BUKHATIR GROUP

Strength through Diversity

Group Policy and Procedure

Group Supply Chain (GSC)

Scrap & Surplus Management

Disposal, Closed Tenders & Proceeds Control

Document No: P-POL-008

Copyright © 2026 Bukhatir Group

Revision Control

This document is issued under the authority of Bukhatir Group and applies when carrying out the activities described. Revisions may be issued as necessary under the authority of the Group Head of Procurement. Revision history is recorded below with every revised policy.

Revision History

Revision Sign-Off

Distribution List

1. Purpose & Objective

This SOP defines the responsibilities and process for the management, disposal and sale of scrap, surplus and obsolete materials across Bukhatir Group Business Units. The objectives are to inform Management on reuse versus disposal decisions, and to ensure the best achievable market price is obtained on all scrap sales through a transparent, auditable process.

2. Scope

This policy applies to all 100%-owned Business Units of Bukhatir Group and to any scrap, surplus inventory, obsolete assets, used equipment, vehicles, fixtures or leftover construction materials that are no longer required for operations.

3. Definitions

4. Policy

1. All scrap and surplus material shall be processed through the BU Central Store in the first instance and classified in the Inventory Management System as Reusable Scrap or Non-Reusable Scrap.
2. Each BU shall establish a standing Scrap Committee composed of representatives from Finance, Stores, Procurement and the Department owning the scrap. The Committee evaluates and endorses scrap quotations prior to award.
3. BU Procurement shall adopt a closed-tender model when soliciting quotes, engaging in negotiations to secure the most favourable market price. Awards are endorsed by Group Procurement where applicable.
4. All requests for disposal of scrap or surplus material with an estimated value above AED 20,000 shall be routed to Group Procurement via a completed Disposal Request Form (DRF), after obtaining the necessary approvals per the Delegation of Authority.
5. Scrap and surplus material with an estimated value at or below AED 20,000 may be approved by the BU Head, with the full DRF package attached for record.
6. No scrap or surplus material may be removed from Group premises without a system-recorded Delivery Note and supporting Scrap Disposal Report (SDR).
7. Proceeds from scrap sales shall be banked into the Group account and recognised by Finance; no cash payments to individuals are permitted.

5. Governance & Ethics

• Segregation of duties: the individual preparing the DRF shall not also approve the award.
• Buyers List is maintained by Group Procurement and reviewed at least annually.
• All scrap transactions are subject to Internal Audit review.

6. Environmental & ESG Considerations

Disposal of scrap and surplus materials shall comply with UAE environmental regulations and the Group Sustainability Policy. Preference shall be given to buyers who demonstrate responsible recycling, safe handling of hazardous materials, and proof of legitimate downstream processing. Hazardous waste shall only be disposed of through licensed waste contractors.

7. Detailed Procedure

1. Source department identifies scrap / surplus and notifies BU Stores and BU Procurement.
2. Items are transferred to the central store, inspected, weighed / counted and classified.
3. BU Procurement prepares the DRF with full description, quantity, condition and photographs.
4. Scrap Committee convenes, reviews and endorses the DRF.
5. Closed RFQ is issued to buyers on the approved Buyers List (minimum three buyers).
6. Bids are received sealed; QCS is prepared ranking bids from highest to lowest.
7. Approval obtained: BUH (≤ AED 20K) or Group Procurement endorsement (> AED 20K).
8. Delivery Note issued; items released to the winning buyer against proof of payment.
9. SDR completed; proceeds recorded by Finance; Inventory System updated.

8. Flowchart

Figure 9: Scrap & Surplus Management Workflow