GOVERNANCE OF CMC GROUP

Purpose & Scope

CMC Group is committed to the highest possible standards of ethical, moral, and legal conduct. Consistent with this commitment, the policy aims to support good management practices and sound corporate governance practices. 

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1. CODE OF ETHICS AND BUSINESS CONDUCT

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At CMC, we act professionally in our business dealings. We conduct ourselves with honesty, integrity and are accountable for our actions. We are guided by the CMC Code of Ethics and Business Conduct, as follows:

1.       Policy

 

It is the policy of the CMC Group Sdn Bhd and our subsidiaries (“CMC" or the “Group”) to provide our Code of Ethics and Business Conduct, which will serve as a guide to proper business conduct for all employees. We expect all employees to observe the highest standards of ethics and integrity in their conduct. This means following a basic code of ethical behaviour that includes the following:
 

1.1.    Build Trust and Credibility

 

The success of our business is dependent on the trust and confidence we earn from our employees, customers and shareholders. We gain credibility by adhering to our commitments, displaying honesty and integrity and reaching company goals solely through honourable conduct. When considering any action, it is wise to ask: will this build trust and credibility for CMC? Will it help create a working environment in which CMC can succeed over the long term? Is the commitment I am making one I can follow through with? The only way we will maximize trust and credibility is by answering “yes” to those questions and by working every day to build our trust and credibility.
 

1.2.    Respect for the Individual

 

We all deserve to work in an environment where we are treated with dignity and respect. CMC is committed to creating such an environment because it brings out the full potential in each of us, which, in turn, contributes directly to our business success.

 

CMC is an equal employment / affirmative action employer and is committed to providing a workplace that is free of discrimination of all types from abusive, offensive or harassing behaviour. Any employee who feels harassed or discriminated against should report the incident to his or her manager or to the Talent Management Department.
 

1.3.    Create a Culture of Open and Honest Communication

 

At CMC everyone should feel comfortable to speak his or her mind, particularly with respect to ethics concerns. Managers have a responsibility to create an open and supportive environment where employees feel comfortable raising such questions. We all benefit tremendously when employees exercise their power to prevent mistakes or wrongdoing by asking the right questions at the right times. CMC will investigate all reported instances of questionable or unethical behaviour. In every instance where improper behaviour is found to have occurred, the company will take appropriate action. We will not tolerate retaliation against employees who raise ethics concerns in good faith.
 

1.4.    Uphold the Law

 

Our commitment to integrity begins with complying with laws, rules and regulations where we do business. Further, each of us must have an understanding of the Group policies, laws, rules and regulations that apply to our specific roles. If we are unsure of whether a contemplated action is permitted by law or Group policy, we should seek advice from the resource expert. We are responsible for preventing violations of law and for speaking up if we see possible violations.
 

1.5.    Competition

 

We are dedicated to ethical, fair and vigorous competition. We will provide services and sell products based on their merit, superior quality, functionality and competitive pricing. We will make independent pricing and marketing decisions and will not improperly cooperate or coordinate our activities with our competitors. We will not offer or solicit improper payments or gratuities in connection with the purchase of goods or services for CMC or the sales of its products or services, nor will we engage or assist in unlawful boycotts of particular clients or customers.

1.6.    Proprietary Information

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It is important that we respect the property rights of others. We will not acquire or seek to acquire improper means of a competitor’s trade secrets or other proprietary or confidential information. We will not engage in unauthorized use, copying, distribution or alteration of software or other intellectual property.
 

1.7.    Selective Disclosure

 

We will not selectively disclose (whether in one-on-one or small discussions, meetings, presentations, proposals or otherwise) any material non-public information with respect to CMC, its business operations, plans, financial condition, results of operations or any development plan. We should be particularly vigilant when making presentations or proposals to customers to ensure that our presentations do not contain material non-public information.
 

