GOVERNANCE SUPPLY CHAIN MANAGEMENT Why It Matters The effective management of our supply chain is critical to our ability to deliver high quality, safe and environmentally responsible products to our customers. A single incident of supplier non-compliance – whether relating to sustainability, product quality, employment practices or ethics and integrity – could lead to significant legal, financial and reputational ramifications as well as operational disruptions, impacting our standing within Malaysia and across our global presence. We also have a responsibility to uplift our suppliers by imparting knowledge that enables them to improve their practices and their stance on sustainability. Through wellplanned supplier development programmes, we can equip our partners with the skills and competencies necessary to thrive on the international stage, creating long-term value for Malaysia’s business ecosystem as a whole. Our Approach Effective supplier management begins with careful procurement processes. We adhere to detailed procedures and processes relating to purchasing, tendering and vendor and contract management. These dictate that all potential suppliers be subjected to a comprehensive pre-qualification assessment prior to being invited to submit a quotation, and that potential suppliers must complete our Vendor Registration and Declaration Form – confirming their commitment to upholding our standards in relation to anti-bribery and anti-corruption, ESG-related issues, business conduct and more. Our procurement practices are further steered by our Discretionary Authority Limits (“DAL”), which provides a sound framework of authority, accountability and segregation of duties to facilitate effective decision-making on supplier selection at different levels of the Group. The DAL is regularly reviewed to ensure that changes to our operations and business environment are appropriately reflected. Meanwhile, large procurement exercises are escalated to the Board Purchasing and Tender Committee, ensuring extensive and appropriate oversight of these higher-risk engagements. Upon appointment, suppliers are required to sign our AntiBribery and Anti-Corruption Form and are provided with a copy of our ABAC Policy and Vendor & Partner Code of Conduct to facilitate their detailed understanding of and adherence to our expectations. Additionally, suppliers are informed of their responsibility to uphold all applicable federal, provincial and municipal laws, regulations, standards and codes at all times, and we mandate that they obtain all necessary permits, licenses, exemptions, consents and approvals required to manufacture and deliver goods and services as stipulated within their contract with the Group. To uphold our standards across our supply chain, we conduct detailed monitoring and annual evaluations of our approved vendors. We also avail our suppliers of training and development programmes – refreshing their understanding of our standards and expectations, keeping them abreast of relevant regulatory requirements and upskilling them in critical areas of development including ESG. Spending on Local Suppliers* Proportion of Spending on Procurement from Local Suppliers** 2021 71% 2022 68% 2023 84% * Data covers DNeX, OGPC (general purchases only), Dagang Net, SealNet, IAC and DNeX Telco. ** ‘Local suppliers’ is defined as suppliers whose business is registered in the same country as the entity that procured its services Sustainability Statement DAGANG NeXCHANGE BERHAD 138
RkJQdWJsaXNoZXIy NDgzMzc=