Governance and Ethics


1. Background

A corporate liability was introduced with effect from 1 st June 2020 under the new
Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (“MACC”) which
provides that a commercial organisation commits an offence if any person
associated with the commercial organisation commits a corrupt act in order to obtain
or retain business or an advantage in the conduct of business for the commercial
organisation. Section 17A also holds the directors of the company as personally
liable for such corrupt practices.

The commercial organisation or its directors may be liable whether or not its top
management has actual knowledge of the corrupt acts of its employees or persons

Pursuant to Subsection 17A(5) of MACC, the Governance, Integrity and Anti-
Corruption Centre (GIACC) has issued the Guidelines on Adequate Procedures
(“GAP”) which outline the procedures and measures to be implemented to prevent
the occurrence of corrupt practices in their business activities and which procedures
could be relied on as a defence to absolve liability under Section 17A of MACC.

MACC clearly specifies the act of soliciting, giving, accepting or receiving
gratification, directly or indirectly, to or from a person in auhtority either in the form of
money, services or valuable goods as an inducement or reward to or not to do an
act in relation to the commercial organisation’s principal affairs as undertaking the
act of corruption.

Under MACC, corruption covers all acts of bribery, fraud, abuse of power and
money laundering

2. Objectives

Ygl is committed to conducting its business ethically and in compliance with the
provisions of MACC. This Policy is designed to provide guidance on how to develop,
implement and maintain effective controls and compliance procedures. The
objectives are to:

  • establish Ygl’s dedicated internal anti-bribery and corruption policy, controls and
    procedures under the five main principles outlined in GAP;
  • promote a culture of ethical business practices and compliance with the relevant
    law and regulations;
  • uphold high standard of integrity and ethical conduct of Ygl and all its
  • ensure this Policy are well communicated to all employees, customers,
    suppliers, business associates and any person dealing with Ygl;
  • ensure the procedures are adhered to when dealing in Ygl’s business; and
  • maintain effective controls to prevent the incidence of corrupt practices.
3. Scope of the Policy

The scope of this Policy is on corruption in the form of bribery which commonly
involves the offer, promise, request, acceptance or transfer of anything of value
either directly or indirectly to or by a person, in order to improperly induce, influence
or reward the performance of a function or an activity. Bribery may involve a
commercial arrangement or misuse of corporate power for private gain in order to
obtain, retain or direct buisness or to improperly secure any advantage in the
conduct of business.

This Policy applies to all Ygl’s directors, employees and persons associated in all its
business transactions either dealt directly or indirectly in Malaysia or overseas.

“Persons associated”defined under Section 17A of MACC include:

  1. Director
  2. Partner
  3. Senior Management
  4. Employee
  5. Subcontractor
  6. Agent
  7. Representative
  8. Nominee
  9. Trustee
  10. Associate

“Associate” under GAP is defined widely to cover:

  • Any person who is a nominee or an employee of such person
  • Any person who manages the affairs of such person
  • Any organisation of which such person, or any nominee of such person, is a partner, or a person in charge or in control of, or has a controlling
    interest in, its business or affairs
  • Any corporation within the meaning of the Companies Act 2016 of which
    such person, or any nominee of such person, is a director or is in charge
    or in control of its business or affairs, or in which such person, alone or
    together with any nominee of such person, has or have controlling
    interest, or shares to the total value of not less than 30% of the total
    issues capital of the corporation
  • Trustee of any trust where the trust has been created by such person or
    the total value of assets contributed by such person amounts to not less
    than 20% of the total value of the trust’s assets
4. Framework

Ygl aknowledges that while no anti-bribery and corruption programme can
completely prevent or protect against corruption, guidelines and procedures can
help to mitigate bribery and corruption risks.

The framework of this Policy is based on the 5 guiding principles laid out by GAP to
encapsulate Ygl’s anti-bribery and corruption commitment in the prevention,
detection, response and investigation of bribery or corruption for better business
ethics and compliance with MACC.

