HIBISCUS PETROLEUM BERHAD
(“Hibiscus Petroleum” or the “Company”)
TERMS OF REFERENCE
TABLE OF CONTENTS
1.0 Definitions and Interpretation
4.0 Duties and Responsibilities
5.0 Committee Meetings
7.0 Revision of the Terms of Reference
1.0 DEFINITIONS AND INTERPRETATION
1.1 In this Terms of Reference, where the context so admits the following expressions shall have the following meanings:
“Board” The Board of Directors of Hibiscus Petroleum;
“Company Secretary” Company Secretary(ies) of Hibiscus Petroleum;
“Group “ Hibiscus Petroleum Berhad (798322-P) and its subsidiaries
“Hibiscus Petroleum” or “Company” Hibiscus Petroleum Berhad (798322-P)
“Independent Director” A director as defined in Chapter 1 of the Listing Requirements
“Listing Requirements” The Main Market Listing Requirements of Bursa Malaysia Securities Berhad, including any amendments made from time to time
“Member” A member of the Remuneration Committee as appointed pursuant to this Terms of Reference
“Senior Management” Employees of the Company who are able to exercise significant influence in making strategic decisions in the Group
“Terms of Reference” The terms of reference of the Remuneration Committee
1.2 In this Terms of Reference, unless the context otherwise requires:
1.2.1 words importing the masculine gender shall include the feminine, neuter genders and vice versa; and
1.2.2 words importing the singular shall include the plural and vice versa.
In carrying out its duties and responsibilities, the Remuneration Committee shall have the following rights:
(a) The Remuneration Committee shall not have the power to implement its recommendations but shall be obliged to report its recommendations to the Board for its consideration.
(b) The Remuneration Committee shall have access to all required information and assistance from personnel within the Company or to obtain external professional advice at the Company’s cost and to secure the attendance of representatives of such external advisers, if deemed necessary.
(a) The Remuneration Committee must comprise not less than 2 members, consisting of mainly non-executive directors, a majority of whom must be independent:
(b) No alternate director shall be appointed as a member of the Remuneration Committee; and
(c) In the event of any vacancy resulting in non-compliance of the minimum of 2 members, the Board shall appoint such number of directors to fill up such vacancy within 3 months of the event.
The Board must review the term of office and performance of the Remuneration Committee and each of its members, at least once every 3 years, to determine whether the Remuneration Committee and members have carried out their duties in accordance with their terms of reference.
4.0 DUTIES AND RESPONSIBILITIES
(a) Recommend the remuneration package and key terms of employment for the executive directors, which shall be approved by the Board as a whole. Determination of the remuneration packages of non-executive directors should be determined by the Board as a whole. The individuals concerned shall abstain from discussion or decision of their own remuneration;
(b) The level of remuneration shall be aligned with the financial position of the Group in its ability to offer remuneration on par with that offered in the current market environment:
In reviewing the level of remuneration, the Remuneration Committee shall consider the following:
(i) The executive directors’ remuneration should be of a sufficient level to attract and retain high calibre executive directors to successfully run the Company;
(ii) The non-executive directors’ fees should reflect their respective levels of experience, expertise and responsibilities; and
(iii) The non-executive directors’ fees shall be subject to shareholders’ approval at a general meeting of the Company.
(c) Recommend to the Board the remuneration packages of the Managing Director, all
C-Suites or high-ranking officers reporting directly to the Managing Director, and any other senior officer(s) deemed appropriate by the Board taking into consideration the performance appraisal(s) reviewed by the Nominating Committee.
(d) Review Management’s proposed budget and final recommended pay-out (based on actual performance) of the annual salary increment and bonus for the Group. The proposals shall be reasonable and benchmarked against the level of remuneration accorded by comparable companies in the industry.
5.0 COMMITTEE MEETINGS
(a) The Remuneration Committee shall meet at least once in the financial year and additional meetings may be called at any time, at the discretion of the Chairman of the Committee especially when there are major changes to executive directors and corporate structure within the Company; and
(b) The quorum for a meeting shall be 2 members.
6.0 REVISION OF THE TERMS OF REFERENCE
(a) Any revision or amendment to this Terms of Reference, as proposed by the Remuneration Committee or any third party, shall first be presented to the Board for its approval; and
(b) Upon the Board’s approval, the said revision or amendment shall form part of this Terms of Reference and this Terms of Reference shall be considered duly revised or amended.
This policy sets out the criteria to be used in recommending the remuneration package of the following categories of Directors of Hibiscus Petroleum Berhad (“Hibiscus” or the “Company”).
