Simplifying Third-Party Due Diligence in a Complex World - EY India

1. Simplifying third-party due diligence in a complex world

2. ??????????????????????? • ?????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????? • ?????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????????? ???????????????????????? Understanding who you conduct business with has become more than just good business practice; it is increasingly becoming a smart compliance imperative. Multinational organizations are rapidly adjusting to enforcement standards according to which companies are responsible for the actions of their business partners and vendors, and need to conduct effective third-party due diligence on them. Be it the Foreign Corrupt Practices Act (FCPA) in the US, the UK Bribery Act or the recently enacted anti- corruption regulations in India, Brazil, Russia, China and Mexico, governments are taking clear steps against the practice of making improper payment through third parties. ????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ??????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????? ????????????????????????????????????? ????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????????? ??????????????? The Criminal Division of the United States Department of Justice (DOJ) and the Enforcement Division of the United States Securities and Exchange Commission (SEC) recently provided guidance on compliance with the FCPA. ?????????????????????????????????????????????????? • ??????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ?????????????????????? Simplifying third-party due diligence in a complex world

3. ???????????????????? Integrity Consistency Client needs Accessibility 1 Consistency Our Integrity Diligence teams understand this problem. We help clients design, implement and maintain effective third-party diligence systems around the world. Our offerings are built on our wide and long experience of conducting complex international fraud- and corruption-related investigations, as well as fraud and corruption risk consulting projects, in every major market worldwide. Our Integrity Diligence offering is designed to respond to the following needs of our clients ????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????????????? 2 Accessibility ?????????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????????????? ?????????????? 3 Integrity ????????????????????????????????????????????????????????????????????? ?????????????????????????? Simplifying third-party due diligence in a complex world

4. EY_ID is a technology tool created by EY ??????????????????????????????????????????????? address the risks involved in their third-party business relationships worldwide. It also offers a highly customizable ??????????????????????????????????????? ??????????????????????????????????????? features such as the following: The tool is a web-based, globally accessible platform and provides companies with the opportunity to collect relevant information about their third-party partners, segment third parties by their level of risk, conduct and document multiple levels of due diligence ?????????????????????????????????????????????? third parties and incorporate streamlined approval processes in their operations. It is designed to enhance standardization, transparency and accountability throughout the life cycle of a third-party partnership. • ????????????????????????????????????????????????????????? ?????????????????????????? • ????????????????????????????????????????????????????? ???????????????????????????????????????????????????????? ?????????????????????????????????????? • ??????????????????????????????????????????????????????? ?????????????????? • ???????????????????????????????????????????????????????? ?????????????????????????????? ??????????????????????????????????????????????????? ?????????????????????????????????????????????????????? ?????????????????? EY_ID offers advanced dashboards with visual data analytics and an enhanced search functionality. Simplifying third-party due diligence in a complex world

5. • Today, EY Fraud Investigation & Dispute Services India has more than 65 third- party due diligence specialists with multi- lingual capabilities. The in-house team ????????????????????????????????????????? Spanish, Chinese, Japanese, Bangla and various other Indian languages. Commonly raised red flags when conducting third-party due diligence Omission of certain key personnel/ shareholders • An analysis of over 30,000 third-party due diligence checks which were undertaken in the last three years highlighted that almost 50% of cases which were reviewed ????????????? A lack of information or trading history (this factor alone would not rule out start-ups) A business address in a non-commercial zone or at service office suites Sector focus Pharmaceutical Low capitalized company Suppliers with a small capital base acting merely as middlemen for undisclosed suppliers Oil & Gas Automobile Financial services Tampering or irregularities with the tendering process Acceptance of late bids or bids being accepted despite failings in technical specifications or scoring, and bids at or very close to set budgets FMCG Retail Technology Types of third parties representing the biggest compliance risk of respondents believe risks are more likely to arise from third parties than from internal staff. 55% 12% Vendor/Supplier Distributor 22% Agent of respondents have no systems or processes in place to manage and monitor third-party relationships. 57% Joint venture partner 26% 9% ???????????????????????????????????????? Simplifying third-party due diligence in a complex world

