CODE OF CONDUCT

. Introduction

The board of directors of MEGADYNE S.p.A. has adopted this Code of Conduct, which is an integral part of the Organisational model pursuant to Legislative decree no. 231/2001.
 

The Code reflects the company's commitment to conducting its business in line with ethical principles that ensure reliability, honesty, correctness and transparency and that fully comply with the applicable laws and regulations.
 

It is designed to regulate business activities, setting principles and rules with the primary objective of clarifying a system of values and conduct, necessary to achieve the company's mission.
 

Adoption of the Code implies the following objectives:

• providing employees with guidelines to assist them to recognise and tackle ethical issues;

• maintaining focus on management methods of the areas at risk;

• developing a culture of integrity, honesty and responsibility within the company, rejecting corruption and all illegal practices.
 

The company believes that implementation of this Code is necessary to make it an increasingly efficient tool to combat corruption as required by international and domestic laws, including pursuant to Law no. 190 of 6 November 2012 on "Instructions for the prevention and sanctioning of corruption and illegality in the public administration".
 

The Italian legislator reformed the anti-corruption system to comply with international law and introduced more rigid conduct rules to regulate administrative transparency as well as a heavier sanctions system, which covers both individuals and companies.

Therefore, the Code of Conduct is the conduit used to implement company policies. It reflects the company's precise intention to refuse corruption and all illegal practices.


 

2. Addressees

 

The Code is applicable to the company bodies, employees and all those parties who cooperate with the company in its activities and to achieve its mission in Italy and abroad.
 

The addressees shall adopt conduct practices based on the fundamental principles of honesty, moral integrity, correctness, transparency, objectivity and respect for the individual when carrying out their activities to pursue the company's mission and in all transactions performed with individuals and bodies both inside and outside the company in the public and private sectors.
 

Pursuit of the company's interests never justifies actions that do not comply with honest conduct.
 

Accordingly, MEGADYNE S.p.A. may decide not to work with or to continue to work with parties that adopt conduct which is not compliant with the provisions of this Code.


 

3. General principles

 

3.1  Legality

The addressees shall comply with the law and equivalent regulations.

This requirement holds true for the national legislation of all the countries in which the company does business.

No violations of this requirement are accepted, not even when violation reflects an interest or objective of the company.

The addressees shall comply with the internal rules issued by MEGADYNE S.p.A., given that their scope is to better ensure constant compliance with the law.
 

3.2  Correctness

The addressees shall comply with professional rules, especially those referring to diligence and appraisals applicable to transactions performed in the name or on behalf of the company.

The addressees shall also comply with the internal rules which detail how to achieve company objectives without violating the Code.
 

3.3 Transparency

All transactions carried out in the name and on behalf of MEGADYME S.p.A. shall comply with the principles of integrity and transparency. The addressees shall act loyally, in good faith and responsibly.

The company guarantees correctness, completeness, accuracy, consistency and timeliness in managing and communicating internal information. It thus avoids deceptive practices by parties that may gain undue advantages.
 

3.4  Conflicts of interest

Situations where the parties involved find themselves in conflicts of interest should always be avoided when carrying out company business.

Conflicts of interest exist when the Addressee pursues an objective different to that of the company or intentionally procures a personal advantage when carrying out business in the company's interest. They also exist when the representatives of consumers, contractors, subcontractors, suppliers or public or private institutions act contrary to the fiduciary duties inherent in their position.
 

3.5 Prevention of corruption: gifts, benefits and other benefits

As provided for by internal rules and anti-corruption regulations, the Addressees shall abstain from offering or promising to public sector or private sector parties gifts, presents or other benefits, unless they have a modest value and are part of normal courtesy practices (e.g., official celebrations) or normal commercial transactions, when they are made to obtain preferential treatment during the performance of any whatsoever activities linked to MEGADYNE S.p.A..
 

