1. PURPOSE AND INTENT

CP Wholesale India Pvt. Ltd., is committed to the core principles set out in the Charoen Pokphand Group’s Anti Bribery and Anti-Corruption Policy and hereby adopts the Group’s Anti Bribery and Anti-Corruption Policy which recognizes the commitment to do business with integrity, honesty and transparency in accordance with good corporate governance, by realizing that bribery and corruption can cause seriously consequences to the country, its people and the organization in the long-term, all of which are directly against Charoen Pokphand Group’s core values.

2. GENERAL PRINCIPLES

2.1 CP Wholesale India Pvt. Ltd. (“Company“) has a policy to forbid the Company personnel from undertaking or accepting or supporting any acts and all forms of corruption, either directly or indirectly, whereby this also extends to any parties involved with the Company. The Company has determined that monitoring is undertaken on a regular basis with regard to full compliance with this policy on anti-bribery and anti-corruption (“Policy“) together with rules and regulations and applicable laws.

2.2 This Anti-Bribery and Anti-Corruption Policy is applicable to all activities involved with the conduct of business by the Company, which includes the Company’s domestic as well as overseas business operations.

2.3 Company is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates, and to implementing and enforcing effective systems to counter bribery. This includes compliance with all laws, domestic and foreign, prohibiting improper payments, gifts or inducements of any kind to or from any person, including officials in the private or public sector, customers and suppliers. Company is equally committed to the prevention, deterrence and detection of bribery and other corrupt business practices.

2.4 Bribery and corruption can take many forms including cash or gifts to an individual or family members or associates, inflated commissions, fake consultancy agreements, unauthorized rebates, non-monetary favours and false political or charitable donations. These actions may be undertaken directly or through a third party. It is illegal and immoral to, directly or indirectly, offer or receive a bribe.

2.5 The Company upholds all laws relevant to countering bribery and corruption applicable to the Company in the conduct of business across all the jurisdictions in which Company operate including, the Indian Prevention of Corruption Act, 1988 (“PCA“). Different statutes adopt different yardsticks to determine whether or not a particular act or omission is an offence thereunder; thus an act may be an offence under one statute, but not under another. Under the PCA, bribery of government officials and agents, whether directly or indirectly, is strictly prohibited.

2.6 The PCA has been amended in 2018 to further strengthen the legislative framework of the PCA and it is now a criminal offence under the PCA to engage in any of the following: (a) ‘supply’ side of bribery (i.e., giving bribes to a public servant); (b) a company can be held liable under the PCA as an offender if any person ‘associated’ with the company gives a bribe to a public servant. Employees, agents and subsidiaries are amongst those considered to be ‘associated’ with a company. However, a company may be able to defend itself by proving that it had in place adequate procedures (such as a robust anti-bribery and anticorruption program) designed to prevent persons associated with it from undertaking such conduct; and (c) every director, manager, secretary or other officer with whose ‘consent or connivance’ the offence was committed, has been made liable under the PCA.

2.7 In addition to the PCA, the following laws in India also presently apply to offences relating to or resulting in corruption and bribery and resolutions available in case of occurrence of corruption or bribery:

(a) Indian Penal Code, 1860 (“IPC“);
(b) Prevention of Money Laundering, 2002;
(c) Central Vigilance Commission Act, 2003;
(d) Lok Ayukta Acts of various states;
(e) Companies Act, 2013.

2.8 The purpose of this model Anti-Bribery and Anti-Corruption Policy (“ABAC Policy”) is to ensure that Company sets up adequate procedures in order to prevent Company’s involvement in any activity relating to bribery, facilitation payments, or corruption, even where the involvement may be unintentional. It requires employees, directors, officers of the Company and third parties subject to this ABAC Policy to recognize questionable transactions, behaviour or conduct, and to take steps to record, comply and follow procedures set in place to deal with such behaviour or conduct.

