SUMMARY OF FREE GOODS & FREE GIFTS REGULATION

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1 Free Goods Free goods define as items that are given for free by the supplier to the company.
They are part of assortment and part of stock inventory. Free goods can be given to
customer or sold by Company.

2 (two) types of free goods:

1. Free goods with negotiation can be performed by Merchandise Buyer (head office)
or Store Department Head (stores).
2. Free goods without negotiation. The suppliers initiate to give free goods for stores
without any negotiation.

Both types of free goods should be supported by Purchase Order (PO) before the
physical free goods are received by the stores through the following mechanisms:
1. Scheduled Order (SO) for free goods identical to the items ordered and negotiated
by the Merchandise Buyer
2. Non Scheduled Order (NSO) for free goods when negotiated by store or by
Merchandise Buyer for non identical items.

The Store Receiving Checker should isolate the free goods without PO until the NSO
created in the COP Tools by the Store Department Head.

All free goods (SO or NSO) must be recorded into the P4CM+ or P4CM system at the
time of receiving to add the quantity in the stock.

No free goods can be released to the store commercial without any PO and
Receiving Report in the P4CM or P4CM+ system.
2 Free Gifts Free gifts defined as items that are given free of charge by supplier to company. The
items are not sold, not part of inventory stock, and could be part of store assortment
or not. Given to customer for free for special commercial activity. Free gifts can be
turned into free goods in specific circumstances.

2 (two) types of free gifts:

1. Free gifts with negotiation can be performed by Merchandise Buyer (head office) or
Store Department Head (stores).
2. Free gifts without negotiation. The suppliers initiate to give free gifts to stores
without any negotiation.

Both types of free gifts do not need PO, are not recorded in the P4CM+ or P4CM system
and are not recorded in physical inventory.

The receiving of free gifts should be recorded in the Manual Receiving Report Form
with no exception.

Free gifts must not be used to replenish the stock in the purpose of covering the
shrinkage.
3 Free Gifts Storage and Stock Control The free gifts stock for the customers may only be stored in these areas: Sales Area,
Customer Service Area, and Free Gifts Storage

The inflow and outflow of free gifts in the customer service area should be recorded in
the Free Gifts Stock Card on timely manner.

If there are some remaining free gifts that have passed the promotion period, then:
1. Free gifts belonging to store assortment may be sold to the customers on condition
when there is no writing on the item packaging stating that the item is a free gift or
not for sale or the barcode has not been crossed (void), converted into free goods and
recorded in the P4CM+ or P4CM system.
2. Free gifts not belonging to store assortment may be bundled up with other items of
the same supplier aiming at improving the item sales.

