Group Anti-Bribery and Corruption Policy and Procedures

1. Objectives
   1. Conflicts of interest may arise in situations where Personnel¹ engage in businesses or other activities outside the Group² or have personal interests, whether it directly or indirectly benefits themselves or their closely related person(s), i.e. close relatives³ or close associates⁴, which competes or conflicts with the interests of the Group.
   2. Furthermore, a conflict of interest arises in a situation in which an individual is able to take advantage of his or her role in the Group for his or her personal benefit, including the benefit of his/ her family/ household and friends. This would undermine the duties of good faith, fidelity, diligence, and integrity as expected by the Group from its Personnel in the performance of their duties and obligations. In addition, it may also attract legal liabilities.
   3. Employees should try to avoid any conflict of interest. However, in the event that the conflict is unavoidable, employees must obtain written approval of their respective Head of Department (“HOD”) before undertaking activities which may give rise to a conflict of interest.
   4. The Company Secretary is responsible for managing the director’s statutory conflict of interest declarations. Where a Subsidiary has its own board of directors, the Company Secretary of that Subsidiary shall be responsible for the directors’ statutory declarations.
   5. Business Associates⁵ are required to declare any Conflict of Interest, which arises as part of their commercial relationship(s) with the Group.
2. Definitions
   1. A conflict of interest may arise where a Personnel might be seen to be influencing Group matters for actual, potential or perceived personal benefit. Such a conflict may arise in a situation when a director or an employee, is able to influence (directly or indirectly) the Group’s business, or other decisions in ways that could lead to gain for themselves, their family or others.
   2. A conflict of interest may relate to a Personnel’s own interests or to a connected person, which means family, relatives, close associates, or persons from any business of which the Personnel may hold any direct or indirect interest.
   3. An interest can be a financial or non-financial interest:
      1. Financial interests include remuneration (such as salary, wages, commission, consultancy fees, or other form of income) and assets (investments, stocks, bonds, property).
      2. Non-financial interests include enhancement of career, education or reputation, access to privileged information or facilities. Although many of these interests may not compete with the Personnel’s current duties and responsibilities to the Group, however, where a
         Personnel’s obligations to the Group are, or may appear, to be compromised, then a conflict of interest may still occur.
   4. For the purpose of this Policy and Procedures, the Group defines conflicts of interest broadly as:
      1. Actual Conflicts of Interest (the person faces a real, existing conflict).
      2. Potential Conflicts of Interest (the person is in or could be in a situation that may result in a conflict, but this has not fully materialised); and
      3. Perceived Conflicts of Interest (the person is in or could be in a situation that may appear to be a conflict, even if this is not the case).
   5. All three types of Conflict of Interest above are a potential risk to the Group. Therefore, all actual, potential or perceived conflicts that may arise, as a result of a business or personal relationship, should be declared.
3. Avoiding Conflicts of Interest
   1. Where there exist conflicts of interest, no Personnel should be involved in making decisions on behalf of the Group. If there are any doubts on whether the decision made may conflict with the Group, then the test for bias would be whether an objective and informed observer would have reason to suspect that a conflict of interest may exist.
   2. Such considerations apply to a wide range of activities, in which conflicts of interest may arise, including, but not restricted to staff recruitment, staff promotion and remuneration, disciplinary proceedings, appeals, procurement, and assessing proposed relationships between the Group and other third parties.
   3. Examples of situations in which conflicts of interest might arise, include:
      1. where there is actual, potential, or perceived personal gain or gain to a close relatives/ close associate.
      2. where there is actual, potential, or perceived financial/ non-financial gain
         which may be seen to influence action or decision-making.
      3. where an individual is in a position whether actual, potential, or perceived to, directly or indirectly enhance their career or the career of others, with whom they are personally associated.
      4. where there is actual, potential, or perceived reputational impact, for either the Group or the Personnel.

      Further examples are listed in Appendix A.

