final assessment ultra electronics holdings...

ULTRA ELECTRONICS 19/11/14 HTTP://WWW.ULTRA-ELECTRONICS.COM/

FINAL ASSESSMENT

ULTRA ELECTRONICS HOLDINGS PLC

The following pages contain the detailed scoring for your company based on

public information.

The following table represents a summary of your scores:

Topic Number of

questions

% score based

on public

information

Leadership, Governance and Organisation 10 55%

Risk Management 5 70%

Company Policy and Codes 12 79.2%

Training 5 70%

Personnel and Helplines 7 64.3%

Total 39 67.9%

TI has found no evidence that the company is involved in offsets and has therefore removed the two relevant questions (A13a and A13b).

ULTRA ELECTRONICS HOLDINGS PLC 02/12/14 HTTP://WWW.ULTRA-ELECTRONICS.COM/

A1:

Does the company publish a statement from the Chief Executive Officer or the Chair of the Board supporting the ethics and anti-corruption agenda of the company?

Score:

1

Comments:

Based on public information, there is evidence that the company publishes a statement from both the Chief Executive Officer and Chair of the Board supporting the ethics and anti-corruption agenda of the company. TI has found evidence of two such clear statements in the last two years. The company therefore scores 1.

References:

Public:

Code of Ethics and Business Conduct, Policy Statement, p.1:

‘Code of Ethics and Business Conduct (“Ethics Code”)

It is the policy of Ultra Electronics that all employees will comply with all laws governing its operations and will conduct business affairs in an ethical manner. The company and its employees will maintain high standards of personal conduct and integrity at all times in carrying out the company’s affairs.

Ultra Electronics and its divisions and operating businesses require that all employees conduct themselves in ways that demonstrate high ethical standards in all of their dealings

with customers, suppliers, governments, the public and each other. The integrity of Ultra Electronics’ businesses rests on the integrity of its employees.

Rakesh Sharma

Chief Executive’

(p.2): ‘Ultra is committed to effective corporate governance. Having the right people, doing the right things and in the right way is at the core of Ultra’s compliance framework. The Board sets the tone for ethical standards across the Group. High standards of integrity and ethical behaviour are expected from every employee. Ultra’s values of responsibility, authority and accountability and an established commitment of ‘delivering on our promises’, promote and endorse this behaviour.


Douglas Caster

Chairman’.

http://www.ultra-electronics.com/uploads/business-documents/Ethics_within_Ultra_v7.pdf

Annual Report (2013), p.49:

‘Chairman’s Governance Statement

Ultra is committed to effective corporate governance. Having the right people, doing the right things and in the right way, is at the core of Ultra’s compliance framework. The Board sets the tone for ethical standards across the Group. High standards of integrity and ethical behaviour are expected from every employee. Ultra’s values of responsibility, authority and accountability and an established commitment of ‘delivering on our promises’, promote and endorse this behaviour.

During the year, the Board has been engaged in ensuring the Group’s governance framework meets the changes introduced by the September 2012 edition of the UK Corporate Governance Code (the Code) and the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the Regulations). The strength of our embedded governance framework and our underlying processes mean, in the main, only changes in how we report the Board’s activities within the Annual Report and Accounts, are required. These changes can been seen in our Audit Committee Report on page 60, our Directors’ Remuneration Report on page 63 and the Strategic Report on pages 4 to 47. Our additional reporting includes the statement, made by the Directors on pages 58 and 59, that they consider the Annual Report and Accounts, taken as a whole, to be fair, balanced and understandable and providing the information necessary for shareholders to assess the Group’s performance, business model and strategy. The processes which underpin and support the Directors’ confidence in making this statement (which are explained in this Corporate Governance Report) are long-established and fully embedded in Ultra’s governance framework.

Having the right people in the right roles extends to Ultra’s Board, which is composed of individuals from a wide range of professional and sector experience. This ensures that we have a truly balanced Board, with the right skills and experience to contribute to, and challenge, decision- making. During the year, Mary Waldner joined the Board as the Group Finance Director. Mary has a broad range of experience in a number of sectors and an excellent track record of achievement.

Last year, I wrote to Ultra’s major shareholders advising them that, in view of the change of Financial Director and internal auditors in the year, the Board had decided to extend Mr Chris Bailey’s tenure, as Non-Executive Director, into a tenth year. He will continue as Chair of the Remuneration, Audit and Nominations Committees. Chris is a highly-experienced, former large plc Finance Director, who brings vital specialist and general management expertise to Ultra’s Board. He will provide continuity and risk reduction of the finance function during this period. The Board expects to appoint a replacement finance specialist Non-Executive Director to seek election at the Annual General Meeting in the spring of 2015.

Douglas Caster CBE, Chairman 28 February 2014’



http://www.ultra-electronics.com/investors/annual-reports.aspx



A2:

Does the company’s Chief Executive Officer or the Chair of the Board demonstrate a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the Chief Executive Officer or the Chair of the Board demonstrate a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company.

References:

Public:

NA


A3:

Does the company’s Chief Executive Officer demonstrate a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company, actively promoting the ethics and anti-corruption agenda at all levels of the company structure?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the company’s Chief Executive Officer demonstrates a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company, actively promoting the ethics and anti-corruption agenda at all levels of the company structure.

References:

Public:

TI notes:

Code of Ethics and Business Conduct Ultra’s Policy Statement on Ethics and Business Conduct

‘The integrity of Ultra Electronics’ businesses rests on the integrity of its employees.

Rakesh Sharma

Chief Executive’




A4:

Does the company publish a statement of values or principles representing high standards of business conduct, including honesty, trust, transparency, openness, integrity and accountability?

Score:

1

Comments:

Based on public information, there is limited evidence that the company publishes a statement of values representing high standards of business conduct. Integrity and accountability are mentioned in the Chairman’s Governance Statement. However, this falls short of the range of values sought by the question. The company therefore scores 1.

References:

Public:

Code of Ethics and Business Conduct, Policy Statement, p.1:

‘Code of Ethics and Business Conduct (“Ethics Code”)

It is the policy of Ultra Electronics that all employees will comply with all laws governing its operations and will conduct business affairs in an ethical manner. The company and its employees will maintain high standards of personal conduct and integrity at all times in carrying out the company’s affairs.