MEGADYNE absolutely forbids its employees to accept, request or seek for themselves or others recommendations, preferential treatment, gifts or other benefits from parties with which they do business outside normal commercial or courtesy practices, which may prejudice impartial judgment.

 

For the purposes of this article, modest value gifts or other benefits may not exceed €150.
 

Employees who receive gifts, preferential treatment, economic advantages or other benefits that do not qualify as modest value courtesy practices or that are above the limits set by internal procedures shall refuse them and inform the relevant departments, their direct superior and/or the supervisory body immediately. They shall indicate the origin of the payment in kind or promised and the size and nature of the gift received or promised.
 

As MEGADYNE S.p.A. is required to comply with laws combatting corruption in all the countries in which it operates, any gifts or presents outside Italy shall not be offered before consulting the local anti-corruption laws.
 

Gifts and benefits of all kinds (charitable donations, sponsorships, hosting, etc.) shall be managed and authorised in line with internal procedures and properly documented.

Gifts, economic advantages or other benefits shall generally have the following characteristics:

a) they shall not consist of cash payments;

b) they shall relate to legitimate commercial or other activities of MEGADYNE S.p.A. and shall be given in good faith;

c) they shall be reasonable in the circumstances;

d) they shall comply with generally accepted professional courtesy standards.
 

MEGADYNE S.p.A. takes decision about sponsorships and charitable donations to organisations active in the social or non-profit sector, particularly considering all possible conflicts of interest of a personal or company nature.
 

MEGADYNE S.p.A. forbids sponsorships that are not justified by related and proportionate advantages of promoting the company and developing its commercial relations.
 

All contributions to charitable organisations, bodies and organisational bodies shall be specifically authorised in line with internal procedures.
 

Employees may offer lunch invitations or attend social or sporting events to develop good business relations or to promote the company's image as long as these activities are carried out within acceptable limits and are provided for by internal regulations.

Employees shall always refuse invitations of this type when they deem that they may compromise their independence and impartiality when taking decisions during their normal working duties.

Employees shall not accept fees in any form from external parties for services which they are required to provide as part of their normal working duties. When agreeing contracts on behalf of the company, they shall not negotiate, pay or promise benefits, as compensation, to facilitate (or solely for having led to) the agreement or execution of contracts, including when this conduct creates an advantage for the customer.


4. Relations with personnel

MEGADYNE S.p.A. protects and fosters the value and development of its human resources, also because they are a key success factor, in order that they can fully realise their professional potential, based on merit criteria.

The hiring, transfer or promotion of employees shall not in any way be influenced by offers or promises of money, goods, benefits, preferential treatment or services of any kind.

MEGADYNE S.p.A. requires that authority is exercised equally and correctly with respect to hierarchical relations. It forbids all conduct that may damage employees' dignity and independence.

All forms of discrimination are forbidden, especially discrimination based on race, nationality, gender, age, disability, sexual orientation, political opinions or trade union membership, philosophical belief or religious convictions involving persons within or outside the company.

Sexual harassment or physical or psychological violence is not tolerated. MEGADYNE S.p.A. is committed to protecting its employees' moral integrity, ensuring the right to work conditions that respect the individual's dignity.

MEGADYNE S.p.A. does not accept any forms of irregular work, i.e., unregularised employment contracts or any type of resort to work services not provided for in the contractual and legal framework in the country in which such services are provided.

MEGADYNE S.p.A. protects its employees' privacy pursuant to Legislative decree no. 196/03.

Employees and/or consultants shall keep information acquired during their duties strictly confidential and shall not circulate it within or outside the company, except within the terms of the current legislation and internal procedures.

At the start of the employment relationship, each employee shall receive concise information about their duties, responsibilities and tasks; legal, contractual or regulatory disciplinary measures; legal and remuneration information, standards and procedures to be adopted to avoid conduct that does not comply with the law and the internal policies.

