Group Guideline

Anti-Corruption

Responsibility: Dr. Winfried Zimmermann,

Group Human Resources and Controlling (V-PC)
Tel. No. 0049-40-6461-280

Contact: Mechtild Wigger,

Corporate Benefits and Policies (PK-GS)
Tel. No. 0049-40-6461-8984
Mechtild.Wigger@ottogroup.com

Cornelia Franck,
Labour Law & Collective Bargaining (PK-GS-AR)
Tel. No. 0049-40-6461-8262
Cornelia.Franck@ottogroup.com

As of: March 25, 2008

Overall coordination of guidelines:

Mechtild Wigger (see above)

Barbara Voss,
Guidelines and Organization (GS-RO)
Tel. No. 0049-40-6461-5223
Barbara.Voss@ottogroup.com
Group Guideline
Anti-Corruption

Contents
Page

A. Summarised content of the guideline 3

• Content of regulation 3

• Scope of application 3

• Actions required of the management and employees 3

B. The guideline in detail 4

1. Basic regulations 4

1.1 Basic Principle 4

1.2 Organizational measures to prevent irregularities 4
1.3 Reporting corrupt behaviour 4
1.4. Anti-corruption measures as part of compliance regulations 5
1.5. Breach of guideline 5

2. Special code of conduct – guiding principles – 6

2.1 „We treat business partners and authorities correctly.“ 6

2.2 „Business partners and authorities treat us correctly.“ 6
2.3 „We take a responsible approach towards gifts.“ 6
2.4 „We clearly separate business from private affairs.“ 6
2.5 „We avoid conflicts of interest arising from secondary employment and/
or equity investments.“ 7
2.6 „The Management decides about donations.“ 7

3. Contact persons 7

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Group Guideline
Anti-Corruption

A. Summarised content of the guideline

• Content of regulation

In order to fight and prevent corruption in business transactions the world business
organization, the International Chamber of Commerce (ICC), assisted by experts
from member companies covering different industrial sectors, introduced practical
rules of conduct in 1998. The Otto Group Guideline Anti-Corruption is based on
these ICC rules of conduct. The group guideline contains a general consensus on
corporate ethics and on executive staff, especially at management level, to act as
examples to others. They furthermore contain binding guiding principles for
executive staff and employees, rules on organizational measures within the
companies as well as control and sanctioning mechanisms up to penal action.

• Scope of application

This group guideline applies worldwide to all group companies belonging

to the Otto Group, regardless of their company form, size or organisational
structure. These include all companies in which the Otto Group holds a
direct or indirect share of more than 50 percent of the voting rights and/or
companies the Otto Group can exert a dominating influence over. Exceptions
must be approved by the Board; bilateral/multilateral agreements shall be made
with these companies.

For minority holdings the group guideline is not directly binding. The relevant
advisory boards shall be obliged to work towards introducing appropriate
monitoring and corporate governance rules.

These rules are principally only binding insofar as they don’t contradict country-
specific relevant laws or regulations (e.g. data protection provisions).

• Actions required of the management and employees

This group guideline is binding for all executives (including managerial staff) and
employees of the Otto Group.

Management members are obliged to implement these minimum guideline

requirements in their companies. All company managements and other executives
as well as all employees are furthermore obliged to ensure that these rules are
observed in their respective fields of responsibility. Executives have to inform
their employees about the content of this guideline and to raise awareness
regarding anti-corruption issues. Comprehensive communication and training
measures are recommended.

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Group Guideline
Anti-Corruption
In this context, all executives - managing directors, directors and executive
officers in particular - will have to act as examples to others. They will only fulfill
this requirement, if honesty and fairness towards employees, customers and
suppliers, competitors, authorities and the public are part of their day-to-day
working routine.

B. The guideline in detail

1. Basic regulations

1.1 Basic Principle

All executives and employees must behave in a way that will prevent any personal
dependency, obligation or exertion of influence.

Everybody’s business behaviour is expected to be based on fairness and

compliance with applicable law and other relevant regulations and in-house rules.
A solid, mutual-benefit business cooperation can only be ensured through fair
competition and strict observance of legal rules.

Under point 2: „Special code of conduct – guiding principles - “ the main

guiding principles for all executives and employees are summarised.

1.2 Organizational measures to prevent irregularities

To prevent irregularities, organizational measures must be taken, e.g. applying the

„four-eyes-principle“, separating functions such as decision-making, execution of
tasks and controlling, ensuring correct documentation, staff rotation in sensitive
areas or introducing regular checks with regard to alternative suppliers (cf. Group
Guideline “Internal Control System”).

1.3 Reporting corrupt behaviour

Each executive and employee is obliged to report suspected corrupt behaviour or

evidence of corrupt behaviour immediately.

To report suspected corrupt behaviour (or corrupt behaviour) within the Otto
Group, staff members can contact the managements of the divisions Security,
Group Auditing and Group Law and Real-estate, which are members of the
Compliance Committee (see page 7).

Each report shall be acted upon. The person reporting such an instance shall, if he
or she so wishes, remain anonymous. No one performing their duty to supply
information shall suffer any disadvantage from doing so.

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Group Guideline
Anti-Corruption
In addition, members of staff can contact an external ombudsman, independent
and confidential attorney Dr. Buchert, worldwide to report corrupt behaviour:

Attorney
Dr. Rainer Buchert
Rechtsanwaltsgesellschaft mbH
Rossertstr. 9
60323 Frankfurt am Main
Germany
Tel.No: 0049-69-97 14 19 20 oder 06105-92 13 55
Fax: 0049-69-97 14 19 13
Email: dr-buchert@dr-buchert.de

Attorneys are subject to professional law regulating the legal profession.