Ultra Electronics and its divisions and operating businesses require that all employees conduct themselves in ways that demonstrate high ethical standards in all of their dealings

with customers, suppliers, governments, the public and each other. The integrity of Ultra Electronics’ businesses rests on the integrity of its employees.

Rakesh Sharma

Chief Executive’

(p.2):

‘Ultra defines its culture as the values, role models, processes, procedures and behaviours of its employees which drive the Group’s success. Many individuals join Ultra each year through organic growth and acquisitions. Ultra is committed to ensuring that its culture is not diluted as the Group grows. To achieve this, Ultra has identified four cultural behaviours of its people which are highly valued and encouraged. These are leadership,


entrepreneurship, audacity and paranoia. Together, they are known within the Group as LEAP. Prospective employees are assessed against these values as part of Ultra’s rigorous recruitment process’.


Company Website: About us – Working at Ultra:

‘Culture

Ultra defines its culture as the values, role models, processes, procedures and behaviours of its employees which drive the Group’s success. Many individuals join the Ultra team each year, through organic growth, natural staff turnover and acquisitions. Ultra is committed to ensuring that its culture is not diluted as the Group grows. To achieve this, Ultra has identified four cultural behaviours of its people which are highly valued and encouraged. These are leadership, entrepreneurship, audacity and paranoia. Together, they are known within the Group as LEAP.

Growth through engagement

The Group is focused on helping customers identify their true needs by developing long-term relationships based on performance excellence and meeting commitments. To do this, Ultra utilises an additional, complementary set of behaviours, called LAUNCH.

Continuing to ensure that Ultra has positively engaged people, is a key factor in driving the performance of the Group forward and Ultra businesses provide a diverse range of opportunities for their employees to become involved with the local community.

LEAP

Ultra has identified four cultural behaviours of its people which are highly valued and encouraged. These are leadership, entrepreneurship, audacity and paranoia. Together they are known as LEAP.

Leadership

determine the future direction and vision for the business communicate inspirationally that future inspiring and energising the business team, customers, suppliers and colleagues stimulating an innovative culture to release creativity enabling change to provide a greater and faster return to the business.

Entrepreneurship

encouraging the whole business to be entrepreneurial seeking competitive advantage through the differentiation of offerings ensuring competitions skewed in Ultra’s favour, while behaving ethically seeking to enhance the offering by teaming either internally or externally

Audacity

embrace innovation to inject rapid growth into the business being daring or bold thinking of the bigger picture or opportunity being prepared to take a leap forward

Paranoia

considering risks and leaving no stone unturned to secure market opportunities recognising threats and making it difficult for competitors to steal Ultra’s established position constantly worrying about satisfying customers’ real needs considering every possible angle when



strategising bids to enhance Ultra’s competitive position’

http://www.ultra-electronics.com/about-us/working-at-ultra.aspx

Company website: Ethical business conduct

‘Ultra is committed to ethical business conduct and requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business, including those pertaining to

anti-bribery and corruption practices

competition and anti-trust laws

Ultra’s corporate ethics policy, encompassing gifts and hospitality, is the benchmark against which all Ultra’s businesses report on compliance on a monthly basis, with Board level review biannually.’

http://www.ultra-electronics.com/about-us/corporate-responsibility/ethical%20business%20conduct.aspx


‘Chairman’s Governance Statement

Ultra is committed to effective corporate governance. Having the right people, doing the right things and in the right way, is at the core of Ultra’s compliance framework. The Board sets the tone for ethical standards across the Group. High standards of integrity and ethical behaviour are expected from every employee. Ultra’s values of responsibility, authority and accountability and an established commitment of ‘delivering on our promises’, promote and endorse this behaviour.

During the year, the Board has been engaged in ensuring the Group’s governance framework meets the changes introduced by the September 2012 edition of the UK Corporate Governance Code (the Code) and the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the Regulations). The strength of our embedded governance framework and our underlying processes mean, in the main, only changes in how we report the Board’s activities within the Annual Report and Accounts, are required. These changes can been seen in our Audit Committee Report on page 60, our Directors’ Remuneration Report on page 63 and the Strategic Report on pages 4 to 47. Our additional reporting includes the statement, made by the Directors on pages 58 and 59, that they consider the Annual Report and Accounts, taken as a whole, to be fair, balanced and understandable and providing the information necessary for shareholders to assess the Group’s performance, business model and strategy. The processes which underpin and support the Directors’ confidence in making this statement (which are explained in this Corporate Governance Report) are long-established and fully embedded in Ultra’s governance framework.

Having the right people in the right roles extends to Ultra’s Board, which is composed of individuals from a wide range of professional and sector experience. This ensures that we have a truly balanced Board, with the right skills and experience to contribute to, and challenge, decision- making. During the year, Mary Waldner joined the Board as the Group

http://www.ultra-electronics.com/about-us/working-at-ultra.aspx




Finance Director. Mary has a broad range of experience in a number of sectors and an excellent track record of achievement.

Last year, I wrote to Ultra’s major shareholders advising them that, in view of the change of Financial Director and internal auditors in the year, the Board had decided to extend Mr Chris Bailey’s tenure, as Non-Executive Director, into a tenth year. He will continue as Chair of the Remuneration, Audit and Nominations Committees. Chris is a highly-experienced, former large plc Finance Director, who brings vital specialist and general management expertise to Ultra’s Board. He will provide continuity and risk reduction of the finance function during this period. The Board expects to appoint a replacement finance specialist Non-Executive Director to seek election at the Annual General Meeting in the spring of 2015.

Douglas Caster CBE, Chairman 28 February 2014’.


A5:

Does the company belong to one or more national or international initiatives that promote anti-corruption or business ethics with a significant focus on anti-corruption?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the company belongs to one or more national or international initiatives that promote anti-corruption or business ethics with a significant focus on anti-corruption.

References:

Public:

NA


A6:

Has the company appointed a Board committee or individual Board member with overall corporate responsibility for its ethics and anti-corruption agenda?

Score:

2

Comments:

Based on public information, there is evidence that the company has appointed the Ethics Overview Committee with overall corporate responsibility for its ethics and anti-corruption agenda.

References:

Public:

Code of Ethics and Business Conduct, p.4:

‘Business Performance Reports every month, each and every business within the Ultra Group reports on its compliance with Ultra’s Compliance Policies. Any non-compliances are investigated by the Company Secretary & General Counsel.