Employees shall avoid performing or facilitating transactions which give rise to effective or potential conflicts of interest with the company. Similarly, they shall avoid activities that may affect their ability to take impartial decisions in the company's best interests and in full compliance with this Code's provisions.

Specifically, employees shall not have a financial interest in selecting suppliers, in a competitor or customer. They shall not perform activities that may give rise to a conflict of interest.

Relations between MEGADYNE S.p.A. employees and private or public sector parties shall take place in compliance with this Code and internal procedures.

No one may be fired, transferred, suspended or discriminated against in any way as part of the employment relationship as a result of having refused to make a prohibited payment or to give a benefit that does not comply with company.


5. Relations with suppliers
 

Relations with suppliers are based on principles of transparency, loyalty, integrity, confidentiality, diligence, professionalism and objectivity.

The relevant company departments select suppliers and purchase goods and services using objective criteria about legality, expertise, competitiveness, quality, correctness, respectability, reputation and price.

Supplier selection procedures shall comply with current regulations and internal procedures. Therefore, undue pressure, aimed at privileging a supplier to the detriment of another and such to discredit the company with the market with respect to transparency and correctness when applying the law, is unacceptable.

It is forbidden to accept gifts or any other type of benefit, except for that provided for by the company, which could compromise the independent selection of suppliers.

MEGADYNE S.p.A. suppliers shall not be involved in illegal activities and shall ensure working conditions based on respect for fundamental human rights, international conventions and current laws.

MEGADYNE S.p.A. recommends its suppliers not offer goods or services, especially as gifts, to company personnel that exceed normal courtesy practices. It forbids its employees to offer goods or services to employees of other companies or bodies to obtain confidential information or significant direct or indirect benefits for themselves or the company.

MEGADYNE S.p.A. may legally take action in the case of violations of the principles of legality, correctness, transparency, confidentiality and respect for the individual's dignity. This may result in termination of the relationship with the supplier.


6. Relations with external consultants, agents, brokers and other contractors

With respect to relations with external consultants, agents, brokers and other contractors, the directors and employees are required to:
• carefully assess whether to resort to external consultants and contractors and to select counterparties with appropriate professional and reputation qualifications;
• develop efficient, transparent and cooperative relations, maintaining open and frank communications in line with the best commercial practices;
• constantly check the best service/cost ratio;
• ensure application of the contractually provided for conditions;
• work in accordance with ruling regulations and to ensure their respect.

Relations with these parties are governed by formalised contracts which specify the contract conditions and object and the collection and payment methods.

All parties that work on behalf of or that represent MEGADYNE S.p.A. shall comply with this Code, as far as it is applicable, based on the specific clauses included in the individual contracts.

It is forbidden to accept gifts or other benefits that might compromise independent judgment when selecting consultants, brokers, agents and other contractors.

It is forbidden to provide services or payments to contractors, consultants, brokers, agents or other third parties that work on the company's behalf and are not adequately justified by the contractual relationship with them or by the type of engagement to be provided.

Violation of the principles of legality, correctness, transparency, confidentiality and respect for the individual's dignity is just cause for termination of the contract.


7. Relations with customers

Professionalism, expertise, availability, respect and correctness are MEGADYNE S.p.A.'s guiding principles and conduct rules of thumb for its relations with customers.

Customer relations are hinged on complete transparency and correctness, compliance with the law and independence from all forms of pressure, either internal or external.

To this end, the company forbids all forms of gifts, economic advantages or other benefits in sales procedures which exceed normal courtesy practices (e.g., official celebrations) or normal commercial practice and are given to illegally obtain preferential treatment pursuant to this Code and internal regulations.

Contracts and communications with customers shall be:
• clear and straightforward;
• compliant with ruling legislation, without resorting to obstructive or incorrect practices;
• compliant with internal commercial policies and their parameters;
• complete, without neglecting any relevant factor necessary for customers to take decisions.