   4. Staff recruitment is an activity which requires additional transparency and careful management of interests. All related interests must be recorded, inclusive of how the conflict of interest was managed.
   5. In relation to external commitments that may create conflicts of interest, Personnel should ensure that they do not enter commitments or engage in activities which are inconsistent with their terms and conditions of employment for staff, or terms of appointment for directors, regarding outside commitments or activities and the permission required to enter such commitments or engage in such activities.
   6. In the event of queries or doubts concerning a conflict of interest, Personnel should refer to the Group policies. Alternatively, Personnel may seek advice from HOD and/ or Human Resource Department (“HR”). Should further advice be required, Personnel may also seek guidance from the Risk/ Integrity Officer of the company, or the Head of Risk/ Integrity, or PPB Group Berhad’s Risk Management & Integrity Department (“PPBHQ RMID”).
4. When To Declare Conflicts of Interest
   1. Personnel
      1. All Personnel shall declare their conflicts of interest, whether actual, potential, or perceived conflict:
         1. during the onboarding process, i.e. new employment or when transferred between roles.
         2. on an annual basis. For employees, this exercise will be initiated by HR. For directors, they will undertake an annual declaration of their interests and submit their declaration to the Company Secretary. (Note: For annual declaration, employees are still required to provide their declaration to HR even when there is no conflict).
         3. on ad hoc basis. That is, immediately or as soon as they become aware of any changes to their current interests.
      2. Whilst it is primarily the duty of a Personnel to declare all interests, others, such as a manager, colleague, or employees of the Group, may also become aware of an actual, potential, or perceived conflict of interest and should request that the Personnel declare their interests so
         that they can be dealt with appropriately.
      3. There may be times where Personnel would not necessarily know whether there exists a conflict of interest, and if so, how it should be dealt with. As such, when in doubt, Personnel are advised to always declare the conflict.
   2. Business Associates
      1. Business Associates are also required to complete a declaration of interests when dealing with the Group. A declaration should be made:
         1. during the onboarding process as a new Business Associate.
         2. during the renewal of the relationship.
         3. as soon as they become aware of any changes to their current interests.
      2. Declaration should be made either to the Procurement Department, or the relevant Business Sponsor/ Project Sponsor⁶.
5. Making a Declaration
   1. To declare a conflict of interest:
      1. Employees:
         1. A declaration can be made to the HOD by completing the Conflict of Interest Declaration Form (“COI Declaration Form”). If necessary, the HOD may consult the relevant party (as specified in the COI Declaration Form) for the proposed action plan on how to mitigate or resolve such conflict. Thereafter, the HOD shall review the proposed action plan, sign off the form (approve), and ensure that the necessary
            controls are in place.
         2. No employee is allowed to approve their own Conflict of Interest Declaration. For clarity, where the conflict involves the senior management, the declaration should be made as follows:
            • HOD to declare to the Head of Company (“HOC”).
            • HOC to declare to Chief executive Officer (“CEO”).
            • CEO to declare to Group Managing Director (“Group MD”).
            • Group MD to declare to the Board of Directors (“BOD”) Chairman.
         3. Once completed, the employee is to forward the COI Declaration Form to HR for record and keep a copy of the form for his/ her own record and future reference. Thereafter, he/ she is required to lodge the declaration into the Conflict of Interest Register (“COI Register”) and attach the COI Declaration Form as supporting document.
         4. Conflicts of interest relating to recruitment, transfer, or promotion, must be dealt with in accordance with HR’s policy and procedures. If there are no conflicts of interest, HR will proceed with the hiring, onboarding, or transfer process and Personnel will be informed of the outcome. Where the conflict of interest falls within the category of high-risk personnel, e.g. recruitment of individuals with connection to political officials or public officials, HR must notify PPBHQ RMID, or the Head of Risk/ Integrity, or the Risk/ Integrity Officer of the company and subsequently obtain
            approval from the HOC/ CEO/ Group MD (as the case may be). The outcome of each case shall be recorded accordingly.Please refer to Appendix B for the declaration process flowchart for employees.
      2. Business Associates:
         1. A declaration can be made to the Procurement Department or to the relevant Business Sponsor/ Project Sponsor. The Procurement Department, or the relevant Business Sponsor or Project Sponsor will then review the declaration and consult the relevant party as per Group’s internal procedure, for the proposed action plan on how to mitigate, or resolve such conflict. Thereafter, the Head of Procurement or Head of the Business Sponsor/ Project Sponsor shall review the declaration and sign-off (approve) the form.
         2. Once completed, the Procurement Department or the relevant Business Sponsor/ Project Sponsor is to keep a copy of the form for its own record and future reference. Thereafter, they are required to lodge the declaration into the COI Register.
      3. Committees:
         1. At the beginning of any committee meeting or meetings where decisions are made, there should be a standing item on the agenda on conflicts of interest. Members of the meeting shall declare any conflict of interest, whether actual, potential, or perceived conflict of interest. The minutes of each meeting should record whether any conflicts of interest were declared.
      4. Directors:
         1. In respect of directors, additional provisions for the management of the BOD (including the BOD Chairman) on actual, potential, or perceived conflicts of interests and conflicts of loyalty should be followed. A conflict of loyalty may occur where a director’s loyalty or duty to another person or organization could prevent them from deciding in the best interests of the Group.
         2. Directors should be mindful of the potential for bias in decision-making and, with the Company Secretary, should consider whether there is the possibility of actual or perceived bias in fulfilling their various roles in the Group. The provisions for the Management of Declaration of Interests by Directors are set out in Appendix C of this Policy and Procedures.
6. Assessing And Dealing with Conflicts of Interest
   1. As stated above, all declared actual, potential, or perceived conflicts of interests should be reviewed and considered by the HOD (or the Committee Chair, as appropriate). Where the declaration relates to a specific activity, it must be assessed accordingly by the HOD, and the party consulted (relevant department). The HOD should then determine if further action is required based on the recommendation by the consulted party (if any).Personnel should not determine the management of their own declarations.
   2. Several factors may need to be considered when assessing the seriousness of the conflict of interest declared and to avoid any potential for bias. These include but are not limited to:
      1. the seriousness of the actual, potential, or perceived conflict
      2. how closely the two interests are related to each other
      3. the magnitude of the actual, potential, or perceived effect of one on the other
      4. the nature or significance of the decision or activity being carried out
      5. the extent to which the individual’s other interest could affect or be perceived to affect the Group’s decision or activity
      6. the nature or extent of the individual’s current or intended involvement in the PPB Group’s decision or activity
7. Potential Outcomes
   1. No Conflict Exists
      1. Where the HOD (or the Committee Chair) determines that there is no conflict of interest, this should still be formally recorded and lodged in the COI Register. An explanation and any supporting documentation, i.e. COI Declaration Form, should be included as to why it was concluded that no conflict of interest arose.
      2. In the instance that the overlap of two or more interests is so slight that it does not constitute a real conflict of interest, for example, where the connection between the interests is remote or insignificant, then it may be determined that such interests do not represent a conflict.
   2. Conflict Does Exist
      1. Once a conflict of interest is determined to exist, the HOD (or Committee Chair) will decide on the appropriate action. These may include, to:
         1. Continue: be permitted to continue with full participation, and no restrictions.
         2. Continue with exemption: be permitted to continue with full participation, and no restrictions.
         3. Continue with restrictions or additional oversight: additional oversight or review over their activity in relation to the project or transaction.
         4. Abstain: for the individual to abstain/ withdraw from any decision-making in relation to the project.
         5. Reassign: reassign/ refer the decision, tasks, or duties to others.
         6. Remove/ Withdraw Entirely: for the Personnel to be removed from any involvement, or to withdraw entirely from the project, where there is a significant or ongoing conflict.
      2. If the Committee Chair has a conflict of interest, the committee should agree for the Deputy Chair or another appropriate member to act as the Committee Chair for the relevant conflict/ matter.
   3. The HR/ Procurement Department/ Business Sponsor/ Project Sponsor/ HOD may consult the Risk/ Integrity Officer, or Head of Risk/ Integrity, or the PPBHQ RMID, on any area of concern pertaining to the conflict of interest declaration. A copy of the COI Declaration Form is to be provided to enable assessment to be conducted.
   4. The Committee Chair may consult the Company Secretary for advice. The Company Secretary may consult the Risk/ Integrity Officer, or Head of Risk/ Integrity, or the PPBHQ RMID, and/ or Legal Department, if necessary.
8. Consequences for Non-Disclosure
   1. Failure to disclose a conflict of interest, providing an incomplete or inaccurate disclosure of a conflict of interest, failing to seek approval in an event of a conflict of interest, or failing to appropriately deal with a conflict of interest, may constitute misconduct or a breach of terms and conditions of employment (for employees) and may result in disciplinary action being taken by the Group. For directors, it may result in termination of their appointment.
   2. For Business Associate, failure to disclose any conflict of interest may cause the contract or transaction to be terminated and potentially blacklisted from future dealings with the Group.

Appendix A: Examples of Interests and Potential Conflicts of Interests

Appendix B: Conflicts of Interests for Employees Flowchart

Appendix C: Management of Declaration of Interests by Directors

Footnote

1. Objectives
   1. PPB Group¹ is committed to conducting our business with the highest standard of integrity and with good governance.
   2. The Group has adopted a “No Gift Policy” whereby, the Group’s Personnel² and their family members are prohibited from, directly or indirectly, receiving gifts in any form in their dealings with third parties such as stakeholders, customers (including potential customers), partners and vendors, subject only to certain narrow exceptions.
   3. The Group requires all its Personnel to abide by this Policy and Procedures, especially during on-going or potential business dealings between the Group and external parties, as a gift can be seen as a bribe that may be in violation of anti-bribery and corruption laws or tarnish the Group’s reputation.
   4. PPB Group’s Personnel has the responsibility to inform external parties involved in any business dealings with the Group of our “No Gift Policy” practice and to request the external party’s understanding and adherence to this Policy and Procedures.
   5. The Group’s giving and receiving of charitable and philanthropic donations are subject to separate procedures. Please refer to the Charitable Donations and Sponsorship Policy and Procedures for further information.
2. Receiving Gifts
   1. The Group is very much aware that the exchange of gifts can be a very delicate matter where, in certain cultures or situations, gift-giving is a central part of business etiquette. Despite acknowledging the Group’s “No Gift Policy”, some external parties may still wish to provide gifts to the Group’s Personnel and/ or their family members in certain situations which do not fall within the general exceptions.
   2. Although the general principle is to immediately decline or return such gifts, accepting a gift is allowed only in very limited circumstances, whereby refusing the gift is likely to seriously offend and may sever the Group’s business relationship with the third party, for example gifts given due to customary practices, such as weddings or funerals.
   3. In these limited circumstances, unless otherwise specified under Section 4 below or as specified in the Gift Exception Guidance, employees are expected to immediately report the gift to the Head of Department (“HOD”) (in writing), who will then verify the declaration and decide whether to approve the acceptance of the gift or require it to be returned. If necessary, HOD may seek advice from the Risk/ Integrity Officer, or Head of Risk/ Integrity, or PPB Group Berhad’s Risk Management & Integrity Department (“PPBHQ RMID”), and/ or HOD to endorse the declaration and obtain approval from Chief Executive Officer (“CEO”)/ Group Managing Director (“Group MD”) (for local entities) or Head of Company (“HOC”) (for foreign subsidiaries). Subsequently, this must be recorded in the GHE Register. Directors should inform the Company Secretary, as soon as reasonably practicable, to seek his/ her advice when faced with a similar situation.Please refer to Appendix A for the gift declaration process flowchart for employees.
   4. In determining the above, the approver is expected to exercise proper care and judgment in each case, taking into account important circumstances including the nature of the gift, its purpose, the position/ seniority of the person(s) providing the gift, the business context, reciprocity, applicable laws and cultural norms.
   5. Even if it may appear disrespectful to refuse or decline a gift from an external party, nevertheless, if there is a conflict of interest situation (e.g. during sensitive period such as a tender or bidding process, where the gift is personal in nature, given by one of the bidders), then clearly such gifts cannot be accepted. In this situation, the gift must be politely returned with a note of explanation about the Group’s “No Gift Policy”.
3. Providing Gifts
   Generally, employees are not allowed to provide gifts to third parties, except for the HOC, or CEO, or Group MD, and any other officers authorized by the HOC/ CEO/ Group MD to do so. However, there are limited exceptions allowed.
4. Exceptions to the “No Gift Policy”
   1. Although generally the Group practices a “No Gift Policy”, there are certain exceptions to the general rule whereby the receiving and giving of gifts are permitted in the following situations:
      1. Exchange of gifts at the company-to-company level, e.g. gifts exchanged between companies as part of an official company visit / courtesy call/ signing ceremony/ launch event and thereafter said gift is treated as company property.
      2. Gifts which are given openly and transparently and given to all attendees in relation to a company’s official function, such as reasonable door gifts or commemorative gifts.
      3. Gifts of personal occasions that may be given to, or received by Personnel, which is not connected to their duties, and does not create a sense of obligation, such as gifts from family members or work colleagues for birthday, weddings, retirement, resignation, etc.
      4. Corporate gifts of reasonable value normally bearing the company’s logo, e.g. t-shirts, pens, diaries, calendars, and other marketing or promotional items³, which is part of the branding exercise, that are given as part of general business courtesy and is a common practice within its industry/ business environment.
      5. Gifts to or from external parties who have no business dealings with the Group, e.g. monetary gifts or gifts in-kind to charitable organizations.
      6. Other gifts, e.g. ceremonial or customary gifts, which are spelt out in the Gifts Exception Guidance.
   2. To be clear, corporate gifts of reasonable value, as stated under Section 4.1 (d) above, are permitted, even during sensitive period as this is considered as part of marketing, branding and promotion exercise and as part of general courtesy with the third party, including public officials, without the appearance of bribing.
   3. Even in the above exceptional circumstances, PPB Group Personnel are expected to exercise proper judgment in handling gift activities and behave in a manner as per below:
      1. Continuously maintain the highest degree of integrity.
      2. Always exercise proper care and judgment.
      3. Done openly and transparently, and not in secret.
      4. Avoid conflicts of interest.
      5. Refrain from taking advantage of their position or exercising their authority to further their personal interests at the expense of the Group.
      6. No intention to illegally influence a third party to do or refrain from doing something to obtain or retain business for the Group.
      7. Comply with applicable laws, regulations and all Group policies and procedures.