Board monitoring

Biannually, the Board reviews the businesses’ compliance with Ultra’s Compliance Policies.

Ethics Overview Committee

The Ethics Overview Committee was formed in 2008 with the remit to provide independent advice and scrutiny of Ultra’s business activity, providing assurance that the Group’s current and planned undertakings are conducted in a manner consistent with the legislative environment and are transparent. The Committee comprises six permanent members, three of whom, including the Chairman, are independent. Independent members of Ultra’s Ethics

Overview Committee comprise of:

•David Shattock, ex-Chief Constable in Command of Dyfed Powys and Avon & Somerset forces;

•Martin Bell, journalist and ex-independent MP for Tatton: and

•Major General Tim Cross (Retired), who commanded a Division of the UK Field Army.

The Committee members from Ultra are:

•Rakesh Sharma, Group Chief Executive;


•Sharon Harris, Group Company Secretary & General Counsel; and

•Chris Gane, Managing Director of the Aircraft & Vehicle Systems Division.

To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively within the remit of the independent members.

The Committee meets quarterly. It provides assurance that Ultra’s business is being conducted in line with the Group’s policies, processes and relevant legislation. It does this through discussions with senior managers, receiving reports and conducting visits to Ultra’s businesses. The Committee undertakes a formal review of business activities. During these reviews, the independent members provide advice and guidance on the appropriateness of target markets and customers and on potential teaming partners. The Committee also considers the reports that come through the Ethics Point hotline.

Internal Audit

The internal audit function, which is independent of the businesses and reports directly to the Audit Committee, provides assurance to the Board of the effectiveness of the Group’s internal control environment. The programme of work undertaken by the internal audit function is approved in advance by the Audit Committee. All significant business units are audited by the internal audit function at least once every 2 years, while other businesses are audited on a 3 year cycle. In addition, all newly acquired free-standing businesses are audited within a year of their acquisition date. The internal audit function presents its findings to the Audit Committee twice annually. Progress reports on follow-up remedial actions are reported regularly to the Audit Committee. The internal audit function confirms whether appropriate action has been taken to address the risks when it next visits the business concerned’.


Anti-Corruption and Bribery Policy (June 2011), pp. 5-6:

‘14. WHO IS RESPONSIBLE FOR THE POLICY?

14.1 The board of directors has overall responsibility for ensuring this policy

complies with our legal and ethical obligations, and that all those under our

control comply with it.

14.2 The Group Company Secretary has primary and day-to-day responsibility for

implementing this policy and for monitoring its use and effectiveness and dealing with any queries on its interpretation. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.

15. MONITORING AND REVIEW

15.1 The Group Company Secretary will monitor the effectiveness and review the

implementation of this policy, regularly considering its suitability, adequacy and effectiveness. Any improvements identified will be made as soon as possible. Internal control systems and procedures will be subject to regular audits to provide assurance that



they are effective in countering bribery and corruption.’

http://www.ultra-electronics.com/uploads/business-documents/Anti-corruption_and_Bribery_Policy.pdf

Company Website: Corporate Responsibility

‘Independent Ethics Overview Committee

An independent Ethics Overview Committee provides guidance, advice to, and scrutiny of Ultra’s businesses. The Committee provides assurance that Ultra’s business is being conducted in line with the Group’s policies, processes and in accordance with relevant legislation. It does this through discussions with senior managers, receiving reports and visits to Ultra businesses.

The Committee comprises six permanent members, three of whom, including the Chairman, are independent. To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively within the remit of the independent members.’





A7:

Has the company appointed a person at a senior level within the company to have responsibility for implementing the company’s ethics and anti-corruption agenda, and who has a direct reporting line to the Board?

Score:

2

Comments:

Based on public information, there is evidence that the company has appointed the General Counsel with responsibility for implementing the ethics and anti-corruption agenda of the company. The individual is identified as Sharon Harris.

References:

Public:

Code of Ethics and Business Conduct, p. 2:

‘All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.

(p.4):

‘Business Performance Reports every month, each and every business within the Ultra Group reports on its compliance with Ultra’s Compliance Policies. Any non-compliances are investigated by the Company Secretary & General Counsel.

Board monitoring





•David Shattock, ex-Chief Constable in Command of Dyfed Powys and Avon & Somerset


forces;







To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively within the remit of the independent members’.











implementation of this policy, regularly considering its suitability, adequacy and effectiveness. Any improvements identified will be made as soon as possible. Internal control systems and procedures will be subject to regular audits to provide assurance that they are effective in countering bribery and corruption.’


Company Website, Structure:

http://www.ultra-electronics.com/businesses/structure.aspx


'Ethical business conduct





Ultra remains committed to achieving and sustaining a prominent role in ethical business conduct. To support these aims, the Group has focused its initiatives on three core areas:

• meeting and exceeding the legal and ethical standards

• providing guidance and support to employees

• an independent Ethics Overview Committee to offer advice and guidance

Meeting legal and ethical standards Ultra requires that all employees, businesses and all third parties who act on Ultra’s behalf must comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business.

Ultra is committed to operating in accordance with all legislative requirements, including those pertaining to anti-bribery and corruption practices, the relevant national export control regulations and any competition and anti-trust laws. Ultra has a corporate ethics policy which encompasses a gifts and hospitality policy. All the individual businesses are required to report on compliance every month. In addition, the Board reviews compliance twice a year. Although ultimate responsibility for the Group’s ethics policy lies with the Board, Managing Directors and Presidents of the individual businesses have responsibility for the implementation and control of the policy.'




A8:

Is there regular Board level monitoring and review of the performance of the company’s ethics and anti-corruption agenda?

Score:

2

Comments:

Based on public information, there is evidence of regular Board level monitoring and review of the performance of divisional compliance performance reports. Ethics and anti-corruption policies are reviewed biannually by the Board and there is an Ethics Overview Committee that meets quarterly.

References:

Public:


‘Monitoring and Support

The operation of the Ethics Code is monitored by the Ultra Group Board of directors twice annually via a compliance report which is submitted by each Division. Businesses are responsible for conducting periodic reviews to ensure that high standards of ethical behaviour are maintained across all parts of the Group. Businesses are responsible for ensuring that appropriate support arrangements are in place including, but not limited to, advice and training’.

(p.2): ‘All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.