2. Fundamental Principles
The prescribed policy recognises that the nature of the Group’s business activities in the Exploration & Production segment within the Oil & Gas industry requires a suitable mix of Directors with the following key attributes :-
specialised technical knowledge
width and depth of relevant experience
The Group will continue to undergo various phases in its growth evolution. Accordingly, the Directors’ Remuneration packages will be assessed annually by the Remuneration Committee to ensure that the Directors are fairly remunerated based on the following factors :-
Financial performance of the Group, namely its EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation);
Nature and size of the Group’s operations;
Scope of duties and accountability;
Level of engagement required from non-executive directors in the form of meetings, workshops and discussions; and/or
Independent external advice may be sought, if and when required.
Furthermore, it is also a policy of the Company that executives of the Company or its subsidiary companies who are appointed to the boards of associate or subsidiary companies of Hibiscus attracting Directors’ remuneration, fees, expenses or benefits, shall, surrender such remuneration, fees, expenses or benefits to Hibiscus as soon as practically possible after receipt, provided that such an individual is fully and adequately protected and indemnified from all claims and liabilities that may be incurred by the individual concerned in discharging his / her duties in a lawful manner in the interest of the company on whose board he / she is serving.
3. Remuneration Components
The various components of remuneration for Directors, their eligibility for each component and the approving authority for each component are tabulated below:
R: Recommended By: A: Approved By:
RC: Remuneration Committee Board: Board of Hibiscus Petroleum Berhad
CP: Company Policy NA: Not Applicable
* Includes additional attendances and time expended by any Non-Executive Director for the Company’s purposes (or on behalf of the Company) at meetings and/or third-party events involving external parties, in the Non-Executive Directors’ capacity as a Director of the Company.
In addition, expenses (e.g. travel and accommodation expenses) incurred by Directors in discharging their duties relating to the ordinary course of the Company’s business activities shall be reimbursed accordingly. All reimbursements must be accompanied with claimable receipts and shall be submitted to the Company Secretarial Department (applicable to Non-Executive Directors) and Human Resource Department (applicable to Executive Directors) for processing on a timely basis.
The salary component is for every Executive Director, including the Managing Director (“MD”).
The salary is determined according to the factors set out under Section 2.0 above, as well as the prerequisite qualifications and experience and strategic targets and performance of the Group (amongst others).
The award of bonuses to Executive Directors is to recognise and reward outstanding performance of an Executive Director. A discretionary assessment is made based on pre-determined targets, and to ensure that all key factors are considered.
3.3 Fixed Fee for Non-Executive Directors
The Board reviews their remuneration annually, primarily based on the factors set out under Section 2.0 above. The fixed fees and any benefits payable to the Non-Executive Directors shall be approved at a General Meeting.
Approval of Non-Executive Directors fees and any benefits payable may be sought in a prospective or retrospective manner. However, payment of Directors’ fees shall only be made in arrears either on a progressive (e.g. quarterly) or lump-sum basis (i.e. year-end).
Directors who are shareholders shall abstain from voting at General Meetings of the Company to approve their fees.
3.4 Meeting Allowances
Payment shall be made to Non-Executive Directors for attendance (physical or virtual) on a per-meeting basis. Virtual participation by video, teleconference or other electronic mode that permits Non-Executive Directors to participate during meetings will constitute attendance and meeting allowances will be accorded accordingly.
Benefits for Executive Directors are determined after taking into the level of benefits provided throughout the Group.
The Remuneration Committee retains the discretion to change the benefits provided in line with regulations and/or market practice.
Benefits for the Executive Directors are to be decided by the Board as a whole, with the individual Executive Director abstaining.
4. Directors and Officers Liability Insurance
Directors are accorded with Directors and Officers Liability Insurance in respect of any liability (civil or criminal) arising in the course of discharging their duties as Directors of the Company provided that such liabilities were not as a result of negligence, default, breach of duty or breach of trust.
The Directors and Officers Liability Insurance premium shall be borne primarily by the Company and partially by the Directors. The premium paid does not form part of the benefits awarded to Directors as part of their remuneration packages.
5. Disclosure of remuneration
5.1 Directors’ remuneration shall be disclosed annually on a named and individual basis and by the exact amount, both at Company and Group levels. The remuneration breakdown shall amongst others include fees, salary, bonus, benefits and other emoluments, as the case may be. The disclosure shall also include Directors who were appointed or retired during the financial year.
5.2 The service contracts of Directors shall made available for inspection by major shareholder(s) upon written request and all details of remuneration in such contracts are therefore accessible to such shareholders.
This Code of Conduct and Ethics establishes a set of standard expectations for the conduct of the Directors and employees of Hibiscus Petroleum Berhad (“Hibiscus” or the “Company”) and its subsidiaries (“Hibiscus Group”).