      In addition to the exceptions specified under Section 4 here, please also refer to the Gift Exception Guidance for other exceptions under this “No Gift Policy”.

5. Consequences of Non-compliance with this “No Gift Policy”
   Any non-compliance or violation with this No Gift Policy and Procedures, including the Gift Exception Guidance, may constitute as a misconduct or a breach of terms and conditions of employment (for employees) and may result in disciplinary action being taken by the Group. For directors, it may result in termination of their appointment.
6. Further Information
   For further guidance and information, employees may contact the PPB HQ Risk Management & Integrity Department or reach out to the respective entities’ Head of Risk/ Integrity, or the Risk/ Integrity Officer. Business Associates and other third parties may contact PPB’s Corporate Affairs at [email protected] for any enquiries regarding this Policy.

Appendix A: Gift Declaration Process Flowchart for Employees (Exception Basis)

Footnote

1. Objectives
   1. The objective of this Policy and Procedures is to serve as a guidance and point of reference with regards to the giving and/ or receiving of hospitality and entertainment, to prevent any corrupt acts. In doing so, this Policy and Procedures will:
      1. assist in avoiding conflict of interest or the appearance of conflict of interest in any on-going or potential business dealings with the Business Associates¹.
      2. promote transparency in the disclosure of hospitality and entertainment received and/ or given.
      3. support the building of good business relationships between PPB Group and its Business Associates.
   2. This Policy and Procedures applies to expenditure on Hospitality and Entertainment given or received by PPB Group’s² Personnel³ to existing or potential Business Associates, existing or potential customers, or any third parties that have business dealings with PPB Group.
   3. It does not include expenditure for meetings within the Group, i.e., between PPB Group and its Affiliates⁴. This expenditure will continue to be governed under PPB Group’s Financial Authority Limits (“FAL”) or the internal claim process.
2. Definitions
   Hospitality and entertainment expenditure includes:
   • the provision of food and drink.
   • the provision of recreation including amusement, sport, theatrical, sightseeing, and similar leisure time pursuits.
   • travel, transportation, or accommodation associated with any of the abovementioned activities during the course of business.

   It does not include the provision of light refreshments such as tea, coffee and sandwiches, or reasonable meals consumed on PPB Group’s premises.

3. Authority LimitsThe following PPB Group Personnel are authorized to incur reasonable hospitality and entertainment expenses in accordance with this Policy to further PPB Group’s business interests:
   • Chairman and the Board of Directors
   • Group Managing Director (“Group MD”)/ Chief Executive Officer (“CEO“)
   • Head of Company (“HOC”) / Head of Department (“HOD”)
   • Employees authorized by Group MD/ CEO/ HOC/ HOD
4. Expenditure And Record-keeping
   1. All expenditure on Hospitality and Entertainment incurred by the authorized Personnel must satisfy the following:
      1. have a direct link to advancing the business interests of PPB Group (includes any invited guests that are considered of benefit to advancing the business interests of PPB Group).
      2. aimed at creating and promoting genuine relationship building, e.g. knowledge sharing session.
   2. The designated approving officer must be able to identify that the expenditure is business related.
   3. The expenditure must be properly and accurately reported and authorized in accordance with the requirements of PPB Group’s FAL or other relevant policies pertaining to authority limits.
   4. Only “reasonable” and “appropriate” expenditure may be incurred. The authorized Personnel shall be guided by the following:
      1. the respective Business Units’ financial claims procedure with reference to the Hospitality and Entertainment threshold.
      2. the frequency of the provision of such expenditure.Please refer to the Summary of GHE Thresholds for more information.
   5. Examples of expenditure that is not “reasonable and appropriate” include:
      1. where there is an unacceptable element of risk. For example, any expenditure that may expose PPB Group to legal or reputational risk.
      2. the provision of lavish meals, travel (including accommodation), or entertainment⁵ which is neither necessary nor justifiable.
      3. where there is an obvious mismatch between the quantum of the expenditure and the outcome.
      4. providing overly frequent and excessive Hospitality or Entertainment.
      5. the incurrence of Hospitality and Entertainment expenditure that may involve family and friends of the Personnel and Business Associate, or expenditure which is not business related.
   6. In addition to the above, Personnel are STRICTLY PROHIBITED from either paying for, or participating in any activities which are exorbitant, illegal, and immoral. Examples of expenditure that are unacceptable are as follows:
      1. entertainment at night clubs.
      2. provision of sexual favours.
      3. extravagant or disproportionate circumstances.
   7. When requesting reimbursement of expenses incurred on Hospitality and Entertainment, the authorized Personnel shall include the following:
      1. the names of all PPB Group recipients of the benefit.
      2. the names of all other recipients of the benefit, and the organization and department, of which they are a representative.
      3. original receipts or tax invoices with clear details on the expenditure incurred.
      4. provide the purpose of the claim, i.e. justifying how the business interests of PPB Group have been advanced by the incurrence of the expenditure.
      5. any other information that may be required by the Finance Department for the reimbursement of expenses.
   8. In incurring of expenses, the most senior Personnel hosting the hospitality or entertainment must pay and submit the claims for approval in accordance with the FAL or existing claims procedures.
5. Limitations
   1. Any giving and receiving⁶ of hospitality or entertainment during sensitive period, should be avoided or declined. Examples of sensitive period (non-exhaustive) include:
      1. During an external audit, inspection, or quality assessment.
      2. Where it involves an approval, such as during an application for license or renewal of permit.
      3. During tender process or contract negotiation.

      However, in some limited circumstances, reasonable⁷ hospitality may be permitted on an occasional basis, for example, a courtesy meal for the team conducting the audit, inspection, or assessment (if permitted by local law) at a moderately-priced restaurant, to mark the end of a review or an assessment exercise. Employees must obtain prior approval from the HOC/ CEO/ Group MD, based on the recommendation/ endorsement of the HOD, before any giving or receiving of hospitality or entertainment.

