Anti-Corruption

Anti-Corruption Policy

Smothong Group Public Company Limited (the "Company") and its subsidiaries are committed to conducting business in compliance with the law, with integrity, transparency, and responsibility toward society and all stakeholder groups, in accordance with the principles of Good Corporate Governance, the Code of Conduct, and Company policies and regulations. Therefore, the Company has established this Anti-Corruption Policy (the "Policy") to demonstrate its intent and commitment to opposing all forms of corruption and to promote transparency in business operations.

1. Objectives

1. To demonstrate the integrity, transparency, and accountability of the Company and its subsidiaries in the fight against corruption.
2. To define duties, responsibilities, criteria, and guidelines for countering and preventing corruption, as well as to establish measures to prevent any violations of these guidelines.
3. To encourage personnel of the Company and its subsidiaries to provide leads or report information regarding corruption through the designated channels.

2. Definition

2.1 “Corruption” refers to the abuse of entrusted power for personal gain, or any act of dishonesty through the use of one's position, authority, or influence for the benefit of oneself and/or others. This includes bribery, whether through offering, promising, giving, accepting, or demanding assets or any other benefits, either directly or indirectly, to induce an individual to act in violation of the law or moral principles, or to neglect their duties in order to acquire or retain any improper business advantage. This excludes cases permitted by law, regulations, notifications, rules, local customs, traditions, or trade practices.

2.2 "The Company" refers to Smothong Group Public Company Limited.

2.3 "Subsidiary" refers to an entity that possesses any of the following characteristics:

1. An entity over which the Company has controlling power.
2. An entity over which the entity in (1) has controlling power.
3. An entity that is under the controlling power of the entity in (2), continuing in a successive chain starting from the control exercised by the entity in (2).

2.4 “The Group” refers to the group of companies consisting of Smothong Group Public Company Limited, its subsidiaries, associates, and joint ventures over which Smothong Group Public Company Limited has management authority.

2.5 “Personnel” refers to directors, executives, consultants, staff, and employees.

2.6 “Executives” refers to individuals holding the positions of Chief Executive Officer, Managing Director (including the Chief Financial Officer), and Senior Executive Vice President.

2.7 “Employees” refers to employees of the Company and its subsidiaries, including permanent employees, daily-wage employees, probationary employees, and contract (temporary) employees.

3. Forms of Corruption

Acts that may lead to the risk of corruption can occur in various forms, such as political contributions, charitable donations, and sponsorships, as well as the payment or receipt of gifts, hospitality fees, and entertainment expenses, among others.

4. Scope of the Policy

This Policy applies to the Company and its subsidiaries, as well as any other relevant individuals.

5. Responsibilities

5.1 The Board of Directors has the following responsibilities:

1. To define the policy and guidelines ensuring that the Company and its subsidiaries conduct business without involvement in any form of corruption, including ensuring full compliance with the law. This is to ensure that the management recognises and prioritizes anti-corruption efforts and cultivates them as an organisational culture.
2. To oversee the implementation of the Policy and review its appropriateness at least once a year.

5.2 The Audit Committee has the following responsibilities:

1. To review the preparation of financial reports, internal controls, risk management, and other processes related to anti-corruption measures.
2. To oversee compliance with anti-corruption measures to ensure that the Anti-Corruption Policy is adequate and effective, and to review the Policy for submission to the Board of Directors for approval.
3. To regularly report internal audit findings related to anti-corruption to the Board of Directors.
4. To provide practical advice and recommendations to the Board of Directors and the Company’s executives.

5.3 The Risk Management Committee has the following responsibilities:

1. To assess the risks associated with the business operations of the Company and its subsidiaries regarding potential involvement in corruption, and to establish risk management measures appropriate to the assessed risk levels.
2. To monitor the progress of the risk management plan to prevent corruption within the Company and its subsidiaries, including business partners, consultants, intermediaries, or business agents.

5.4 The Management has the following responsibilities:

1. To establish processes that promote and support the Anti-Corruption Policy, including encouraging partners within the business supply chain to implement policies and practices that ensure no involvement in corruption, whether through soliciting, receiving, or paying bribes.
2. To communicate and provide training to employees and all relevant parties to ensure they are aware of and understand the Policy, and to implement it consistently throughout the organization. This includes participating in the assessment of operational risks that may lead to corruption and reviewing the appropriateness of processes and measures to stay aligned with business changes, regulations, and legal requirements.
3. To provide whistleblowing channels for reporting corruption, establish clear operational guidelines, ensure the investigation of information according to Company-defined procedures, and report findings to the Audit Committee.
4. To disclose facts regarding cases where the Company or its subsidiaries are under investigation, or have been investigated, by authorized agencies concerning potential violations of anti-corruption laws.

