ANTI-CORRUPTION POLICY

Statement of Principles

NagaCorp Ltd. (NagaCorp) is committed to maintaining high ethical standards in all of our operations and business activities. This involves each of us – employees, officers and members of the Board of Directors alike – fostering and maintaining NagaCorp’s reputation for integrity, honesty and transparency. With this in mind, NagaCorp is dedicated to a zero-tolerance policy with regard to involvement in corruption or bribery activities of any type. This policy document is intended to help employees of NagaCorp and all its subsidiaries achieve a better understanding of corruption and bribery, and how to avoid them.

Corruption in the workplace involves the abuse of power for personal gain. Acts of corruption include bribery, kickbacks, rebates, fraud, extortion and embezzlement. Corruption in any form, commercial or political, is forbidden in all NagaCorp business dealings. No NagaCorp funds may be used, either directly or indirectly, for any bribe or other unlawful payment anywhere or under any circumstance. The purchase or sale of goods and services on behalf of NagaCorp must not lead to employees or their families receiving personal kickbacks or rebates. Kickbacks and rebates can take many forms and are not limited to direct cash payments or credits in connection with a particular transaction. Such practices are not only unethical, but in many cases are also illegal.

Background

NagaCorp is the largest hotel, gaming and leisure operator in Cambodia and the company has been listed on the Hong Kong Stock Exchange since 2006. NagaCorp is in compliance with best international standards and practices in dealing with anti-corruption and anti-bribery issues which include, but are not limited to, Cambodian law, Hong Kong Stock Exchange list requirements, the Organization for Economic Cooperation and Development, the United Nations Convention Against Corruption and the principles supporting the Foreign Corrupt Practices Act.

Cambodian Law Regarding Anti-Corruption and Anti-Bribery

In 2010, the Cambodian Government passed the Anti-Corruption Law, which aims to combat corruption through education, prevention, and more effective enforcement. The law established two new institutions: the Anti-Corruption Unit, which is charged with overseeing police investigations into corruption cases, and the Anti-Corruption Council, which is responsible for anti-corruption policy-making. These bodies complement existing ones, including the National Audit Authority (NAA), created in 2002, and the Ministry of National Assembly-Senate Relations and Inspection (MoNASRI), created in 1999, which has a mandate to investigate corruption.

Under the Anti-Corruption Law, all civil servants are obligated to declare their financial assets to the government every two years. The third round of asset and debt declaration took place during the month of January 2014. The Anti-Corruption Unit has launched several high-profile prosecutions against public officials, including members of the police and judiciary.

Cambodia's Anti-Corruption Law is in line with international standards. Corrupt acts are covered and criminalized in the provisional Criminal Code, including active and passive bribery, extortion and abuse of office for private gains. Bribes in the form of donations or promises are also criminalized. There is no limitation on the value of gifts, but they are forbidden if given with a corrupt intent. Facilitation payments are also prohibited in Cambodia.

International Standards Regarding Anti-Corruption and Anti-Bribery

Foreign Corrupt Practices Act and Omnibus Trade Anti-Corruption Measures

To combat the damaging effects of bribery in international business transactions, the United States Congress passed the Foreign Corrupt Practices Act (FCPA) in 1977. The law established substantial penalties for persons and corporations making payments to foreign government officials, political parties and candidates for public office in order to obtain or retain business.

The FCPA has had a major impact on how U.S. companies conduct business overseas. However, in the absence of similar legal prohibitions by key trading partners, U.S. businesses were put at a significant disadvantage in international commerce. Their foreign competitors continued to pay bribes without fear of penalties, resulting in billions of dollars in lost sales to U.S. exporters. In 1988, Congress amended the FCPA as part of a broad legislative effort to strengthen the global competitiveness of American businesses. These measures were enacted as part of the Omnibus Trade and Competitiveness Act of 1988. The 1988 amendments were aimed at reaffirming Congressional commitment to stemming transnational corporate corruption.

The scope of FCPA is quite broad and it applies to American corporations, corporations that trade in the U.S. securities market, nationals, citizens, and residents. Foreign corporations and their officers are also covered by the Act if the corrupt conduct occurs on U.S. territory.

