ACCREDITATION SERIES

1. ACCREDITATION SERIES Car & Equipment Finance ETHICS IN THE WORKPLACE CAR & EQUIPMENT FINANCE ACCREDITATION

2. Group’s Ethical Standards Banking is a profession founded on high standards ofpersonal integrityand conduct, which require absolute honesty. The Group is committed to eliminating fraud, dishonestyand unacceptablepractices in the workplace. The Group’s ethical standards are embodied in the Statement of Professional Practice

3. Definitions ETHICS Decisions, choices and actions we make that reflect and enact our values. FRAUD A deceitful or dishonest act committed with the objective of obtaining an unjust personal gain or advantage. UNETHICAL BEHAVIOUR Behaviour that has a harmful effect upon the business by not conforming to approved standards of professional conduct. CORRUPT CONDUCT An act or omission which is contrary to the interests of the Group or which involves an abuse of person’s position of trust or power with the objective of gaining advantage or causing disadvantage to another person or entity.

4. Ethical Decision Making 6. Decide 5. Test 4. List options 3. Evaluate 2. Get the facts 1. Recognise 7. Act/ Reflect If I told someone I respected/ my actions were played out in the media, how would my actions be viewed? Could the situation damage the Group? Does the decision involve a choice between right and wrong? What are your options? Have all relevant persons been contacted? Which option will produce the right outcome and the least harm? Which option is best for the business? What are the facts? Can you learn more about the situation? Do you know enough to make a decision? Could the situation damage the Group? Does the decision involve a choice between right and wrong? How did my action turn out? What have I learnt?

5. Case Study One Robcaster Engineering is Henry’s Customer Henry Asset Finance Specialist Henry’s customer Robcaster Engineering is committed to a Government contract where the company has to construct several new classrooms under the Federal Government’s School Grant Program. It is critical for the customer to have $80 000 truck on location to pick materials and deliver for commencement of their job on Monday.

6. Case Study One This is the customer’s first Asset Finance deal and thus the AFS supported the submission for a $500 000 limit. The approval took longer than anticipated and document delivery was also slow due to excess demand. As a result, documents were provided back to the Bank on the Friday afternoon and request was a submitted after AFO’s guaranteed cut-off. The customer had booked in with the dealership to take delivery of the truck at 8am on Saturday morning – the next day! Henry is advised that that his request will be processed on Monday upon which he will receive a funding notice to provide to the dealer. Waiting until Monday means that the dealer will not be releasing the truck in required time. Henry is well aware that this will cause a major customer service issue with further ripple affects across the business. Henry, believing that the deal would be funded first thing on Monday morning with the funds transferred to the supplier’s account, alters a settlement advice he had received from AFO on a previous deal. He then faxes this to the supplier confirming funding. Subsequently, on Saturday the delivery goes ahead as scheduled. What ethical issues can you identify? What do you think are some of the impacts on the Group? What should Henry have done?

7. Case Study One – The Full Story On Monday, when the request is processed, it is discovered that the serial numbers on the agreement are different to that on the invoice. Funding is put on hold pending the customer’s signature next to the corrected serial number on the agreement. When the supplier does not receive the funds on Monday, they contact AFO to inquire about the delay in funding. Upon further investigation it was revealed that an altered settlement advice was sent to the supplier. Even though Henry did not receive a financial benefit and acted within the guise of providing good customer service, it was found that he had committed a fraudulent act and was subsequently dismissed.

8. Case Study Two TCM International is Lisa’s and Tiffany’s customer Tiffany is a Relationship Manager, Lisa is an Asset Finance Specialist TCM International wishes to finance 3 custom built CNC Lathes valued at $100,000 each. TCM International also requests that all supplier communication goes through them. A supplier check confirms that the supplier on the invoice is not listed on the Bank’s Approved Supplier list. In order to proceed, the Bank needs to acquire some further information by conducting inspection and valuation. TCM International advises Tiffany that they would like to change the supplier, requesting the three machines be financed on separate agreements, the equipment now being a catalogue order. The inspection and valuation requirement is now waived with the goods being classified as “standard”.

9. Case Study Two The following day the Bank is provided with a new invoice. Lisa notices that the invoice appears to be in the same format as the previous invoice. She also notices that new equipment details and serial numbers are very similar to the previous invoice. The name on the invoice is of a major supplier of this type of equipment and thus is listed on the supplier list. However, Lisa notices the account details for the supplier are different to the details in Commsee. Following a request for confirmation of the supplier’s account, the customer provided a request to add bank account details on the supplier’s letterhead. Something just didn’t feel right about the deal to Lisa. Seeing that the required inspection was signed by Tiffany, Lisa asks Tiffany what she thinks about the inspected equipment. Tiffany tells Lisa that she had just signed the form to make sure the funding went through for end-of-month and that all will be OK. Lisa understands it’s a $300,000 deal and its the last week of the month to hit target so she decides not to disagree and lets the funding request go through. What ethical issues can you identify? What do you think are some of the impacts on the Group? What should Lisa have done?

10. Case Study Two – The Full Story Three months later, payments on the agreement for the equipment stop. The customer had been moved under CRS control 30 days earlier and had been suffering severe cash flow problems for six months due to the Global Financial Crisis. Upon investigation it was found that the initial order of the 3 Lathes had been cancelled, a new invoice was fabricated to “ease through theGroup’s processes to avoid inspections” and gain funds from theGroupto put into the business. The funds had been transferred to another account belonging to the customer.

11. Your ethical responsibilities have consequences • Poor decision making has an impact on our customers, our reputation and our careers. • TheGroupis committed to operating ethically in all business- related endeavours; the same is expected of you • Integrity, honesty, care and confidentiality in all dealings. • Support and promote ethical behaviour = Tone from the top • Comply with the Statement of Professional Practice • Speak up! – Report any ethical concerns or breaches to your Manager/ MoR/ Phone/ Email • Violating the Statement of Professional Practice may result in disciplinary action

12. In Summary • We all must act in Group’s best interests and protectGroup’s reputation • We act with honesty and integrity at all times • We identify conflicts of interest and manage them responsibly • We respect and maintain privacy and confidentiality • We do not make or receive improper payments, benefits, submissions or gains • We comply with the Statement of Professional Practice • We immediately report any concerns or breaches

13. Conclusion • QUESTION TIME