2. Code of Conduct
The Board and employees will operate in a manner that promotes ethical and responsible decision making by all Directors and employees of Hibiscus Group.
2.2 Procedures and Guidelines
The Board has adopted a Code of Conduct for Directors to promote ethical and responsible decision making by the Directors.
The principles of the Code of Conduct are:
A Director must act honestly, in good faith and in the best interests of the Hibiscus Group as a whole.
A Director has a duty to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office.
A Director must use the powers of office for a proper purpose, in the best interests of the Group as a whole.
A Director must recognise that his/her primary responsibility is to Hibiscus' shareholders as a whole but should, where appropriate, have regard for the interest of all stakeholders of the Group.
A Director must not make improper use of information acquired as a Director.
A Director must not take improper advantage of the position of Director.
A Director must not allow personal interests, or the interests of any associated person, to conflict with the interests of the Company.
A Director has an obligation to be independent in judgment and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken as a Board.
Confidential information received by a Director in the course of the exercise of directorial duties remains the property of the Company and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the Company, or the person from whom the information is provided, or is required by law.
A Director should not engage in conduct likely to bring discredit upon the Company.
A Director has an obligation at all times, to comply with the spirit, as well as the letter of the law and with the principles of the Code of Conduct.
3. Code of Ethics
The Board and employees of the Hibiscus Group will abide by all the laws of the jurisdictions in which the Company has interests in, and seek mutually beneficial relationships in all dealings with business partners, suppliers and other stakeholders.
3.2 Procedures and Guidelines
Hibiscus has implemented a Code of Conduct and Ethics, which provides guidelines aimed at maintaining high ethical standards, responsible corporate behaviour and accountability within the Company.
Hibiscus’ Directors and employees are expected to:
Respect the law, Code of Conduct and Ethics and the Company’s Policies and Procedures and act in accordance with it;
Respect confidentiality and not misuse Company information, assets or facilities;
Value and maintain professionalism;
Avoid real or perceived conflicts of interest;
Act in the best interests of the Group, shareholders, stakeholders, where applicable;
By their actions, contribute to Hibiscus’ reputation as a good corporate citizen which earns the respect of the community and environment in which it operates;
Perform their duties in ways that minimise negative environmental impacts and maximise workplace safety;
Commit to respecting internationally recognised human rights and labour standards which includes to not employ forced, bonded or underage labour, and to take all reasonable steps to ensure that there is no form of slavery in the Group’s business and supply chain;
Exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace and with customers, suppliers and the public generally; and
Act with honesty, integrity, professionalism and responsibility at all times.
An employee that breaches the Code of Conduct and Ethics may face disciplinary action. If an employee suspects that a breach of the Code of Conduct and Ethics has occurred or will occur, he or she must notify management of that breach. No employee will be disadvantaged or prejudiced if he or she reports, in good faith, a suspected breach. All such reports will be acted upon and kept confidential.
The Board of the Company will periodically review the Code of Conduct and Ethics and communicate the new changes to all employees.
1.0 Introductory Statement
1.1 Policy of the Group
The Hibiscus Petroleum Berhad (“Hibiscus Petroleum” or “Company”) group of companies (“Group”) has a zero‐tolerance policy against all forms of bribery and corruption. It is the Group’s dogma to conduct its business and operations in an honest and ethical manner and is committed to acting professionally, lawfully and with integrity in all its business dealings and relationships. In this regard, the Group will continually evaluate and improve its implementation and enforcement of effective systems to ensure that the Group’s Anti‐Corruption and Anti‐Bribery Policy (“policy”) is reflected in its everyday operations.
1.2 Applicability of the Policy
This policy covers the following persons:‐
i. Directors and employees of the Group; and
ii. Contractors, joint venture partners, or other parties working/dealing with the Group.
1.3 Inter‐connection with other Group Policies
The Hibiscus Petroleum Group Code of Conduct and Ethics (“CCE”) sets out the Group’s core principles. This policy expands on (and forms part of) the CCE principles, to serve as a guideline on how to deal with improper solicitation, bribery and other corrupt issues which may arise in the course of business. This policy is not intended to provide definitive answers to all questions regarding bribery and corruption, but is instead envisioned to provide a basic introduction to how the Group combats bribery and corruption in furtherance of its commitment to lawful, fair and ethical behaviour at all times, in addition to being designed to avoid situations in which bribery and corruption may take root.
Failure to comply with this policy, whether intentional or not, may lead to disciplinary action and criminal liability for the individual(s) involved.