1.8.    Avoid Conflicts of Interest

 

We must avoid any relationship or activity that might impair, or even appear to impair, our ability to make objective and fair decisions when performing our jobs. At times, we may be faced with situations where the business actions we take on behalf of CMC may conflict with our own personal or family interests because the course of action that is best for us personally may not also be the best course of action for CMC.

 

We owe a duty to CMC to advance its legitimate interests when the opportunity to do so arises. We must never use CMC's property or information for personal gain or personally take for ourselves any opportunity that is discovered through our position with CMC. Determining whether a conflict of interest exists is not always easy to do. Employees with a conflict of interest question should seek advice from management. Before engaging in any activity, transaction or relationship that might give rise to a conflict of interest, employees must seek review from their managers or the Talent Management Department.
 

1.9.    Accepting Business Courtesies

 

Most business courtesies offered to us in the course of our employment are offered because of our positions at CMC. We should not feel any entitlement to accept and keep a business courtesy. Although we may not use our position to obtain business courtesies, and we must never ask for them, we may accept unsolicited business courtesies. Employees who award contracts or who can influence the allocation of business, who create specifications that result in the placement of business or who participate in the negotiation of contracts must be particularly careful to avoid actions that create the appearance of favouritism or that may adversely affect the company’s reputation for impartiality and fair dealing. The prudent course is to refuse a courtesy from a supplier when CMC is involved in choosing or reconfirming a supplier or under circumstances that would create an impression that offering courtesies is the way to obtain CMC business.
 

1.10. Meals, Refreshments Entertainment and Gifts

 

We may accept occasional meals, refreshments, entertainment, gifts and similar business courtesies that are customary and conform to reasonable ethical practices of the marketplace, provided that:

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• They are not inappropriately lavish or excessive.

• The courtesies are not frequent and do not reflect a pattern of frequent acceptance of courtesies from the same person or entity.

• The courtesy does not create the appearance of an attempt to influence business decisions, such as accepting courtesies or entertainment from a supplier whose contract is expiring in the near future.

• The employee accepting the business courtesy would not feel uncomfortable discussing the courtesy with his or her manager or co-worker or having the courtesies known by the public.

 

Customary business entertainment is proper however, impropriety results when the value or cost is such that it could be interpreted as affecting an otherwise objective business decision. Employees with questions about accepting business courtesies should talk to their manager or the Human Resources Department.
 

1.11. Offering Business Courtesies

 

Any employee who offers a business courtesy must assure that it cannot reasonably be interpreted as an attempt to gain an unfair business advantage or otherwise reflect negatively upon CMC. An employee may never use personal funds or resources to do something that cannot be done with the Group resources. Accounting for business courtesies must be done in accordance with approved company procedures. Other than to our government customers, for whom special rules apply, we may provide non-monetary gifts (i.e., company logo apparel or similar promotional items) to our customers. Further, management may approve other courtesies, including meals, refreshments or entertainment of reasonable value, provided that:

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• The practise does not violate any law or regulation or the standards of conduct of the recipient’s organisation.

• The business courtesy is consistent with industry practice, is infrequent in nature and is not lavish.

• The business courtesy is properly reflected on the books and records of CMC.

1.12. Reporting Results Accurately

 

1.12.1.    Accurate Public Disclosures

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We will make certain that all disclosures made in financial reports are full, fair, accurate, timely and understandable. This obligation applies to all employees, including all financial executives, with any responsibility for the preparation of such reports, including drafting, reviewing and signing or certifying the information contained therein. No business goal of any kind is ever an excuse for misrepresenting facts or falsifying records. Employees should inform the Human Resources Department if they learn that information in any filing or public communication was untrue or misleading at the time it was made or if subsequent information would affect a similar future filing or public communication.

 

1.12.2.    Corporate Recordkeeping

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We create, retain and dispose of our company records as part of our normal course of business in compliance with all CMC policies and guidelines, as well as all regulatory and legal requirements. All corporate records must be true, accurate and complete, and company data must be promptly and accurately entered into our books in accordance with CMC’s and other applicable accounting principles. We must not improperly influence, manipulate or mislead any audit, nor interfere with any auditor engaged to perform an independent audit of CMC books, records, processes or internal controls.

