Wilmar International : Letter to Shareholders

WILMAR INTERNATIONAL LIMITED

(Incorporated in the Republic of Singapore) (Company Registration No.: 199904785Z)

LETTER TO SHAREHOLDERS DATED

28 MARCH 2024 IN RELATION TO

• 1. THE PROPOSED RENEWAL OF THE INTERESTED PERSON TRANSACTIONS MANDATE; AND

• 2. THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE.

WILMAR INTERNATIONAL LIMITED

(Incorporated in the Republic of Singapore) (Company Registration No.: 199904785Z)

Board of Directors: Executive Directors

Mr Kuok Khoon Hong (Chairman and Chief Executive Officer) Mr Pua Seck Guan (Chief Operating Officer)

Ms Teo La-Mei (Group Legal Counsel and Company Secretary) Non-Executive and Non-Independent Directors

• Mr Kuok Khoon Ean

• Mr Kuok Khoon Hua

• Mr Gregory Morris

• Mr Juan Ricardo Luciano (Alternate to Mr Gregory Morris)

Ms Tong Shao Ming (Alternate to Mr Kuok Khoon Hua) Non-Executive and Independent Directors

• Mr Lim Siong Guan (Lead Independent Director)

• Mr Kishore Mahbubani

• Mr Teo Siong Seng

• Mr Soh Gim Teik

Dr Chong Yoke Sin

Dr Cheung Chi Yan, Louis Ms Jessica Cheam

To:The Shareholders of Wilmar International Limited (the "Company")Dear Sir/Madam

• 1. INTRODUCTION

• 1.1 Notice of Annual General Meeting

  We refer to:

  Registered office:

  28 Biopolis Road Wilmar International

  Singapore 138568

  28 March 2024

  • (a) the notice of annual general meeting of the Company dated 28 March 2024 (the "Notice of AGM") convening the forthcoming annual general meeting of the Company to be held on Friday, 19 April 2024 at Level 1, Auditorium, 28 Biopolis Road, Wilmar International, Singapore 138568 and by way of electronic means (the "forthcoming AGM");

  • (b) Ordinary Resolution No. 12 relating to the proposed renewal of the interested person transactions mandate, as proposed in the Notice of AGM; and

  • (c) Ordinary Resolution No. 13 relating to the proposed renewal of the share purchase mandate, as proposed in the Notice of AGM.

• 1.2 Letter to Shareholders

  The purpose of this letter to shareholders (this "Letter") is to provide Shareholders (as defined below) with information relating to Ordinary Resolution No. 12 and Ordinary Resolution No. 13 proposed in the Notice of AGM.

• 1.3 Singapore Exchange Securities Trading Limited

  The Singapore Exchange Securities Trading Limited ("SGX-ST") assumes no responsibility for the accuracy of any of the statements made, opinions expressed or reports contained in this Letter.

1.4

Advice to Shareholders

Shareholders who are in any doubt as to the action they should take, should consult their stockbrokers or other professional advisers immediately.

If a Shareholder has sold or transferred all his Shares (as defined below), the Shareholder should immediately forward this Letter together with the Notice of AGM and the proxy form to the purchaser or transferee, bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

2.

DEFINITIONS

In this Letter, the following definitions shall apply unless the context otherwise requires:

"Act"

: The Companies Act 1967 of Singapore, as may be amended or modified from time to time

The annual general meeting of the Company

A stock exchange that has rules which safeguard the interests of shareholders against interested person transactions according to similar principles in Chapter 9

• (a) in relation to any director, chief executive officer, substantial shareholder or controlling shareholder (being an individual), means:

  • (i) his immediate family member (that is, the spouse, child, adopted child, step-child, sibling and parent);

  • (ii) 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

  • (iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more;

• (b) in relation to a substantial shareholder or a controlling shareholder (being a company), means any other company which is its 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 30% or more

"entity at risk"

"EPS"

"FY2023"

"Group"

"interested person"

"interested person transaction" or "IPT"

"Latest Practicable Date"

"Listing Manual"

"Market Day"

"NTA"

"Off-Market Share Purchase"

"On-Market Share Purchase"

"Ordinary Resolution"

"Registrar"

"Related Expenses"

"Shareholders"

"Share Option"

:

• (i) The listed company;

• (ii) a subsidiary of the listed company that is not listed on the SGX-ST or an approved exchange; or

• (iii) an associated company of the listed company that is not listed on the SGX-ST or an approved exchange, provided that the listed group or the listed group and its interested person(s), has control over the associated company

