ANTI-FRAUD POLICY

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1. INTRODUCTION
 

 

The Board of Directors (“Board”) of Engtex Group Berhad (“Company) is mindful of the everpresent and growing threats of fraud against the Company and its subsidiaries (“Group”), and the Board adopts a zero-tolerance attitude towards frauds committed against the Group.
This Policy forms part of the larger Corporate Governance setting of the Group which entails other policies such as the Whistle-Blowing Policy, Anti Bribery & Corruption Policy, Code of Ethics & Conducts etc., which supplement the applications of this Policy.

   

2. OBJECTIVES
  This Policy aims to achieve the following:
 

2.1

Setting tone – affirms the Board’s stance against any fraud committed against the Group and create awareness among the employees and business associates (including agents, representatives, clients/customers, vendors, shareholders etc.).
  2.2 Framework – establishes or provides a framework for the Group and its employees to deal with actual and suspected fraud incidents in a consistent manner.
  2.2 Procedures – outlines the procedures for fraud response, investigation, monitoring and reporting.
  2.2 Responsibilities – assigns responsibilities for fraud detection, investigation and development of internal controls against frauds.

 

3. SCOPE
  3.1 This Policy shall apply to all level of personnel of the Group and its business associates.
  3.2 Actions constituting fraud include but not limited to:
   
  • Misappropriation of financial and non-financial assets (including theft of cash/funds, equipment, stocks, physical assets; Forgery or unauthorised alteration to cheques and other paying instruments.).
  • Disclosing confidential information to outsiders for personal gain;
  • Deceiving customers into making payments to personal accounts.
  • Manipulations, falsifications and alterations of the documents/records of the Group.
  • Recording transactions without substance.
  • Falsifying claims (including expenses, medical leaves, overtime, allowances, salaries or wages etc.).
  • Wilful or malicious damage or destroy Group’s assets.
  • Insider trading.
  • Bribery and corruption (e.g. getting undisclosed kickbacks or accepting gifts or hospitality as inducement for giving orders to vendors.)
  • Blackmailing.
  • Deliberate material accounting misstatement.
  • Other inappropriate conducts resulting in gaining benefits at the expense of the Group or its subsidiaries.


4. RESPONSIBILITIES

Body/Function/Individuals Roles and Responsibilities
Board of Directors
  • Overall oversight of anti-fraud initiatives.
  • Anti-Fraud Policy approval and subsequent reviews.
  • Set the tone and attitude towards frauds against the Group.
Audit Committee / Risk Management Committee Periodic risk assessment on fraud risk of the Group.
Group Managing Director /Executive Management Primarily responsible for the Group-wide implementation, review and monitor internal control system for the prevention and detection of frauds. Lead by example.
Subsidiaries’ Directors and Senior Management
  • Ensuring that this policy is implemented and adhered to, and that all employees, third parties and business partners are made aware of the policy and its requirements.
  • Ensure compliance with the Code of Ethics & Conducts, ensure proper segregation of duties, ensure security of valuable assets, review management accounting information, carry out regular fraud risk assessment etc.
Other employees Day-to-day prevention, detection and reporting of frauds.
Internal Auditors Function
  • Regular review on performance, efficiency and effectiveness of the fraud prevention and detection related internal control system.
  • Ensuring that material fraud risks in the Group are duly attended to and communicated to the Audit Committee.
  • Conduct fraud investigation upon instruction by the Senior Independent Director or Chairman of the Audit Committee.
Human Resources & Administration Function
  • Ensure employees are aware of the Anti-Fraud Policy.
  • Conduct fraud investigation upon instruction by the Senior Independent Director or Chairman of the Audit Committee.
  • Disciplinary actions against employees who have committed fraud against the Group.

   

5. POLICY
 

 

The Board of Directors is committed to preventing and addressing all significant acts of fraud against the Group. All employees shall perform their duties with honesty, integrity and in an ethical manner. All actual or suspected frauds shall be reported and handled according to the procedures laid down in this Policy, or according to the Group’s Whistle-Blowing Policy which is available at the Group’s corporate website.

   

6. PROCEDURES
  6.1 Making a Report
 
  All actual or suspected frauds must be immediately reported to:
  Senior Independent Director Dr. Teh Chee Ghee email: cgteh@engtex.com.my
  Audit Committee Chairman Dr. Paul Lim email: paullim@pnl.com.my
  Group Internal Audit Department Mr. Beh Sui Boon email: sbbeh@engtex.com.my
Tel: 603-6140 1111 (Ext 378)
    Where possible, the report should cover the following: -
 
  1. A detailed description of the nature and occurrence of the fraud.
  2. The amount/value, if established.
  3. The period over which irregularity occurred, if known.
  4. The date of discovery and how the suspected fraud was discovered.
  5. The type of irregularity and what led to it, i.e., was there a breakdown in the system of internal control, or is there any inherent weakness in the system of internal control which allowed it to occur.
  6. Whether the person responsible has been identified.
  7. Whether any collusion with others is suspected and.
  8. Actual or copies of the evidence.
  9. Any other information or comments which might be useful.
    Anonymous reporting may be accepted provided that the reporting is made in good faith and is supported by credible and actionable information and evidence.
  6.2 Investigation
    The Senior Independent Director or the Audit Committee Chairman, may instruct the Group Internal Audit Department, or other senior management personnel (e.g. the Group Human Resources & Administration Manager) who are not implicated in the fraud incident and are likely able to maintain impartiality, or an external independent party to carry out an investigation on the reported incident. During the period of investigation, the accused wrongdoer may be temporary reassigned to other department/function or asked to take leaves, pending the outcome of the investigation.
  6.3 Post-investigation Actions
    Should the investigation reveals that fraud had been committed and parties involved are identified, a recommendation shall be forwarded to the Group Human Resources & Administration Department for appropriate actions to be taken against the wrongdoer, including but not limited to employment termination, reporting the case to the police or other relevant authorities, and/or recover financial losses or obtaining compensation.

   

7. CONFIDENTIALITY
 

 

Information gathered and investigation results will not be disclosed and discussed with anyone other than those with a legitimate need to know. This is to avoid unnecessary damage to the reputation of the accused wrongdoers who may be found innocent of wrongdoings by the investigation.

   

8. FRAUD REGISTER
 

 

A Group Fraud Register shall be maintained by the Group Internal Audit Department, which will be used as a basis for reporting incidents of suspected or actual fraud and outcomes of investigation undertaken into suspected fraud, including the value of any loss to the Company

   

9. ADMINISTRATION
 

 

The Audit Committee is responsible for the administration, revision, interpretation, and application of this policy. The policy will be reviewed at least once every 2 years.