 

1.12.3.    Accountability

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Each of us is responsible for knowing and adhering to the values and standards set forth in this Code and for raising questions if we are uncertain about company policy. If we are concerned whether the standards are being met or are aware of violations of the Code, we must contact the Talent Management Department. We take seriously the standards set forth in the Code, and violations are cause for disciplinary action up to and including termination of employment.

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Integral to our business success is our protection of confidential company information, as well as non-public information entrusted to us by employees, customers and other business partners. Confidential and proprietary information includes such things as pricing and financial data, customer names/addresses or non-public information about other companies, including current or potential suppliers and vendors. We will not disclose confidential and non-public information without a valid business or legal purpose and proper authorization.

 

1.12.4.    Use of Company Resources

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Company resources, including time, material, equipment and information, are provided for company business use. Nonetheless, occasional personal use is permissible as long as it does not affect job performance or cause a disruption to the workplace. Employees and those who represent CMC are trusted to behave responsibly and use good judgment to conserve company resources. Managers are responsible for the resources assigned to their departments and are empowered to resolve issues concerning their proper use.

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Generally, we will not use company equipment such as computers, copiers and fax machines in the conduct of an outside business or in support of any religious, political or other outside daily activity.

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Solicitation of the Group employees by non-employees is prohibited at all times. Solicitation by an employee of another employee is prohibited, while either the person is doing the soliciting or the person being solicited is on working time and or the Group's property. Distribution of materials by employees in work areas or on working time is prohibited. In order to protect the interests of the CMC network and our fellow employees, we reserve the right to monitor or review all data and information contained on an employee’s company-issued computer or electronic device, the use of the Internet or CMC’s intranet. We will not tolerate the use of company resources to create, access, store, print, solicit or send any materials that are harassing, threatening, abusive, sexually explicit or otherwise offensive or inappropriate.
 

1.13.Compliance

 

Compliance with these principles is an essential element in our business success. Our Talent Management Department is responsible for ensuring these principles are communicated to and understood and observed by all employees. Day to day responsibility is delegated to all management members who are responsible for implementing these principles, if necessary through more detailed guidance. Assurance of compliance is monitored and reported each year.

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Compliance with the code is subject to review by the board and subject to audit review. Employees are expected to bring to management’s attention any breach or suspected breach of these principles. Provision has been made for employees to be able to report in confidence.

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From time to time, employees will likely have questions as to how this Code of Ethics and Business Conduct apply in particular situations. We expect all employees with such questions to discuss the exact circumstances with our Head of Talent Management Department. Should the Head of Talent Management Department be uncertain on what actions should be taken to ensure compliance with this Code of Ethics and Business Conduct, he/she will obtain further guidance by consulting with the management.
 

1.14. Violations of the Business Ethics and Conduct Policy

 

If the head of the organisation or governing body has reasonable cause to believe that any employee subject to this policy has failed to disclose actual or possible conflicts of interest, it shall inform the employee of the basis for such belief and afford the individual an opportunity to explain the alleged failure to disclose.

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If, after hearing the response of the party subject to this policy and making such further investigation as may be warranted in the circumstances, the head of the organization or governing body determines that the volunteer/employee has in fact failed to disclose an actual or possible conflict of interest, it shall direct that appropriate disciplinary and corrective action is taken. 

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2. WHISTLEBLOWING POLICY 

This policy aims to provide a structured mechanism for employees and others to raise or report concerns about ongoing or suspected wrongful activities or wrongdoings to provide reassurance that they will be protected from reprisals or victimization for whistleblowing in good faith. 

For the purpose of this policy, wrongful activities or wrongdoings refers to any potential violations or concerns relating to any laws, rules, regulations, acts, ethics, integrity and business conduct, including any violations or concerns relating to malpractice, illegal, immoral, embezzlement and fraudulent activities which will affect the business and image of CMC Group. 

