Policy on Preventing Corruption

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Introduction. Definition of Corruption. Purpose of the Policy.

C&F S.A. and its subsidiaries and affiliates (hereinafter collectively: C&F) do not engage in, and thoroughly condemn, the use of corrupt practices. We expect similar behavior from our employees, associates, consultants, business partners, and all persons, bodies and organizations we come into contact with at work, in our business activities.

Corruption is the act of giving benefits, requesting, accepting, offering, promising benefits, or instigating or aiding and abetting such acts by any person, in any way, in Poland and internationally, in the public sector, in the private sector and in non-governmental organizations, as well as at any interface between these sectors, as long as it is done for a dishonest purpose and especially in violation of the applicable law; the term benefit means any undue gain, whether financial, personal or otherwise (further defined later in this policy).

Corruption occurs when a benefit is given, accepted, offered or promised with a view to procuring unfair action or inaction in the performance of a person’s responsibilities under employment, service, exercise of authority, performance of other duty, derived from a law, from an act of public authority, from a contract, or from other circumstances and events.

These activities are sometimes referred to as bribery, kickbacks, paid patronage, as well as corruption in the operation of public authorities, economic corruption and political corruption.

Corruption is forbidden by law, unacceptable on moral grounds, and extremely harmful in social and economic relations. Therefore, bearing in mind the applicable Polish, European and international laws, the good of C&F, maintaining good business standing and meeting the expectations of our business partners, and above all our values and ethical principles, we have implemented the following in this document (hereinafter: “Policy”) as a reflection of the zero tolerance principle for corruption.

Key Concepts

For the purposes of this Policy, the following terms will have the meanings as defined below:

1. corruption – the activity described above in the introduction to this Policy;
2. obligated party – C&F S.A., its affiliates and subsidiaries, as well as members of their bodies, employees, associates, consultants, suppliers, subcontractors, other business partners, and all persons and organizations with whose activities we come into contact at work, in our business activities;
3. benefit – is any kind of gain, including money and its equivalents (including securities, gift certificates, shares, stocks, or options on shares, stocks and property rights), things, property or personal benefits that is given, provided, accepted, offered, promised by or for the benefit of obligated persons, or third parties, in violation of the law and the provisions of the Policy;
4. warning signal – information or circumstance indicating that, with a significant probability, corruption has occurred, or that the obligated person may be taking actions bearing the hallmarks of misconduct;
5. misconduct – the occurrence of corruption or any other violation and/or potential violation by an obligated person of laws or internal regulations, including this Policy, or a condition that is conducive to the occurrence of such violations. Misconduct, therefore, is understood here not only as corruption, but also any illegal act or warning signal.

Prohibition of Corrupt Practices

It is forbidden to carry out any activity that constitutes corruption, including giving, soliciting, accepting, offering or promising any benefit, as well as claiming or using influence to transfer or obtain benefits for oneself, other persons or represented entities, including, in particular, doing so in order to obtain or maintain business transactions, market access, restrictions on competition (including collusive bidding), permits, authorizations, rights, licenses, concessions, business reputation, privileged position or to avoid investigation or prosecution.

Permissible Representation Expenses

It is permissible to provide benefits in the form of incurring representation expenses for the benefit of third parties, as long as this has a proper business rationale and is done in a transparent manner, only for the benefit of those involved in the business relationship, and provided that these activities are undertaken in good faith for the development of the business relationship, that their size and value is not excessive and is appropriate to the circumstances, that this is done in the course of ordinary business activities, and that doing so does not violate the law or good morals.

Representation expenses may not:

1. be received or given in the form of cash or cash equivalents (e.g., securities, loans, shares, stocks and similar property rights or options on shares, stocks and property rights),
2. be received by or given to participants in any bidding or purchasing processes,
3. be against the interests of C&F.

Special caution is required in incurring representation expenses in relations with officials and other persons acting in the capacity of public authority, including political parties and candidates for election to elective public bodies. With regard to such persons, it is forbidden to accept or give any benefits, gifts, souvenirs, invitations, including the incurring of representation expenses, in any case where these may be regarded as a means of influencing the performance of their duties in a manner contrary to the law or good morals, in particular if they may be perceived as a form of corruption aimed at influencing decisions related to official matters.

For representative purposes, it is permissible to give an item of minimal value which has a representative function.

It is forbidden to give, offer, or promise any benefit to reward an official or other person acting in an official capacity in exchange for the issuance of any decision or other administrative act in connection with their function, or for refraining to act.

Reporting Misconduct

Each obligated person should pay attention to the occurrence of warning signals and other types of misconduct, and is required to report misconduct immediately. In particular, this applies to misconduct involving:

1. failure to perform a person’s duties or abuse of powers, a person’s announcing that they will do so, and the occurrence of preparation, attempt, or execution of a criminal act;
2. failure to exercise due diligence as required under the circumstances, in accordance with the contract or provisions of the law;
3. the existence of a condition or situation which could promote or lead to the occurrence of corruption; in particular when (the following provided solely as an example): the obligated person proposes to invoice services, supplies or benefits that have not taken place, when the obligated person issues such invoices; when the obligated person requests a loan in relations other than those strictly related to financing by design; when the obligated person requests payment in cash, or non-cash, but in an unconventional manner; when the obligated person issues invoices with a vague description of the services provided or with a value significantly different from that expected;
4. the obligated person claims that in government bodies, political parties, or entities that are parties to business contracts there are persons acting or employed who are related, connected, or have a close personal relationship with the obligated person, and the obligated person recommends or prefers professional contacts or concluding a contract with such a person, or entrusting a specific activity to them;
5. an obligated person denies the right to provide information or conduct an anti-corruption audit, or refuses to provide information about themselves or their business practices when a request for such an audit or the provision of such information is warranted;
6. practices are used that involve procuring the services of intermediaries and the remuneration of the intermediary does not correspond to the scope of services, or the agent requests remuneration in excess of what is customary for such services, excessive commissions, non-standard upfront payments or other types of payments unconventional in form or nature are used.

Reports of misconduct or warning signals at C&F can be made via e-mail to: legal@candf.com.

Any report made in the correct manner, including anonymous reports, will be investigated. Inherently, investigating a case reported anonymously may be difficult or impossible due to the inability to obtain additional information.

Failure to comply with the obligation to report may result in adverse consequences for the obligated person who shirks this obligation.

Reports made in good faith are treated confidentially and investigated with due diligence. The person making a report in good faith is entitled to protection, including the protection of their identity. As long as a report is made in good faith, even if it turns out to be false, it cannot be the basis for consequences against the obligated person who made the report. The fact that a report was made cannot have any negative effect on bypassing for promotion, demotion, lack of assignment of work tasks, posting to another place of work, reduction in pay or termination of employment or cooperation.

Reports made in bad faith will be evaluated according to their legal and factual nature, and persons making them will not be protected. Bad faith occurs when the person making the report knows or, with due diligence, should know that the misconduct being reported is a false accusation or the report is based on false evidence.

All obligated persons are required to familiarize themselves with the contents of this Policy and confirm in writing that they agree to comply with it.