   2. For any hospitality or entertainment given to authorities or public officials, prior approval must be obtained from the HOC/ CEO/ Group MD on the recommendation/ endorsement of the HOD and declared in the GHE Register.Please refer to Appendix A and Appendix B for the hospitality and entertainment declaration process (giving and receiving) for employees.
   3. For clarity, both scenarios (a) & (b) above do not include the provision of light refreshments such as tea, coffee, and sandwiches, or reasonable meals consumed on PPB Group’s premises.
   4. Personnel must be present (as the host) when providing any Hospitality or Entertainment. Otherwise, the expenditure is considered as a gift.
   5. Any offers of hospitality, i.e., travel, transportation, or accommodation by Business Associates is only allowed if it is specified in the contract. Otherwise, any offer to pay for Personnel’s travel, transportation, and accommodation expenses require prior approval from HOC/ CEO/ Group MD, on the recommendation/endorsement of the HOD.For clarity, modest offer of transportation, for example, offer from Business Associates to pay for Personnel’s taxi fare to the airport after a meeting, is permitted and does not need to be declared.

Appendix A: Hospitality and Entertainment Declaration Process (Giving) Flowchart for Employees

Appendix B: Hospitality and Entertainment Declaration Process (Receiving) Flowchart for Employees

Footnote

1. Objectives
   1. PPB Group¹ is committed to conducting its business in accordance with applicable laws and regulations and in a way which will maintain and enhance its reputation in the market. One aspect of this commitment is that PPB Group always behaves in a professional, honest, and responsible manner and avoids any conduct which may be considered to be corrupt or contrary to good corporate ethics.
   2. PPB Group strictly prohibits any activity that seeks to bribe, corrupt or otherwise improperly influence a Public Official in any country, or to act (or omit to act) in a way that differs from that official’s proper duties, obligations, and standards of conduct.
2. Applicability
   1. This Policy and Procedures should be read in conjunction with the Code of Conduct & Ethics, Whistleblowing Policy and Procedures and other relevant Group policies.
   2. This Policy and Procedures applies to all PPB Group’s Personnel² , Business Associates³ and any other person associated with PPB Group, wherever located.
3. Definitions
   1. Bribery can be any inducement or reward offered, promised, or provided in order to make a person act improperly, or to reward them for having done so. It is important to recognize that a bribe can be anything of value, and therefore is not only related to the payment of money. For example, it could include offering entertainment, gifts, travel, job offers and advantages for family or friends.
   2. A Public Official includes:
      1. a person who holds a legislative, administrative, regulatory, or judicial position of any kind, whether appointed or elected.
      2. a person performing the duties of an officer or position created under a law of a country or territory (including foreign country), or by the custom or convention of a country.
      3. a person in the service of a government body including a member of the military or the police force.
      4. a politician, judge, or member of the legislature of a country.
      5. an employee, official or contractor of a government body or state-owned enterprise.
      6. an employee, contractor, or person otherwise in the service of a public international organization (such as the United Nations).
      7. an individual who is or who holds himself or herself out to be an authorized intermediary of a Public Official.
4. Prohibited Behavior
   Under this Policy and Procedures, PPB Group’s Personnel, Business Associates, and any other person associated with PPB Group (including their representatives) must not:
   1. Bribe a Public OfficialPersonnel and Business Associates must not seek to bribe, corrupt or otherwise improperly influence a Public Official in any country. Such actions are in direct violation of the Group’s ABAC Policy and Procedures and the Code of Conduct & Ethics. This conduct is also an offence under the laws of many jurisdictions where the Group operates. Committing bribery may expose PPB Group and the individual to criminal penalties. These penalties could include substantial fines and, in the case of an individual, imprisonment. Team members may also be subject to internal disciplinary action, including possible dismissal.
   2. Make a ‘Facilitation Payment’
      PPB Group also prohibits its Personnel and Business Associates from making Facilitation Payments to Public Officials in any country. A facilitation payment may constitute a bribe and is made with the intention of expediting an administrative process.For more information on Facilitation Payment, please refer to the Group’s No Facilitation Payment Policy and Procedures.
5. Dealing With Public Officials
   1. Each entity under the PPB Group should have appropriate procedures for dealing with Public Officials. These procedures should include appropriate training so that team members understand the special circumstances which apply to dealing with public officials.
   2. PPB Group’s Personnel should follow the general prohibitions and guiding principles as detailed in the No Gifts Policy and Procedures and the Hospitality and Entertainment Policy and Procedures.
   3. Generally, the offering of gifts, hospitality or entertainment to Public Officials would be inappropriate in a range of circumstances, including where the Public Official is exercising their discretionary power such as in a tender process. However, in some limited circumstances, and depending on local laws, this may be permitted subject to prior approval from the Head of Company
      (“HOC”) (for foreign entities only), or the Chief Executive Officer (“CEO”), or the Group Managing Director (“Group MD”), and based on HOD’s recommendation.For clarity, the approval process under Section 5.3 above does not include the provision of light refreshments such as tea, coffee and sandwiches, or meals consumed on PPB Group’s premises. For more information, please refer to the No Gifts Policy and Procedures and Hospitality and Entertainment Policy and Procedures.
6. Political Lobbying, Political Donations and Political Activities
   1. Any form of political lobbying (the act of attempting to influence decisions made by officials in the government) by PPB Group’s Personnel or Business Associate is STRICTLY PROHIBITED.
   2. Any form of political donation made on behalf of the Group is STRICTLY PROHIBITED. For more information on political donations, please refer to the Charitable Donations and Sponsorship Policy and Procedures.
   3. Senior Personnel⁴ must not attend or participate in any political activities, e.g. party conferences or events, where they are, or may be deemed to be, representing the Group, without the prior approval of the HOC (for foreign entities only), or the CEO, or the Group MD.For clarity, any employee who attends or participate in political activities, should be doing so within their personal capacity, that is, while employee is off-duty, away from the office/ workplace/ any of the Group’s property, and without the use of the Group’s uniform, vehicle or the
      Group’s logo.
   4. Any third party who is authorized to engage with a Public Official on behalf of PPB Group is required to read and acknowledge their understanding of this Policy and Procedures.
7. Expenditures
   Any expenditures in respect of gifts, hospitality and entertainment for Public Officials should be approved in accordance with the Group’s No Gifts Policy and Procedures and Hospitality and Entertainment Policy.
8. Detecting And Reporting
   1. PPB Group recognizes the value and importance of Personnel and Business Associates reporting identified or suspected instances of bribery of Public Officials and other corrupt practices and strongly supports such disclosures and reports.
   2. Team members should remain alert to any instances of:
      1. other team members, joint venture partners, project partners or advisers, attempting to, or succeeding in, bribing, or corrupting a Public Official, or
      2. where their conduct does not meet the standards of behavior required under this Policy and Procedures.
   3. Reports concerning possible instances of bribery of Public Officials, or other examples of corrupt practices, should be made in accordance with the Group’s Whistleblowing Policy and Procedures, or reported to the Risk/ Integrity Officer, or the Head of Risk/ Integrity, or to PPB Group Berhad’s Risk Management & Integrity Department (“PPBHQ RMID”).
9. Other ConsiderationsPublic Officials often have their own Code of Conduct (or equivalent) relating to acceptance of gifts, hospitality, or entertainment. These guidelines generally provide that acceptance of gifts, hospitality or
   entertainment would be inappropriate in a range of circumstances, including where the provider of the gift, hospitality or entertainment is involved in a tender process or is the subject of a decision within the discretionary power or substantial influence of the government employee concerned.The Group recommends that all its Personnel, Business Associates and any third party who is authorized to engage with a Public Official on behalf of PPB Group, read and familiarize themselves with the Public Officials Code of Conduct (or equivalent) before engaging with them.

