INTERSERVE PLC POLICY ON FRAUD

INTERSERVE PLC POLICY ON FRAUD Interserve Plc ( The Company ) is committed to the highest standards of personal and corporate behaviour. We will not tolerate any incidence of fraud committed by workers or others. We will take immediate and appropriate action (which may include dismissal, reporting to the police and legal action to recover assets) against those persons committing a fraud, irrespective of length of service or position. This policy and associated procedures extends to all the business dealings and transactions of the Company and its subsidiaries ( Group Company(ies)') in all countries in which Group Companies operate and is designed to further Conducting Business with Interserve. We will also seek to encourage the adoption of similar arrangements by those associate companies and joint ventures over which the Group does not exercise overall control. This policy and associated implementation documentation does not form part of any employee's contract of employment, will be publicised to all employees and will be reviewed on a regular basis to be updated or revalidated as appropriate The policy and associated procedures reflect the minimum standards of Interserve. Business units may supplement this by adding additional requirements or guidance relevant to their own businesses. January 2017. 1

Introduction The aim of this document is to help develop an understanding and awareness of the risks and consequences of fraud by providing a framework for promoting Interserve s policies and procedures that assist in the prevention and detection of fraudulent activity across the Interserve Group both in the UK and overseas. Defining and Identifying Fraud Fraud encompasses a wide range of irregularities and illegal acts, all of which are characterised by intentional deception. Normally fraud involves intentional distortion of financial statements, accounting or other records. This is done in order to conceal the misappropriation of assets or the appropriation of other material gain to which the person or organisation is not rightfully entitled. Annex A sets out further information on categories and types of potential fraud. Promoting an anti-fraud culture A culture of honesty, propriety and vigilance, which is seen to include individuals at all levels, is fundamental to managing fraud. All Interserve s workers need to be alert to the risk of fraud and irregularity both within the organisation, and in organisations with which Interserve Group companies contract, and to report any matters of a fraudulent nature utilising the Whistleblowing procedures located at http://iris.interserve/grouppolicies/whistleblowing/pages/default.aspx. Roles and responsibilities All workers have a role to play in limiting the scope for fraud by adhering strictly to the policies and procedures in place for financial matters including the handling of payments and receipts; for procurement of all goods and services; and for dealing with travel, subsistence and other claims. Line managers should ensure that adequate internal controls and management checks are in place and are carried out effectively; that workers are fully familiar with financial and other policies and procedures; and that these policies and procedures are followed. Line managers' responsibilities include identifying activities in their area which pose risks of fraud, theft or corruption, and developing procedures, including surprise checks, which are adequate to counter these risks. Line managers should also follow up obvious worker errors or unusual behaviour such as a unwillingness to take holiday entitlements for fear their fraud will be detected, inconsistency between earnings and lifestyle, irrational or unreasonable behaviour or an unwillingness to delegate to or involve others in the provision of information. A number of departments and workers have specific responsibilities for the management of systems of fraud control and investigations. 2

Business units are responsible for: Developing and maintaining effective controls to prevent fraud; Subject to the Group Response Plan, assistance in carrying out vigorous and prompt investigations if fraud occurs; Notifying the Group Finance Director and the Group Company Secretary of the discovery of any fraud; Taking appropriate disciplinary and legal action against perpetrators of fraud; and Taking disciplinary action against managers or supervisors where management or supervisory failures have caused or contributed to the commission of fraud. Executives, managers and supervisors are responsible for: Identifying the risks to which systems and procedures are exposed; Developing and maintaining effective and efficient procedures and controls to prevent and detect fraud; and Ensuring that procedures and controls are being complied with. Individual workers are responsible for: Following company procedures and controls; Acting with propriety in the use of Interserve and client resources and in the handling and use of corporate funds, assets, liabilities and accounting systems; Acting with propriety in their dealings with suppliers, clients and Interserve staff; and Reporting details immediately to their line manager, or other more senior staff within Interserve if they suspect that a fraud has been committed or see any suspicious acts or events. Any member of staff may use the Whistleblowing procedure. Conflicts of interest Interserve has a clear policy covering Conflicts of Interest which can be found in the Conflict of Interest Policy and which is referred to in Conducting Business with Interserve. In accordance with this policy, all workers are required to report actual or potential conflicts of interest in writing to their immediate line manager and agree a procedure for the way in which such a conflict should be handled. 3

There is also a policy regulating the acceptance of entertainment and gifts by workers, within the Interserve Plc anti-bribery and corruption procedure and Conducting Business with Interserve to which the attention of all staff should be drawn. Group Response Plan The preparation of an effective contingency plan to help deal with a fraud either having taken place, or being discovered in action, is fundamental to any business operation. Interserve's Group Response Plan sets out the procedures in advance of a fraud, so that when it occurs, prompt and effective action can be taken in an organised manner. The Group Response Plan identifies post holders with specific responsibilities, and their authority, for dealing with a notification of fraud. Deputies are also identified in case the first identified post holder is not available. Interserve will deploy all practical and cost effective methods available to proactively identify fraud or the threat of fraud. Signed by Position Date 4

APPENDIX A Fraud can be committed in three ways: By false representation (i.e. knowing that the representation is false or misleading or being aware that it might be). By failing to disclose information where there is a legal duty to do so (e.g. statutory, contractual, custom from a trade or market, or a fiduciary relationship). By abuse of position i.e. where someone occupies a position where he would be expected to safeguard the victim's financial interests, and the defendant abuses that position. Such an abuse is capable of being committed by omission. For the offence of fraud to be committed the false representation, failure to disclose information or abuse of position will have to be carried out dishonestly with the intention to secure either a gain for the perpetrator or a loss or risk of loss to another of money or any other property. In determining whether an individual acted dishonestly, the test is whether his actions were dishonest according to the ordinary standards of reasonable and honest people and, if so, whether he realised that his actions were, according to those standards, dishonest. The general offence attracts a maximum penalty of 10 years imprisonment and can also attract a fine. Where actions have been taken with a view to committing a fraud, but the actual fraud has not been committed, a person may be guilty of the offence of conspiracy to defraud. Examples Theft the removal of cash or assets to which the fraudster is not entitled; or Accounting frauds involving Revenue manipulation Ghost workers Fictitious suppliers Fictitious invoices Fictitious sales Fictitious commissions; and Fictitious expenses. 5