• : Earnings per Share

• : Financial year ended 31 December 2023

• : The Company and its subsidiaries

• : A director, chief executive officer or controlling shareholder of the listed company or an associate of any such director, chief executive officer or controlling shareholder

• : A transaction between an entity at risk and an interested person

• : 29 February 2024, being the latest practicable date prior to the printing of this Letter

• : The listing manual of the SGX-ST, as may be amended or modified from time to time

• : A day on which the SGX-ST is open for securities trading

• : Net tangible assets

• : A Share Purchase by the Company (if effected otherwise than on the SGX-ST) pursuant to an equal access scheme or schemes (as defined under Section 76C of the Act) for the purchase of Shares from the Shareholders

• : A Share Purchase by the Company effected on the SGX-ST through ready market, through one or more duly licensed stockbrokers appointed by the Company for the purpose

• : The ordinary resolution as set out in the Notice of AGM

• : The Registrar of Companies appointed under the Act and includes any Deputy or Assistant Registrar of Companies

• : Brokerage, stamp duty, commission, applicable goods and services tax and other related expenses

• : The registered holders of Shares except where the registered holder is CDP, the term "Shareholders" shall, in relation to such Shares and where the context admits, mean the persons named as Depositors in the Depository Register maintained by CDP and whose securities accounts are credited with such Shares. The terms "Depositor" and "Depository Register" shall have the respective meanings ascribed to them in Section 81SF of the Securities and Futures Act 2001 of Singapore

• : Share options granted pursuant to the Wilmar Executives Share Option Scheme 2019 (which was approved by the Shareholders and adopted on 24 April 2019), which may be amended or modified from time to time

"Share Purchase"

• : Purchase of Shares by the Company pursuant to the Share Purchase Mandate

  "Share Purchase Committee"

• : The share purchase committee, comprising of Mr Kuok Khoon Hong (Chairman) and Mr Pua Seck Guan, is authorised to administer the Share Purchase Mandate

  "Share Purchase Mandate"

• : The proposed general mandate to authorise the Directors of the Company to purchase, on behalf of the Company, Shares in accordance with the terms as set out in this Letter

  "Shares"

• : Ordinary shares in the capital of the Company

  "subsidiary holdings"

• : Shares held by subsidiaries of the Company, if applicable in the circumstances referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Act

  "Substantial Shareholder"

• : A person who has an interest in one or more voting Shares (excluding Treasury Shares) in the Company and the total votes attached to that Share, or those Shares is not less than 5% of the total votes attached to all the voting Shares (excluding Treasury Shares) of the Company

  "Take-over Code"

• : The Singapore Code on Take-overs and Mergers, as may be amended or modified from time to time

  "Treasury Shares"

• : Shares which (a) were (or are treated as having been) purchased by the Company in circumstances which Section 76H of the Act applies; and (b) have been held by the Company continuously since the Shares were so purchased

The Company has engaged Chang See Hiang & Partners as its legal adviser for the corporate actions set out in this Letter.

• 3. THE PROPOSED RENEWAL OF THE IPT MANDATE

• 3.1 Chapter 9 of the Listing Manual

  Chapter 9 governs a transaction between an entity at risk and an interested person. The objective of Chapter 9 (as stated in Rule 901 of the Listing Manual) is to guard against the risk that interested persons could influence a listed company, its subsidiaries or associated companies to enter into transactions with interested persons that may adversely affect the interests of the listed company or its shareholders.

• 3.2 Materiality thresholds, announcement requirements and shareholders' approval

  Except for certain transactions which, by reason of the nature of such transactions, are not considered to put the listed company at risk to its interested persons and are hence excluded from the ambit of Chapter 9, an immediate announcement, or, an immediate announcement and shareholders' approval would be required in respect of transactions with interested persons if certain financial thresholds (which are based on the value of the transaction as compared with the listed group's latest NTA) are reached or exceeded.

  In particular, shareholders' approval is required for an interested person transaction of a value equal to, or exceeding:

  • 3.2.1 5% of the listed group's latest audited NTA; or

  • 3.2.2 5% of the listed group's latest audited NTA, when aggregated with the values of other transactions entered into with the same interested person during the same financial year.

• 3.3 Shareholders' general mandate

  Chapter 9 allows a listed company to seek a general mandate from its shareholders for recurrent transactions of a revenue or trading nature or those necessary for its day-to-day operations such as the purchase and sale of supplies and materials, but not in respect of the purchase or sale of assets, undertakings or businesses. A general mandate is subject to annual renewal.