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 SUMMARY OF FREE GOODS & FREE GIFTS REGULATION
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4 Free Goods & Free Gifts Negotiation To obtain the free goods or free gifts, the Merchandise Buyer (head office) or Store
5 Free Goods & Free Gifts Ordering
6 Free Goods & Free Gifts Receiving
Details
Department Head (stores) will perform negotiations with the suppliers.
Negotiation by Merchandise Buyer
- The negotiation result will be confirmed to suppliers by the Merchandise Buyer by
email and copy to Merchandise GM.
- For free goods that are related to the ordering of identical items to the suppliers,
the Merchandise Buyer will send email to Codification Department to input in P4MD+
system. That will be automatically routed to COP to create the PO which will include
the calculation of free goods based on the volume of items ordered.
- For free goods that are not related to the ordering of identical items to the suppliers
or free gifts, the Merchandise Buyer will send an email of free goods or free gifts
commitment to the Store Division Head and Store Manager to create the NSO (except
for free gifts).
- The Store Division Head will forward the email of free gifts commitment to the Store
Receiving Head.
Negotiation by Store Department Head
- The negotiation result will be created in writing by the Store Department Head by
using the Free Goods & Free Gifts Commitment Negotiated By Store Form to be
validated by the authorized signatories including acceptance by supplier.
- The Store Department Head gives the copy of validated Free Goods & Free Gifts
Commitment Negotiated By Store Form to the Store Receiving Head/Team Leader
and Store Controller.
Free Goods
- For the free goods that identical with the ordered items and negotiated by the
Merchandise Buyer, the order will be automatically performed through SO by COP.
- For free goods that not identical with the ordered items and negotiated by
Merchandise Buyer or free goods (either identical or not identical) and negotiated by
Store Department Head, the NSO will be created by related Store Department Head in
COP Tools.
Free Gifts
There is no ordering process for free gifts. Free gifts are agreed and requested during
the negotiation process.
Receiving of free goods that ordered through SO
1. The handover of free goods from the suppliers to the Company refers to the Policy
and Procedure of Store Receiving in the same manner of receiving regular items.
2. For store that using P4CM, the Store Receiving Checker will take the following
steps:
- Input the quantity of basic goods first than input the quantity of free goods into
Radio Frequency Terminal (RFT) if the quantity of items delivered is equal to quantity
of items ordered (basic goods + free goods)
- Count proportionately the quantity of basic goods and free goods before inputting
the quantity of basic goods into RFT if the total quantity delivered is less than the
total quantity ordered (basic goods + free goods).
3. For store that using P4CM+, the Store Receiving Checker input the total quantity
delivered into RFT and P4CM+ will split it automatically.
Receiving free goods that ordered through NSO
1. The Store Receiving Checker directly input the quantity of free goods received into
RFT if the NSO has been created before the free goods arrive.
2. The Store Receiving Admin will request the Store Department Head to create
the NSO of the free goods if the NSO has not been created when the free goods arrive.
3. The Store Receiving Head/Team Leader will prepare and submit the supporting
documents to the Stock Controller Head.
4. The Stock Controller Head will perform the stock adjustment in the P4CM+ or P4CM
system.
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 SUMMARY OF FREE GOODS & FREE GIFTS REGULATION

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Receiving of free gifts
1. The handover of free gifts from the suppliers to the Company refers to the Policy
and Procedure of Store Receiving point receiving of free gifts.
2. All receiving free gifts must be done with Manual Receiving Report with no
exception.
3. Store Receiving Checker should handover the free gifts to the Customer Service
Staff by using the Free Gifts Stock Card.
7 Free Goods & Free Gifts Management Free Goods
Since there is no dedicated area to store the free goods, the Store Commercial Staff
may store them in the sales area or in the storage, just as the regular items.

Free Gifts
The storage of the free gifts can be done in the following ways:
1. Free gifts are bundled with regular items on the shelves in the sales area.
2. Free gifts are stored in the customer service area during the commercial activity.
3. Free gifts are stored in the free gifts area in the storage, in the 2 (two) following
cases :
- The volume of free gifts over the capacity of the customer service area.
- At the end of commercial activity the remaining stock are kept in the free gifts area
in the storage.

Free Gifts Selling After Commercial Activity Period

1. The Store Department Head must create the PO of free goods in COP Tools by NSO
based on remaining stock and attach the Delivery Note from supplier.
2. The free gifts should be physically moved to receiving yard by Store Commercial
before the Store Receiving Checker counted the remaining free gifts.
3. The Store Receiving Checker to input the item quantity into the systems through
RFT based on the physical counting.
4. The Store Receiving Checker to print the Receiving Report from the P4CM+ or P4CM
system and the Store Receiving Head/Team Leader to sign the report.
5. The Store Receiving Head submits the supporting documents to the Stock
Controller Head.
6. The Stock Controller Head will perform the stock adjustment in P4CM or P4CM+
system.

8 Formulirs & Reports 1. Free Gifts Stock Card

2. Free Goods & Free Gifts Commitment Negotiated by Store Form
3. Stock Adjustment Form

9 Level Of Authorization: 1 (one) level of approval.

Free Gifts Stock Card

10 Level Of Authorization: 3 (three) levels of approval.

Free Goods & Free Gifts Commitment
Negotiated by Store Form

11 Level Of Authorization: 3 (three) levels of approval.

Stock Adjustment Form

12 Exception Approval Exceptions should be approved by the the Commercial Director or by the Exploitation
Director if it is related to the store operation.

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