6. ?????????? ????????????????????? ?????????????????????? ????????????????????????????? ?????????????????? Tel: + 91 11 6671 8000 Hyderabad ???????????????????????????? ????????????????????? Hyderabad - 500081 Tel: + 91 40 6736 2000 Ahmedabad ?????????????????????????? ????????????????????? Ambawadi Ahmedabad - 380 015 Tel: + 91 79 6608 3800 Ernst & Young LLP ?????????????????????????????????????????????? ???????? ????????????????????????????????????????? ???????????????????????????????????????????????? ??????????????????????????????????????????? ???????????????????????????????????????????? ???????????????????????????????????????????? ??????????????????????????????????????????? ???????????????????????????????????????????? ???????????????????????????????????????????????? ????????????????????????????????????????????? ???????????????????????????????? Fax: + 91 11 6671 9999 Fax: + 91 40 6736 2200 Fax: + 91 79 6608 3900 Kochi ??????????????????????? ???????????????? Kochi - 682304 Tel: + 91 484 304 4000 ????????????????????????????? ????????????????????? ?????????????? ???????????????????????? ????? Tel: + 91 120 671 7000 Bengaluru ???????????????? ??????????????????????? No.24 Vittal Mallya Road Bengaluru - 560 001 Tel: + 91 80 4027 5000 + 91 80 6727 5000 Fax: + 91 80 2210 6000 ??????????? Fax: + 91 80 2224 0695 ??????????? Fax: + 91 484 270 5393 ?????????????????????????????????????????????? ????????????????????????????????????????????? ??????????????????????????????????????????????? ?????????????????????????????????????????????? ????????????????????????????????????????????? ??????????????????????????????????????????????? ??????????????????????????????????????????? ????????????? Fax: + 91 120 671 7171 Kolkata 22 Camac Street ????????????????? ????????????????? Tel: + 91 33 6615 3400 Pune ???????????????? ??????????????????? Yerwada ??????????????????????? ?????????????? Tel: + 91 20 6603 6000 Fax: + 91 20 6601 5900 ????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????? ?????????????????????????????????????????? Fax: + 91 33 2281 7750 ???????????????????????????? ??????????????????????? ????????????????????? Bengaluru - 560 001 Tel: + 91 80 6727 5000 ????????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ????????????????????????? Mumbai ???????????????????? 29 Senapati Bapat Marg ?????????????????????????? Tel: + 91 22 6192 0000 ?????????????????????????????????????????????? ???????????????????? Fax: + 91 80 2222 4112 ???????????? ??????? Fax: + 91 22 6192 1000 Chandigarh ??????????????????????? ??????????????????????? Chandigarh - 160 009 Tel: + 91 172 671 7800 ????????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????????? ?????????????????????????????????????????????????????????????? ???????????????????????????????? ???????????????????? ????????????????????? ??????????????????????????? ???????????? Mumbai - 400 063 Tel: + 91 22 6192 0000 Fax: + 91 22 6192 3000 Fax: + 91 172 671 7888 Chennai ???????????????????????????? ???????????????????????? ???? ?????????????????????????? Taramani Chennai - 600113 Tel: + 91 44 6654 8100 Fax: + 91 44 2254 0120 NCR ??????????????????????????? ???????????????????? Sector 42 ???????????????? Tel: + 91 124 464 4000 ????????????????????????????????????????????????? ??????????????????????????????????????????? ???????????????????????????? Fax: + 91 124 464 4050 Contacts Partner & National Leader Arpinder Singh? ? ????????????????????????????????????????????????????????????????????? Partner Dinesh Moudgil ? ???????????????????????????????????????????????????????????????????? Simplifying third-party due diligence in a complex world