• 3.4 IPT Mandate

  At the AGM held on 20 April 2023 ("2023 AGM"), the Company obtained approval from its Shareholders for the entity at risk to enter into certain types of transactions with interested persons ("IPT Mandate") to take effect until the forthcoming AGM. Details of the IPT Mandate were set out in the Company's Letter to Shareholders dated 29 March 2023.

  The Company is seeking to renew the IPT Mandate at the forthcoming AGM to take effect until the next AGM. There is no change to the scope and terms of the IPT Mandate which is proposed to be renewed. Details of the IPT Mandate are set out in the following paragraphs 3.5 to 3.8.

• 3.5 Scope of the IPT Mandate

  The IPT Mandate will cover a wide range of transactions arising in the normal course of business operations of the entity at risk that are entered into with certain classes of interested persons.

  The IPT Mandate will not cover any transaction by an entity at risk with an Interested Person (as defined in paragraph 3.7) which has a value below S$100,000 as such transactions are not normally aggregated under Chapter 9, unless the SGX-ST requires.

  Transactions with interested persons which do not fall within the ambit of the IPT Mandate shall be subject to the relevant provisions of Chapter 9 and/or other applicable provisions of the Listing Manual and/or any applicable law. Transactions conducted under the IPT Mandate are not separately subject to Rules 905 and 906 of Chapter 9 pertaining to threshold and aggregation requirements.

• 3.6 Duration of the IPT Mandate

  The IPT Mandate will take effect from the date of the passing of the Ordinary Resolution relating thereto at the forthcoming AGM and will continue in force until the next AGM. Approval from Shareholders will be sought for the renewal of the IPT Mandate at the next AGM and at each subsequent AGM, subject to satisfactory review by the Audit Committee of its continued application to the interested person transactions.

• 3.7 Classes of Interested Persons

  The IPT Mandate will apply to transactions (as described below) with the following persons ("Interested Persons"):

  • (1) Archer Daniels Midland Company ("ADM") and its associates ("ADM Group"); and

  • (2) any Director (that may be appointed from time to time) and the Chief Executive Officer of the Company and their respective associates who are or may be, directly or indirectly, interested in a transaction or proposed transaction with the Group.

• 3.8 Categories of Interested Person Transactions

  The following recurrent transactions with the Interested Persons (the "Mandated Transactions") are in connection with the provision to, or the obtaining from, the Interested Persons of products and services in the Group's normal course of business or which are necessary for its day-to-day operations or which are of a revenue or trading nature (but not in respect of the purchase or sale of assets, undertakings or businesses) comprising:

  • (1) sale of palm oil and lauric products, soy bean, soy bean oil and other edible oils;

  • (2) purchase of materials such as fresh palm fruit bunches, crude palm oil, soy bean, coal and other materials;

  • (3) the payment of advances for purchases of products and materials;

• (4) the provision of office premises, storage facilities, transport and logistics services and brokerage services;

• (5) the rental / lease of land;

• (6) provision of loans and guarantees;

• (7) the entry into of licence agreements or arrangements for the use of trade names and logos;

• (8) payment of technical consultation and other professional fees; and

• (9) the transactions and agreements described in Sections 14.1(d) (in respect of the annual payment of the technical consultation fee by the ADM Group), 14.2 (in respect of on-going IPTs) and 14.3 (in respect of potential and proposed IPTs) of the Circular dated 10 June 2006 issued by the Company.

3.9

Review Procedures

The Company has in place an internal control system to ensure that the Mandated Transactions are made at an arm's length basis and on normal commercial terms consistent with its usual business practices and policies, which are generally no more favourable to the Interested Persons than those extended to non-Interested Persons, and are not prejudicial to the interests of the Company and the minority Shareholders. In particular, the following review procedures have been put in place:

• (1) when supplying items or services to an Interested Person, the sale price or fee, and the terms, of at least two latest successful sale or supply of a similar nature to non-Interested Persons will be used for comparison. The sale price or fee for the supply of goods or services shall not be lower than the lowest sale price or fee of these other transactions (of a similar nature) with non-Interested Persons;

• (2) when purchasing items from or engaging the services of an Interested Person, at least two latest successful purchases or quotations for the purchase or provision of same or similar items or services from non-Interested Persons will be obtained (where available) for comparison. The purchase price or fee shall not be higher than the most competitive price or fee of these other transactions (of a similar nature) with non-Interested Persons. In determining the most competitive price or fee, non-price factors, including but not limited to quality, delivery time, and track record will be taken into account;