2.9 While an exhaustive list cannot be provided, set out below are indicative questionable transactions or situations that Employees should be careful about– which, when appearing together or individually, should raise a ‘red flag’:

(a) A contract requires the use of a third-party consultant where the third party’s principal or owner is a government official;
(b) The business lacks qualifications or resources i.e. the potential business partner does not appear capable of performing the services being offered. Sham service contracts, under which corrupt payments are disguised using a consulting agreement or other arrangement are typical modalities for indulging in bribery or corrupt activities;
(c) Any potential partner who provides guarantees of success or claims to have the ability to obtain licenses or other government approval without providing a description of a legitimate manner by which those goals will be accomplished;
(d) Transactions involving unusual payment patterns or financial arrangements. Accordingly, a request to pay unusually high commissions is a warning sign of possible corruption. A request to deposit commissions in multiple bank accounts, perhaps in offshore banks, also justifies additional scrutiny;
(e) A potential counterparty who refuses to accept an ABAC or anti money laundering clause in the proposed contract;
(f) Based on pre-acquisition / counterparty due diligence, it becomes apparent that the potential counterparty has a reputation for offering bribes or violating other laws or indulging in unusual structured transactions;
(g) Inflated pay-outs to, or questionable role in the project of potential counterparty or its affiliate;
(h) A proposed counterparty resists or fails to provide details of parentage or has undisclosed principals, associates or subcontractors with whom it splits fees;
(i) A proposed counterparty refuses access to its books and records where requested under the proposed contract.

2.10 This ABAC Policy constitutes a minimum standard. It must be complied with in any country in which Company does business even when the policy is stricter than the anti-bribery laws that are applicable, including both applicable local laws and those laws with extra-territorial application. However, when applicable anti-bribery laws are stricter than this policy, such laws must be complied with. In case of any doubts, Employees must contact Company’s Compliance Officer (as defined below).

3. COMPLIANCE OFFICER

3.1 The Company shall, from time to time, designate an employee of sufficient seniority, competence and independence as the compliance officer to ensure compliance with the provisions of this ABAC Policy (“Compliance Officer“) and the same shall be notified to the Employees. All reports, complaints, doubts or concerns in relation to this ABAC Policy shall be raised by the Employees to the Compliance Officer. Every query or concern raised by any Employee in relation to any suspected violation of this ABAC Policy shall be investigated by the Compliance Officer. The Company has appointed Ms. Hemanshu Yadav, Manager-Legal, as the Compliance Officer.

3.2 Any action required to be undertaken under this ABAC Policy shall be taken by the Compliance Officer in accordance with this ABAC Policy. The Compliance Officer shall submit quarterly compliance reports to the Human Resource Department. Aggravated cases of breach of this ABAC Policy shall be escalated to the Board of Directors of the Company (“Board“).

4. DEFINITIONS

4.1 “Bribery” shall mean and include the offer, promise, giving, demand or acceptance of an undue advantage as an inducement for an action which is illegal, unethical or a breach of trust. Bribes often involve payments (or promises of payments) but may also include anything of value – providing lavish/inappropriate gifts, hospitality and entertainment, inside information, or sexual or other favours; offering employment to a relative; underwriting travel expenses; abuse of function; or other significant favours. Bribery includes advantages provided directly, as well as indirectly through an intermediary. This ABAC Policy prohibits Employees from giving bribes not only to any public/government official but also to any private individual. Bribery in any form will not be tolerated.

4.2 “Corruption” means and includes wrongdoing on the part of an authority, or those in power, through means that are illegitimate, immoral, or incompatible with ethical standards.

