Compliance program

BACKGROUND

Česká zbrojovka a.s. is aware of its corporate social responsibility and, with this in mind, it takes measures that are based on strict compliance with the applicable laws and on moral and ethical standards. To ensure adherence to moral and ethical standards and to ensure that its procedures and processes comply with the applicable laws, the company has introduced a compliance management system and is committed to observing the principles of this system and to developing each element of the system.

In general, a compliance management system is a system for the management of a company through activities and procedures that are aimed to prevent, detect and respond to any conduct that is contrary to internal regulations or the statutory provisions and that may put a company in a position of criminal liability.

The compliance management system at Česká zbrojovka a.s. is comprised of the following elements:

The Code of Conduct of Česká zbrojovka a.s., which all employees are bound to observe.

The Compliance Officer, i.e. an employee authorized by the company’s board of directors who is responsible for the operation and supervision of the compliance management system.

Whistleblowing, which is a set of measures aimed to detect any misconduct or wrongdoing and to report information on any such misconduct or wrongdoing to individuals or entities who may check the issue that has been reported and take measures to tackle the issue, if necessary (e.g. Compliance Hotline).

Special training, which all the company’s employees must complete and which is focused on the legislation applicable to the jobs they do and on the prevention of corporate criminal liability.

A set of measures (internal standards, labour instructions, principles) eliminating the risks of criminal liability of Česká zbrojovka a.s.

COMPLIANCE HOTLINE

Being aware of its obligation to check and promote compliance with the applicable laws and with moral and ethical standards, Česká zbrojovka a.s. has introduced a uniform system for raising concerns or suggestions that trigger the need to check any misconduct or wrongdoing in the form of the channels specified below. By using these channels, anyone (an employee, a partner, a company visitor, a stakeholder, etc.) may report any misconduct or wrongdoing.

In the opinion of Česká zbrojovka a.s., a wrongdoing or misconduct is any conduct that may cause harm to Česká zbrojovka a.s., its employees, business partners or other related parties and that has impact on the company’s criminal liability. The main categories of wrongdoing or misconduct include:

• violations of the statutory provisions or internal regulations,
• fraudulent, inaccurate or incorrect maintenance of accounting records and documents or financial statements, distorting or influencing audits,
• violations of competition rules,
• any conduct involving conflict of interest,
• any conduct supporting or directly inciting corruption; the corruption behaviour itself,
• embezzlement and theft of financial and movable assets,
• any wrongdoing concerning workplace safety, fire protection, environmental protection,
• faking contracts,
• insider trading/dealing,
• acceptance of any working conditions that are contrary to the rules of ethical conduct (e.g. violations of human rights),
• providing unethical or false information (through whistleblowing) with the aim to cause harm to any other individual or corporation.

If you decide to report any such wrongdoing or misconduct, you have the following options:

a)      directly reporting the issue by an e-mail message to: compliance@czub.cz

b)      dropping your concern into one of the boxes designed for this purpose (only for employees of Česká zbrojovka a.s.)

c)      filing out the following form

In your notice, please provide:

• a description of the wrongdoing
• when the wrongdoing occurred
• why you think it is wrong
• the section/department concerned