(p.4): ‘Business Performance Reports every month, each and every business within the Ultra Group reports on its compliance with Ultra’s Compliance Policies. Any non-compliances are investigated by the Company Secretary & General Counsel.

Board monitoring



The Ethics Overview Committee was formed in 2008 with the remit to provide independent


advice and scrutiny of Ultra’s business activity, providing assurance that the Group’s current and planned undertakings are conducted in a manner consistent with the legislative environment and are transparent. The Committee comprises six permanent members, three of whom, including the Chairman, are independent. Independent members of Ultra’s Ethics











Internal Audit

The internal audit function, which is independent of the businesses and reports directly to the Audit Committee, provides assurance to the Board of the effectiveness of the Group’s internal control environment. The programme of work undertaken by the internal audit function is approved in advance by the Audit Committee. All significant business units are audited by the internal audit function at least once every 2 years, while other businesses are audited on a 3 year cycle. In addition, all newly acquired free-standing businesses are audited within a year of their acquisition date. The internal audit function presents its findings to the Audit Committee twice annually. Progress reports on follow-up remedial actions are reported regularly to the Audit Committee. The internal audit function confirms whether appropriate action has been taken to address the risks when it next visits the business concerned’.
















'• Chief Executive’s Report

covers the Group’s operational performance, particular performance issues in each Division, the overall outlook for the Group and health and safety performance

• Finance Director’s Report

financial forecasts for the half and full year, review of cash performance to date and future forecasts, review of banking covenants, review of analysts’ views of the Group, major shareholdings and major share buyers and sellers

• Major projects report

• Marketing Director’s report

• Human Resources report

• Review of current acquisition activity and approval of any offers for proposed acquisitions

• Business presentation by a Managing Director

Other important topics which are covered on a routine basis during the year are:

Other significant matters addressed by the Board in

2012 included:

• Approval of annual and interim financial statements and accompanying regulatory announcements

• Review and approval of the annual budget

• Review and approval of major capital investment projects and bids

• A special full day Board meeting is held to review the five-year strategic plan, with presentations given by the Executive Team and discussions held on significant matters identified in the proposed plan

• Six-monthly review of Compliance Reports prepared by Divisional Managing Directors and Presidents

• Annual reviews of health & safety and environmental reports summarising the position




across all Group businesses

• Approval of any changes to the rules of operation of the Group’s employee share plans

• Effectiveness of internal controls

• Review of the risk register

• Post acquisition reviews

• Board evaluation

• Corporate governance updates

• Approval of a new revolving credit facility

• Consideration of the Group’s tax position

• Structure, policies and procedures to address internal cyber-security and potential new cyber-security offerings

• Appointment of Moelis & Company as joint financial adviser with J.P. Morgan Cazenove

• Corporate Social Responsibility, in particular Ultra’s approach to the proposed mandatory carbon reporting legislation

• Corporate pension strategy'


A8(a):

Is there a formal, clear, written plan in place on which the review of the ethics and anti-corruption agenda by the Board or senior management is based, and evidence of improvement plans being implemented when issues are identified?

Score:

1

Comments:

Based on public information, there is evidence of a plan that guides the Board when reviewing the anti-corruption policy and the Code of Ethics. However, there is no further evidence of monitoring indicators on which improvement plans might be based. The company therefore scores 1.

References:

Public:





(p.4): ‘Business Performance Reports every month, each and every business within the Ultra Group reports on its compliance with Ultra’s Compliance Policies. Any non-compliances are investigated by the Company Secretary & General Counsel.

Board monitoring















Internal Audit

The internal audit function, which is independent of the businesses and reports directly to the Audit Committee, provides assurance to the Board of the effectiveness of the Group’s internal control environment. The programme of work undertaken by the internal audit function is approved in advance by the Audit Committee. All significant business units are audited by the internal audit function at least once every 2 years, while other businesses are audited on a 3 year cycle. In addition, all newly acquired free-standing businesses are audited within a year of their acquisition date. The internal audit function presents its findings to the Audit Committee twice annually. Progress reports on follow-up remedial actions are reported regularly to the Audit Committee. The internal audit function confirms whether appropriate action has been taken to address the risks when it next visits the business concerned.

At Ultra, risk is identified, collated, assessed and managed at the most appropriate level of the business (Board, Executive or Business level) as part of the annual strategic planning process. Annually, businesses identify risks to the successful delivery of their strategic plan and these are assessed at the divisional level. Risks which are corporate in nature or which span Ultra businesses, are elevated to the Executive Team for management. Resulting


strategic risks are assessed and reviewed by the Board. Risks are reviewed regularly to ensure that they are relevant and appropriate mitigations are in place. Review of business activity and the management of resultant risk are also an integral part of Ultra’s processes. Risks are considered and managed as business decisions are made’.

















A9:

Does the company have a formal process for review and where appropriate update its policies and practices in response to actual or alleged instances of corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company conducts regular reviews of its anti-corruption policy and updates its procedures if they are found to be ineffective in preventing corruption.

References:

Public:





(pp.4-5): ‘The Committee meets quarterly. It provides assurance that Ultra’s business is being conducted in line with the Group’s policies, processes and relevant legislation. It does this through discussions with senior managers, receiving reports and conducting visits to Ultra’s businesses. The Committee undertakes a formal review of business activities. During these reviews, the independent members provide advice and guidance on the appropriateness of target markets and customers and on potential teaming partners. The Committee also considers the reports that come through the Ethics Point hotline.


Internal Audit

The internal audit function, which is independent of the businesses and reports directly to the Audit Committee, provides assurance to the Board of the effectiveness of the Group’s internal control environment. The programme of work undertaken by the internal audit function is approved in advance by the Audit Committee. All significant business units are audited by the internal audit function at least once every 2 years, while other businesses are audited on a 3 year cycle. In addition, all newly acquired free-standing businesses are audited within a year of their acquisition date. The internal audit function presents its findings to the Audit Committee twice annually. Progress reports on follow-up remedial actions are reported regularly to the Audit Committee. The internal audit function confirms whether appropriate action has been taken to address the risks when it next visits the business concerned.

At Ultra, risk is identified, collated, assessed and managed at the most appropriate level of the business (Board, Executive or Business level) as part of the annual strategic planning process. Annually, businesses identify risks to the successful delivery of their strategic plan and these are assessed at the divisional level. Risks which are corporate in nature or which span Ultra businesses, are elevated to the Executive Team for management. Resulting strategic risks are assessed and reviewed by the Board. Risks are reviewed regularly to ensure that they are relevant and appropriate mitigations are in place. Review of business activity and the management of resultant risk are also an integral part of Ultra’s processes. Risks are considered and managed as business decisions are made’.

