It is forbidden to engage in conduct that may harm consumers' trust and concurrently damage market transparency and safety.


8. Partnerships, consortia, joint ventures and similar undertakings

The company complies with the law and the ethical standards contained in this Code when setting up and developing partnerships, consortia, joint ventures and similar undertakings. Specifically, the directors, employees and contractors shall:
a) solely work with partners that have respectable reputations and only engage in lawful activities;
b) ensure that the business combinations operate in line with the principles set out herein;
c) ensure that no one partner receives excessively preferential treatment compared to its contribution;
d) ensure the transparency of agreements avoiding secret and/or illegal agreements or pacts;
e) maintain transparent and correct relations with partners.


9. Fair competition

MEGADYNE S.p.A. adheres to the principle of fair competition and abstains from collusive or predatory conduct.

The company and its personnel shall comply with the principles and rules of free competition and shall not violate the current laws about competition, antitrust and consumer protection.
It is forbidden to engage in conduct that violates regular and free trade and industry and that damages commercial trust and good faith.

With respect to fair competition and consumer protection, the company and its personnel are committed to not violating third party rights to intellectual property and to respecting rules protecting distinguishing marks of intellectual works or industrial products (trademarks, patents). They ensure full compliance with the regulations governing industrial property rights.

It is forbidden to sell products that include signs, figures or indications giving false information sufficient to be misleading about the real origin, source or quality of the work or product.


10. Relations with the public administration

Relations with the public administration and public institutions (Italian and foreign) which perform activities of public use or interest are solely held by company representatives or authorised managers or persons delegated by them pursuant to the regulations, the rules of this Code and internal instructions, especially the principles of correctness, honesty and transparency.

All directors, employees, contractors and any other party that works in the name or on behalf of the company are absolutely forbidden to inappropriately influence the decisions of the related institution in order to ensure conduct not compliant with or contrary to their official duties.

Specifically and as an example:
• It is not allowed to directly or indirectly or via nominees offer or promise money, gifts or rewards in any form or to exercise undue pressure or to promise any object, services or favour to managers, junior managers or employees of public sector entities or their relatives or partners in order to induce them to perform official acts or acts in breach of their official duties.
• It is not allowed to adopt deceptive conduct so as to mislead the public administration; specifically, it is not allowed to use or present statements or documents that are false or contain untrue attestations or that omit information to obtain grants, funding or other benefits from the state, a public sector body or the EU to the advantage or in the interest of the company.
• It is forbidden to use grants, funding or other benefits from the state, a public sector body or the EU for reasons other than those for which they have been allocated.
• With respect to commercial relations with the public administration, including participation in public tenders, all parties shall operate in accordance with the law and correct commercial practices.
• It is forbidden to alter in any way the working of an IT or computerised system of a public sector body or to illegally process data, information and programs included or related to such systems in order to achieve an illegal gain and cause damage.

The correct working of the public administration and especially the legal system is ensured by the ban imposed on all addressees of this Code from directly or indirectly undertaking any illegal act that could favour or damage another party in a civil, criminal or administrative proceeding.

Specifically, it is forbidden to bring illegal pressure (offers or promises of money or other benefits) or unlawful coercion (violence or threats) in order to induce the person called before the court to make statements to be used in a criminal proceeding not to make statements or to make false statements when this person has the right to remain silent.


11. Conduct principles for corporate, administrative or financial activities

MEGADYNE S.p.A. requires correct, transparent and cooperative conduct in accordance with the law and internal procedures for all the activities undertaken to prepare financial statements and other corporate communications designed to provide shareholders and the market with true and fair information about the company's financial position, financial performance and cash flows.

All transactions shall be exact, verifiable and legal.

This implies that all actions and transactions shall be reflected appropriately in the accounting records and supported by suitable documentation to allow checks, identification of the various levels of responsibility and the correct reconstruction of the transaction.

