KENANGA ANNUAL REPORT 2019

H OW W E A R E G O V E R N E D 1 2 3 4 5 61 6 7 Principles Scope Leadership Commitment The commitment and aspirations of the Board and Senior Management to create an environment where the goals and values of the employees are aligned with the mission of the Group. Employees Support The appreciation of the employees on the position of the Board and Senior Management involving ethics, which would be a driver for the employees to apply ethics in the conduct of business. Ethics Risk Management Framework The process involved in the establishment of and the undertaking of ongoing processes in relation to managing ethics risk involving misconduct, which include development of a new and revision of the existing policies, procedures and practices of the Group. Independent Assessment The process of continuous assessment of policies, procedures and practices of the Group to measure adequacy and relevance of the safeguards and controls to manage ethics risk. • Group Code of Conduct for Vendors The Group Code of Conduct for Vendors (“ Vendors Code ”) was adopted to clearly specify the expected business conduct and ethical practices of all contractors, consultants, suppliers, agents and any person who engage with or undertake work for the Group. The essentials of the Vendors Code include: - Compliance with the laws and regulations on prevention of corporate crimes including anti- fraud, bribery, corruption, money laundering and terrorist financing; - Avoidance of actual, potential or appearance of a conflict of interest and prohibition of insider trading; - Controls on provision of gifts, hospitality, entertainment and sponsorship in relation to employees and business of the Group; - Obligation on confidentiality and data protection; and - Prohibition of anti-competitive practices. The Vendors Code reflects the standards and principles on honest, fair and transparent business practices of the Group and the commitment extending to any person who conduct business for or on behalf of the Group. It would ultimately help at building trusting relationship with the goal of developing a professional and efficient working rapport for mutual beneficial outcomes. • Gap Assessment on Readiness to Comply with the Guidelines on Adequate Procedures Issued Pursuant to Section 17A of the Malaysian Anti- Corruption Commission Act 2009 (“MACC Act”) With the introduction of Section 17A of the MACC Act, it was crucial to identify the compliance status and shortcomings in key areas of the business of the Group in so far as implication of Section 17A is concerned. Therefore, the Gap Assessment was conducted to ensure that the Group embarks on the necessary enhancements to be in full compliance with Section 17A when the same comes into effect in June 2020. The Gap Assessment has enabled GBEI to identify areas of the business of the Group that are susceptible to ethical issues such as those relating to fraud, bribery and corruption and to outline the necessary measures to strengthen controls and to improve response for corrective measures. • Checklist for Assessment on Compliance with the Guidelines on Adequate Procedures Issued Pursuant to Section 17A of the MACC Act In furtherance to the Gap Assessment and towards compliance with Section 17A of the MACC Act, GBEI has also prepared the Checklist which further details elements that should be in place to affirmatively state that the Group has taken steps and measures to having adequate procedures in place. ETHICS AND COMPLIANCE STATEMENT