
  3. the provision or receipt of services;
  4. the issuance or subscription of securities;
  5. the granting of or being granted options; and
  6. the establishment of joint ventures or joint investments; whether or not in the ordinary course of business, and whether or not entered into directly or indirectly (for example, through one or more interposed entities)

2. General Procedures

The following procedures will be implemented by our Group in relation to Interested Person Transactions:

(a) when purchasing any products or procuring any services form an Interested Person, at least two (2) additional quotations from non-Interested Persons will be obtained as a comparison to ensure that MAPCO’s Interests and minority Shareholders’ interests are not disadvantaged. The purchase price or fee for services shall not be higher than the most competitive price or fee of the two (2) additional quotations from non-Interested Persons. Pertinent factors, including but not limited to quality, requirements, specifications, delivery time and track record will be considered in determining the most competitive price or fee

(b) when selling any products or supplying services to an Interested Person, the price or fee and terms of two (2) other successful transactions of a similar nature with non- Interested Persons will be used as comparison to ensure that the interests of MAPCO and minority Shareholders are not disadvantaged. The price or fee for the sale of products or the supply of services shall not be lower than the lowest price or fee of the two (2) other successful transactions with non- Interested Persons;

(c) when renting properties from or to an Interested Person, appropriate steps will be taken to ensure that such rent is matched with prevailing market rates, including adopting measures such as making relevant enquires with landlords of similar properties and obtaining suitable reports or reviews published by property agents (including an independent valuation report by a property valuer, where considered appropriate). The amount payable shall be based on the most competitive market rental rates of similar properties in terms of size, suitability for purpose and location, based on the results of the relevant inquires; and

(d) where it is not possible to compare against the terms of other transactions with unrelated third parties and given that the products or services may be purchased only form an Interested Person, the Interested Person Transaction will be approved by either our Managing Director or Chief Financial Officer, if he has no interest in the transaction, or failing which, our Audit Committee, in accordance with our usual business practices and policies. In determining the transaction price payable to the Interested Person for such products and/or service, factors such as, but not limited to, quantity, requirements and specifications will be taken into account.

3. Review and Approval Procedures

(a) All Interested Person Transactions entered into by MAPCO will be categorized in the following manner:

  1. Category 1: An Interested Person Transaction where the value thereof is equal or in excess of 3.0% of the latest audited net tangible asset of MAPCO.
  2. Category 2: An Interested Person Transaction where the value thereof is below 3.0% of the latest audited net tangible asset of MAPCO but is equal to or in excess of Ks 200,000,000.
  3. Category 3: An Interested Person Transaction where the value thereof is below Ks 200,000,000.

(b) The relevant thresholds applicable in determining each category of Interested Person Transaction may be revised by the Board from time to time as may be considered appropriate by the Board.

(c) Category 1: Interested Person Transaction must be approved by our Audit Committee prior to entry.

(d) Category 2: Interested Person Transaction need to be approved by Audit Committee prior to entry, but must be approved by Managing Director and Chief Financial Officer prior to entry and shall be reviewed on a quarterly basis by our Audit Committee.

(e) Category 3: Interested Person Transaction need to be approved by Audit Committee or Managing Director or Chief Financial Officer prior to entry, but shall be reviewed on a quarterly basis by Audit Committee.

(f) Audit Committee will review all Interested Person Transactions, if any, on a quarterly basis to ensure that they are carried out on an arm’s length basis. In accordance with the procedures outlined above, our Audit Committee will take into account all relevant non-quantitative factors.

(g) MAPCO’s Audit and Finance Department shall prepare all the relevant information to assist Audit Committee in its review and will keep a register recording all Interested Person Transactions. The basis for entry into the transactions, including the quotations and other evidence obtained to support such basis, shall also be recorded in the register.

(h) The following will apply to the review and approval process for all categories of Interested Person Transactions:

  1. If Managing Director or Chief Financial Officer has an interest in the transaction or is a nominee for the time being of the relevant Interested Person, the review and approval process shall be undertaken by the Chairman of Audit Committee or another member of our Audit Committee (who is not a nominee of the Interested Person and has no interest in the transaction) designated by the Chairman of Audit Committee from time for such purpose.
  2. If a member of our Audit Committee has an interest in a transaction or is a nominee for the time being of the relevant Interested Person, he shall abstain from participating in the review and approval process of the Audit Committee in relation to that transaction.

4. Disclosure

MAPCO will disclose in our annual report the aggregate value of Interested Person Transactions entered into during the financial year under review. The aggregate value of the Interested Person Transaction entered into with the same Interested Person (as determined reasonably by the Board) will also be disclosed.

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