The following is applicable to all those persons who, including when they solely provide data, are involved in the preparation of financial statements and similar documents, or documents presenting the company's financial position, financial performance and cash flows, and especially the directors, statutory auditors and senior management:
• they are required to provide maximum cooperation for the specific aspects they are responsible for and to ensure the completeness and clarity of the information provided and the accuracy of the data and processing;
• it is forbidden to provide untrue facts, even when they are subject to assumptions, or to omit information or hide data directly or indirectly violating the law and internal regulations so as to mislead the users of the above-mentioned documents;
• it is forbidden to undertake fictitious transactions or to circulate false information about the company and its activities.

It is forbidden to prevent or hinder the controls legally attributed to shareholders or other company bodies.
It is forbidden to engage in fictitious or fraudulent conduct aimed at influencing the shareholders to obtain an undue gain for themselves or other parties.

MEGADYNE S.p.A. intends to guarantee the circulation and compliance with conduct principles aimed at protecting share capital, creditors and third parties that work with the company in full compliance with the law.

The company is committed to providing its shareholders with accurate, true and timely information and to improving their ability to participate in corporate decisions, in full compliance with the current regulations and the by-laws.

Company employees shall ensure their dealings with the board of statutory auditors and the independent auditors are transparent, clear and correct so as to develop a professional and cooperative relationship. Information is provided after being supervised and coordinated by the relevant departments.


12. Use of company assets and IT systems

Documents, work tools, systems and equipment and all other tangible and intangible assets (including intellectual property and trademarks) owned by MEGADYNE S.p.A. are used solely to pursue company objectives and as established. They may not be used for illegal purposes. They shall be used and cared for with the same diligence that the employees would adopt for their own belongings. All
illegal use is punishable, including with disciplinary measures, regardless or whether such use qualifies as a crime.

The company protects the personal data of all the parties with which it has relations in accordance with the ruling privacy regulations.

Information of which it becomes aware during its activities belongs to the company and as such is subject to the relevant legal provisions and confidentiality requirements. Such requirements shall be complied with, even after termination of the relationship with the company as legally provided for.

The IT and computer tools (such as telephones, faxes, e-mail, internet, intranet and all hardware and software) made available to employees are work tools and, therefore, shall be used solely for work purposes. This applies to the use of personal computers and other tools, programs and services.

Employees are required to take the necessary care to prevent the possible committing of crimes using IT tools.

Specifically, the following is forbidden to employees:
• abusive access to an IT or computerised system;
• the unauthorised holding or abusive circulation of access codes to IT or computerised systems;
• circulation of equipment, devices or IT programs designed to damage or block an IT or computerised system;
• illegal tapping, blocking or interrupting IT or computerised communications;
• damaging information, data and computer programs and IT and computerised systems.

Employees may not upload unauthorised or unlicensed software on loan onto company systems. Similarly, it is forbidden to make unauthorised copies of licensed programs for personal, company or third party use.


13. Prohibition on transactions for handling stolen goods, laundering and use of cash, assets or other illegally gained goods

MEGADYNE S.p.A. carries out its activities in full compliance with the current regulations about money laundering and the instructions issued by the relevant authorities.

MEGADYNE S.p.A. ensures maximum transparency in its commercial transactions and uses the most suitable tools to combat the handling of stolen goods, the laundering and use of cash, assets or other illegally gained goods.

Company employees are severely forbidden to undertake or be involved in activities entailing laundering (i.e., receipt or laundering) of any form of proceeds from criminal activities.

The directors, employees and contractors shall verify a priori the available information (including financial) about commercial counterparties, consultants and suppliers to check their moral integrity, respectability and the legitimacy of their activities before entering into a business relationship with them. They are required to scrupulously comply with the law and the internal policies and procedures during all economic transactions, ensuring the full traceability of cash inflows and outflows and full compliance with money laundering laws, when applicable.