A9(a):

Does the company have a formal anti-corruption risk assessment procedure implemented enterprise-wide?

Score:

2

Comments:

Based on public information, there is evidence that the company has a formal anti-corruption risk assessment procedure implemented enterprise-wide.

References:

Public:


‘Anti-Corruption Risk Assessment Procedure

Ultra applies due diligence procedures in respect of persons who perform or will perform services for or on its behalf (“Third Parties”) in order to mitigate bribery risks. A proportionate and risk based approach is taken. Each prospective agreement is classified as high or low risk based on the Transparency International Risk Perceptions Index according to the country in which the Third Party is operating on Ultra’s behalf. Ultra conducts a minimum level of due diligence on all Third Parties, including:

Internet based searches–records of such search results are retained and any unusual facts emerging from such searches are followed up.

•References are obtained e.g. national trade associations and Government’s overseas trade ministries.

In addition, in higher risk situations, Ultra’s businesses engage a third party search company to carry out a more detailed search and any unusual facts or red flags raised by such search are followed up. Due diligence on Third Parties is repeated at intervals of no more than 2 years. Agreements contain anti-bribery provisions which provide for termination in the event of anti-bribery breaches. Ultra operates a bid approval process, which includes an assessment of anti-bribery compliance risks’.

‘Internal Audit

The internal audit function, which is independent of the businesses and reports directly to the Audit Committee, provides assurance to the Board of the effectiveness of the Group’s


internal control environment. The programme of work undertaken by the internal audit function is approved in advance by the Audit Committee. All significant business units are audited by the internal audit function at least once every 2 years, while other businesses are audited on a 3 year cycle. In addition, all newly acquired free-standing businesses are audited within a year of their acquisition date. The internal audit function presents its findings to the Audit Committee twice annually. Progress reports on follow-up remedial actions are reported regularly to the Audit Committee. The internal audit function confirms whether appropriate action has been taken to address the risks when it next visits the business concerned.

At Ultra, risk is identified, collated, assessed and managed at the most appropriate level of the business (Board, Executive or Business level) as part of the annual strategic planning process. Annually, businesses identify risks to the successful delivery of their strategic plan and these are assessed at the divisional level. Risks which are corporate in nature or which span Ultra businesses, are elevated to the Executive Team for management. Resulting strategic risks are assessed and reviewed by the Board. Risks are reviewed regularly to ensure that they are relevant and appropriate mitigations are in place. Review of business activity and the management of resultant risk are also an integral part of Ultra’s processes. Risks are considered and managed as business decisions are made’.



‘Risk is identified, collated, assessed and managed at the most appropriate level of the business (Board, Executive or Business level) as part of the annual strategic planning round. Resulting risks are reviewed regularly to ensure that appropriate mitigations are in place.

Ultra encourages its businesses to challenge the market through innovation and to exhibit audacity. Profitable growth is not achieved without considered risk, so review of business activity and the management of resultant risk has become an integral part of Ultra’s processes. Risks are considered and managed as business decisions are made, so that the Group’s collective exposure is well understood and controlled.’



(p.36): ‘Annually, businesses identify risks to the successful delivery of their strategic plan and these are assessed at the divisional level. Risks which are corporate in nature or which span Ultra businesses, are elevated to the Executive Team for management. Resulting strategic risks (shown below and over the page) are assessed and reviewed at Board level’.


A10:

Does the company have a formal anti-corruption risk assessment procedure for assessing proposed business decisions, with clear requirements on the circumstances under which such a procedure should be applied?

Score:

1

Comments:

Based on public information, there is some evidence that the company has a formal risk assessment procedure for assessing compliance in proposed business decisions. However, details of the process, including the full circumstances under which the process would apply, are not available publicly. The company therefore scores 1.

References:

Public:


‘Ultra adopts a rigorous integration process for newly acquired businesses which includes training on Ultra’s policies’.

(p.3): ‘Ultra’s businesses comply with the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctions in regard to any person named on the Specifically Designated Nationals and Blocked Persons list (SDN) as well the Comprehensive and Non-Comprehensive sanctions programmes which prohibit or limit financial transactions and other dealings involving certain named countries. It is the responsibility of each business unit to proactively monitor existing and proposed transactions against the latest published lists. Businesses conduct due diligence on third parties to ensure compliance with OFAC and keep records of all checks made’.

(p.5): ‘Anti-Corruption Risk Assessment Procedure







Annual Report (2013), p 34:

‘Risk is identified, collated, assessed and managed at the most appropriate level of the business (Board, Executive or Business level) as part of the annual strategic planning round. Resulting risks are reviewed regularly to ensure that appropriate mitigations are in place. Ultra encourages its businesses to challenge the market through innovation and to exhibit audacity. Profitable growth is not achieved without considered risk, so review of business activity and the management of resultant risk has become an integral part of Ultra’s processes. Risks are considered and managed as business decisions are made, so that the Group’s collective exposure is well understood and controlled.’



(p.45):


A11:

Does the company conduct due diligence that minimises corruption risk when selecting or reappointing its agents?

Score:

2

Comments:

Based on public information, there is evidence that the company conducts due diligence on third parties, which is repeated at intervals of no more than 2 years.

References:

Public:


‘Ultra’s businesses comply with the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctions in regard to any person named on the Specifically Designated Nationals and Blocked Persons list (SDN) as well the Comprehensive and Non-Comprehensive sanctions programmes which prohibit or limit financial transactions and other dealings involving certain named countries. It is the responsibility of each business unit to proactively monitor existing and proposed transactions against the latest published lists. Businesses conduct due diligence on third parties to ensure compliance with OFAC and keep records of all checks made’.





In addition, in higher risk situations, Ultra’s businesses engage a third party search company


to carry out a more detailed search and any unusual facts or red flags raised by such search are followed up. Due diligence on Third Parties is repeated at intervals of no more than 2 years. Agreements contain anti-bribery provisions which provide for termination in the event of anti-bribery breaches. Ultra operates a bid approval process, which includes an assessment of anti-bribery compliance risks’.