1.4 Seek Clarification for any Queries
As the Group operates in various jurisdictions, if the law in a particular country conflicts with a provision set out in this policy, you should comply with the law. If you perceive that a provision of this policy conflicts with the law in your jurisdiction, you should consult with your Head of Department and the Legal Department, and not disregard the policy without consultation.
It is strongly urged that if you are unclear about your obligations under this policy or have any doubt about the scope of applicable laws or the Group’s policies concerning bribery and corruption, that you check with the Legal Department immediately.
2.0 What is Bribery?
A bribe generally involves :
(i) A financial or other inducement or reward or advantage offered, promised or provided in order to improperly gain any commercial, contractual, regulatory or personal or other advantage, or/and
(ii) A financial or other inducement or reward or advantage requested, agreed to be received or accepted by another person with the intention of inducing them or another person to perform their responsibilities or duties inappropriately.
It does not matter whether the bribe is given or received directly or through a third party or for the benefit of the recipient or some other person. A bribe also does not actually have to take place – just agreeing to receive or accept one is bribery.
Bribes can take many forms including money (or cash equivalent such as shares); gifts, favours, entertainment or hospitality; kickbacks; unwarranted rebates or excessive commissions (e.g. to sales or marketing agents); unwarranted allowances or expenses; “facilitation” payment or payment to perform the job more quickly or to prioritise a particular individual/entity; uncompensated use of company services or facilities; political or charitable contributions or any other item of value.
Effective in year 2020, the Company, subsidiary or Group may also be liable if it fails to prevent bribery by an associated person1 (including, but not limited to an employee) for the Company’s/subsidiary’s/Group’s benefit.
1 A person who performs any services or functions on behalf of another person, or under the instruction of another party, who works/deals with the Group.
2.1 Gifts and hospitality
In general, the Group adopts a “no gift” policy. However, in some jurisdictions, such gift‐ giving or hospitality (given or received) during major celebrations or upon the achievement of any Company/subsidiary/Group milestone(s), or for genuine and justifiable occasions, are part of maintaining “ordinary” business relationships, and is the “acceptable” business relationship practice in the relevant jurisdiction.
Therefore, this policy does not prohibit the narrow exception of gift‐giving and hospitality (given and received) to or from third parties in such limited instances (including in circumstances where refusal may appear disrespectful or may offend the other party), which must be done openly and not in secret. However, such exceptions, if given or received, must not be of value above RM500 (or equivalent amount in other currencies) and must be given only in the form of food to be shared with employees or given to charity, or an item which must be displayed at the Company’s or subsidiary’s office.
Nevertheless, the overriding principles in cases where consideration is being given of whether to give or accept gifts and hospitality include the following :
• Gifts and/or hospitality given/received must not be made with the intention of improperly influencing another person/entity to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage, or in explicit or implicit exchange for favours or benefits;
• Gifts and/or hospitality given/received must comply with local law in all relevant countries;
• Gifts and/or hospitality given/received in relation to office/business matters must be given in the name of the Company/subsidiary/Group, not in an individual’s name (if a gift is given in the name of an individual, the gift must be placed at the Company’s or subsidiary’s office or shared with employees or given to charity);
• Gifts and/or hospitality given/received must not include cash or a cash equivalent;
• Gifts and/or hospitality given/received must be appropriate in the circumstances;
• Gifts and/or hospitality given/received must be of an appropriate type and value and given at an appropriate time taking into account the reason for the gift;
• Gifts and/or hospitality given/received must be given openly, not secretly; and
• Gifts and/or hospitality given/received must not be offered to, or accepted from, government officials or representatives, politicians or political parties, without the prior written approval of either the Company’s Corporate Governance officer or Group General Counsel.
The intention behind the gift must always be considered. It is imperative that the exercise of proper care and judgement must be employed at all times. It is necessary to conscientiously maintain the highest degree of integrity in all decisions/actions taken.
Even if refusal of the gift and/or hospitality is considered disrespectful or may offend the other party, the gift must be politely returned with a note of explanation of the Group’s “no gift” policy if there is a potential conflict of interest situation (as deemed by the Company’s Corporate Governance officer or Group General Counsel).
For clarity, it is not acceptable for anyone (or someone on their behalf) to:
• Give, promise to give, or offer, a payment, gift or hospitality with the expectation or hope that they or the Company/subsidiary/Group will improperly be given a business advantage, or as a reward for a business advantage already improperly given;
• Give, promise to give, or offer, a payment, gift or hospitality to a government official, agent or representative to facilitate or expedite a routine procedure;
• Accept payment from anyone where it is known or suspected that it is offered or given with the expectation that the person/entity will improperly obtain a business advantage;
• Accept a gift or hospitality from anyone where it is known or suspected that it is offered or provided with an expectation that a business advantage will be improperly provided by the Company/subsidiary/Group in return;
• Threaten or retaliate against another person who has refused to commit a bribery offence or who has raised concerns under this policy; or
• Engage in any activity that might lead to a breach of this policy.