They are obliged to maintain secrecy with regard to information revealed by
their clients and have the right to refuse to give evidence to anyone, even to
authorities, courts of law and the police. Without prior consent from the
respective member of staff, a lawyer is not entitled to pass on any information to
any third party.

If approved by the board member for Group Human Resources and Controlling
(V-PC), additional company-specific confidentiality posts can be created. This is
recommended especially for non-German-speaking countries.

1.4. Anti-corruption measures as part of compliance regulations

Due to the many risks involved, measures to prevent and disclose corruption count
among the most important aspects of compliance. „Compliance“ means
conforming to all laws and in-house guidelines as well as observing all contractual
obligations (e.g. the code of conduct). Compliance covers all corporate areas and is
relevant for all major legal fields the company and its corporate body members are
affected by (e.g. antitrust law, capital market and foreign trade law).

In order to deal with compliance violations within the group systematically, a

cross-divisional compliance committee consisting of members from Security,
Group Law and Real-estate, Group Auditing, Corporate Benefits and Policies as
well as the Board Member for Group Human Resources and Controlling has been
established.

1.5. Breach of guideline

Breaches of this guideline and of legal provisions will result in disciplinary and
legal action being taken.

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Group Guideline
Anti-Corruption
2. Special code of conduct – guiding principles –

2.1 „We treat business partners and authorities correctly.“

The Otto Group won’t permit fair competition to be corrupted or

influenced/compromised e.g. by bribery, fraud, business espionage, theft or
business compulsion. There will be no agreements in breach of antitrust law.
Executives and employees who, dishonestly and through corrupt behaviour,
try to influence authorities or business partners will not be tolerated.

2.2 „Business partners and authorities treat us correctly.“

Any attempted exertion of influence must be reported to the management in

charge.

2.3 „We take a responsible approach towards gifts.“

Presents are generally not to be distributed or accepted.

As to the value of advertising gifts, it must be ensured that the recipient feels
in no way dependent or under any obligation by accepting such a present and
that no impression of exerting undue influence is created (in cases of doubt the
executive in charge must be contacted for approval).

Further note on point 2.3:

Executives and employees are principally prohibited from offering, granting,
asking or accepting advantages from persons or companies that maintain or
endeavour to establish business relations with a company to which this guideline
applies. Such personal advantages include any gifts of money in any form and
currency, other valuable gifts, loans, discounts, promotional bonuses, free or cut-
rate services, incentive trips or similar offers.

In some countries it may be considered customary or polite to give presents.

Special care must, however, be taken so as not to make a party dependent or put it
under any obligation and to ensure that the legal provisions applicable in the
respective country are observed.
In such an event, the executive in charge must be informed immediately. To decide
on how to proceed further, the management and the Member of the Executive
Board of the Otto Group, Human Resources and Controlling(V-PC) must be
contacted.

2.4 „We clearly separate business from private affairs.“

Private and business activities must be strictly separated.

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Group Guideline
Anti-Corruption

2.5 „We avoid conflicts of interest arising from secondary employment

and/ or equity investments.“

Secondary employment and equity investments held by executives, employees

and their close relatives, especially with business partners and competitors,
must be reported in writing and be approved by the respective group company.
Contractual and other provisions valid for the respective employment
agreement have to be taken into account.

2.6 „The Management decides about donations.“

The Otto Group stands by its responsibility in society. Donations must be

made within legal boundaries and must generally be approved by the
responsible management within its authority. A correct donation receipt to be
submitted by the recipient is required. Donation guidelines that have already
become effective in a group company must be observed.

3. Contact persons
Questions about the guideline:

Mechtild Wigger, Manager Corporate Benefits and Policies (PK-GS)*)

Tel. No. 0049-40-6461-8984
Mechtild.Wigger@ottogroup.com

Cornelia Franck, Manager Labour Law and Collective Bargaining (PK-GS-AR)

Tel. No. 0049-40-6461-8262
Cornelia.Franck@ottogroup.com

Reporting corrupt behaviour:

Hans-Josef Eiting, Manager Security (ZD-SI) *)

Tel. No. 0049-40-6461-8110
Hans-Josef.Eiting@otto.de

Andreas Deppendorf, Manager Group Auditing (PC-RV) *)

Tel. No. 0049-40-6461-8655
Andreas.Deppendorf@ottogroup.com.

Martin Mildner, Manager Group Law and Real-estate (FI-RK) *)

Tel. No. 0049-40-6461-444
Martin.Mildner@ottogroup.com
*)
Members of the Compliance Committee

contacts: date: page:

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Group Guideline
Anti-Corruption
External contact

Attorney
Dr. Rainer Buchert
Rechtsanwaltsgesellschaft mbH
Rossertstraße 9
60323 Frankfurt am Main
Germany
Tel.No: 0049-69-97 14 19 20 oder 06105-92 13 55
Fax: 0049-69-97 14 19 13
Email: dr-buchert@dr-buchert.de

Hamburg, March 2008

Hans-Otto Schrader Dr. Winfried Zimmermann

Chairman of the Executive Board Member of the Executive Board
and Chief Executive Officer Otto Group Group Human Resources and Controlling

contacts: date: page:

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Frau Wigger, PK-GS, 0049-40-6461-8984