Anti-Corruption and Bribery Policy (June 2011), p. 1:

‘1.5 We have identified that Agents Agreements (including Resellers, Distributors, Teaming Partners and Joint Venture Partners) are a particular risk for our business. To address those risks we maintain a list of all Agents Agreements and undertake further investigations into those Agents Agreements in territories which we have classed as being of high risk.

1.6 In this policy, third party means any individual or organisation you come into contact with during the course of your work for us, and includes actual and potential clients, customers, suppliers, distributors, business contacts, agents, advisers, and government and public bodies, including their advisors, representatives and officials, politicians and political parties.’

(pp. 8-9): ‘Schedule Potential risk scenarios: "red flags"

The following is a list of possible red flags that may arise during the course of you working for us and which may raise concerns under various anti-bribery and anti-corruption laws. The list is not intended to be exhaustive and is for illustrative purposes only.

If you encounter any of these red flags while working for us, you must report them promptly to your line manager or to the Ultra Electronics Employee Hotline

(a) you become aware that a third party engages in, or has been accused of engaging in, improper business practices;

(b) you learn that a third party has a reputation for paying bribes, or requiring that bribes are paid to them, or has a reputation for having a "special relationship" with foreign government officials;

(c) a third party insists on receiving a commission or fee payment before committing to sign up to a contract with us, or carrying out a government function or process for us;

(d) a third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;

(e) a third party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;

(f) a third party requests an unexpected additional fee or commission to "facilitate" a service;

(g) a third party demands lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services;

(h) a third party requests that a payment is made to "overlook" potential legal violations;

(i) a third party requests that you provide employment or some other advantage to a friend or relative;

(j) you receive an invoice from a third party that appears to be nonstandard or customised;



(k) a third party insists on the use of side letters or refuses to put terms agreed in writing;

(l) you notice that we have been invoiced for a commission or fee payment that appears large given the service stated to have been provided;

(m) a third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to us;

(n) you are offered an unusually generous gift or offered lavish hospitality by a third party’





A12:

Does the company have contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption?

Score:

1

Comments:

Based on public information, there is some evidence that the company has contractual rights and processes for the behaviour and audit of agents with respect to countering corruption. However, there is no explicit evidence of contractual terms in place or the exact procedure of monitoring of third parties. The company therefore scores 1.

References:

Public:


‘Ultra’s businesses comply with the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctions in regard to any person named on the Specifically Designated Nationals and Blocked Persons list (SDN) as well the Comprehensive and Non-Comprehensive sanctions programmes which prohibit or limit financial transactions and other dealings involving certain named countries. It is the responsibility of each business unit to proactively monitor existing and proposed transactions against the latest published lists. Businesses conduct due diligence on third parties to ensure compliance with OFAC and keep records of all checks made’.



Internet based searches–records of such search results are retained and any unusual facts


emerging from such searches are followed up.







(pp. 8-9): ‘Schedule Potential risk scenarios: "red flags"

The following is a list of possible red flags that may arise during the course of you working for us and which may raise concerns under various anti-bribery and anti-corruption laws. The list is not intended to be exhaustive and is for illustrative purposes only.

If you encounter any of these red flags while working for us, you must report them promptly to your line manager or to the Ultra Electronics Employee Hotline

(a) you become aware that a third party engages in, or has been accused of engaging in, improper business practices;

(b) you learn that a third party has a reputation for paying bribes, or requiring that bribes are paid to them, or has a reputation for having a "special relationship" with foreign government officials;

(c) a third party insists on receiving a commission or fee payment before committing to sign up to a contract with us, or carrying out a government function or process for us;

(d) a third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;

(e) a third party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;

(f) a third party requests an unexpected additional fee or commission to "facilitate" a service;

(g) a third party demands lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services;



(h) a third party requests that a payment is made to "overlook" potential legal violations;

(i) a third party requests that you provide employment or some other advantage to a friend or relative;

(j) you receive an invoice from a third party that appears to be nonstandard or customised;

(k) a third party insists on the use of side letters or refuses to put terms agreed in writing;

(l) you notice that we have been invoiced for a commission or fee payment that appears large given the service stated to have been provided;

(m) a third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to us;

(n) you are offered an unusually generous gift or offered lavish hospitality by a third party’


Annual Report (2013), p. 44:

‘Meeting legal and ethical standards Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business’.




A13:

Does the company make clear to contractors, sub-contractors, and suppliers, through policy and contractual terms, its stance on bribery and corruption and the consequences of breaches to this stance?

Score:

1

Comments:

Based on public information, there is some evidence that the company makes clear to contractors, sub-contractors, and suppliers, through policy and contractual terms, its stance on bribery and corruption. However, there is no evidence of contractual terms that will allow sanctions in the event of a breach. The company therefore scores 1.

References:

Public:


‘Ultra Electronics and its divisions and operating businesses require that all employees conduct themselves in ways that demonstrate high ethical standards in all of their dealings with customers, suppliers, governments, the public and each other. The integrity of Ultra Electronics’ businesses rests on the integrity of its employees’.





In addition, in higher risk situations, Ultra’s businesses engage a third party search company to carry out a more detailed search and any unusual facts or red flags raised by such search are followed up. Due diligence on Third Parties is repeated at intervals of no more than 2


years. Agreements contain anti-bribery provisions which provide for termination in the event of anti-bribery breaches. Ultra operates a bid approval process, which includes an assessment of anti-bribery compliance risks’.





(p. 6): ‘13.2 Our zero-tolerance approach to bribery and corruption must be communicated to all suppliers, contractors and business partners at the outset of our business relationship with them and as appropriate thereafter.’


Annual Report (2013), p. 44:

'Meeting legal and ethical standards Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business.'





A13(a):

Does the company explicitly address the corruption risks associated with offset contracting?

Score:

NA

Comments:

Based on public information, there is no readily available evidence that the company engages in offset contracting.

References:

Public:

NA


A13(b):

Does the company conduct due diligence that minimises corruption risk when selecting its offset partners and offset brokers?

Score:

NA

Comments:

Based on public information, there is no readily available evidence that the company engages in offset contracting.

References:

Public:

NA


A15:

Does the company have an anti-corruption policy that prohibits corruption in its various forms?

Score:

2

Comments:

Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms.

