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The engine company. DEUTZ®

Code of Behaviour

1 PURPOSE

With its code of conduct, the Board of DEUTZ AG is committed to its obligation to act responsibly, ethically impeccable and legally.
All employees are asked to make a commitment to making this the guiding principle of all their actions.

2 SCOPE / VALIDITY

Scope is the entire DEUTZ Group. The directive enters into force with immediate effect.

3 DEFINITION

The code of conduct describes and explains goals and rules that reflect our commitment to responsible, ethically proper and lawful action.

Abiding by the law

DEUTZ is committed to upholding the law. All employees must respect and follow the laws and regulations. The same applies to internal instructions and guidelines from DEUTZ. During international activities and foreign business transactions, employees must also comply with the applicable laws and regulations of the country concerned, as well as all applicable social norms.

Integrity

Dealing with gifts and donations

Employees may neither request nor accept services, gifts or benefits from customers, suppliers, or other third parties that could influence their behaviour with regard to their activities for DEUTZ. No employee may offer promise or grant customers, suppliers, public officials, or other third parties services, gifts or benefits, so that they or some third party give DEUTZ unfair preference.

Gifts and invitations must remain within an appropriate framework and should not aim at or even elicit the appearance of unduly influencing business decisions. The assessment whether gifts or invitations are appropriate, is determined according to normal business practice. Special country-specific particularities must be taken into account. Any semblance of dishonesty and impropriety must be avoided. Especially when dealing with representatives of public institutions, strict standards are to apply. In case of doubt, employees should talk to their superiors or the compliance officer.

Gifts that exceed a certain threshold (€20), and invitations that go beyond a normal lunch, are also to be shown to a superior and require their approval. The acceptance of direct financial donations is expressly prohibited.

Fair competition

DEUTZ is committed to the principles of the market economy and fair competition. DEUTZ conducts all its business operations according to the principle of merit and on the basis of free, unfettered competition. Suppliers, agents or other intermediaries are chosen only after careful and objective assessment. DEUTZ lives up to all its legal obligations to make business decisions in the best interest of the company regardless of accords or agreements with competitors. The excellent quality of our products is the key to the DEUTZ’ success.

No corruption or bribery

DEUTZ does not condone any form of bribery or corruption, and monitors its staff’s compliance with this principle.

In addition, employees should strictly avoid situations which, although in themselves do not constitute any bribery or corruption, but still give the impression that extraneous considerations may have influenced decisions by DEUTZ or by customers, suppliers, public officials, or other third parties. Because even such situations may adversely affect the reputation of DEUTZ.

The principles set forth in this code of conduct dealing with gifts and benefits, as well as fair competition behaviour provide appropriate rules of conduct which should help the employees to avoid such situations. However, because constellations are conceivable, in which employees can itself not clearly assess whether a particular behaviour conforms to the rules, they should speak to their superiors or the compliance officer at DEUTZ in case of doubt, to allow clarification of the facts of the case in advance.

Inadmissibility of insider trading

Employees may not illegally use insider information. These include such information received by an employee regarding events that are not publicly known involving listed companies or their securities, in particular of DEUTZ AG and its shares, and which are likely to affect the stock exchange or market price significantly in the event that they become known to the public. Such information is relevant, if a prudent investor would take note of it when deciding on an investment.

These include, for example

  • the sale or acquisition of companies or significant assets as well as joint ventures or mergers;
  • restructuring measures or capital increases;
  • the conclusion or termination of important contracts;
  • developments in important court cases.

The illegal use of insider information is in particular:

  • exploiting insider information for personal or third-party securities transactions;
  • disclosing insider information to others or providing them with access to it;
  • Other recommendations given on the basis of inside information to buy or sell securities or to induce such transactions in any other way.

Even within DEUTZ, insider information may only be passed on to those who entitled to receive it on the basis of their position.

Insider trading is punishable by law and can also lead to civil compensation claims against the respective employee. The attention of all employees is expressly drawn to the corresponding rules of the German Securities Trading Act.

For more details, please refer to the insider policy that was published in November 2008 in the in the V-circular 2008–09.

Handling conflicts of interest

Every employee has to ensure that his private interests do not come into conflict with business interests.

A conflict of interest exists when an employee or any of his family members (spouse, registered partner, children or other relatives who live in the same household as the employee) is involved in off-duty activities that could affect the objectivity of the employee in carrying out his official duties. Such activities include in particular activities at the premises of customers, suppliers, service providers and competitors or significant financial interests, or interests in these.

Unless there is a conflict of interest for an employee, or could be, or if even the appearance of a conflict of interest could be raised, the respective staff member is to immediately inform his supervisor or the compliance officer about these circumstances.

Money laundering

All employees have to ensure that DEUTZ cannot be abused for money laundering or other illegal purposes. Financial or economic transactions, in which illegally acquired cash and cash equivalents are introduced into the legal financial system are referred to as money laundering. Express attention is drawn to the rules regarding the criminality of the money laundering set down in the penal code.

Staff should inform themselves sufficiently about the business background of the contract partner, the contract partner himself and the purpose of the intended business – especially before making any larger business transactions.

