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Guidance Notes 11 - Independent Directors
Guidance Notes 12 - Recurrent Related –Party Transactions of a Revenue Nature

The Malaysia Securities Exchange Berhad has issued amendments to the Listing Requirements for the MESDAQ Market (hereinafter referred to as the "said Amendments") together with Guidance Notes 11 on Independent Directors and Guidance Notes 12 on Recurrent Related-Party Transaction of a Revenue Nature (collectively referred to as the "Guidance Notes").

Scope and Objectives

The said Amendments and Guidance Notes are part of the Exchange's ongoing efforts to enhance the regulatory framework for companies listed on the MESDAQ Market. The primary objective of eth said Amendments and Guidance Notes is to rationalise the relevant provisions with those of the Listing Requirements for the Main Board and Second Board and the Securities Commission's guidelines, where applicable or necessary.

Key Changes

The key changes encompassed in the said Amendments include the following:

• Amendment to the definition of "independent director";

• Removal of the requirement foe substantial shareholders to submit a statutory declaration in an application for listing;

• Prescribing the conditions which apply to shareholders wishing to irrevocably undertake to subscribe to a rights issue;

• Inserting provisions allowing Listed Companies to seek their shareholders' mandate in respect of recurrent related party transactions of a revenue nature and prescribing the applicable conditions in relation to the same;

• Deletion of the relevant provisions pertaining to prospectuses; and

• Inserting provisions relating to breaches by subsidiaries and directors of Listed Companies.

Brief Summary of the Guidance Notes

A brief summary of Guidance Notes 11 and Guidance Notes 12 is set out below:

• Guidance Notes 11 clarifies certain aspects of the amended definition of "independent director" and further prescribes the circumstances in which a person who fulfills all the requirements of the definition of "independent director" save for paragraph (e) thereof, may apply to the Exchange to be considered as an independent director.

• Guidance Notes 12 clarifies the application of the relevant requirements pertaining to recurrent related party transactions of a revenue nature and also sets out the additional information required to be included in a circular seeking shareholders' mandate for such transactions.

Implementation

The said Amendments and Guidance Notes shall take effect from 2 February 2004. As a transitional measure, Listed Companies are given up to 30 April 2004 to take necessary steps to comply with the amended definition of "independent director" and Part I of Guidance Notes 11. To aid the Listed Companies in complying with the aid Amendments and Guidance Notes, a set of Questions and Answers has been issued by the Exchange.

The said Amendments, Guidance Notes and the Question and Answers are available for reference at the KLSE Berhad website at http://www.klse.com.my and the Bar Council Secretariat. Copies may also be purchased at the Secretariat at reasonable photostating charges. For further details, kindly contact Ms. Vinodhini Samuel at ext 149/e-mail: vino.bs@malaysianbar.org.my

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