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          Compliance

          Compliance Compliance

          General Business Principles of the Diehl Group

          Preliminary Remark

          Diehl carries out its business activities both in agreement with the laws and regulations of public authorities  in the countries  where  its  employees  work  and  in  accordance  with  the  principles  described here. All employees on all hierarchical levels, as well as the executive bodies, are to comply with them without exception. Unfair or even illegal practices are not compatible with our business principles.
           
          We therefore attach importance to a working environment in which employees address compliance issues openly and discuss them with their superiors as well as with the Compliance Organization. Our goal is to sensitize all employees to compliance in their daily work by means of sustainable communication.
           
          For the Executive Board   

          Dipl.-Wirtsch.-Ing. Wolfgang Weggen 
          Executive Vice President / CFO
          (Corporate Department Finance and Controlling)

          Dipl.-Kfm. Dr.-Ing. Martin Sommer    

          (Corporate Department Human Resources)

          1. Proper business practices

          Diehl bases all its business activities on the principles of integrity and fairness. All business documents must be in accordance with both national laws and Diehl’s own guidelines. No assets are permitted which are not recorded in the company’s books.

          1.1 Prohibition of bribery / corruption

          Diehl forbids every kind of bribery. No employee may offer, provide, or accept bribes. Bribery is a criminal offense. This includes bribery in business transactions, as well as bribery of any holder of office or granting of advantage. In particular, any direct or indirect offer, promise, provision, or acceptance of inappropriate benefits, whether material or of any other kind, for the purpose of acquiring orders or procuring unlawful advantages is forbidden to all employees.  

          1.2 Competition / prohibition of cartels  

          All employees must comply with the legal regulations governing antitrust laws and business competition that are applicable in each case.

          In particular, employees may not enter into or propose any agreement:

          • with competitors regarding the trade in goods or services with third parties;
          • with customers regarding prices or conditions of supply under which the customer will resell Diehl products or services to third parties.
          1.3 Business relations

          Relationships  with  other  companies  and  between  employees  and  their business  partners  –  e.g., with suppliers and customers and with governmental offices and their employees, etc. – must be characterized by transparency, especially in the areas of purchasing and sales. This also applies to relationships with former employees and, in particular, to the family members of employees who directly or indirectly supply goods or services to the Group.
           
          Based  on  our  compliance  guidelines,  due  diligence  checks  are  carried  out  on  specific  business partners.
           
          Employees who are involved in contractual negotiations with authorities must be familiar with the guidelines governing the process of submitting business offers in each respective country and may not violate them.
           
          Diehl competes for orders by fair and legal means and carries out contractual negotiations in compliance with all legal provisions.

          1.4 Observation of export and import control laws 

          Employees involved in the import or export of goods, services or technical information must know and observe the relevant regulations. Furthermore, they have to ensure that the import or export documents are complete.
           
          Where the export of products and technical data to a particular country is regulated, the employees must obtain the necessary licenses and other state permits prior to the export.

          1.5 Money laundering prevention   

          Diehl complies with the legal regulations on money laundering prevention.  

          1.6 Avoidance of conflicts of interests

          All employees must avoid any situation which could result in a conflict between their own personal interests  and  the  interests  of  Diehl.  A  conflict  of  interest  can  result  when  an  employee  takes  a course of action or pursues interests which can hamper him or her in objectively and effectively carrying out his or her duties and meeting his or her responsibility to Diehl.

          1.7 Proper handling of invitations, gifts and other benefits  

          Gifts and other benefits may be accepted or granted only after approval by the respective company superior or Corporate Compliance Officer (CCO) and only under the condition that the gifts or benefits do not contravene laws or guidelines, are within proper limits, and are not intended to influence decisions in a dishonest manner. The question of whether gifts or invitations are appropriate is to be decided according to normal business practices and with due consideration, if necessary, for the special customs of each individual country. Every appearance of dishonesty and incorrect behavior is to be avoided.

          1.8 Business secrets and protection of intellectual property

          Every employee is obliged to treat business information about Diehl or its business partners that is not public knowledge with confidentiality and to protect it from unintentional disclosure.
           
          One of Diehl's most significant assets is its intellectual property. This includes patents, business secrets, trademark rights and copyrights. It is Diehl's Group policy to exercise all rights to economically significant intellectual property, and to use, maintain, protect and defend them in a responsible manner. Diehl respects the intellectual property of other natural persons and legal entities and uses  the relevant  information,  computer  programs  or  processes  only  in  accordance  with  the respective license agreements or within the framework of the legal provisions.

          1.9 Data protection  

          Personal data is collected, processed and utilized only insofar as this is permitted by law, serves legitimate purposes and is necessary for the fulfillment of duties. All employees must handle and protect personal data in accordance with applicable laws.
           
          Diehl  uses  security  measures  of  a  technical  and  organizational  nature  to  protect  personal  data against manipulation, loss, destruction or against access by unauthorized third parties. These security precautions are continuously improved in line with the state of developments.

