COMPLIANCE PROGRAM

EXCALIBUR INTERNATIONAL Code of Ethics

One of the key components of the anti-corruption program is the Code of Ethics for the holding’s employees who are obliged to adhere to it. Some of its provisions also concern EXCALIBUR INTERNATIONAL partners, e.g. sales representatives and dealers. The EXCALIBUR INTERNATIONAL Code of Ethics is based on requirements of the UK-based Transparency International. The Code includes:

• the ban of corruption
• the ban of conflicts of interest
• reporting of corruptive of unethical practices
• special duties of sales departments concerning fulfilling the anti-corruption program
• rules of sponsorship and donations to political parties and movements
• the commitment to spread the anti-corruption program beyond EXCALIBUR INTERNATIONAL

EXCALIBUR INTERNATIONAL Sponsoring Rules

As a socially responsible company operating in defense industry, EXCALIBUR INTERNATIONAL supports mainly non-profit activities in the regions of the member companies residence. This covers mainly the activities such as sports, cultural, educational and other fields. Special attention is paid to educational events supporting development of technical disciplines which contribute to the national wealth of the Czech Republic, boost the national export potential and fight the chronical lack of promising students.
The main rule in EXCALIBUR INTERNATIONAL´s sponsoring activities is that any support must not be tied to any specific business opportunities in public or private sector. Similarly, sponsoring under the circumstances of conflict of interests is also forbidden. Sponsoring activities of EXCALIBUR INTERNATIONAL are usually publicized either by press releases or by posting the information on the website.

Support to Political Parties and Movements

The support to political parties and movements by EXCALIBUR INTERNATIONAL must be transparent. At the same time, it must not be connected to any business opportunity in the public sector. EXCALIBUR INTERNATIONAL strictly adheres to all legal obligations concerning any potential support to political parties.

Gifts and Hospitality

EXCALIBUR INTERNATIONAL provides standard services for their partners in the context of building acceptable professional relationships including the option to cover the costs of accommodation during their partners’ stays and to extend gifts and hospitality.
However, it is forbidden to provide a disproportionately luxurious accommodation, unethical and expensive entertainment or give gifts of a clearly unreasonable value. These actions are considered potentially corruptive in relation to the EXCALIBUR INTERNATIONAL partners. Similarly, managers and employees of EXCALIBUR INTERNATIONAL member companies, especially in their sales departments, are forbidden to accept such inappropriate services or luxurious gifts. In case such offers are extended by a partner, the employee is required to report this to their superior.
Facilitation Payments
At certain foreign markets, state employees are allowed to legally require facilitation payments. It is strictly forbidden for EXCALIBUR INTERNATIONAL companies to provide such payments. Facilitation payments do not include business provisions for private sector partners, e.g. based on dealer agreements, license agreements or sales representation contracts.

EXCALIBUR INTERNATIONAL´s  Involvement in Offset Programs

While Czech legislation, in adherence to the European law, does not further enable Czech companies to participate in offset programs as a part of public contracts of Czech government and ministries, they can be required to fulfil offset programs when working in foreign environments. A typical requirement, even in democratic countries, can be the partial transfer of production, which can be perceived as a so-called direct offset. EXCALIBUR INTERNATIONAL, in cooperation with their foreign partners, carries out offset programs in strict accordance with national legislation, usually in order to fulfil customer’s need to gain the capability of partial production and maintenance of a product. EXCALIBUR INTERNATIONAL refuses and does not participate in offset programs whose aim is to submit contracts unrelated to their activities, which include risk of corruption and could be misused in order to commit corruption. EXCALIBUR INTERNATIONAL informs about the activities which can be perceived as direct offsets by standard means while communicating information about the original contract (the production transfer is possible only with major, publicly controllable projects).