OECD Anti-Bribery Convention

The Organization for Economic Cooperation and Development (OECD) was founded in 1961 to stimulate economic progress and world trade. The Anti-Bribery Convention requires its parties to criminalize the bribery of foreign public officials in international business transactions.

The Anti-Bribery Convention is the only legally binding instrument globally to focus primarily on the supply of bribes to foreign public officials in international business transactions. All Convention countries must make the bribery of foreign public officials a criminal offense. They are obligated to investigate credible allegations and, where appropriate, to prosecute those who offer, promise or give bribes to foreign public officials and to subject those who bribe to effective, proportionate and dissuasive penalties. At the same time, Parties to the Convention undertake to provide “prompt and effective legal assistance” to other Parties investigating offenses within the scope of the Convention. They are also required to deny the tax deductibility for such bribes.

The Asian Development Bank/OECD Anti-Corruption Initiative for Asia and the Pacific serves as a regional forum for supporting national and multilateral efforts to reduce corruption in Asia and the Pacific. The Initiative helps governments in the Asia-Pacific region meet international anti-corruption standards, including proper implementation of the UN Convention against Corruption. The ADB/OECD Action Plan sets out goals and standards for fighting corruption in the region. Cambodia was an early adopter, endorsing the Action Plan on March 4, 2003.

In September 2014, the Cambodia Anti-Corruption Unit hosted the 8th Regional Conference of the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific focusing on “Fighting Corruption and Building Trust” and “Preventing Illicit Financial Flows for Financing Development."¹

The Members of the ADB/OECD Initiative in attendance agreed to restore trust in government by:

• Increasing transparency in government institutions, fiscal matters, and decision-making
• Updating and modernizing anti-corruption strategies, including through the use of technology
• Encouraging companies to adopt measures to prevent and detect corruption
• Increasing prosecutions of individuals and companies that engage in corruption
• Enhancing the right to information, media freedoms and monitoring by civil society

Opening the Conference, Cambodian Prime Minister Hun Sen reinforced the need for cooperation in the fight against corruption: “It is doubtless that when both the public and private sectors work together, it will not only help improve the effectiveness of the fight against corruption, but also create an environment attractive to investment and clean business in the region and beyond.” ²

United Nations Convention against Corruption

The Convention was opened for signature in December 2003, and entered into force December 14, 2005. The Convention contains many provisions on preventive measures countries can take to stop corruption, and requires countries to adopt additional measures as may be necessary to criminalize fundamental anti-corruption offenses, including bribery of domestic as well as foreign public officials. As of November 2014, there were 174 parties, including the United States. Cambodia ratified the UN Convention against Corruption in 2007.

Hong Kong Exchange Listing Requirements

The Stock Exchange of Hong Kong Limited conducts regular reviews of the corporate governance practices of the companies listed in Hong Kong for the purpose of determining the effectiveness of the implementation of the Corporate Governance Code in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (Listing Rules).

NagaCorp has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules as the code of conduct of the Directors in respect of transactions in securities of the Company. Following specific inquiry by NagaCorp of all Directors, NagaCorp confirmed that the Directors have complied with the required standard set out in the Model Code for the year ended 31 December 2015.³

NagaCorp has applied the principles of and complied with, all the applicable code provisions of the Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange during the year ended 31 December 2015.⁴

¹https://www.oecd.org/site/adboecdanti-corruptioninitiative/ADB-OECD-Initiative_8thConference-Press-Release.pdf
²https://www.oecd.org/site/adboecdanti-corruptioninitiative/ADB-OECD-Initiative_8thConference-Press-Release.pdf
³ Per NagaCorp website: http://www.nagacorp.com/eng/cg/practices.php
⁴ Per NagaCorp website: http://www.nagacorp.com/eng/cg/practices.php

Your trust and commitment is essential to our success. I encourage you to proudly maintain the Company’s reputation for integrity, honesty and transparency.

This material contains information that is proprietary to NagaCorp Ltd. and shall not be circulated beyond Naga without permission.