          2.    Employees / colleagues

          2.1 No harassment (respectful conduct) 

          The  personal  dignity,  privacy  and  personality  rights  of  each  individual  are  to  be  respected.  Employees  may  not  be  subject  to  corporal  punishment  or  physical,  sexual,  psychological  or  verbal harassment or abuse.

          2.2 Non-discrimination

          Cultural differences are recognized and respected. All employees shall be fundamentally assessed only on the basis of the abilities and qualifications required for the job, including the issues of recruitment, promotion, remuneration, additional benefits, further training and qualification, dismissal and termination of the employment contract.

          2.3    Health & safety

          All employees are guaranteed working conditions meeting the requirements of occupational health and safety, with the relevant statutory regulations representing the minimum standards to be applied. Appropriate measures are taken to prevent accidents at work and occupational diseases.

          3.      Social environment / public relations

          3.1 Working hours

          The working hours shall conform to the statutory regulations or the regulations applicable in the relevant branch of industry, whichever are more stringent.  

          3.2 Remuneration

          Wages and salaries, including payment for overtime and bonus payments, must be in line with the relevant laws and regulations.

          3.3 Freedom of association

          Diehl respects the employees' right to freedom of association and collective bargaining.  

          3.4 Prohibition of child labor

          Child labor in any form is prohibited. If no higher age limit is prescribed by law, no person of school age or under 15 years of age may be employed (exceptions in accordance with the Agreement on ILO Convention No. 138).

          3.5 Prohibition of forced labor and human trafficking

          Forced labor, slavery and human trafficking of any kind are prohibited. This includes involuntary prison  labor,  servitude  and  similar  forms  of  labor  (in  accordance  with  ILO  Conventions  29  and 105).

          4. Environmental protection

          All employees are obliged to observe the regulations and standards regarding environmental protection.  Environmental  impact  is  to  be  minimized  and  environmental  protection  continuously  improved.  

          5. Observance of the business principles

          Superiors and managers have a special role model function and ensure that their employees are familiar with the content of the aforementioned business principles. The managers implement preventive measures in their area in order to prevent violations. All employees at all hierarchical levels, as well as the executive bodies, are themselves responsible for compliance with the aforementioned  business  principles.  Notwithstanding further  civil  and/or  criminal consequences,  violations can be punished with disciplinary measures.  

          5.1 Compliance training courses

          In all countries in which the Diehl Group is active, compliance training courses (on-site events and e-learning) are held regularly for employees at all hierarchical levels. The contents of these compliance  training  courses  are  the  explanations  of  the  "General  Business  Principles  of  the  Diehl Group", with a focus on corruption prevention / competition law. For certain positions, e.g., sales and purchasing, training courses tailored to these areas are also conducted. 

          5.2 Compliance Organization

          In order to anchor compliance in the Diehl Group and to enforce the "General Business Principles of the Diehl Group", the Executive Board and Supervisory Board have established a Compliance Organization. The Corporate Compliance Officer (CCO) heads the Group's Compliance Organization.  
           
          In order to regularly review our business processes with regard to compliance with these principles, and to identify compliance problem areas and to investigate identified violations, a Compliance Committee has been set up to which members of the Executive Board also belong. Moreover, the CCO regularly reports to the Executive Board.
           
          The Compliance Organization at Diehl is supplemented by a neutral external ombudsman (lawyer) who is obliged to maintain strict confidentiality. Diehl employees and third parties can turn to the ombudsman as a neutral body in confidence if they have observed improper business practices in companies of the Diehl Group.
             
          Diehl encourages its employees to report suspicious cases in order to prevent damage to the company. The identity of employees who report a possible violation will be treated confidentially. Similarly, no employee may be sanctioned or otherwise disadvantaged as a result of having made such a report.
           
          The  contact  details  of  the  CCO,  as  well  as  of  the  ombudsman,  are  published  on  the  Internet (www.yizf7.com  /  Group  /  Company  /  Compliance).  The  CCO  may  be  consulted  on  all  relevant matters.

          Training

          Compliance training courses (on-site events and e-learning) are regularly conducted in all countries where the Diehl Group has a site for employees on all hierarchical levels. Such Compliance training courses provide explanations regarding the "General Business Principles of the Diehl Group", with emphasis on corruption prevention/competition law. For particular departments, such as sales and purchasing, training courses specifically tailored to them are conducted. 

          Organization

          In order to implement Compliance within the Diehl Group and to enforce the "General Business Principles of the Diehl Group", the Executive Board and Supervisory Board have established a Compliance Organization. Diehl's Compliance Organization is headed by Attorney Esser (Corporate Compliance Officer).

          A Compliance Committee, also including members of the Executive Board, has been set up to regularly check the business processes for compliance with the "General Business Principles of the Diehl  Group", to identify Compliance issues and to investigate recognized violations. Moreover, the Corporate Compliance Officer (CCO) regularly reports to the Executive Board.

          In addition, the Compliance organization includes a neutral, external ombudsman who is obliged to maintain strict confidentiality (Attorney Dr. Rainer Buchert). Diehl employees and third parties may contact him in confidence if they have observed improper business practices within companies of the Diehl Group.

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