EXCALIBUR INTERNATIONAL Ethics Line (ET-LINK)

To create a unified reporting channel for testimonies of unethical, corruptive, illegal, unsafe or environment-damaging behaviour, EXCALIBUR INTERNATIONAL holding has created the Ethics Line which can be used by anybody to report the above-mentioned problematic behaviour in the form of sending a report to etika@czechoslovakgroup.cz.
EXCALIBUR INTERNATIONAL prefers that the reports are not anonymous because as such, they pose a risk of unethical behaviour themselves and abuse the Ethics Line. However, nobody is forced to leave his/her name.
The receiver of all reports is the EXCALIBUR INTERNATIONAL HR department. If a report is submitted by e-mail, the HR acknowledge the acceptance and inform the sender within 14 days about the steps taken. After the report has been investigated, the sender is notified about the result.
EXCALIBUR INTERNATIONAL declares that they value reasonable reports submitted to the Ethics Line. However, this does not apply to false reports submitted with the aim to unjustly accuse another person or company. Such report itself is a breach of the Code of Ethics and EXCALIBUR INTERNATIONAL´s anti-corruption program with all the associated consequences.

1. The Code of Ethics applies to all employees in technical, economic and worker professions, company management and company directors. Certain provisions relate to the specific groups of employees (e.g. sales persons) or subjects outside the Company (e.g. suppliers) in the Czech Republic and in foreign countries where operates.
2. EXCALIBUR INTERNATIONAL requires its employees and partners to maintain legal regulations as well as the highest ethical standards based on fair conduct, mutual trust, transparency, honesty, integrity and responsibility.
3. EXCALIBUR INTERNATIONAL has joined the Transparency International program of safe technologies, and its employees are obliged to meet the requirements of the program and refer to it in their activities. 
4. EXCALIBUR INTERNATIONAL management is generally responsible for the compliance with the anti-corruption program; the anti-corruption program is carried out by the Human Resources manager, who has direct access to the Company management in the matter of the anti-corruption program and is responsible for continuous compliance with the ethical and anti-corruption agenda in the Company. She is also responsible for monitoring and evaluation of the EXCALIBUR INTERNATIONAL´s ethical and anti-corruption program and for implementation of the formal procedure to resolve corruption concerns.
5. EXCALIBUR INTERNATIONAL strictly rejects and prohibits any corruption conduct of its employees. In the event of demonstrably corruptive behavior, the Company claims damage compensation and usually terminates the employment immediately and within its legal liability, the Company reports the corruptive action to the Police of the Czech Republic which can instigate prosecution.
6. EXCALIBUR INTERNATIONAL prohibits any conflict of interests of its employees. Therefore, the employees may not participate in any contractor and business relations with EXCALIBUR INTERNATIONAL as suppliers or consumers of goods and services in any direct or indirect way and may not receive any personal profit from such relations from other subject than EXCALIBUR INTERNATIONAL. Conflict of interests resulting e.g. from family relationships or friendship in suppliers´ or customers of company bodies or those holding shares in such companies should be reported by the concerned employees to the EXCALIBUR INTERNATIONAL Human Resources manager.
7. In the event of suspected unethical, corruptive, occupational safety or environment disrupting behavior or behavior damaging the Company´s goodwill, an employee or any person who plausibly gets known hereof, should report to EXCALIBUR INTERNATIONAL via the ET-LINK.
8. However, this does not apply to petty-minded, evidence-lacking or false reports submitted with the aim to unjustly accuse a person or company. The reporting person is held fully responsible for such reports and can be sanctioned regarding to the fact that s/he disrupts the trust and standard working relationship in the Company, and as a consequence, they are contrary to the Code of Ethics.
9. The EXCALIBUR INTERNATIONAL employees, especially marketing and sales persons, are obliged to acquaint the external partners, mainly the suppliers, with the EXCALIBUR INTERNATIONAL anti-corruption program, especially with parts hereof that concern such external partners.
10.  The EXCALIBUR INTERNATIONAL sales persons are obliged in the process of business opportunities evaluation and business meetings to take corruption risks in consideration.  The risks depend on whether a client comes from the public or private sector and on the situation of a client´s country of origin in the global anti-corruption Transparency International scale and on the method of public tender opening (competitions or addressing one subject).
11.  The EXCALIBUR INTERNATIONAL sales persons are obliged to check the available media and Internet resources for possible proven corruption cases related to the EXCALIBUR INTERNATIONAL external partners and take them into consideration in the making of business decisions, including the option of termination relationships with partners involved in corruption.
12.  EXCALIBUR INTERNATIONAL provides standard services for their partners in the context of building acceptable professional relationships including the option to cover the costs of accommodation during their partners’ stays and to extend gifts and hospitality. However, it is forbidden to provide a disproportionately luxurious accommodation, unethical and expensive entertainment or give gifts of a clearly unreasonable value. These actions are considered potentially corruptive in relation to the EXCALIBUR INTERNATIONAL partners. Similarly, managers and employees of EXCALIBUR INTERNATIONAL member companies, especially in their sales departments, are forbidden to accept such inappropriate services or luxurious gifts. In case such offers are extended by a partner, the employee is required to report this to their superior.
13.  At certain foreign markets, state employees are allowed to legally require facilitation payments. It is strictly forbidden for EXCALIBUR INTERNATIONAL companies to provide such payments. Facilitation payments do not include business provisions for private sector partners, e.g. based on dealer agreements, license agreements or sales representation contract.
14.  Sponsorship relating to any business opportunity in the public or private sector is strictly forbidden. This rule applies also to gifts to political parties and movements.
15.  The aim of the Code of Ethics is its implementation in EXCALIBUR INTERNATIONAL and support to the anti-corruption agenda and fair business in the general public and enterprises in the Czech Republic and in foreign markets where EXCALIBUR INTERNATIONAL operates.