4.3 “Public Official (Government Official or Public Servant) / Foreign Public Official“, in the Indian context, would mean and include (but not be limited to) the following:

(a) any person holding a legislative, executive or administrative office of the government (domestic or foreign), or acting in the official capacity for or on behalf of a legislative, executive, or administrative office of the government (domestic or foreign), whether appointed or elected, whether permanent or temporary, whether paid or unpaid, irrespective of that person’s seniority;
(b) any person in the service or pay of the government or of a corporation established by or under a central, provincial or state statute, or an authority or a body owned or controlled or aided by the government or a government company or is remunerated by the government by fees or commission for the performance of any public duty;
(c) any judge, including any person empowered by law to discharge, whether by himself/herself or as a member of any body of persons, any adjudicatory functions;
(d) any person authorised by a court of justice to perform any duty, in connection with the administration of justice, including a liquidator, receiver or commissioner appointed by such court;
(e) any person who performs a public duty, including for a public agency or public enterprise, or provides a public service, as defined in the domestic law of the country and as applied in the pertinent area of law; and
(f) any other person defined as a “public official” under the domestic law.

4.4 “State” shall mean all levels and subdivisions of governments (i.e., local, regional, or national and administrative, legislative, or executive).

4.5 “Facilitation Payments” shall mean unofficial payments made to public officials in order to secure or expedite the performance/ non-performance of a routine or necessary action. They are sometimes referred to as ‘speed’ money or ‘grease’ payments or ‘good-will money’. The payer of the facilitation payment usually already has a legal or other entitlement to the relevant action.

4.6 “Kickbacks” are typically payments made in return for a business favour or advantage.

4.7 “Improper performance” shall mean breach of an expectation that a person will act in good faith, impartially or in accordance with a position of trust amounts to improper performance. This would also include obtaining, agreeing to receive, accepting, or attempting to obtain, an undue advantage for acts to be performed properly.

5. WHAT IS CORRUPTION

5.1 Corruption can take place in many types of activities. It is usually designed to obtain financial benefits or other personal gain. For example, bribes are intended to influence behaviour – they could be in the form of money, a privilege, an object of value, an advantage, or merely a promise to influence a person in an official or public capacity. Usually, two people are involved and both would benefit. Examples of a bribe include offering or receiving of cash in the form of a kickback, loan, fee or reward, or giving of aid, donations, or voting designed to exert improper influence.

5.2 The areas of business where corruption, including bribery, can most often occur include:

(a) Gifts, Entertainment and Hospitality;
(b) Facilitation Payments;
(c) Procurement Process;
(d) Political, Community or Charitable Contributions;
(e) Improper Performance of Duties;
(f) Favours Regarding Recruitment Opportunities.

5.3 In the Indian context, the ingredients of an act of bribery under the PCA are:

(a) Any gratification to a public servant for doing or forbearing to do an official act or favour/ disfavour to any person.

(b) Any gratification to any person for inducing any public servant by corrupt/ illegal or personal influence to do/ forbear from doing an official act or to show favour/ disfavour to any person.

(c) Providing of any valuable thing, without adequate payment for the same, to a public servant by a person who has or is likely to have official dealings with the public servant.

5.4 Violators of the PCA shall be subject to fines and/or imprisonment. Liability could also be attributed to a company, if an employee/agent acted within the scope of employment, to obtain benefit for such a company. The PCA and recent judgments of the Supreme Court of India have made it clear that private persons can be prosecuted under the PCA along with public servants for having abetted the offence of bribery. Improper Performance could lead to accusations of criminal breach of trust, which is an offence under the Indian Penal Code (IPC). The IPC also penalises abetment as an offence. Under the IPC any person who intentionally aids, by any act or illegal omission, the doing of a thing, or engages with a person/persons in a conspiracy for the doing of a thing, is guilty of the offence of abetment. Additionally, a person could also be prosecuted for offenses of cheating and/or criminal breach of trust under the IPC.

6. GIFTS, ENTERTAINMENT AND HOSPITALITY

6.1 Gifts, entertainment, and hospitality may be acceptable if they are reasonable, proportionate, made in good faith and in compliance with the Company’s Gift Policy. Any doubts in this regard should be clarified with the Compliance Officer.

6.2 An Employee may give a modest gift to a government or other public official only when it is appropriate, allowed by local law, and in accordance with Company’s Gifts Policy.