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The Board of Directors (“BOD”) of CMC has a stewardship responsibility to communicate the requirements of this policy and to guide the organisation in dealing with concerns arising from wrongful activities or wrongdoings.

 

The Policy of the BOD is:

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1. To encourage active and moral obligation to report wrongdoings 
   All employees and others are required to report any ongoing or suspected wrongful activities or wrongdoings at the earliest possible stage through the proper channel of reporting so that immediate action can be taken.
   
    

2. To use internal disclosure to report wrongdoings 
   As far as reasonable, internal disclosure is encouraged and used to avoid a public crisis. 
   
    

3. To protect the whistleblower 
   Where the disclosure is made in good faith, the whistleblower will be protected against victimisation or other adverse treatment.
   
    

4. To ensure appropriate and fair disciplinary actions 
   All actions taken against the alleged wrongdoers would be fair and without prejudice.
   
    

5. To require that an effective whistleblowing guideline is established and maintained by CMC Whistleblowing guidelines must be sufficient to: 
    

• Establish a formal and robust whistleblowing guideline, including hotline accessibility;

• Prohibit legal sanctions for retaliatory action taken against the whistleblower;

• Establish timely, feedback, respond and remedial and/or corrective action;

• Ensure that this policy is properly communicated to all employees;

• Establish procedures to maintain records confidentiality and retention; and 

• Embed integrity, transparency and accountability within the business

Reporting Mechanisms 

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Employees are encouraged to advise the Board if they become aware of or believe that any of the following activity is taking place in any of the Companies in the CMC Group.

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• Failure to comply with legal obligations;

• Criminal offence;

• Corruption or fraud;

• Misuse or abuse of CMC Group’s funds or assets;

• Gross mismanagement within CMC Group;

• Serious financial irregularity or impropriety within CMC Group;

• Serious breach of CMC Group’s Code of Business Conduct And Ethics or Conflict Of Interest Code for its employees and directors;

• Actions which endanger the health or safety of employees or the public;

• Failure to comply with the provisions of the Government Laws and Regulations where the wrongdoer, knowingly, disregards or does not comply with such provisions;

• Knowingly directing or advising a person to commit any of the above wrongdoings; and

• Any action which is intended to conceal any of the above.

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For the benefit of the employees and to maintain each complaint in strict confidence, CMC has established an email address and mailing address to be managed by the Whistleblowing Unit of CMC, and employees may report the suspected or actual illegal acts via these methods. The details are as follows:

 

Operating hours:

Monday to Friday (9.00am to 5.00pm)

 

Address:

CMC Whistleblowing Unit,
CMC ENGINEERING SDN BHD (387302-W)
A6-3a Jalan Selaman 1/1,
Dataran Palma,
68000 Ampang,
Selangor Darul Ehsan,
MALAYSIA

 

Email address:

contactus@cmce.com.my

CMC shall not permit any form of intimidation or retaliation against an employee by way of, but not limited to, discharge, demotion, suspension, threats, harassment or any other manner of discrimination with respect to an employee’s terms or conditions of employment. In respect of an employee who reports a suspected violation in good faith and is not engaged in questionable conduct, the company will attempt to keep its discussions and actions confidential to the greatest extent possible. In the course of the investigation, the company may need to share information with others on a “need to know” basis. 

The action taken will depend on the nature of the items inquiry. Initial inquiries will be made in respect of all reports received, to determine the nature and extent of further investigation.

A follow-up report will be provided to a complainant after the initial enquiry. If an investigation is done, a summary of the findings of the investigation will be given to the complainant.

The Board of the CMC Group will exercise the oversight function over the administration of the policy.

 

Modification

The CMC Group may modify this Policy to maintain compliance with applicable laws and regulations or accommodate organisational changes within the Group.

If you have any inquiries or other matters in ren to the Code of Ethics and Business Conduct, please send an email to contactus@cmce.com.my. All incoming information will be treated with the highest confidentiality.