References:

Public:

Anti-Corruption and Bribery Policy (June 2011), pp.1-2:

‘1. POLICY STATEMENT

1.1 It is our policy to conduct all of our business in an honest and ethical manner.

We take a zero-tolerance approach to bribery and corruption and are committed to:-

(a) acting professionally, fairly and with integrity in all our business

dealings and relationships wherever we operate, and

(b) implementing and enforcing effective systems to counter bribery.

1.2 We will uphold all laws relevant to countering bribery and corruption in all the jurisdictions in which we operate. We are bound by the laws of the UK, including the Bribery Act 2010, in respect of our conduct both in the UK and elsewhere in the world.

1.3 The purpose of this policy is to:

(a) set out our responsibilities, and of those working for us, in observing

and upholding our position on bribery and corruption; and

(b) provide information and guidance to those working for us on how to recognise and deal with bribery and corruption issues.

1.4 Bribery and corruption are punishable in the UK for individuals by up to ten years imprisonment and if we are found to have taken part in corruption we could face an unlimited fine, be excluded from tendering for public contracts and face damage to our reputation. We therefore take our legal responsibilities very seriously.

2. WHO IS COVERED BY THE POLICY?

This policy applies to all individuals working at all levels and grades, including senior


managers, officers, directors, employees (whether permanent, fixed term or temporary), consultants, contractors, trainees, seconded staff, home workers, casual workers and agency staff, volunteers, interns, agents, sponsors, or any other person associated with us, or any of our subsidiaries or their employees, wherever located (collectively referred to as workers in this policy).

3. WHAT IS BRIBERY?

A bribe is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or personal advantage. (including examples)’

(p. 4):

5. WHAT IS NOT ACCEPTABLE?

It is not acceptable for you (or someone on your behalf) to:

(a) give, promise to give, or offer, a payment, gift or hospitality with the expectation or hope that a business advantage will be received, or to reward a business advantage already given;

(b) give, promise to give, or offer, a payment, gift or hospitality to a government official, agent or representative to "facilitate" or expedite a routine procedure;

(c) accept payment from a third party that you know or suspect is offered with the expectation that it will obtain a business advantage for them;

(d) accept a gift or hospitality from a third party if you know or suspect that it is offered or provided with an expectation that a business advantage will be provided by us in return;

(e) threaten or retaliate against another worker who has refused to commit a bribery offence or who has raised concerns under this policy; or

(f) engage in any activity that might lead to a breach of this policy

6. FACILITATION PAYMENTS AND KICKBACKS

6.1 We do not make, and will not accept, facilitation payments or "kickbacks" of any kind. Facilitation payments are typically small, unofficial payments made to secure or expedite a routine government action by a government official.

They are not commonly paid in the UK, but are common in some other jurisdictions.

6.2 If you are asked to make a payment on our behalf, you should always be mindful of what the payment is for and whether the amount requested is proportionate to the goods or services provided. You should always ask for a receipt which details the reason for the payment. If you have any suspicions, concerns or queries regarding a payment, you should raise these with your line manager.

6.3 Kickbacks are typically payments made in return for a business favour or advantage. All workers must avoid any activity that might lead to, or suggest, that a facilitation payment or kickback will be made or accepted by us.’



‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters’.




(p.6): ‘All employees and Directors are required to complete Ultra’s on-line anti-bribery training within one week of joining Ultra. Businesses confirm compliance with this requirement through the monthly Business Performance Reports. Any non-compliance with this requirement is investigated by the Company Secretary & General Counsel. Additional bespoke anti-bribery training is provided for those in higher risk roles, for example those who carry out overseas business. Ultra adopts a zero tolerance approach to bribery and corruption.

Additional bespoke anti-bribery training is provided for those in higher risk roles’.


Company Website: Corporate Responsibility:


Ultra is committed to ethical business conduct and requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business, including those pertaining to



Ultra’s corporate ethics policy, encompassing gifts and hospitality, is the benchmark against which all Ultra’s businesses report on compliance on a monthly basis, with Board level review biannually.'






A16:

Is the anti-corruption policy explicitly one of zero tolerance?

Score:

2

Comments:

Based on public information, there is evidence that the company’s anti-corruption policy is one of a zero-tolerance.

References:

Public:


‘1. POLICY STATEMENT

1.1 It is our policy to conduct all of our business in an honest and ethical manner.

We take a zero-tolerance approach to bribery and corruption and are committed to:-

(a) acting professionally, fairly and with integrity in all our business

dealings and relationships wherever we operate, and

(b) implementing and enforcing effective systems to counter bribery.’



‘Ultra adopts a zero tolerance approach to bribery and corruption’.




A17:

Is the company's anti-corruption policy easily accessible to Board members, employees, contracted staff and any other organisations acting with or on behalf of the company?

Score:

1

Comments:

Based on public information, there is evidence that Board members, employees, contracted staff and other organisations can publicly access the Anti-Corruption and Bribery Policy and the Code of Ethics and Business Conduct. Further information is available on the Company’s intranet. However, it is not clear that these documents are available in languages other than English. The company therefore scores 1.

References:

Public:

Code of Ethics and Business Conduct, p. 3:

‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee.’


Anti-Corruption and Bribery Policy (June 2011):

http://www.ultra-electronics.com/uploads/business-documents/Anti-

corruption_and_Bribery_Policy.pdf

Company Website, Ethical Business Conduct:

http://www.ultra-electronics.com/about-us/corporate-

responsibility/ethical%20business%20conduct.aspx







A17(a):

Is the company’s anti-corruption policy easily understandable and clear to Board members, employees and third parties?

Score:

2

Comments:

Based on public information, there is evidence that the company’s policies are written in comprehensive language that is easily understandable and clear.

References:

Public:





http://www.ultra-electronics.com/uploads/business-documents/Anti-

corruption_and_Bribery_Policy.pdf


http://www.ultra-electronics.com/about-us/corporate-

responsibility/ethical%20business%20conduct.aspx







A18:

Does the anti-corruption policy explicitly apply to all employees and

members of the Board?

Score:

2

Comments:

Based on public information, there is evidence that the company has an anti-corruption policy and it applies to all employees and Board members.

References:

Public:





‘2. WHO IS COVERED BY THE POLICY?

This policy applies to all individuals working at all levels and grades, including senior managers, officers, directors, employees (whether permanent, fixed term or temporary), consultants, contractors, trainees, seconded staff, home workers, casual workers and agency staff, volunteers, interns, agents, sponsors, or any other person associated with us, or any of our subsidiaries or their employees, wherever located (collectively referred to as workers in this policy).’