14. Health and safety in the workplace

MEGADYNE S.p.A. is committed to pursuing action to improve its employees' health and safety as an integral part of its business activities and a strategic objective considering its more general objectives.

To this end, the company:
• is committed to circulating and building a culture of health and safety in the workplace, making all employees aware of risks and encouraging their responsible conduct;
• provides training courses at specific stages of the employees' time with the company and ongoing training for operating personnel;
• encourages and implements all actions aimed at minimising risks and removing causes that could damage employees' health and safety, undertaking technical and organisational projects.

Employees shall ensure their health and safety and those of other persons in the workplace on whom the effects of their actions or omissions would be felt, in line with their training and using the means provided by the employer.

Accordingly, the use of drugs, abuse of alcohol or abuse of illegal drugs is unacceptable in the workplace.


15. The environment

MEGADYNE S.p.A. confirms the full compliance of its activities with the areas in which it operates and surrounding environment.

Therefore, it is committed to carrying out its business fully respectful of the environment, in the widest sense possible; specifically by:
• considering the environmental impact of new activities and new production processes;
• using natural resources responsibly and knowledgeably;
• developing a constructive relationship based on maximum transparency and trust both internally and with the general public and institutions in managing environmental issues;
• maintaining high safety and environmental protection indexes by implementing effective management systems.


16. Relations with local communities

16.1 Trade unions and political parties
MEGADYNE S.p.A. does not provide any funding directly or indirectly to political parties, movements, committees or political and trade union organisations and their representatives or candidates except in the forms and using the methods provided for by ruling regulations.

16.2 Press relations
MEGADYNE S.p.A. only engages with the press and mass media through the designated company bodies and departments. Its press relations are based on principles of correctness, availability and transparency in compliance with its defined communication policy.

Employees and contractors may not provide information to the mass media without the prior specific authorisation of the relevant departments.

Information and communications about the company shall be accurate, complete, true, transparent and consistent.


17. Communication of violations

Any alleged or known violation of the rules of this Code and the regulations referred to herein, including the anti-corruption laws, shall be reported immediately or as soon as possible to the following parties:
- direct superior
- supervisory body.

MEGADYNE S.p.A. employees will not be fired, downgraded, suspended, threatened, oppressed or discriminated against in any way at work because they have correctly communicated a violation of this Code in good faith.


18. Compliance with the Code of Conduct

Violation of the rules of this Code harms the trust relationship with the company and may lead to disciplinary actions or compensation of damage as provided for in the company's organisational model.

Violation of the single conduct rules set out herein by employees represents unlawful conduct to be disciplined pursuant to the relevant national sector labour contract.

Compliance with the Code by employees and contractors and their commitment to respecting the general principles of loyalty, correctness and performance of the employment contract in good faith are an essential part of their contractual commitments pursuant to article 2104 of the Italian Civil Code.

Conduct engaged in by employees that violates the law and conduct or procedural rules set out herein shall be taken to be unlawful conduct subject to disciplinary sanctions as provided for by the applicable regulations.

Compliance with the Code of Conduct by third parties (suppliers, consultants, etc) integrates their obligation to comply with diligence and good faith requirements in negotiations and when executing contracts with the company.

Violations committed by third parties shall be punished as provided for by the related engagements and contracts.

If one or more members of the board of directors or the members of the board of statutory auditors violate the Code, the supervisory body shall inform the entire board of directors and the board of statutory auditors that will take the necessary measures depending on the seriousness of the violation and in line with their powers envisaged by the law and/or the by-laws.


19. Circulation and revision of the Code of Ethics

MEGADYNE S.p.A. is committed to promoting and guaranteeing proper knowledge of the Code, circulating it to the addressees efficiently and through adequate information and communication activities.

This Code of Conduct is posted on the company's internet site.

The company is also committed to revising the content of this Code when required to do so by changes in the context, relevant regulations, the environment or company organisation.

The company's board of directors is responsible for all changes and/or integrations to this Code of Conduct.

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