Compliance program

DESCRIPTION OF THE COMPLIANCE PROGRAM

1. Purpose of the Program

The Compliance Program of Colt CZ Group SE (hereinafter referred to as “Colt CZ”) is intended to allow Colt CZ to comply with applicable laws and internal regulations aimed at doing business in an ethical and legally sound manner. The below text identifies and describes the framework documents and instruments of the Compliance Program, summarises areas of compliance covered by the program, explains the compliance instrument system, including the approach to training and internal audit.

2. Scope

The Compliance Program is, to its full extent, binding on Colt CZ, its individual employees and persons with a similar status, the Board of Directors and its members, the Supervisory Board and its members, the Audit Committee and its members, Colt CZ officers authorised to act for or on behalf of Colt CZ, and Colt CZ officers in charge of management or audit tasks (hereinafter referred to as the “Relevant Persons”).

The Compliance Program is addressed to the Relevant Persons in Colt CZ as well as other entities including but not limited to Colt CZ group companies, i.e. companies directly or indirectly controlled by a Colt CZ company, companies managed by a Colt CZ company, which are hereby requested by Colt CZ to implement the comprehensive Compliance Program.

3. Description of Framework Compliance Instruments

Strict compliance with the Compliance Program

Colt CZ strictly complies with the rules and principles set forth in the Compliance Program. Colt CZ promotes the principles of ethical behaviour and motivates the Relevant Persons to comply with them. Violations of the above rule are subject to Colt CZ's actions against the Relevant Persons.

Code of Conduct

The Code of Conduct clarifies the basic principles of conduct of the Relevant Persons in Colt CZ and its companies.

Specific rules for employees in the individual areas of compliance

These manuals give employees and the Relevant Persons a practical guidance designed to promote the objectives of Colt CZ and its companies for compliance with the relevant legal and moral rules in the following areas of compliance: anti-corruption, competition, protection of personal data.

Compliance Department

The department staff includes a compliance officer nominated by the Board of Directors to be in charge of the application, supervision and improvement of the Compliance Program.

Monitoring of laws and best practices in areas regulated by the Compliance Program

Colt CZ systematically monitors all changes in statutory obligations and compliance therewith. Measures are adopted and changes are implemented in the modified compliance rules in consideration of the monitoring results and in accordance with best practices.

Regular risk assessment

Colt CZ regularly reviews the rules for the individual areas of compliance, reduces associated risks and assesses the effectiveness of the existing Compliance Program.

Colt CZ will amend and elaborate on the existing rules and implement additional principles from time to time in consideration of the results of the measures taken.

Whistleblowing

Whistleblowing is a set of measures aimed at detecting unethical conduct by disclosing information to persons or entities (Compliance Department) that may examine and properly investigate the report and take action if necessary (“Compliance Line”).

Training and awareness

Awareness of the Relevant Persons of the principles and rules set for the individual areas of compliance is one of the fundamentals of the Compliance Program. For this purpose, Colt CZ will train all employees and the Relevant Persons correspondingly in all the specific areas of compliance. The training is organised in accordance with the Colt CZ risk profile and is adequate to the level of responsibility of the relevant employee.

4. Overview of Areas of Compliance

Anti-corruption

Anti-corruption laws criminalize corruption and improper influence aimed against someone who has been entrusted with acting on behalf of others. Violations may result in sizeable monetary penalties, imprisonment and, last but not least, the penalty of dissolution of the legal entity. The Anti-Corruption Policy provides guidance and restrictions in dealing with the public and private sectors in regard to hospitality, corporate events, gifts and charity.

Competition

Competition laws promote or are aimed at protecting the competition in the market by regulating behaviour that distorts competition. The Competition Compliance Policy provides guidance for dealing with competitors, suppliers, distributors and customers and for preventing abuse of market position.

Personal data protection

Data protection laws impose privacy protection procedures for the disclosure and processing of information concerning employees, customers and other individuals. The Privacy Policy provides guidance for major aspects of personal data protection, including data collection and processing, access to and retention of data as well as the quality, confidentiality and security of data.

WHISTLEBLOWING (COMPLIANCE LINE)

Being aware of its obligation to monitor and promote compliance with laws and moral and ethical principles, Colt CZ has implemented a uniform system for reporting suspicions of unethical conduct which many be used by anyone (employee, customer, partner etc.) to report any such conduct.

Conduct considered by Colt CZ to be unethical includes but is not limited to:

• violations of laws and regulations and compliance principles;
• fraudulent, improper and incorrect accounting books and reports, final statements, falsifying and influencing audit;
• violations of the rules of competition;
• acting in conflict of interest;
• misuse of trade secrets;
• conduct promoting or soliciting corruption, corruption itself;
• embezzlement and theft of financial assets and/or property;
• improper conduct in terms of occupational safety, fire protection, environmental protection;
• falsifying contracts;
• misuse of information in trade;
• accepting working conditions which are in violation of the rules of ethical conduct (such as violations of human rights);
• providing unethical and false information (in whistleblowing) with a view to cause harm to another person or company.

The Colt CZ commits to protect, within its powers, persons, who reported unethical conduct in good faith, from any retaliation or any form of discrimination from the reported party.

In addition, Colt CZ guarantees that no employee will be retaliated (dismissal, transfer to an inferior job position, bonus reductions etc.) for exercising ethical whistleblower activities.

Reporting of unlawful or unethical conduct

One of Colt CZ's most valuable assets is its integrity. Unlawful or unethical behaviour is unacceptable to us. Employees may report any instance, occurrence, or practice that they, in good faith, believe is inconsistent with, or in violation of, the Code of Conduct, including any suspected violations of the laws. To detect possible unlawful conduct, we have created an internal notification system in accordance with Act No. 171/2023 Coll., on the Protection of Whistleblowers (the "Act").

Who may report a notification through the internal notification system?

Notifications may be submitted by employees of Colt CZ via the internal notification system. In accordance with provisions of the Act, Colt CZ excluded from the possibility of using the internal notification system persons who are not employed at Colt CZ.

What is the purpose of the internal notification system?

Employees of Colt CZ may in good faith report suspected violations of legal regulations specified in the Act through the internal notification system.

Colt CZ protects whistleblowers’ identity and guarantees protection against retaliation. All reports are evaluated confidentially, impartially and the whistleblower is notified of the results of the investigation. In accordance with the Act, Colt CZ is not obliged to deal with anonymous reports.

How to make a notification through the internal notification system?

How will be handled the personal data?

Personal data is processed in accordance with personal data protection legislation. We keep records of notifications received to the extent of: (a) the date of receipt of the notification; (b) the name, surname, date of birth and contact address of the notifier, if known; (c) a summary of the content of the report and, if the identity is known, the person against whom the report was directed; (d) the date of completion of the assessment of the merits of the report or of the assessment of the report by the relevant person and the outcome of the assessment. Notifications received are kept for 5 years from their receipt.

Only authorized persons shall have access to the register in the case of notifications made through the internal notification system.