6.3 Employees are prohibited from offering gifts or granting favours outside the ordinary course of business to current or prospective customers, their employees or agents or any person (including but not limited to Government Officials) with whom the company or its business associates have a contractual relationship, or intend to negotiate an agreement. No Employee should accept or solicit any personal benefit from anyone in the course of business in a manner that might compromise, or appear to compromise their objective assessment.

7. FACILITATION PAYMENTS OR KICKBACKS

All Facilitation Payments and kickbacks are corrupt payments, and any such payment in the course of Company’s business is strictly forbidden.

Facilitation Payments are often involved in obtaining non-discretionary permits, licenses or other official documents, expediting lawful customs clearances, obtaining the issuance of entry or exit visas, providing police protection, whether or not such actions are connected to the award of new business or the continuation of existing business.

8. PROCUREMENT PROCESS

Employees must follow Company’s processes and adhere to the system of internal controls around supplier selection. Supplier selection should never be based on receipt of a gift, hospitality or payment. When supplier selection is a formal, structured invitation for the supply of products or services (often called a ‘tender’), it is most important to maintain documentation supporting internal controls. Employees must familiarise themselves with Company’s procurement processes and must adhere to the same.

9. INTERACTION WITH CUSTOMERS

9.1 Where an Employee is responsible for relationships with customers, she/he may entertain customers for bona-fide purposes only in accordance with Company’s Gifts Policy. Records of such entertainment should be maintained as per Company’s Gifts Policy.

9.2 Bribery may also occur on the sales side, for example an employee might accept a bribe to prefer one customer over another, again with potentially damaging consequences for relationships with other customers, as well as the legal consequences to Company.

9.3 In the normal course of business, discounts and rebates are offered to customers in both the private and public sectors. While this is common industry practice, the wide variety of arrangements and the relative complexity of some of them creates a degree of risk that such arrangements could be used to disguise improper inducements to individual customer representatives (for example, selective dissemination of the fact that free products are being provided), and consequently great care needs to be exercised in the deployment of such arrangements.

10. USE OF THIRD PARTY AGENTS, CONSULTANTS AND OTHER INTERMEDIARIES

10.1 Company may be held responsible for bribes paid on its behalf by third parties, with severe and often irreparable consequences, even if Company did not authorize these payments. Therefore, it is critical that due care is given in the selection of agents, that is, those people or companies who act on behalf of Company.

10.2 All dealings with suppliers, agents, contractors, service providers, intermediaries, consultants, and advisors, shall be carried out with the highest standards of integrity and in compliance with all relevant laws and regulations.

10.3 The following shall be ensured prior to engaging a third party:

(a) Appropriate due diligence is conducted and properly documented;

(b) Formal commitment (in writing) is sought from the third party to ensure compliance to these standards;

(c) Appropriate anti-bribery and anti-corruption provisions are incorporated in the contracts in consultation with Company’s Legal team, including the right to audit, as well as a clause on termination, if the partner/party fails to abide by the anti-bribery and anti-corruption terms.

11. GOVERNMENT INTERACTION

11.1 Doing business with the government is highly regulated and typically follows stricter rules than those in the commercial marketplace. If an Employee works with government officials or a government-owned (or partially-owned) company, such Employee has a special duty to know and comply with applicable laws and regulations, adhere to the highest standards of integrity and avoid even the appearance of impropriety. Company may interact with the government, government officials and government agencies in multiple forms, such as: for seeking statutory or regulatory approvals, as a supplier, as a customer, etc. Employees should always be truthful, accurate, co-operative and courteous while representing Company before any government, government officials and government agencies.

11.2 Company and Employees shall not offer or give any company funds or property as donation to any government agency or its representative, directly or through intermediaries. However, in the Indian context for example, donation of Company’s funds or property to the Prime Minister’s Relief Fund or donations towards disaster relief may be permitted pursuant to Company’s policies. The Company shall comply with government procurement regulations and shall be transparent in all its dealings with government agencies.