The above list is not exhaustive and may include any intentional act or omission, which if proven, will constitute an act of misconduct under the policy or be regarded as a criminal offence under relevant legislations in force.
The above “no gift” policy does not include the following permitted occasions:
• Exchange of gifts at company‐to‐company level as part of an official visit/courtesy call where the gift is treated as the Company’s/subsidiary’s/Group’s property.
• Gift from the Company to external institutions or individuals in relation to the Company’s/subsidiary’s/Group’s official events, functions and celebrations (e.g. commemorative gifts or door gifts to all attending guest).
• Gifts from the Company/subsidiary/Group and/or their family members in relation to an internal or externally recognised function, event or celebration (e.g. in recognition of the employee’s/director’s service to the Company/subsidiary/Group).
• Token gifts of nominal value bearing the Company’s/subsidiary’s/Group’s logo that are deemed as part of the Company’s/subsidiary’s/Group’s brand building or promotional activities.
• Gifts to external parties who have no business dealings with the Group (e.g. monetary or gifts‐in‐kind to charitable organizations).
2.2 Facilitation payments and “kickbacks”
Facilitation payments or “kickbacks” are any payments, no matter how insignificant or “unofficial”, given to an official to secure or expedite a routine or administrative government action by a government official, or payments made in return for a business favour or advantage.
Offering, promising or requesting facilitation payments are just as prohibited as actually paying or receiving facilitation payments. Facilitation payments need not involve cash or other financial asset; it can be any sort of advantage with the intention to influence them in their duties.
We do not make, and will not accept, facilitation payments or “kickbacks” of any kind. If you receive a request or if you are offered facilitation payments, you must report it to Company’s Corporate Governance officer or Group General Counsel.
However, in dangerous situations where you are faced with having to make facilitation payment in order to protect your life, limb or property, you are allowed to make the payment but must immediately report it to Company’s Corporate Governance officer or Group General Counsel. Making facilitation payments in such a situation is the only exception which may be used as a defence when faced with allegations of bribery and corruption.
2.3 Charitable Donations and Sponsorship
Given the nature of our business, the Group is at times asked to contribute to social investment initiatives/activities in the countries in which we have operations.
As part of our commitment to corporate social responsibility and sustainable development, the Company/subsidiary provides such assistance in appropriate circumstances and in an appropriate manner, after carefully examining the legitimacy of the request, conducting due diligence and ensuring that such a contribution would not improperly influence a business outcome.
The Company/subsidiary may only make charitable donations and provides sponsorship that are legal and ethical under local laws and practices and which are in accordance with the Group’s internal policies and procedures.
Steps must be taken to ensure that donations to foreign‐based charities or beneficiaries are not disguised illegal payments to government officials nor act as a conduit to fund illegal activities in violation of any applicable law. When in doubt, employees can escalate the matter to the Legal Department to determine the authenticity of such requests.
2.4 Educational Sponsorship
Hibiscus Petroleum has a sponsorship programme to provide opportunities to deserving students to pursue fully funded postgraduate petroleum engineering degrees at a reputable British university with a campus located in Malaysia.
The selection of sponsorship recipient(s) is based on approved criteria such as academic qualifications and assessment results. The process of selection is transparent and the reasons for selection are properly recorded.
Hibiscus Petroleum and its subsidiaries provide internship opportunities to both local and foreign university students, as part of our efforts to give back to the community.
Such interns are chosen based on applications received and according to an approved selection criteria which includes relevance of the field of internship being applied for to the Company’s or subsidiary’s operations. The basis for selection is properly recorded and the selection process is transparent.
Hibiscus Petroleum and its subsidiaries also allow internship applicants from the family members of employees, so long as the individual meets the selection criteria set, and the proper declarations are made upfront in the application form. Such applicants are only chosen upon the required internal processes being observed and the necessary approvals being received.
2.6 Dealing with Public Officials
Although this policy applies to both the public and private sectors, dealing with public officials pose a particularly high risk in relation to bribery due to the strict rules and regulations in many countries.
Public officials include, without limitation, those in public office, employees of Government owned or controlled enterprises, international organizations, political parties and political candidates.
The provision of money or anything of value, no matter how small, to any public official for the purpose of influencing them in their official capacity, is strictly prohibited.