The 5 Guiding Principles (TRUST)

  1. Top Level Commitment
  2. Risk Assessment
  3. Undertake Control Measures
  4. Systematic Review, Monitoring and Enforcement
  5. Training and Communication
5. Top Level Commitment


The top level management is primarily responsible to establish a programme
which identifies risk areas, sets clear guidelines, places control measures and
implements compliance within Ygl Group. This is to provide assurance to both
internal and external stakeholders that Ygl is operating in compliance with anti-
bribery and corruption statutory requirements.

Roles and responsibilities

The Board of Directors (“Board”) endorses this Policy and oversees its
effectiveness in setting the highest standard of ethical behaviour and upholding
the highest integrity level in Ygl.

The Audit and Risk Management Committee (“ARMC”) assists the Board in
assessing exposure to risk and overseeing the implementation of and compliance
with this Policy.

Senior Management is entrusted to establish, administer and maintain a
programme which integrates ethical practices into Ygl’s business operation in
compliance with MACC

Internal reporting

Internal reporting is important because it keeps the whole company informed of
the level of compliance with this Policy.

The Board should receive periodic updates on the effectiveness of the Policy and
any pertinent matters requiring the Board’s attention.

The ARMC should be notified of any alleged corrupt practice and internal
investigation into such cases and update the Board, if necessary with the advice
of legal advisors.

Senior Management should investigate and hold inquiry into any alleged corrupt
practice which is reported in good faith by whistleblower or any corrupt act
discovered by the system.

Senior Management should receive relevant internal report on:

  • status of implementation and operation of the compliance programme
  • performance metrics;
  • significant deviations from procedures;
  • significant engagement with third parties;
  • legal and regulatory updates;
  • internal review and risk assessment;
  • any other significant issues.

Company-wide Policy

This Policy must be driven “top down” with top management commitment and
applicable as a company-wide Policy.

This Policy shall be made accessible and applicable to all departments in Ygl
especially functions such as Dealer Network, Marketing, Business Development,
Sales and Procurement where there is interaction with external service providers
or vendors.

The Policy should also be made known to contract staff, outsourced service
providers, subcontractors, dealers and whoever deals with Ygl.

Ygl reflects zero tolerance for any corrupt practice. This Policy should reference
all employees’ personal accountability in order to protect Ygl and themselves. As
such, This Policy:

  • prohibits the promising, offering, giving, solicitation or receiving of
    anything of value, directly or indirectly through third parties, improperly
    intended to influence action or obtain an advantage;
  • prohibits falsifying or concealing any documents, records or accounts in
    relation to the business of the Company, its customers, suppliers or
    business associates;
  • defines and identifies heightened risk interaction with Government or
    Semi-government officials (if any);
  • provides employees with proper channel of reporting potential bribery in a
    confidential manner and protected from retaliation through Ygl’s
    Whistleblower Policy;
  • notifies employees of the consequences of non-compliance; and
  • garners commitment from the Board, Senior Management and all levels of
    employees through training and awareness campaigns.
6. Risk Assessment

Risk assessment is the prelude to the development of a review and monitoing
programme as it allows ranking of each department by their relative susceptibility
to risks. The nature and extent of inherent risk of Ygl business should be
periodically assess to keep pace with changes in business environment.

Any change in risk should be countered with corresponding controls in place with
adjustment and update made to this Policy to mitigate the residual risk to an
acceptable level.

It is recommended that a comprehensive corruption risk assessment is done
once every three years with intermittent assessment conducted when necessary.

The ARMC shall be in charge of risk assessment and discuss with Senior
Management to make necessary arrangement to the compliance programme to
detect potential corruption red flags. Updates and amendments of risk
assessment should be recorded in the risk register.

Independence of internal risk assessment

Top management should ensure that internal risk assessment is carried out by an
ethical employee as a separate function from the implementation team or audited
by independent professionals such as accounting or legal firm. Risk assessment
should be a stand alone process.

Risk assessment questionnaire

Each department will complete a risk assessment questionnaire which gathers
information such as:

  • significant customers including government;
  • requirements as to anti-corruption training;
  • sales volume from major customers including government;
  • procurement needs;
  • existing anti-corruption policies and procedures.