• (3) when obtaining or providing loans, the Audit Committee's approval in respect thereof shall be required and the Audit Committee shall ensure that the interest rate quoted and other salient terms are no less favourable than that given by bona fide third party lenders or the prevailing market rate or terms. In the event that a Director of the Company is interested in any such Mandated Transaction, that Director will abstain from approving that particular transaction;

• (4) when giving guarantees, credit support or entering into licensing agreements, the Audit Committee will review and approve the terms thereof to ensure that it is not prejudicial to the interests of the Company and the minority Shareholders. In the event that a Director of the Company is interested in any such Mandated Transaction, that Director will abstain from approving that particular transaction;

• (5) when renting properties from or to an Interested Person, the Audit Committee shall take appropriate steps to ensure that such rent is commensurate with prevailing market rates, including adopting measures such as making relevant enquiries with landlords of similar properties (in terms of area and location) and obtaining necessary reports or reviews published by property agents (including an independent valuation report by a property valuer, where considered appropriate). The rent payable or to be received shall be based on the most competitive market rental rate of similar properties (in terms of area and location), based on the results of the relevant enquiries. When it is not possible to obtain or establish the prevailing market rates through the methods described above, the matter will be referred to the Audit Committee and the Audit Committee will determine whether the rental fees to be paid or received are fair and reasonable and consistent with the Group's usual business practices; and

• (6) for shared services, a fee shall be charged to the Interested Person based on the time cost charges of the employees involved and an agreed mark up, in accordance with the terms of the agreement. Where the time spent exceeds that set out in the agreement, additional charges would be applicable, based on the actual excess time spent.

For (1) and (2) above, in the event that it is not possible for appropriate information (for comparative purposes) to be obtained, the respective heads of the finance department in Indonesia, Malaysia or Singapore (where applicable) of the Group (with no interest, direct or indirect, in the Mandated Transaction), will determine whether the price, fees and/or the other terms offered by the Interested Persons are fair and reasonable. In so determining, that head of the finance department will consider whether the price, fees and/or other terms is in accordance with usual business practices and pricing policies and is consistent with the usual margins and/or terms to be obtained for the same or substantially similar types of transactions to determine whether the relevant transaction is undertaken at an arm's length and on normal commercial terms.

In respect of other transactions regarded as IPTs (within the meaning of the Listing Manual), a person regarded as independent of the transaction by the Audit Committee will be appointed to review and approve such transactions.

The Company shall monitor the transactions with Interested Persons entered into by the Group and categorise these transactions as follows:

• (i) a Category 1 Mandated Transaction is one where the value thereof is in excess of 5% of the NTA of the Group; and

• (ii) a Category 2 Mandated Transaction is one where the value thereof is below or equal to 5% of the NTA of the Group.

All Category 1 Mandated Transactions must be approved by the Audit Committee prior to its entry. Category 2 Mandated Transactions need not be approved by the Audit Committee prior to its entry but shall be reviewed and reported upon by the internal auditor of the Group on a quarterly basis and such report shall be reviewed by the Audit Committee upon receipt. In its review of each quarterly report, the Audit Committee will also review the payment terms, payment period(s) and settlement of the transactions in respect thereof to ensure that they are not prejudicial to the interests of the Company and its minority Shareholders. The internal auditor shall also, in its report to the Audit Committee, report whether such Mandated Transactions were carried out in accordance with the abovesaid internal control procedures. The internal auditor of the Company, and the Audit Committee (independent of the internal auditor), where either of it deems fit or necessary, may carry out additional reviews.

The Company will maintain a register of Interested Persons. This register will be updated monthly and will be sent to a designated person in the Plantation and Refinery division of the Group as well as a designated person in each member of the Group. The purpose of this register is to enable that designated person to identify the Interested Persons so as to facilitate the recording of all Mandated Transactions excluding those below S$100,000, in accordance with Chapter 9. The Company will also maintain a register of transactions carried out with Interested Persons pursuant to the IPT Mandate (recording the basis, including the quotations obtained to support such basis, on which they were entered into).

On a monthly basis, the designated person in each member of the Group will submit details of all Mandated Transactions, including the value in respect thereof, (excluding those below S$100,000, in accordance with Chapter 9) entered into during the previous calendar month to the designated person in the Plantation and Refinery division of the Group, who will then transmit that information to the designated person in the Company. A "nil" return is required if there are no such transactions for the previous calendar month. The Group's internal audit plan will also incorporate a review of the transactions entered into in the relevant financial year pursuant to the IPT Mandate to ensure that the relevant approvals have been obtained and the review procedures in respect of such transactions are adhered to. The Audit Committee shall review the internal audit reports to ascertain that the guidelines and procedures in respect of such transactions are adhered to.