In exceptional circumstances where approval is obtained to provide a token gift or corporate hospitality to public officials, guidance from the Legal Department is required prior to extending such gift/hospitality and the value must not be above RM500 (or equivalent value in other currencies) or, where applicable, the allowable maximum value imposed by the recipient’s own corporate business policy, whichever is the lower.
2.7 Dealing with Third Parties
Dealings with third parties which include suppliers, contractors, agents, consultants, joint venture partners, introducers, government intermediaries, etc must be carried out in compliance with all relevant laws and consistent with the values and principles of the Group’s CCE.
The Group expects that all third parties, acting for and on its behalf, to share the same values and ethical standards as their actions may implicate the Group legally and tarnish its reputation.
Therefore, prior to the engagement of any third party, the relevant due diligence check is conducted (where reasonably appropriate or practicable) and the third party is made aware of the Group’s policies and of their obligations to comply with the same.
If there are any particular high‐risk transactions, further due diligence/investigation may be required, and an independent service provider may be appointed in such instances.
All arrangements with third parties should be subject to clear contractual terms including specific provisions requiring them to comply with minimum standards and procedures in relation to bribery and corruption. Appropriate wording to be included in contracts may be obtained from the Legal Department.
3.0 Money Laundering
Money laundering occurs when the criminal origin or nature of money or assets is hidden in legitimate business dealings or funds to support criminal activities, including financing terrorism. Money laundering is a very serious crime and the laws governing the same can have extra territorial effect i.e. the application of the law extends beyond local borders. Penalties for breaching anti‐money laundering legislation are severe and can include incarceration and extradition.
The Group strongly objects to, and prohibits, any practices related to money laundering, including dealing in the proceeds of criminal activities.
To avoid violating anti‐money laundering laws, employees are expected to always conduct counterparty due diligence to understand the business and background of the Company’s/subsidiary’s/Group’s prospective business counterparties and to determine the origin and destination of money, assets and services.
4.0 Appointment of Directors and Recruitment of Employees
Hibiscus Petroleum Group operates in many jurisdictions and provides equal opportunities for any competent and qualified individual from various multiracial and multicultural backgrounds to join the Group, whether as a director or an employee.
The appointment of directors or recruitment of employees is based on an approved selection criteria to avoid any element of corruption being involved in the appointment of directors or hiring of employees. This is to ensure that only the most qualified and suitable individuals are appointed as directors or recruited as employees.
Background checks are conducted or declaration forms furnished to ensure that, amongst others, potential directors or employees have not been convicted in any bribery or corruption cases. When appointing directors or hiring employees for management positions, more detailed checks may be conducted in view that such roles come with decision making responsibilities.
A process exists to ensure that all rights, entitlements and benefits to be given to a potential employee are reasonable in value and within the position job grade.
If the potential director or employee has a family and/or other relationship with the Group or any employee of the Group, this information must be made transparent during the recruitment process and the relevant clearance must be obtained before any appointment or hiring decision is made (so long as no local laws or regulations are breached).
If the potential director or employee is a relative of a government official, relevant checks must be made to ensure that such potential hiring is not against the law of the particular country, before relevant internal approval is sought to proceed with recruitment of the candidate.
5.0 Provision and/or receipt of Entertainment
The Group acknowledges that in conducting its businesses, it is a common acceptable practice to provide a reasonable level of entertainment to external parties, and to receive a reasonable level of entertainment from external parties.
While the Group allows its Directors and employees to entertain its external clients and to accept a reasonable level of entertainment, the following guiding principles must be applied:
• It must be permitted by the Group’s policies, including any other policies that may be issued by the Group at a later stage;
• There must be a proper business purpose for the entertainment, and the purpose is not to obtain an inappropriate advantage for the Group and/or the counterparty and/or oneself;
• It must be permitted by applicable laws and regulations;
• It must be permitted by the recipient’s and/or the provider’s own policies and procedures;
• It must be in a reasonable amount; and
• It must be documented (purpose of the entertainment, names of individuals present, their designations, company name and relevant other information).
However, the provision and receipt of entertainment to and from any public official (including their spouses and immediate family members) is prohibited unless prior written approval has been obtained from the Group’s Corporate Governance Officer or Group General Counsel.
At this juncture, the Group would like to make clear that the quantum for the provision and/or receipt of any entertainment must be modest and adhere to the applicable approval process and instituted limits.
In addition, any entertainment received must be declared on a monthly basis, whereby the name(s) of the person(s) involved, designation and company of the counter‐party must be stated, together with the dining venue where the entertainment/hospitality was received.