Government or semi-government officials

MACC law generally treats interaction with government or semi-government
officials as well as their representatives as presenting higher corruption risk for
companies seeking to obtain or retain government business or influence
government action e.g. approving licenses. Any transaction with government or
semi-government agency must have proper correspondence and tender
documents for monitoring purpose.

Government or semi-government officials are defined as individuals of any rank
or level at the following organisations:

  • national, regional , local or municipal government bodies;
  • state owned or state controlled companies


Any dealing which has to go through an intermediary is an area of heightened
risk. Intermediary include a third party who who acts for or on behalf of a
customer or supplier to find, introduce, obtain or maintain business or any other
commercial advantage or obtain government approval or action. The identity,
appointment and role of such intermediary must be disclosed.

7. Undertake Control Measures

Once the risks are identified and prioritised, control measures and procedures
can be established and put in place. The control measures and procedures cover
the followings:

Ygl provides gifts (e.g. goods or cash vouchers) to customers and suppliers to
maintain cordial business relationship. No gift is to be made on behalf of the
Company without the approval of the Management.

Requests from customers or suppliers for gifts to their internal events must be
supported by the customers’ or suppliers’ official letters. Only gifts in physical form
or cash vouchers are allowed. The standard is RM200 cash vouchers or up to
RM300 goods. Cash contribution is disallowed.

Charitable contribution

As a caring organisation fulfulling its corporate social responsibility, Ygl may make
contribution to approved charitable bodies subject to approval from the
Management. All contibutions must be supported by official receipts of the charitable


Only approved employees are allowed to entertain existing or potential customers or
principal suppliers within the budget set by the Company. Only the CEO, COO and
General Manager are allowed to claim entertainment. The type of entertainment
approved by the Company covers customary business meals only.

The limit set by the Company is maximum RM50 per person per meal. The number
of persons being entertained must be reasonable and the persons must be
identifiable to existing customers, potential customers, principal suppliers and
business related persons who can provide Ygl with sales pipeline.

Entertainment in excess of the set limit of RM50 per person per meal must be prior
approved by the Management.

Use of office claim form

All entertainment claims are subject to the approval of the Management. Claim of
entertainment expenses must be applied for using the “entertainment expense claim
form” attached with supporting documents and details of whom are entertained,
where and for what purpose.

Referral or dealer margin

Ygl has a referral program and dealer network program where referral fee or
margin is given to the referor who successfully introduce a new customer or
dealer who successfully close a project. The referral fee and dealer margin are
determined based on percentage of project sum or mutually agreed amount
which is evidenced in writing.

Political contribution

Political contribution is not allowed.

Government project

Any attempt to secure a government or semi-government project must be have
proper tender documentation. Any payment made must be related to the
tendering processing such as registration fee, document fee etc which are
equally imposed on all tender applications.

Marketing sponsorship

Branding and marketing activities are strategic to promoting the Company and its
products offerings. Before Ygl embarks on branding or marketing events, there
should be a background check on the service providers and the type of activities
or services they offer. Application for budget should be submitted by Marketing
Department with feedback from sales team prior to approval by the Management.
The branding and marketing actitivities must genuinely promote the Company
and its products. Photos or video of the activities must be submitted to Finance
Department before payment is released.

Customer-related corruption risk

Ygl is in the business of providing software solution primarily to manufacturers for
their own use. There is no facilitation payment involved and there is no
opportunity for customers to launder illegal proceeds.

Any discount offered to customer is comparative to market price, approved by the
Management and evidenced in writing.

Employment and work experience

Ygl has a practicum program for undergraduates to undergo training for three to
six months. The intake of interns is following the terms set by the respective
universities. An allowance of token sum is paid to the trainees in appreciation for
their effort.

In order to prevent offer of employment to be abused for corrupt purpose, Ygl has
in place a consistent recruitment process and hiring procedures are based on
merits where only eligible candidates are selected. Ygl’s recruitment requirement
depends on vacancy of position.

Third party service providers or vendors

Ygl works with third party programmers and consultants as well as purchase
hardware from vendors. Ygl is a registered customer of hardware vendors and
makes purchases when necessary. Third party service providers are persons with
expertise and their work is tracked by service report and /or output of their work.