Footnote

1. Objectives
   1. PPB Group¹ is committed to dealing with its Business Associates² in a fair, transparent, and ethical manner. As such, the objective of this Business Associates Policy and Procedures is:
      1. to outline the responsibilities of PPB Group’s Personnel³ to ensure that the collaboration with Business Associates is done in accordance with applicable laws, PPB Group’ policies and procedures, and standards of conduct.
      2. to promote Personnel’s awareness of suspicious circumstances that may conceal bribery or corrupt behavior on the part of Business Associates.
   2. This Policy and Procedures applies to all PPB Group’s businesses and Personnel. PPB Group’s Business Associates are required to read, understand, and comply with this Policy and other relevant Group policies and procedures.
2. Personnel’s Responsibilities
   1. This Prior to entering into a new contract or commitment with a Business Associate, Personnel from the Procurement Department, or the Business Sponsor/ Project Sponsor⁴ are required to:
      1. conduct and document the due diligence on the Business Associate which involves proportionate and risk-based due diligence, including, as appropriate, a review of the potential Business Associates’:
         1. reputation
         2. ownership
         3. links to government or government officials
         4. financial performance
         5. qualifications and experience
         6. creditworthiness
         7. governance and business conduct frameworks, and
         8. any other considerations relevant to the engagement of the Business Associate.
      2. perform regular/ ongoing monitoring of Business Associate’s conduct, in particular where “red flags” have been identified. This can be achieved during their performance evaluation. For more information on conducting due diligence on Business Associates, please refer to the Third-Party Due Diligence Policy and Procedure.
      3. communicate PPB Group’s expectation, by directing our Business Associates to the respective entities under PPB Group’s website, to review the Group’s Anti-Bribery and Corruption Policy and Procedures, and any other relevant policies under PPB Group. PPB Group may also require certain Business Associates to attend training, especially where significant bribery risk has been identified.
      4. document the terms of relationship by entering into a written agreement which contains appropriate legal and contractual provisions (including in relation to compliance with PPB Group’s Anti-Bribery and Corruption Policy and Procedures, and any other relevant policies, and the right to immediate termination in the event of a serious violation of PPB Group’s policies and procedures, or applicable law).
      5. obtain all necessary internal reviews and approvals of the written agreement in accordance with the applicable delegated authority, having regard to PPB Group’s internal review process, including a legal review.
3. Business Associates’ Responsibilities
   1. PPB Group expects all its Business Associates to share the Group’s values and adhere to its stance on bribery and corruption. This particularly applies to any Business Associates working on behalf of the Group, e.g. agents, distributors, and intermediaries, who are required to ensure bribery and corruption does not occur in such organization’s related business dealings.
   2. All PPB Group’s Business Associates must be aware of PPB Group’s Anti-Bribery and Corruption principles,
      as well as the behavior expected of them, and agree to abide by them as long as they have a business
      relationship with the Group.
   3. New Business Associates are required to sign (i) Conflict of Interest Declaration, and (ii) Business Associate Integrity Pact, which is a commitment by the Business Associate to conduct its business without any element of bribery and corruption. Business Associates must be aware that if they are found to be involved with any bribery and/ or corruption or acted in a manner which is inconsistent with the Group’s ABAC Policy and Procedures, during the course of business, the Group then reserves the right to terminate the business relationship with the Business Associate.
   4. Business Associates are required to report any suspected instances of bribery and corruption that they encounter in their dealings with the Group’s Personnel via the Company’s Whistleblowing channels. For more information on making a whistleblowing report, please refer to the Group’s Whistleblowing Policy and Procedures.
4. Consequences of Non-compliance
   1. Laws prohibiting bribery and corruption may not differentiate between illegal acts made by PPB Group or someone acting on PPB Group’s behalf. Bribery and corruption are very serious offences under local and international laws, and corrupt behavior by PPB Group’s Business Associate, particularly intermediaries, could expose PPB Group and its Personnel to severe criminal (a fine or imprisonment or both) and civil liabilities (a financial penalty and liability for damages).
   2. Association with Business Associates who act disreputably or illegally, may:
      1. damage PPB Group’s reputation and jeopardize future business opportunities.
      2. expose PPB Group to scrutiny by regulatory bodies.
      3. make PPB Group complicit to any criminal or illegal acts carried out by the Business Associate.
   3. Any non-compliance with this Policy and Procedures by Personnel will be regarded by PPB Group as serious misconduct which may lead to disciplinary action, including termination of employment/ appointment. For Business Associates, it may lead to immediate termination of the relationship.

Footnote

1. Objectives
   1. The objective of this Policy is to provide awareness and guidance for PPB Group’s¹ Personnel² and its Business Associates³ on PPB Group’s No Facilitation Payment Policy and Procedures.
   2. This guidance is applicable to PPB Group’s Personnel and its Business Associates in all business dealings, and in particular, who have business dealings with countries that have high exposure to risk of corruption, regardless of whether they are working/ operating in Malaysia or overseas.
2. What is a Facilitation Payment?
   1. Facilitation Payment is a payment or other provision made to an individual in control of a process or decision, to secure or expedite a routine or administrative duty or function. Facilitation Payments may be requested by authorities, e.g. for the issuance of a visa, work permit or customs clearance. It may also occur in the private sector, e.g. an employee holding up processing an invoice until a payment has been received.
   2. Facilitation Payments are classified as acts of bribery and corruption under the Malaysian Anti-Corruption Commission Act 2009 and are illegal in most jurisdictions. Therefore, PPB Group prohibits the soliciting (asking), receiving, giving, offering, or promising of Facilitation Payments, whether in cash or in kind, by both Personnel and Business Associates who are acting for and on behalf of the Group.
   3. In the event employee receives a request or demand for Facilitation Payment; or is offered or promised a Facilitation Payment during a business transaction, he/ she must politely and firmly refuse such request/ demand/ offer/ promise. Employee must immediately, or as soon as practicable, report such request to the Head of Department (“HOD”), and thereafter to the Risk/ Integrity Officer, or Head of Risk/ integrity, or the PPB Group Berhad’s Risk Management & Integrity
      Department (“PPBHQ RMID”). For directors, they are to report to the Company Secretary.Please refer to Appendix A for the information required when reporting of Facilitation Payment, and Appendix B and the reporting process flow for employees.
   4. It is PPB Group’s policy that its Personnel or Business Associate are not permitted to claim any Facilitation Payments made, as expense claims.
3. Exception Under the Facilitation Payment ProcedurePPB Group is committed to providing a safe environment for all its Personnel. However, it is important to note that there may be circumstances in which individuals are left with no alternative but to make payments. Payments may be made where individuals fear for their health, safety, or liberty. In such cases where payment is unavoidable, the full details should be reported (when it is safe to do so) to the HOD and Risk/ Integrity Officer, or Head of Risk/ integrity, or the PPBHQ RMID.
4. How Should Personnel Deal with Request(s) For Facilitation Payments The 4Rs approach to resisting facilitation payments stresses the importance of knowing how to plan in advance to avoid these situations and how to deal with them when they arise. The 4Rs:
   • Research
   • Resist
   • Record
   • Report
   1. RESEARCH in advance of your travel:
      • Find out about any local anti‐bribery and corruption initiatives.
      • Official payment requirements, authorisations or permits may be required. If possible, obtain official written confirmation that all documents are in order.
      • Risk assessment – identify the likelihood that you will be asked to make a facilitation payment, the type of payment, and response. If necessary, enter into an agreement with those whom you are working with so that they are aware of the Group’s zero-tolerance approach to bribery and corruption, including on facilitation payments.
      • Build in the necessary time required to get through the administrative formalities in advance of your travel.
      • You may also seek assistance from a person familiar with the local context, procedures, and process.
   2. RESIST if it feels safe to do so:
      • Question the legitimacy of the request.
      • Explain that you have confirmation that your papers are in order from the relevant authorities.
      • Explain that facilitation payments are against Group policy and Malaysian law (or the relevant local law where applicable).
      • Even if after resisting the payment, the payment still appears unavoidable, try asking to make a payment through an office or with a receipt. This can be a useful tactic to avoid making facilitation payments.
   3. RECORD and keep full and accurate records of:
      • All payments that have been requested.
      • If possible (and safe to do so), discreetly record the details of the individual requesting the payment and any other details.
   4. REPORT immediately, or as soon as practicable:
      • Report the request to your manager or HOD.
      • Explain what happened with as much details as possible.
      • Thereafter, all suspected incidents of bribery and/or corruption must be reported to the HOD and Risk/ Integrity Officer, or Head of Risk/ integrity, or the PPBHQ RMID.
5. Reporting Procedure for Business AssociatesThe Group encourages all Business Associates to report any concerns or possible violations of the Group’s ABAC policies and procedures. In the event Business Associates are asked by the Group’s Personnel to make facilitation payments, they are to immediately lodge their report, in good faith, to PPB Group via the whistleblowing channels. For more information on the Group’s whistleblowing policy and procedures, please refer to the Whistleblowing Policy and Procedures as published on each entities website.