6.0 Record keeping
Subject to compliance to this policy including receiving the pertinent approval(s), the relevant Company/subsidiary must keep appropriate financial records and have appropriate internal controls in place which evidence the business reason for gifts, hospitality, entertainment and payments made and received.
7.0 Responsibilities and raising concerns
The prevention, detection and reporting of bribery and other forms of corruption are the responsibility of all those working for the Group or those who liaise with the Group. All directors and employees are required to be familiar and comply with this policy and to avoid any activity that might lead to, or suggest, a breach of this policy.
All employees of the Group are responsible to communicate this policy to contractors, joint venture partners and/or other parties working with/dealing with the Group.
The Company/subsidiary must be notified as soon as possible if it is believed or suspected that a conflict with this policy has occurred, or may occur in the future, or if a bribe is reasonably suspected to be offered or asked, or if the individual/Company/subsidiary believe that they are a victim of another form of unlawful activity.
Any employee who breaches this policy may face disciplinary action, which could result in dismissal for serious misconduct. The Group reserves the right of legal recourse against any person who breaches this policy.
If anyone is aware of any activity by another person/entity which might lead to, or suggest, a breach of this policy, they should raise their concerns with the Company’s Corporate Governance officer or Group General Counsel.
All directors and employees are aware that they have the obligation to act with integrity and to ensure that they understand and comply with this policy. All directors and employees are responsible for the success of this policy and should ensure they use it to disclose any suspected danger or wrongdoing.
The Group is committed to ensuring the employees can speak up with confidence if they have any concerns or need to seek assistance. If you suspect or observe anything that you think may be in contravention of this policy, you have an obligation to report it.
Please refer to the Group’s Whistle Blower Policy in this regard.
The Group provides and/or arranges training to familiarize employees with the relevant laws that criminalize bribery and corruption, and helps them be aware of their roles and obligations in combating various forms of bribery and corruption, recognize such forms, and mitigate associated risks.
10.0 Monitoring and review
The Group monitors the effectiveness and reviews the implementation of this policy at appropriate intervals, considering its suitability, adequacy and effectiveness. Any improvements identified are made as soon as possible. Internal control systems and procedures are also subject to regular review by the Internal Auditor to provide assurance that they are effective in countering any risks of bribery and corruption.
This policy is overseen by the Audit and Risk Management Committee to ensure that the policy meets the requirements of the relevant legislations in place, and remains effective for the Group. Where necessary, changes to the policy will be made, subject to the approval of the Hibiscus Petroleum’s Board of Directors.
Note : Hibiscus Petroleum reserves the right to amend this policy from time to time.
This policy is intended to provide all relevant parties with a platform to confidentially highlight any known malpractices or wrongdoings (“Serious Concerns”) to the Chairman of the Board or Chairman/Chairperson of the Audit and Risk Management Committee or the Senior Independent Director.
This policy covers the following persons:‐
i. Directors and employees of Hibiscus Petroleum Berhad (“Hibiscus Petroleum” or “the
Company”) and its subsidiaries (“Group”);
ii. Contractors, joint venture partners, or other parties working with the Group; and
iii. External stakeholders or members of the public (where relevant)
hereinafter referred to collectively as "Whistle Blower(s)".
2.0 Scope of the Policy
2.1 Acts covered under the Policy
This policy is designed to facilitate the disclosure of any improper conduct (misconduct or criminal offence) such as :
i. Fraud or criminal offences;
iii. Abuse of Power;
iv. Miscarriage of justice;
v. Conflict of Interest;
vi. Theft or embezzlement;
viii. Endangering of a person’s health and safety;
ix. Misuse of the Company’s property(ies);
x. Non‐compliance with any provision of the Code of Conduct and Ethics, legal or regulatory requirements.
The above list is not exhaustive and may include any intentional act or omission, which if proven, will constitute an act of misconduct under Hibiscus Petroleum’s Code of Conduct and Ethics or be regarded as a criminal offence under relevant legislations in force.
2.2 Understanding by Whistle Blowers
Whistle Blowers are not required to prove the allegation(s) but rather to provide sufficient information based on a reasonable belief that an improper activity has occurred to enable the necessary actions to be taken.
To be covered by this Whistle Blower Policy, the Whistle Blower who makes a disclosure must reasonably believe 2 things :‐
i. That they are acting in the public interest.
ii. That the disclosure concerns past, present or likely future wrongdoing falling into one or more of the categories.
2.3 Exclusions to this Policy
a. Personal grievances and complaints
Personal grievances and complaints are not covered by this policy.