12. POLITICAL COMMUNITY AND CHARITABLE CONTRIBUTIONS

12.1 Employees are not allowed to make political contributions from the funds, properties or other resources of Company except political contributions approved by the Board and in compliance with applicable law. Company may make charitable donations for humanitarian needs and other factors, including emergency situations and disaster relief. Such contributions must be made in compliance with Company’s policy. However, it is important that special care is taken while making donations such that they shall be made without demand or expectation, so that Company donations would not be considered inducements, as this would be a violation of the anti-corruption laws and this ABAC Policy. Thus, contributions by the Company to community projects or charities need to be made in good faith and in compliance with this ABAC Policy and all other relevant policies and procedures.

12.2 Before making such a contribution, Employees should ensure that:

(a) Such charitable contributions are not dependent on, nor made to win, a business deal.
(b) The contribution is always made to the charity and not to any particular individual, except where donations or grants are provided directly to affected victims of natural disasters, pursuant to Company’s policy.
(c) Contributions should be given to entities where the end use of the contribution is known and/or controlled.
(d) Contributions should only be made to charitable organisations which are registered under the laws of the country.
(e) As far as possible, background checks on the charitable organisations should be carried out in all cases specially to ensure that the charity does not act as a conduit to fund illegal activities in violation of anti-money laundering laws, anti-terrorism laws and other applicable laws.
(f) Only such charitable contributions shall be made that are legal and ethical under local laws and practices.

13. SPONSORSHIPS

Sponsorships are closely allied to the various types of community / business activities undertaken by Company. These could range from sponsoring educational scholarships to local sports teams. Any sponsorship must be for genuine business or charitable objectives without any element of quid pro quo. Any such sponsorship must be transparent, duly approved, properly documented and duly reported as per Company’s policy.

14. MERGERS AND ACQUISITIONS

14.1 A company that does not perform adequate due diligence regarding compliance with anti-bribery and anti-corruption procedures of the target company prior to a merger or acquisition may face both legal and business risks. The Company will undertake appropriate and reasonable due diligence on the reputation and integrity of any business in which it makes investments.

14.2 Company, when it is acquiring a potential target, will train new employees, re-evaluate third parties under company standards and where appropriate, conduct audits on new business units.

15. BOOKS, RECORDS, AND INTERNAL CONTROL REQUIREMENTS

15.1 Each Employee has a responsibility to be accurate, complete and honest in what he/she reports and records to meet regulatory requirements, as well as in all internal and external documents of Company, including accounting records, time cards, expense reports, invoices, payroll records, safety records, business records, performance evaluations, etc.

15.2 All business units and entities must maintain an effective system of internal control and monitoring of Company transactions. Certain monitoring controls are identified in Company policies, specifically regarding approval of travel and entertainment expenses. It is the responsibility of the Employee to be knowledgeable about control procedures and ensure compliance. Employees are required to ensure that all expense claims relating to hospitality, gifts or charitable donations are submitted in accordance with applicable policies and specifically record the reason for the expenditure.

15.3 Employee are required to maintain all financial records and have appropriate internal controls in place which will evidence the business reason for making payments to or receiving payments from third parties.

15.4 All accounts, invoices, memoranda and other documents and records relating to dealings with third parties, such as customers, suppliers and business contacts, should be prepared and maintained with accuracy and completeness. Such policies ensure that maintenance of records required to meet Company legal, tax and regulatory requirements and securely dispose of records that are no longer needed or are beyond the statutory retention period. Employees should take care never to dispose of information that may be relevant to current or threatened litigation or subject to a legal prohibition or stipulation until they are authorized in writing to do so by the relevant department.

15.5 Employees who see or suspect financial misconduct should notify their supervisors immediately, and contact the Compliance Officer.

16. COMMUNICATION

It is Company’s commitment to ensure that it has adequate procedures to combat ABAC risks and threats. To meet this objective, details of Company’s whistleblowing procedures will be disseminated throughout Company and will be so done on a regular basis.