Appendix A: Information Required for Reporting to the Risk/ Integrity Officer, or Head of Risk/ Integrity, or PPBHQ RMID

Appendix B: Reporting of Facilitation Payment Process Flowchart for Employees

Footnote

1. Objectives
   1. PPB Group¹ aspires to make positive contributions to the communities in which we operate. These contributions may come in the form of money (financial), or donations-in-kind, including our time, resources, and/or other forms of donation or sponsorship. Nevertheless, these donations and sponsorships may be misused by certain parties as vehicles for bribery and corruption.
   2. This Policy and Procedures sets out rules to ensure that PPB Group is supporting legitimate and reputable charities and organizations.
   3. The Group’s CSR Task Force and PPB Group Berhad’s Risk Management & Integrity Department (“PPBHQ RMID”) will review this policy regularly and if needed, may amend it at any time to reflect business developments or changes to international or national laws and regulations.
2. Definitions Under this Policy, the terms below have the meaning assigned to them:
   1. Charitable donations – the provision of cash, venues, equipment, Personnel time or other benefits to a charity, or an individual or organisation nominated by or connected with a charity.
   2. Political donations – the provision of cash, venues, equipment, personnel time or other benefits to a political party, or an individual or organisation nominated by or connected with a member of a political party.
   3. Sponsorship – the provision of cash or other benefits to an individual or organisation in return for or to assist that individual or organisation in performing an act (e.g. an individual running a race, or an organisation holding a sporting or cultural event or a conference).
   4. Corporate Social Responsibility (“CSR”) – where PPB Group provides benefits to a community or institution (e.g. building a school, or providing medical equipment to a hospital).
   5. CSR Task Force comprises of representatives from PPB Group Berhad and the Group’s respective Business Units (“BUs”).
3. Charitable Contributions
   1. In general, all charitable donations and sponsorships (including CSR programmes) for external parties are allowed if they are requested for legitimate reasons and are permitted by the law(s) and regulations. All donation and sponsorship requests are subjected to PPB Group’s policies to ensure consistency and uniformity across the organization.
   2. Beneficiaries of contributions donated by PPB Group are non-profit charitable organisations, legal entities, or individuals.
   3. Charitable donations and sponsorships can only be made to legitimate organizations which have been registered with the Malaysian Registrar of Societies (“ROS”) or certain government agencies. These may include, but are not limited to:
      1. Associations
      2. Clubs
      3. Societies
      4. Social enterprises
      5. Institutions
      6. Non-Government Organizations (NGO)
      7. Schools and universities
      8. Others, as recommended by the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be), which have been subjected to due diligence and approved by the Head of Company (“HOC”)/ Chief Executive Officer (“CEO”)/ Group Managing Director (“Group MD”).
   4. Requests may be made for activities related to the following, as per the CSR programme:
      1. Education
      2. Environment
      3. Healthcare
      4. Sports
      5. Cultural
      6. Welfare
      7. Disasters, e.g. fire, flood, or landslide
      8. Others, as recommended by the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties)/ CSR Taskforce (as the case may be), which have been subjected to due diligence and approved by the HOC/ CEO/ Group MD.
4. Limitations
   1. No Political Donation Policy
      1. The Group maintains a strict No Political Donation Policy. This means that the Group’s funds, or resources (e.g. property or equipment), must not be used, either directly or indirectly, to fund any political party, political campaign, political officials, political candidates, or their representatives². The Group’s funds must also not be used to make political payments under the guise of charitable donations.
      2. PPB Group’s Personnel are required to notify their Business Associates³, or other third parties of the Group’s No Political Donation Policy.
      3. In addition to the above, the Group also does not make contributions or donations to organisations whose policies or activities are not in line with the Group’s values.
   2. Conflict of Interest
      1. A Conflict of Interest is a personal connection that interferes with a Personnel’s ability to perform their duties in a fair and impartial manner. It occurs when a Personnel’s private interests interfere or are not aligned with the interests of the Group, or where the family members or friends of a Group employee receives improper benefits because of that relationship.
      2. Where the Group receives requests for donations or sponsorships from third parties, the Personnel who is either proposing or approving the donations, SHALL disclose their relationship⁴ with the third party (if any). Personnel should complete the Conflicts of Interest Declaration Form which needs to be approved by the HOD. If necessary HOD may consult either the HOC, or the CEO, or the Group MD before the award is made. Regardless of whether that conflict of interest is actual, potential, or perceived, they must not take part in making a decision that could be perceived to be affected by that conflict.
      3. If the conflict involves HOC, a declaration should be made to the CEO. If the conflict involves the CEO/ Group MD, a declaration should be made to the Board of Directors (“BOD”) Chairman. For more information on managing Conflict of Interest, please refer to the Conflict of Interest Policy and Procedures.
   3. Charitable donations and sponsorships that are made to secure business deals are PROHIBITED, no matter what form they take, whether they are given directly or indirectly.
   4. Donation or sponsorship request can also be made by a Business Associate, or other third parties during a sensitive period. In such circumstances, the request SHOULD NOT be entertained before, during or soon after a contract negotiations or significant event such as during audit, or inspection, in order to avoid any negative perception of a bribe. Alternatively, Personnel may consult the Risk/ Integrity Officer, or Head of Risk/ Integrity or PPBHQ RMID regarding donation or sponsorship request received during sensitive period.
   5. For clarity, where the Group makes a charitable donation or sponsorship to an organization’s (recipient) event, and the recipient in return invites the Group to attend/ join the said event, Personnel are allowed to do so, subject to prior permission from the HOD. Corporate gifts or other door gifts of reasonable value which is given to all attendees is permitted. For more information, please refer to the No Gift Policy and Procedures and the Gift Exception Guidance.
5. Authorisation Of Charitable and Sponsorship Activities
   1. Budget relating to charitable donations and sponsorship is approved by the PPB Group Berhad’s Board of Directors (“PPB Group BOD”). A CSR Plan will go through the preliminary review by the CSR Task Force. Subsequently, the CSR Task Force will then present the Group CSR budget to the PPB Group’s Sustainability Steering Committee for approval-in-principle, prior to obtaining final approval from the PPB Group BOD.
   2. In terms of recipients, it will be based on the recommendation by the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be), which have been subjected to due diligence and approved by the HOC/ CEO / Group MD.
   3. For festival donations and sponsorships, i.e. Chinese New Year, Hari Raya Aidilfitri, etc., approval shall be obtained from the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be) and/ or HOC/ CEO/ Group MD, in accordance with the respective entities Financial Authority Limits (“FAL”).
   4. No charitable donations and sponsorships can be made to individuals, unless approved by either the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be) and the CEO/ Group MD, in accordance with the FAL.
   5. The Group may also at times receive offers for sponsorship, e.g. as part of their marketing/ promotion strategy, whereby a manufacturer offers to sponsor their products or equipment as part of the Group’s CSR programme. Any offers of sponsorship that the company receives shall be assessed to ensure the legitimacy of the offer, and that there are appropriate controls in place to prevent a sponsorship from influencing the Group’s decision-making. Personnel must also obtain written approval from his/ her HOD and HOC/ CEO/ Group MD.
   6. Please refer to the respective Business Units CSR Policy for detailed information on managing donations and sponsorship requests.
6. Due DiligenceAll requests for charitable donations and sponsorships shall be subjected to proper due diligence by the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be). The due diligence check is necessary to determine the legitimacy of the request(s), including the legitimacy of the requestor and the beneficiary.
7. Accounting and Record-keeping
   1. For PPB Group HQ, all requests for donations and sponsorships, both financial and in-kind, must be made to the Sustainability Department. For other BUs, the written request is to be made to either the Corporate Affairs Department (FFM Group)/ Public Relations and Branding Department (GSC Group), or the Marketing Communications Department (PPB Properties) (as the case may be).
   2. All payments shall be made directly to the charitable organization or requestor’s (individual) official bank account. No third-party payment, whether to an individual or another organization, is allowed.
   3. Where the sponsorship to the beneficiary involves a third party, e.g. contractor/ vendor/ service providers, payment shall be made directly to the third party for the work done or goods/ service provided.
   4. All transactions shall be recorded and documented accurately.