Employees are directed to the Employees Handbook on the procedure for raising personal grievances and complaints.
b. Anonymous Whistle Blower
Any anonymous disclosure will not be entertained. Any employee or member of the public who wishes to report improper conduct is required to disclose his/her identity to the Company in order for the Company to accord the necessary protection to him. However, the Company reserves its right to investigate any anonymous disclosure.
3.0 Protection to Whistle Blower
Every effort will be made to treat the Whistle Blower’s identity with appropriate regard for confidentiality. The Group gives the assurance that it will not reveal the identity of the Whistle Blower to any third party not involved in the investigation or prosecution of the matter. An exception to this assurance is in the event the Group is obligated to reveal confidential information relating to a whistle‐blowing report, if ordered to do so by a court of law.
A Whistle Blower will also be protected against any adverse and detrimental action for disclosing any improper conduct committed or about to be committed within the Group, to the extent reasonably practicable, provided that the disclosure is made in good faith. Such protection is accorded even if the investigation later reveals that the Whistle Blower is mistaken as to the facts involved.
Any attempt to retaliate, victimise or intimidate the Whistle Blower who made a report in good faith is a serious violation of the Company’s Code of Conduct and Ethics and shall be dealt with accordingly. A Whistle Blower’s right to protection from retaliation does not extend to immunity for any complicity in such matter which is the subject of the allegation or an ensuing investigation.
4.0 Revocation of Whistle Blower protection
The Whistle Blower protection conferred under Section 3 of this policy shall be revoked if it is of the opinion of the Audit and Risk Management Committee, based on the course of investigation that :‐
(a) the Whistle Blower himself/herself has participated in the improper conduct disclosed;
(b) the Whistle Blower willfully made in his/her disclosure of improper conduct a material statement which he/she knew or believed to be false or did not believe to be true;
(c) the disclosure of improper conduct is frivolous or vexatious, which includes the circulation of allegations to parties other than those specified under Section 5.1 of this policy;
(d) the disclosure of improper conduct principally involves questioning the merits of government policy, including policy of a public body;
(e) the disclosure of improper conduct is made solely or substantially with the motive of avoiding dismissal or other disciplinary action; or
(f) the Whistle Blower, in the course of making the disclosure or providing further information, commits an offence under this policy or applicable laws and regulations.
If the Whistle Blower protection has been revoked, the Whistle Blower shall be informed in writing.
5.1 Process for Disclosure
Managers, officers and employees in supervisory roles shall report to the reporting person(s) on any allegations of suspected improper activities.
Such disclosures, including those relating to the Company’s Code of Conduct and Ethics, legal issues, accounting and audit matters, illegal, unethical or improper business conduct within the Group, may be reported directly to
Disclosures can be made verbally or in writing and forwarded in a sealed labelled envelope stating “To be opened by the Chairman of the Board or Chairman/Chairperson of the Audit and Risk Management Committee or Senior Independent Director only” to the following address :‐
Lot 6.05, Level 6, KPMG Tower,
8 First Avenue, Bandar Utama,
47800 Petaling Jaya
Selangor Darul Ehsan
II) Handling of a reported allegation
The action taken by the Group in response to a report of any Serious Concern raised under this policy will depend on the nature of the Serious Concern highlighted. The Audit and Risk Management Committee shall receive information on each report of Serious Concern and follow‐up on actions taken (if any).
The Internal Auditor shall be the named Investigator unless the Audit and Risk Management Committee assigns / appoints another Investigator. The Investigator must be impartial and independent of all parties concerned.
The Investigator is required to report all Serious Concerns raised, the status of all pending and on‐going investigations, and any action taken or to be taken as a result of the investigations, to the Audit and Risk Management Committee.
Initial inquiries will be made to determine whether an investigation is appropriate, and the form that it should take. Some Serious Concerns may be resolved without the need for investigation.
If an investigation leads the Investigator to conclude that a crime has probably been committed, the results of the investigation shall be reported to the police or other appropriate law enforcement agency / regulatory body.
If an investigation leads the Investigator to conclude that the suspect has engaged in conduct that may be in violation of the Company’s Code of Conduct and Ethics, the results of the investigation shall be reported to the Managing Director or the Head of Human Capital in accordance with the applicable procedures for Company conduct and the administration of discipline. Any charges of misconduct brought as a result of an investigation under this policy shall comply with established disciplinary procedures.
6.0 Monitoring and Periodic Review of Policy
This policy is overseen by the Audit and Risk Management Committee to ensure that the policy meets the requirements of the relevant legislations in place, and remains effective for the Group. Where necessary, changes to the policy will be made, subject to the approval of Hibiscus Petroleum’s Board of Directors.
Note : Hibiscus Petroleum reserves the right to amend this policy from time to time.