If during the periodic reviews, the Audit Committee is of the view that the internal control procedures as stated above are not sufficient to ensure that the Mandated Transactions are conducted at an arm's length basis and on normal commercial terms and may be prejudicial to the interests of the Company and the minority Shareholders, the Audit Committee shall make a recommendation to the Board for the Company to obtain Shareholders' approval for a fresh mandate based on new guidelines and review procedures.

In the event that a member of the Audit Committee is interested in any of the Mandated Transactions, that member will abstain from reviewing that particular transaction. Any decision to proceed with such an agreement or arrangement would be recorded for review by the remaining members of the Audit Committee.

The Audit Committee will also review the transactions with interested persons periodically and ensure that the prevailing rules of the SGX-ST (in particular, Chapter 9) are complied with.

• 3.10 Rationale for and benefits of the IPT Mandate

  In view of the time-sensitive nature of commercial transactions, it would be advantageous to the Company to obtain the IPT Mandate to enter into the Mandated Transactions, provided that all such transactions are carried out at an arm's length basis and on normal commercial terms. The IPT Mandate (if approved) will eliminate, among others, the need for the Company to convene separate general meetings on each occasion to seek its Shareholders' approval as and when potential transactions with Interested Persons arise. This will reduce substantially the administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising its corporate objectives and adversely affecting its business opportunities.

  The Mandated Transactions are entered into or, are to be entered into, by the Group in the ordinary course of business. They are recurring transactions which are likely to occur with some degree of frequency and could arise at any time and from time to time.

  Sales to the Interested Persons represent an additional source of revenue for the Group. With regard to purchases, the Group will benefit from having access to quotations from the Interested Persons, in addition to obtaining quotations from third parties, and with the various quotations available for assessment, this will ensure that the Group obtains competitive prices for goods and services of similar quality and specifications. The Group will benefit from the familiarity that the Interested Persons possess in relation to the specifications and requirements that it requires for such goods and services, built on its mutual course of dealing over the years. This gives the Group assurance that the quality of goods and services provided by the Interested Persons would meet its requirements and standards. The terms that the Group extends to the Interested Persons (both for sales, as well as purchases) will not be more favourable than that which it extends to non-Interested Persons.

• 3.11 Disclosures in Annual Report and Financial Statements

  Relevant disclosures will be made in the annual report and the financial statements of the Company in accordance with the requirements of Chapter 9 and other listing rules of the Listing Manual.

• 3.12 Audit Committee Statement

  The Audit Committee, having considered the scope, rationale for and benefit of, and the compliance and review procedures of the IPT Mandate, confirms that (i) the methods and procedures for determining transaction prices of the Mandated Transactions as set out in paragraph 3.9 above, have not changed since the last Shareholders' approval obtained at the 2023 AGM; and (ii) the methods and procedures in (i) above are sufficient to ensure that such Mandated Transactions will be carried out on normal commercial terms which are not prejudicial to the interests of the Company and its minority Shareholders.

• 4. THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE

• 4.1 The Share Purchase Mandate

• 4.1.1 The Act allows companies to purchase or otherwise acquire their own shares in the manner stated in the Act if their constitutions allow them to do so. Article 56 of the Constitution expressly permits the Company to purchase or otherwise acquire, inter alia, its issued Shares.

• 4.1.2 At the 2023 AGM, the Shareholders had approved a mandate (the "2023 Share Purchase Mandate") to enable the Company to purchase or otherwise acquire its issued Shares as permitted under and in accordance with the provisions of the Act. The rationale for, the authority and limits on, and the financial effects of, the 2023 Share Purchase Mandate were set out in the Company's Letter to Shareholders dated 29 March 2023.

• 4.1.3 The 2023 Share Purchase Mandate was expressed, inter alia, to continue in force until (i) the date on which the next AGM is held or required by law to be held; or (ii) the date on which the Share Purchases are carried out to the full extent mandated; or (iii) the date on which the authority conferred by the 2023 Share Purchase Mandate is revoked or varied by the Shareholders in a general meeting, whichever is the earliest.

• 4.1.4 The 2023 Share Purchase Mandate will be expiring on 19 April 2024, being the date of the forthcoming AGM. The Directors proposed that approval for the renewal of the Share Purchase Mandate be sought at the forthcoming AGM.

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Wilmar International Limited published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 00:57:04 UTC.