General procurement process
Procurement of goods and services is an area inclined to higher bribery and
corruption risk. In Ygl, procurement for goods and services is made through
requisition form where details of goods or services providers, pricing above
RM1,000 and purpose for such requisition, person making the application is
submitted for approval of Finance Department. Requisition below RM1,000 is still
subject to verification prior to approval.

Accounting and record keeping
Improper accounting or concealment of financial activity or transaction is strictly
prohibited. All employees share the responsibility to account for anything of value
provided to customers, potential customers, suppliers or any third party.

On the other hand, any accepting of anything of value provided by customers,
potential customers, suppliers or any third party must also be subject to approval,
and properly documented for monitoring.

The accounts of Ygl are scrutinised and reviewed monthly by the Head of
Department for completeness, accuracy and validity of documents and

8. Systematic Review, Monitoring and Enforcement

Monitoring process is one of the most important procedures in the compliance of
the Policy. Once the risks are identified and prioritised, controls and procedures
can be put in place while review and monitoring of the effectiveness , relevance
and weakness of the programme can be planned and conducted.

A risk register will be maintained to record the risk areas, risk exposure, controls,
relevance of procedures and inherent weakness of the Policy.

This Policy outlines the mechanism to review and monitor compliance with
policies and procedures.

Ygl adopts risk-based approach in designing systematic review, monitor and
enforcement of the compliance programme to mitigate risk associated with giving
or accepting anything of value involving:

  • gifts or contribution
  • hospitality (e.g. meals, entertainment, travelling, lodging, training etc)
  • charitable contribution
  • political contribution
  • marketing sponsorship
  • employment or internship
  • third party engagement (e.g. subcontractor, supplier or vendor)

Compliance audit
The purpose of compliance audit is to ensure compliance programme is effective
and to detect bribery or corruption risk. Non- compliance will be addressed and
control will be improved.

It is recommended that Ygl consider an external audit by a qualified and
independent third party [eg ISO 37001:2016 Anti-Bribery Management System
(ABMS) auditors] at least once every three years.

Ygl may also deploy its own team to conduct compliance audit. This team may
comprise staff from various departments such as accounting (knowledge of
accounting principles), MIS (knowledge of data analytics tools and system
control) and finance (select high risk transactions and conduct interview).

Audit planning

  • specify scope of audit
  • specify time frame of audit
  • confirm organisation chart, roles and responsibilities of management and
  • arrangement for interviews
  • check controls and procedures are in place for different functions
  • risk awareness level of each department
  • review of past incidence (if any)
  • review of training programme to ensure it is up to date
  • review of employees’ participation in training
  • due diligence on third party (background, CTOS, contract etc)
  • review of accounting policy and payment procedures
  • review of donation and sponsorship policy

Any corrupt practice or violation of MACC warrants a remedial action to address
the weakness of the relevant control and procedure. Documentation of the
review, monitoring and enforcement process comprises:

  • employee activity and area tested
  • how monitoring/testing is done (use of data analytics tool)
  • how monitoring/testing detects anomaly
  • what type of non-compliance
  • what control weakness is identified (policy violation, inadequate control or
  • what remedy is suggested to address such weakness
  • how recurrence of such practice can be prevented
9. Training and Communication

Awareness and culture

The anti-bribery and corruption policy, standards and procedures should be
effectively comunicated through training and information to:

  • members of the Board
  • Senior Management
  • all levels of employees

These trainings should be provided to new employees upon joining Ygl and on a
periodic basis or with the frequency based on the risk posed by their roles.
Training programmes must be reviewed and updated periodically.

Third parties who deal with Ygl should also be provided with such training or
communication particularly those who are identified as presenting heightened
exposure to risk.

Training and/or communication

Training should include relevant definitions, references to applicable internal
polisies, procedures, laws and regulations along with case studies and practical
examples or potential scanarios which employee may encounter during work.

Training should also provide guidance on when and how to seek advice and how
to report any concern or suspicion of corruption.

Post training assessment or attestation of understanding may be completed by
employees. Retention of the records of completion of training will facilitate
monitoring and reporting during review process.