Footnote

1. Objectives
   1. The objective of this Policy and Procedures is to promote compliance with the Malaysian Anti-Corruption Commission Act 2009, Malaysia’s Guidelines on Adequate Procedures, and all other applicable laws, including local anti-corruption laws where PPB Group¹ conducts business.
   2. This Policy and Procedures applies to all PPB Group’s Personnel². Before entering a relationship or renewing an existing relationship with a Business Associate³, or any third party, the Business Sponsors/ Project Sponsors⁴ must comply with the requirements set forth herein. The specific due diligence requirements will vary depending on the risks associated with the Business Associate, or any third party.
2. Roles And Responsibilities
   1. PPB HQ Risk Management & Integrity Department, or the Head of Risk/ Integrity
      1. The PPB Group Berhad’s Risk Management & Integrity Department (“PPBHQ RMID”) or, the Head of Risk/ Integrity at respective Business Units (“Head of Risk/ Integrity”), is responsible for overseeing the design, implementation, advisory and improvement of the Group’s anti-bribery and corruption policies and procedures, including on Due Diligence. Operational departments, such as Procurement, Sales, Marketing, Human Resources (“HR”), Legal, Finance, Information Technology (“IT”) and/ or others, are responsible for supporting the RMID, or the Head of Risk/ Integrity’s administration of the due diligence process. This may include, as necessary, implementing policies and procedures to ensure that the due diligence process is followed.
      2. The PPBHQ RMID or the Head of Risk/ Integrity, is responsible for reviewing and analyzing all reported Red Flags by the Business Sponsors/ Project Sponsors regarding the Business Associate or the relevant third party. If necessary, the PPBHQ RMID or the Head of Risk/ Integrity may request for further information from the Business Sponsors/ Project Sponsors, as specified in PPB’s Due Diligence Guidelines for Procurement. The PPBHQ RMID or the Head of Risk/ Integrity may also consult other stakeholders such as Legal, or external counsel (if necessary), when reviewing and analyzing the reported Red Flags.
   2. Personnel
      1. Personnel from the Procurement Department or the relevant Business Sponsors/ Project Sponsors are required to carry out due diligence on Business Associates. They will identify the appropriate level of due diligence by assessing the risk level and the presence of any Red Flags, and to report them immediately as required by PPB’s Due Diligence Guidelines for Procurement.
      2. If requested by the PPBHQ RMID or the Head of Risk/ Integrity, the Business Sponsor/ Project Sponsors will provide a statement of the business case, i.e. justification for establishing relationship with the proposed Business Associate. The justification should include details such as:
         • the reason for selecting the proposed Business Associate
         • the business need(s)
         • the capabilities of the proposed Business Associate, in comparison with the other players in the market
         • the reasonableness of the proposed compensation/ remuneration
      3. The Business Sponsor/ Project Sponsor will also be responsible for distributing and collecting the Business Associate Due Diligence Questionnaire, when applicable, to/ from the potential Business Associate, or the relevant third party, to obtain the information necessary to conduct a thorough due diligence review.
      4. HR personnel are required to conduct due diligence on prospective hires. Any presence of Red Flags⁵ will need to be reported to Risk/ Integrity Officer, or the Head of Risk/ Integrity or the PPBHQ RMID for review and assessment. Final written approval must be obtained from either the HOC, or the CEO, or the Group MD, before making an offer to the prospective hire.
      5. Company Secretary is responsible to carry out the due diligence on prospective Directors.
   3. Business Associates
      1. The Group expects all its Business Associates working for or on behalf of the Group to be aware of the Group’s relevant policies and procedures, including the Anti-Bribery and Corruption Policy and Procedures and to agree to abide by them as long as they have a business relationship with the Group.
      2. Where possible, the Group shall include standard clauses in contracts with Business Associates, enabling the Group to terminate the contract if bribery or an act of corruption has been proven. Additional clauses may also be included for Business Associates acting on the Group’s behalf where a significant bribery risk has been identified. New Business Associates are also required to declare any Conflict of Interest and sign an Integrity Pact, to conduct business without the use of bribery and corruption.
      3. Business Associates are required to report any suspected instances of bribery and corruption they encounter in their dealings with the Group’s Personnel via the Group’s existing whistleblowing channels, in accordance with instructions set out in the Whistleblowing Policy and Procedures.
3. Due Diligence Procedures
   1. The extent of the due diligence that needs to be conducted shall depend on the risk level of the Business Associates, or other relevant third parties.
   2. The following are the steps to conducting a due diligence on Business Associates:
      1. Step 1 – Determination of Due Diligence Level: Using the Third-Party Risk Criteria and Red Flag list, as specified in the PPB Due Diligence Guidelines for Procurement, the Business Sponsors/Project Sponsors will determine the type of due diligence that needs to be conducted. Depending on the nature of the risk, a due diligence review may be conducted either prospectively or retrospectively on a Business Associate.
      2. Step 2 – Due Diligence Review: The Business Sponsor/ Project Sponsor shall be responsible in ensuring the information and relevant documents provided by the Business Associate is complete and adequate. Subsequently, the information should be submitted to the Procurement Department, or the department responsible over the procurement function, for further review and assessment. If necessary, Procurement Department or the department overseeing the procurement function may consult or seek feedback from other relevant internal stakeholders in order to complete their review/ assessment. For Red Flags, please refer to Step 3 below.
      3. Step 3 – Risk Mitigation: For High-Risk Business Associates, after completionof Step 2 above, Procurement Department or the department in charge of procurement, will share with the Business Sponsor/ Project Sponsor on the feedback received from the other relevant internal stakeholders, for their further action. If the Business Sponsor/ Project Sponsor wishes to pursue/ continue with the transaction, they will need to justify their intention and provide risk mitigating actions.In the event any Red Flag involving bribery or corruption (including fraud, theft, embezzlement), or those specified in PPB Due Diligence Guidelines for Procurement is identified, it must be escalated to the Risk/ Integrity Officer, or the Head of Risk/ Integrity, or to PPBHQ RMID, for further assessment.
      4. Step 4 – Final Decision: Based on the results of the appropriate level of due diligence review, to obtain the final approval as specified in the PPB Due Diligence Guidelines for Procurement.Personnel are not permitted to proceed with any transactions or dealings with a Business Associate, or other third party, until all Red Flags have been addressed and
         all risks that may impact the Group, including financial, legal, corruption and reputational risks, have been adequately mitigated.
      5. Step 5 – Documentation: The Procurement Department, Business Sponsor/ Project Sponsor or the relevant stakeholders shall be responsible for maintaining an electronic file containing all information gathered or materials created as part of the due diligence process. That file must be retained in accordance with the Group’s official document retention policy or for seven years from the last transaction (whichever is longer).
   3. There may be distinctions between the due diligence processes for Business Associates above, and other different company activities, such as recruitment or for projects. The following (below) provides the distinct approaches and the procedures for each activity:
      1. Personnel
         • Approach
           • The Due Diligence process on Personnel should be conducted depending on their proposed functions and corresponding bribery risk.
           • Bribery and corruption-related Due Diligence checks should be incorporated into existing HR functions. Some actions that can be taken while conducting Due Diligence include:
             • Verifying the accuracy of a prospective Personnel’s qualifications.
             • Obtaining satisfactory references from a prospective Personnel’s former employers.
             • Taking reasonable steps to ascertain if a prospective Personnel has been involved in bribery.
             • Verifying that the Group is not offering employment to a prospective Personnel in return for preferential treatment.
             • Taking reasonable steps to identify the prospective Personnel’s relationship with public officials, if any.
         • Procedures
           • HR will conduct Due Diligence on all prospective Personnel. However, HR may work in collaboration with the department manager looking to hire. HR also identifies existing Personnel (transfer or promotion) requiring Due Diligence.
           • HR will assess the Due Diligence results to decide to whether or not to proceed or continue with the relationship with the Personnel:
             • If the Due Diligence results reveal the Personnel poses an unacceptable risk level, the relationship with the prospective Personnel shall be terminated or HR will take appropriate administrative action; or
             • If the Due Diligence results reveal the Personnel poses an acceptable risk level, HR will identify and implement any mitigating controls to further reduce the risk level. HR will then proceed with the usual HR procedures.
           • For employee who is subject to promotion or transfer, HR will document any action taken, and continue to monitor the employee for any changes in risk level. HR shall retain documented information that:
             • Describes the Due Diligence checks carried out
             • Describes any action taken as a result of the check