5.5 The Internal Audit Function has the following responsibilities:

1. To audit and review business operations to ensure they are conducted correctly in accordance with policies, guidelines, delegation of authority, operational regulations, laws, and the requirements of relevant regulatory agencies. This is to assure that the Company and its subsidiaries have appropriate and adequate internal control systems to mitigate potential corruption risks.
2. To report the findings of reviews concerning compliance with the Anti-Corruption Policy and related measures to the Audit Committee every quarter.

6. Guidelines

Personnel of the Company and its subsidiaries must not engage in or be involved with any form of corruption or bribery, whether directly or indirectly. It is their duty to comply with the Anti-Corruption Policy, Corporate Governance Policy, and Code of Conduct, as well as all other relevant rules and regulations. If any action is found to be in violation of this Policy, it must be reported to a superior or the designated responsible person. Personnel are expected to cooperate fully in any subsequent fact-finding investigations. In case of doubts or inquiries, personnel should consult their superior or the designated person through the established channels.

6.1 Gifts, Hospitality, and Benefits

1. Personnel of the Company and its subsidiaries must exercise extreme caution regarding receiving or giving gifts, hospitality, or any other benefits. Such actions must not influence the decision-making process in the performance of duties or lead to inappropriate consent or concessions in business agreements.
2. Personnel of the Company and its subsidiaries may receive or give gifts with a value not exceeding 2,000 Baht (Two Thousand Baht) per person, per occasion. In cases where a gift is received, it must be submitted to the Human Resources Department to be used as prizes and/or donated to charity as appropriate.
3. Personnel of the Company and its subsidiaries must maintain evidence of approval and expenditure for any gifts, hospitality, or other benefits. Such records must clearly state the value of the assets, services, or hospitality to ensure accountability and auditability.

6.2 Charitable Donations and Sponsorships

1. Charitable donations and sponsorships provided by the Company are managed under the Human Resources Department and the Executive Secretary's Office. Such activities must be conducted with transparency and in full compliance with the law to ensure that charitable donations and sponsorships are not used as a pretext for corruption.
2. Any donation or sponsorship must undergo a verification and approval process in accordance with the Delegation of Authority (DOA), supported by clear documentary evidence, and remain consistent with Company regulations.

6.3 Political Activities and Participation

1. The Company and its subsidiaries maintain political neutrality. There is no policy to provide financial support, resources, or Company assets to political candidates, political parties, political coalitions, or any persons with political authority for the benefit of such groups, whether directly or indirectly. An exception applies only if such support is legally permitted and promotes democracy as a whole, provided that prior approval is obtained before proceeding.
2. Personnel of the Company and its subsidiaries may exercise their political rights in their own name under the provisions of the Constitution, laws, and relevant regulations. However, they must avoid any actions that could lead others to believe such acts are being performed on behalf of the Company.

6.4 Business Relationships and Government Procurement

1. Personnel of the Company and its subsidiaries are strictly prohibited from giving or receiving bribes in any form of business operation, whether directly or through third parties, including joint ventures, agents, representatives, consultants, brokers, contractors, partners, or intermediaries under the direct control of the Company and its subsidiaries.
2. All interactions between the Company, its subsidiaries, and government agencies must be conducted with transparency, integrity, and accuracy, in full compliance with relevant laws and regulations. This includes adherence to laws prohibiting improper influence over government officials, as well as the rules and regulations issued by the National Anti-Corruption Commission (NACC).

6.5 Procurement, Outsourcing, and Sales

1. The Company and its subsidiaries shall establish regular audit processes for operational systems and procedures, including the drafting of sales-related contracts, raw material procurement, general purchasing, and outsourcing services.
2. The Company and its subsidiaries shall conduct corruption risk assessments within the sales, procurement, and outsourcing processes, as well as in the formation of related contracts. These assessments aim to determine risk management strategies or to mitigate such risks to an acceptable level.

6.6 Anti-Money Laundering (AML)

1. The Company and its subsidiaries shall not accept the transfer or conversion of assets, nor support the transfer or conversion of any assets related to criminal offences. This is to prevent any party from using the Company and its subsidiaries as a channel or tool to transfer, conceal, or disguise the illicit origin of assets acquired unlawfully.
2. The Company and its subsidiaries shall ensure that financial transactions or assets are audited, recorded, and documented with care, accuracy, and in full compliance with the law.

6.7 Human Resources Management

1. The Company and its subsidiaries maintain human resources management processes that reflect a strong commitment to anti-corruption measures. This includes recruitment, promotion, training, and performance evaluation, all of which are designed to align with and demonstrate commitment to the organization’s anti-corruption goals.
2. The Company and its subsidiaries have a policy not to demote, penalize, or adversely affect any personnel who refuse to engage in corruption, even if such refusal results in the loss of business opportunities for the Company.
3. The Company and its subsidiaries shall provide safe whistleblowing channels and protection for whistleblowers when personnel wish to report information or leads, or when they seek guidance regarding compliance with the Anti-Corruption Policy.