Chair of the Board of Directors, EXCALIBUR INTERNATIONAL a.s.

To create a unified reporting channel for testimonies of unethical, corruptive, illegal, unsafe or environment-damaging behaviour, holding has created the Ethics Line which can be used by anybody to report the above-mentioned problematic behaviour in the form of sending a report to etika@czechoslovakgroup.cz.
EXCALIBUR INTERNATIONAL prefers that the reports are not anonymous because as such, they pose a risk of unethical behaviour themselves and abuse the Ethics Line. However, nobody is forced to leave his/her name.
The receiver of all reports is the EXCALIBUR INTERNATIONAL HR department. If a report is submitted by e-mail, the HR acknowledge the acceptance and inform the sender within 14 days about the steps taken. After the report has been investigated, the sender is notified about the result.
EXCALIBUR INTERNATIONAL declares that they value reasonable reports submitted to the Ethics Line. However, this does not apply to false reports submitted with the aim to unjustly accuse another person or company. Such report itself is a breach of the Code of Ethics and EXCALIBUR INTERNATIONAL´s anti-corruption program with all the associated consequences.

DEFINITION OF UNETHICAL BEHAVIOUR

Unethical behaviour is behaviour that breaches both the Company's Code of Ethics, and the general notion of morally correct behaviour. You may turn to the ET-LINK management with any issue that threatens yourself, your work, colleagues, superiors or the day-to-day running of the Company.

Forms of unethical behaviour:

• direct breach of the laws of the Czech Republic
• suspected corruptive conduct
• psychological or physical abuse on the part of other employees
• bossing, ignorance, punishments
• sexual harassment
• work performance-related threats
• personal safety violations
• occupational safety violation
• employment issues (wage fairness, working hours, promotion, premiums, business travel)
• intentional actions aimed at impairing the Group or Company's goodwill
• violation of economic competition rules
• embezzlement, appropriating co-workers' ideas
• abuse of powers
• theft of the Company's or private property
• misuse of the Company's assets
• financial fraud
• falsification of contracts
• taking bribes
• wasteful and non-ecological behaviour
• defamation and dissemination of false information, intrigues
• disclosure of confidential information