17. HOW TO RAISE CONCERNS

17.1 Every Employee is encouraged to raise concerns about any bribery issue or suspicion of malpractice or any case of corrupt practice or any breach of this ABAC Policy or applicable ABAC law at the earliest possible. If he/she is unsure whether a particular act constitutes bribery or corruption or if he/she has any other queries, these should be raised with the respective reporting manager and the Compliance Officer. Concerns/queries should be addressed to the Compliance Officers at the following email addresses: legal@cpwi.in

17.2 No personnel who in good faith, reports a violation of the ABAC Policy shall suffer harassment, retaliation or adverse employment consequences.

18. RESPONSIBILITY AND PENALTIES

18.1 Company takes the subject of corruption and bribery very seriously. Any violation of this ABAC Policy will be regarded as a serious matter and shall result in disciplinary action, including termination, consistent with applicable law and the employee’s terms of employment.

18.2 Bribery is a criminal offense. The defaulting Employee will be accountable whether she/he pays a bribe herself/himself or authorizes, assists, or conspires with someone else to violate this ABAC Policy or an anti-corruption/anti-bribery law. Punishments for violating the law are against a defaulting Employee as an individual and may include imprisonment, probation, and significant monetary fines which will not be paid by the Company. For example, punishment under the PCA ranges between 6 months and 5 years, along with a fine. In certain cases of habitual offenders imprisonment could be as high as 7 years. There is no limit on the maximum fine payable.

18.3 In case of violations (alleged or otherwise) of this ABAC policy, the Compliance Officer shall take appropriate steps such as:

(a) Assigning an Investigation Team: Employees with the right knowledge and objectivity may be appointed to investigate a complaint.

(b) Conducting an Investigation: Every investigation relating to a suspected violation of this ABAC Policy shall be investigated by the Compliance Officer together with other members assigned under sub-clause (a) above. The objective of such an investigation would be to determine the facts, through interviews with concerned participants and/or review of documents. Such investigation team will make a written demand for information, records etc. that is reasonably related to the alleged offence, including, without limitation: (i) copies or access to all records relating to the alleged offence (such as telephone records, Internet service records and/or other records stored on computer hard drives or other information storage equipment); and/or (ii) a written statement made by the Employee, if any, setting out in detail all of the facts and circumstances of which such an Employee is aware with respect to the alleged offence. In case of any alleged violation of this ABAC Policy or any indicative questionable transactions or situations by a service provider/consultant/counterparty, similar investigations shall be initiated to determine the involvement of the Employee SPOC (single point of contact) for such provider/consultant/counterparty and/or other Company Employees concerned. Each Employee shall co-operate with the investigation team and promptly respond to all requests for information. It is clarified that the report prepared by the investigations team, shall be kept confidential and shall be shared only with such persons who have a “need to know” under applicable law or Company Policies, e.g. a copy of the report may be shared with the Employee.

(c) Corrective Action: If necessary, corrective actions shall be prescribed or suggested to appropriate managers, officers and employees for implementation.

(d) Penalties: The Compliance Officer shall, after considering inputs, if any, from the Employee have the discretion to recommend appropriate disciplinary action, including suspension and termination of service of such a defaulting Employee. The Compliance Officer shall also recommend if the violation is potentially criminal in nature and should be notified to the authorities. In the event of criminal or regulatory proceedings, the Employees shall co-operate with relevant authorities. Depending on the nature and scale of default by the defaulting Employee, the Compliance Officer may also recommend to the Board to commence civil and/or criminal proceedings against such an Employee in order to enforce remedies available to Company under applicable laws.

18.4 All internal investigations shall follow principles of natural justice and shall ensure that the relevant Employee is provided with an opportunity to make his/her case before the investigation team.

19. PERIODIC REVIEW AND EVALUATION

19.1 Company will monitor the effectiveness and review the implementation of this ABAC Policy, considering its suitability, adequacy and effectiveness.

19.2 Company reserves the right to vary and/or amend the terms of this ABAC Policy from time to time.