6.8 Communication

1. The Company and its subsidiaries shall ensure that the Anti-Corruption Policy is communicated and trained to all personnel through various channels. Every member of the Company’s and its subsidiaries’ personnel will receive a copy of the Policy via Company email, and it is also available for download on the Company’s website.
2. The Company and its subsidiaries shall provide continuous training to personnel to foster a genuine understanding of anti-corruption measures and the penalties for non-compliance. This training is also integrated as a fundamental part of the orientation program for new personnel of the Company and its subsidiaries.
3. The Company and its subsidiaries shall communicate the Anti-Corruption Policy and its guidelines to subsidiaries, associates, other entities under the Company’s control, business partners, stakeholders, and the general public through various communication channels to ensure awareness and compliance with these anti-corruption measures.

6.9 Internal Control

1. The Company and its subsidiaries shall establish an internal control system to combat corruption. This includes defining written policies, operational procedures, transaction recording, controls, reviews, and approvals by authorized persons. These controls cover finance, accounting, record-keeping, and all other Company processes related to anti-corruption measures.
2. The Company shall maintain adequate documentation and records for auditing purposes to verify the accuracy and appropriateness of financial reports and operational procedures. This ensures that no transactions are unrecorded, unexplained, or false, and that all entries are properly approved before being recorded in the accounting system, in accordance with Company policies, relevant laws, accounting policies, and accounting standards.
3. The department responsible for internal auditing shall monitor and audit compliance with the Anti-Corruption Policy and discuss audit findings with relevant parties to determine appropriate corrective actions. Audit results shall be reported to the Audit Committee and the Board of Directors at least once a year. However, any urgent issues found may be reported immediately to the Chief Executive Officer and the Audit Committee for further reporting to the Board of Directors.

7. Whistleblowing Channels and Protection of Whistleblowers or Complainants

7.1 The Company and its subsidiaries have established the following channels for reporting leads, concerns, or complaints:

1. Postal Mail: Addressed to a Superior, the Human Resources Department, or the Chairman of the Audit Committee.
   SMOTHONG GROUP PUBLIC COMPANY LIMITED
   119/1 MOO 10, TUMBOL PRASONG, AMPHUR THACHANA, SURATTHANI 84170
2. Electronic Mail (E-mail) To a Superior or the Human Resources Department: (E-mail: smgh.hr@smg-thai.com)
   Or To the Chairman of the Audit Committee: (E-mail: auditcommittee@smg-thai.com)
3. Website: www.smothonggroup.com

7.2 The Company and its subsidiaries have established the following protection measures for whistleblowers and complainants:

1. Whistleblowers, complainants, and related individuals will receive appropriate protection from the Company and its subsidiaries. This includes, but is not limited to, no changes in job position, job nature, or workplace; no suspension, intimidation, or interference with work performance; and no termination of employment or any other unfair treatment. However, if an investigation reveals that a report was made with malicious intent, a deliberate desire to cause harm, or contained false information, the Company will consider disciplinary action against the executives or employees involved. Such penalties, in accordance with the Work Rules and Regulations, range from verbal or written warnings and suspension to termination of employment, and may include legal proceedings.
2. Information regarding the whistleblowing or complaint will be kept strictly confidential and will not be disclosed to unrelated parties, unless such disclosure is required by law.
3. Any individual who becomes aware of a lead, a complaint, or information related to a complaint under this Policy must keep such matters strictly confidential and refrain from disclosing them to others. Due consideration must be given to the safety and potential damages to the complainant, the source of information, or any related persons. Exceptions apply only when disclosure is necessary for the operational procedures of this Policy or as required by law. In the event of a willful breach where information is intentionally disclosed, the Company or its subsidiaries will take disciplinary action and/or pursue legal proceedings against the violator, as the case may be.

8. Penalties

The Company and its subsidiaries shall establish appropriate disciplinary processes for personnel who fail to comply with the Anti-Corruption Policy. Such penalties may include termination of employment if deemed necessary by the Company. Any act that violates or fails to adhere to this Policy, whether directly or indirectly, will be subject to disciplinary action in accordance with Company regulations or subject to penalties under relevant laws.

9. Related Policies

Personnel of the Company are responsible for reading and understanding this Policy in conjunction with the following Company policies and regulations:

1. Corporate Governance Policy
2. Code of Conduct
3. Whistleblowing Policy
4. Work Rules and Regulations

10. Monitoring and Review

The Company shall submit this Policy to the Board of Directors for review, as appropriate, at least once a year.

This Anti-Corruption Policy of Smothong Group Public Company Limited was approved by the Board of Directors' Meeting No. 1/2025 on March 28, 2025. It shall be effective from April 1, 2025, onwards until further changes or cancellation.

Surachai Chitratsenee
Chairman of the Board of Directors
Smothong Group Public Company Limited