             • Describes the monitoring actions to be taken
      2. Projects, Transactions and Activities
         • Approach
           • Things to take into consideration:
             • Structure, nature, and complexity of the activities (e.g. direct or indirect sale, level of discount, contract award and tender procedures)
             • Financing and payment arrangements
             • Scope of the organization’s engagement and available resources
             • Level of control and visibility
             • Business Associates and other third parties involved (including links between any parties and the authorities)
             • Competence and qualifications of the parties involved
             • Client’s reputation
             • Location
             • Reports in the market, in the press, or online (adverse news).
         • Procedures
           • HOD/ Manager/ Project Team/ Project Lead identifies projects, transactions or activities that require Due Diligence check:
             • High risk projects, transactions or activities based on the Bribery Risk Assessment.
             • A bribery incident that involves a project, transaction, or activity in question such as when a project/ transaction/ activity achieved certain criteria that would classify it as high risk⁶.
           • The HOD/ Manager/ Project Team/ Project Lead will conduct a Due Diligence check that is appropriate with the risk level identified based on the Bribery Risk Assessment and the bribery incident. The HOD/ Manager/ Project Team/ Project Lead will document the results of the Due Diligence check.
           • The HOD/ Manager/ Project Team/ Project Lead will assess the Due Diligence results to decide as to whether or not to proceed or continue with the project, transaction or activity:
             • If the Due Diligence results reveal the project, transaction or activity poses a risk level that is unacceptable, the project, transaction or activity may be terminated; or
             • If the Due Diligence reveals a risk level that is acceptable, the HOD/ Manager/ Project Team/ Project Lead must identify and implement the mitigating controls before continuing with the project, transaction, or activity.
           • The HOD/ Manager/ Project Team/ Project Lead will document the action taken and continue with the projects. HOD/ Manager/ Project Team/ Project Lead shall retain documented information that:
             • Describes the Due Diligence check carried out.
             • Describes any action taken as a result of the check.
             • Describes the monitoring actions to be taken.
           • The HOD/ Manager/ Project Team/ Project Lead to monitor the project, transaction, or activity for any changes in risk level.
      3. Others – Charitable Donations and Sponsorships
         • All requests for Charitable Donations and Sponsorships must be channelled to the Sustainability Department (PPBHQ)/ Corporate Affairs Department (FFM Group)/ Chief Marketing Officer (GSC Group) or the Marketing Communications Department (PPB Properties), and shall be subject to a Due Diligence check. Please refer to the respective Business Units CSR Policy for detailed information on managing donations and sponsorship requests.
         • The Due Diligence check should determine if the recipient of a Charitable Donation and/ or Sponsorship is a legitimate organization, and that the Charitable Donation or Sponsorship is not used as a cover for bribery and corruption.
         • For more information on Charitable Donations and Sponsorship, please refer to PPB Group’s Charitable Donations and Sponsorship Policy and Procedures.
   4. Other Significant areas requiring Due Diligence CheckIn certain areas, enhanced/ additional Due Diligence check may be required as a matter of legal responsibility, or as key components of business strategy. The following explores specific areas where Due Diligence checks are required:
      1. Anti-Money Laundering / Countering Financing of Terrorism (AML/ CFT)
         • Money laundering generally occurs when the criminal origin or nature of money or assets is hidden in legitimate business dealings or when legitimate funds are used to support criminal activities, whereas terrorism financing occurs when funds are used for purposes of terrorism such as financing terror activities and terrorists’ properties.
         • Malaysia’s legislature applies stringent, extra-terrestrial anti-money laundering and anti-terrorism financing laws, which are enshrined within the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
         • The Group is committed to comply with all international anti-money laundering and anti-terrorism financing legislations and will ensure full co-operation with enforcement agencies and competent authorities in the event of an investigation of money laundering and terrorism financing activities.
         • Due Diligence for AML/ CFT:
           • When engaging Business Associates or embarking on projects, certain factors may create higher risks for the Group, such as Business Associates from high-risk countries or industries. If such risks are identified, enhanced measures to manage and mitigate them must be taken. The measures will vary depending on the type and level of risk, and considerations of what is appropriate and reasonable should be considered.
           • High risk Business Associates and projects associated with higher risk countries should be subjected to an enhanced Due Diligence check to determine the precise risk-level that Group may be exposed to. When conducting a Due Diligence check to determine the AML/ CFT-related risks, Personnel should aim to:
             • Understand the business and background of the Business Associate; and
             • Determine the origin and destination of money, property and/ or services prior to entering into a commercial relationship.
         • Potential red flags: “Red flags”are suspicious factors that may lead one to believe a Business Associate is involved in money laundering or terrorism financing practices. The following red flags (non-exhaustive list) may prompt enhanced Due Diligence check on a Business Associate, to ensure the Group enters a partnership fully informed:
           • Usage of cash or occasional transactions that involve large sums more than amounts specified by Bank Negara Malaysia under its sectoral guidelines or relevant circular.
           • Facts and circumstances with reasonable grounds for suspecting a possible case of terrorism financing.
           • High net worth individuals.
           • Places of origin known for high rates of crime (for example drug producing, human trafficking or smuggling) and terrorism activities.
           • Countries or jurisdictions with inadequate anti-terrorism financing and anti-money laundering laws and regulations, which are under Financial Action Task Force (FATF)⁷ Blacklist (High-Risk Jurisdictions subject to a Call for Action) or Grey List (Jurisdictions Under Increased Monitoring), e.g. Democratic People’s Republic of Korea, Iran, etc.
           • Countries listed on sanctions lists, issued by governments or international bodies.
           • Politically Exposed Persons (“PEPs”)⁸.
           • Businesses/ activities identified by the FATF as being vulnerable to higher risks for money laundering and terrorism financing.
           • A third-party intermediary becomes involved in a transaction for no clear reason.
           • The identity of a party involved in the transaction is difficult to establish or is undisclosed.
           • An organisation is used by a third party and the ultimate ownership is concealed or difficult to establish.
           • A party is evasive as to the source or destination of funds.
           • A party asks for exemption from this ABAC Policy.
           • A party wishes to engage in a transaction that appears to lack business sense.
           • The information provided by a third party that identifies a legitimate source for funds is false, misleading, or substantially incorrect.
           • Upon request, the third-party refuses to identify or fails to indicate any legitimate source for his or her funds and other assets; and
           • Without reasonable explanation, the size or pattern of transactions is out of line with any pattern that had previously emerged.
         • If a Personnel encounters any suspicious activity that raises a question on the legitimacy of a person or organization with whom the Group does business, the activities the person or organization is engaged in or his/ her/ its source of funds, the issue should be raised immediately with the RMID or respective entities Head of Risk/ Integrity or the Risk/ Integrity Officer.
         • For more information on AML/ CFT, please refer to PPBHQ RMID, or the Head of Risk/ Integrity.
      2. Mergers and Acquisitions (M&A)
         • Mergers and acquisitions present both business opportunities and risks for the Group. In particular, the Group can be held accountable for the actions of an acquired entity, so anti-corruption Due Diligence checks should be conducted both prior to and after an acquisition, to evaluate the target entity’s internal controls and third-party relationships.
         • Failure to identify and perform a thorough Due Diligence assessment on the target entity may result in severe consequences and risk to the Group, including being subject to regulatory sanctions and potential reputational damage.
         • For more information on M&A, please refer to the Finance Department.

Footnote

PPB Group¹ has whistleblowing channels for whistleblowers to report, in good faith, any possible violations of laws (local and international) and regulations, and including Group’s policies and procedures, including the Group’s Anti-Bribery and Corruption Policies and Procedures.

The Group takes good faith allegations of improper conduct by its Personnel² or Business Associates³ very seriously and shall investigate thoroughly. Whistleblowers are expected to cooperate fully with any investigations into such allegations, and any interfering or providing false information during an investigation is a violation of PPB Group’s policy, which can lead to disciplinary action.

For more information on PPB Group’s whistleblowing procedures, please refer to the Whistleblowing Policy and Procedures which is available on respective entity’s website. Alternatively, Personnel may reach out to the Group Internal Audit Department or the respective entity’s Risk/ Integrity Officer, or the Head of Risk/ Integrity.

Footnote