10. Implications of giving or accepting a bribe

MACC broadly categorises corruption offences into four types;

  • solicits or receives gratification
  • promises, gives or offers gratification
  • gives or uses false claims
  • misuse of office or position by an officer

Gratification may come in the form of money, donation, gift, loan, fee, reward, valuable security, property or interest in property of any description whether movable or immovable, finance benefit or any other similar advantage.


The penalties imposed on a commercial organisation offender are:

  • fine not less than 10 times the value of the bribe or RM1 million whichever
    is higher;
  • maximum 20 years imprisonment;
  • or combination of both

The penalties imposed on an individual offender are:

  • minimum fine of RM10,000 or 5 times the value of bribe whichever is
  • maximum 20 years imprisonment

Commitment of offence

Any person who by himself/herself, or by or in conjunction with any other person

  • corruptly solicits or receives or agrees to receive for himself/herself or for
    any other person; or
  • corruptly gives, promises or offers to any person whether for the benefit of
    himself /herself or of another person,

any gratification as an inducement to or reward for, or otherwise account of

  • any person doing or forbearing to do anything in respect of any matter or
    transaction, actual or propose or likely to take place; or
  • any officer of a public body doing or forbearing to do anything in respect of
    any matter of transactions, actual or propose or likely to take place, in
    which the public body is concerned.

Investigation into reported corrupt act will be based on the principles of
procedural fairness and natural justice to conduct any investigation and ensure
the findings are fair and unbiased.

Any person found guilty of committing a corrupt act within Ygl will be subject to
disciplinary action including dismissal as well as face legal action.

Example of corruption red flags

Below is a non-exhaustive list of examples of transactions which may warrant
further review or due diligence:

  • excessive fee / commission paid not justified by basis
  • unreasonable large discounts given to customers without cause
  • engagement of subcontractor with unrelated background
  • payment to unidentified account/incomplete documents/improper approval
  • payment to any government officials
  • facilitation payment
  • adjustment to remuneration without basis
  • unusual contract terms
  • unusual cash disbursements
  • unauthorized procurement
  • unjustified investment
  • omission in account
11. Record Keeping

Ygl should maintain detailed records of the following as evidence for adequate
procedures put in place to mitigate anti-bribery and corruption risk. The evidence
is a defence for the Company in the event of investigation and conviction by law.

The records include:
i. Anti-Bribery and Corruption Policy advocated by Top Management;
ii. Risk assessment template;
iii. Risk register;
iv. Controls and standard procedures applicable in different areas;
v. Audit plan;
vi. Review documentation;
vii. Documents to show how monitoring is done;
viii. Record of improvement taken to address weakness
ix. Training materials, attendance record and attestation of understanding;

The records may include evidence gathered, interviews conducted, accounting
details, third party confirmation etc.

12. Reporting and Investigation of Alleged Bribery or Corruption

Ygl has a Whistlebower Policy which provides a proper channel for all employees
and external parties to report any alleged misconduct including bribery or
corruption. The Whistleblower Policy is to provide confidentiality to the
whistleblower and protection from retaliation.

The link to Whistleblower Policy is at

Communication channel for report of bribery or corruption should be addressed to
anyone of the below:

Chairman of Audit and Risk Management Committee
Member of Audit and Risk Management Committee (Non-Executive Director)

  • via email at
  • via post to the mailing address below:
    Ygl Convergence Berhad
    No.35, Jalan Scotland,
    10450 Penang
13. Malaysian Anti-Corruption Commission Act, 2009

In the event that there are discrepancies between this Policy and the Malaysian Anti-Corruption Commission Act 2009 (the “Act”), the Act shall prevail.

14. Revision

The Policy will be reviewed once every three years and updated to meet the
compliance requirements of laws and regulations or corporate governance. Such
update shall take effect from the date of adoption.

15. Corporate Website

Pursuant to the revised Listing Requirements of Bursa Malaysia to encapsulate
anti-corruption amendment in support of the National Anti-Corruption Plan 2019-
2023, a copy of the Policy is posted on Ygl’s website.

The Board has approved and adopted the Policy on 1 July 2022.

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