Evidence for the existence of money laundering arise, for example, in the event of

  • unusual cash payments;
  • payments in currencies that are not specified on the relevant invoice;
  • payments that are made by a third party and not by the actual contracting party unless this has been expressly agreed;
  • payments of an invoice or invoice block made in the form of several money orders or cheques;
  • money transactions that bypass the ordinary accounting;
  • attempts to act as described above or inquiries as to whether such an approach would be possible.

Employees must inform their supervisor or the compliance officer promptly in cases of doubt and suspicion of irregularities.

Embargoes and trade control regulations

As a global company with worldwide operations, DEUTZ must comply with all national or international laws or embargoes that prohibit or restrict the import, export or domestic trade of goods, technologies or services, dealing with specific products as well as capital and payment transactions.

Every DEUTZ employee must observe the corresponding control provisions. In particular, they are required to check whether any government authorisation is required and must obtain this if necessary.

In the event of any questions arising in this context, DEUTZ employees can contact Mr Karl-Ulrich Werkmeister (e-mail: werkmeister.k@deutz.com, phone 5510).

Handling company property and business secrets

Company property

Employees are to treat company equipment and property with due care. Every employee of DEUTZ is committed to protecting the company assets. Company assets may only be used for permissible business purposes, and never for illegal purposes. When using working capital and company resources (including phones, computers, Internet and other information technology), the internal guidelines of DEUTZ must be observed. Any use of company property and corporate facilities for private purposes is expressly prohibited insofar as it is not permitted by the above mentioned directives.

Trade secrets and data protection

Our inventions and our know-how are of particular importance for the long-term success of our company. For this reason, DEUTZ employees must protect intellectual property from unauthorised perusal by third parties and against unauthorized access by third parties. Intellectual property includes trade secrets, confidential information, copyrights, trademarks and logos as well as customer lists, business opportunities and product specifications. All employees are therefore urged to adhere to required safety standards for protecting data in their personal communications as well as in electronic communications with third parties.

Treatment of business partners and employees

Business partners

Our business partners (customers, resellers, suppliers) are at the heart of our activities. Our relationships with our business partners should be based on mutual reliability and sustainability. Our business partners expect sincerity in action, courtesy in dealing, respect and fairness from us. This includes that decisions be made transparently and in a comprehensible manner and communicated openly.

Employees

DEUTZ is keen to provide all persons equal professional opportunities and expects that all employees respect the personal dignity, privacy and the privacy of each individual. Any discrimination or harassment in the workplace, be it racial or due to ethnic origin, sex, religion or belief, disability, age or sexual identity will not be tolerated. Violence in any form, in particular, violence in the workplace, including threats and intimidation, are prohibited in DEUTZ.

Business responsibility

Private activities

The private involvement of an employee in clubs, parties, or other social, political, or social institutions or associations is welcomed by DEUTZ. However, this may not jeopardise the fulfilment of the contractual obligations of the employee.

Statements in public

Before a staff member publishes texts, gives a speech, gives interviews or appears in public in connection with his activities at DEUTZ, the consent of his superiors must be obtained. When a DEUTZ employee makes private opinions in public, he may not do so in reference to his function in the company.

Responsibility for health, safety and environment

Environmental protection

A responsible approach to the environment is part of the DEUTZ philosophy. Every employee is to make an effort to protect natural resources, by making material savings, energy-saving planning, prevention, reduction and recycling of waste to keep the environmental impact of his activities to a minimum. The environmental aspect is also to be taken into account as well as economic aspects in the selection of suppliers and service providers. DEUTZ employees are called upon to engage in the development and diffusion of environmentally friendly technologies in the context of their work.

Public health and safety at work

DEUTZ seeks to ensure a healthy and safe working environment for its employees. Therefore, DEUTZ follows the regulations regarding health and occupational safety. Illegal drugs are prohibited in the workplace.

Plant and product safety

Plants require careful planning as well as regular controls and maintenance. DEUTZ employees must be thoroughly briefed, trained and supervised. Malfunctions, accidents or incidents can only be reliably avoided when these measures have been carried out regularly.

To ensure the safe handling of products by our customers, responsibility must be taken for a product throughout the entire product cycle. This requires permanent monitoring. Known or possible dangers arising from the use of a product, are to be reported promptly to the responsible managers. Customer must be informed about any possible concomitant risks associated with the use of products.

Compliance with the code of conduct

Consequences of violations

Each DEUTZ employee is personally responsible for ensuring that his behaviour complies with this code of conduct.

In the event of breaches of this code of conduct, DEUTZ will take appropriate measures to reeducate personnel. Primarily, DEUTZ will try to explain the meaning of the values the employees and thereby encourage a change in behaviour in the future. There is, however, a possibility that violation of this code of conduct will lead to legal or disciplinary consequences within the framework of the applicable laws.

Clarification of questions and reception of notices

For questions and remarks regarding this code of conduct, DEUTZ employees can contact the compliance officer at DEUTZ AG, Dr Christian Lantermann (e-mail: christian.lantermann@deutz.com, telephone: +49 (0) 221 822 5133).

4 RESPONSIBILITIES

Every employee of the DEUTZ Group is responsible for compliance with the rules of the code of conduct at his workplace.

5 OTHER APPLICABLE DOCUMENTS

  • Organisational directive no. 164 (“export controls”)
  • Insider directive (ORG-RL No. 2)