Company Website: Corporate Responsibility


Ultra is committed to ethical business conduct and requires all employees, businesses and





third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business, including those pertaining to



Ultra’s corporate ethics policy, encompassing gifts and hospitality, is the benchmark against which all Ultra’s businesses report on compliance on a monthly basis, with Board level review biannually.'



A20:

Does the company have a policy on potential conflicts of interest, and does it apply to both employees and board members?

Score:

1

Comments:

Based on public information, there is evidence that the company has a policy on potential conflicts of interest. However, there is no clear definition of conflicts of interest or further guidance and examples. The company therefore scores 1.

References:

Public:


‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee. Conflicts of interest (situations in which competing interests may impair an employee’s ability to make objective and unbiased business decisions on behalf of the company) are sought to be avoided through Ultra’s internal approvals and financial processes. Employees are encouraged to discuss potential or actual conflicts of interest with their Line Manager. Ultra adopts a rigorous integration process for newly acquired businesses which includes training on Ultra’s policies. All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.



'Conflicts of interest

The Group has in place procedures for managing conflicts of interest. Ultra’s Articles of Association also contain provisions to allow the Directors to authorise potential conflicts of interest so that a Director is not in breach of his or her duty under company law. If Directors become aware that they have an interest, directly or indirectly, in an existing or proposed transaction with Ultra, they should notify the Board in line with the Articles of Association.



Directors have a continuing duty to update any changes to their conflicts of interest.'


A21:

Does the company have a policy for the giving and receipt of gifts to ensure that such transactions are bona fide and not a subterfuge for bribery?

Score:

2

Comments:

Based on public information, there is evidence that the company regulates giving and receiving of gifts, with clear set upper limits.

References:

Public:

Gifts and Corporate Hospitality Policy (June 2011), p.1:

‘The purpose of this policy is to set out our rules on the giving and receiving of gifts and corporate hospitality in order to protect our reputation and ensure that we operate both lawfully and ethically.

This policy applies to all employees and to contractors, consultants and agency workers.

Offering gifts

You are allowed to offer modest non-cash gifts to business partners where appropriate for marketing purposes or, as long as the gift is occasional and not regular or repeated, other purposes such as expressing thanks or making a goodwill gesture. For example, we may offer promotional material such as pens, calendars etc for marketing purposes or send a small token gift to a business partner as a Christmas gift.

If you want to offer a gift worth more than £25 or $40 you must obtain prior approval from your Managing Director or President who will decide if the proposed gift is legitimate, proportionate and reasonable.

You should never offer:

ifts;

(pp. 1-2):


Accepting gifts

You are allowed to accept token gifts from business partners or potential business partners where this constitutes legitimate and reasonable marketing or where it is a legitimate goodwill gesture. For example, you can accept promotional items such as desk calendars or pens or occasional gestures such as a bunch of flowers from a customer to express thanks or offer congratulations.

You should never accept:

or

or

influence as a result of the gift (for example, a gift from a potential business partner shortly before you make a decision over whether or not to award them a contract); or

terms or the spirit of our equal opportunities/dignity at work policy.

Be aware that a ‘gift’ includes food, drink and other corporate hospitality if the host is not

present. For example, if you are invited to attend a major sporting event by one of our suppliers but the supplier will not be present then the tickets are a gift.

If you are offered a gift in circumstances which make you concerned or uncomfortable then you should raise this with your line manager. It is our policy and your responsibility to act ethically at all times.

If any unauthorised gift is offered to you then you should decline it politely explaining that our policy does not permit you to accept it, unless to do so would be embarrassing or insulting (for example because the gift is offered in public) in which case you should accept the gift and then refer the situation to your manager. The company is likely to write to the donor of the gift explaining our policy and returning the item.

Gifts and overseas travel

If you are travelling overseas on business to an area where gifts are an important part of business culture then you will be allowed and expected to participate in gift giving and receiving but this still needs to be proportionate and reasonable from an Ultra perspective. You should seek guidance from your Managing Director or President.’

(p.3):

‘Recording and disclosing

Each Ultra business must maintain a record of all gifts above £25 or $40 and all

corporate hospitality above £100 or $160 whether these are given or received. These

must be reported to the person who the Managing Director or President designates as

having responsibility for maintaining this record.

Rakesh Sharma

Chief Executive


30 June 2011’

http://www.ultra-electronics.com/uploads/business-documents/GiftsandCorporateHospitalityPolicyGeneral.pdf

Anti-Corruption Policy (June 2011), pp.3-4:

4. GIFTS AND HOSPITALITY

4.1 This policy does not prohibit normal and appropriate hospitality (given and received) to or from third parties. However, corporate hospitality is subject to the Ultra Electronics Gifts and Corporate Hospitality Policy (see separate Policy document)

4.2 The giving or receipt of gifts is not prohibited, if the following requirements are

met:

(a) It complies with the Ultra Electronics Gifts and Corporate Hospitality

Policy.

(b) it is not made with the intention of influencing a third party to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage, or in explicit or implicit exchange for favours or benefits;

(c) it complies with local law;

(d) it is given in our name, not in your name;

(e) it does not include cash or a cash equivalent (such as gift certificates

or vouchers);

(f) it is appropriate in the circumstances. For example, in some

countries it is customary for small gifts to be given at Christmas time;

(g) taking into account the reason for the gift, it is of an appropriate type

and value and given at an appropriate time;

(h) it is given openly, not secretly; and

(i) gifts should not be offered to, or accepted from, government officials

or representatives, or politicians or political parties.

4.3 We appreciate that the practice of giving business gifts varies between countries and regions and what may be normal and acceptable in one region may not be in another. The test to be applied is whether in all the circumstances the gift or hospitality is reasonable and justifiable. The intention behind the gift should always be considered.






(d) accept a gift or hospitality from a third party if you know or suspect that it is offered or




provided with an expectation that a business advantage will be provided by us in return;


(f) engage in any activity that might lead to a breach of this policy’



‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee’.







Ultra’s corporate ethics policy, encompassing gifts and hospitality, is the benchmark against which all Ultra’s businesses report on compliance on a monthly basis, with Board level review biannually’.

Company website: Corporate Responsibility

‘Behaviours for growth

The Group will continue to differentiate itself from its competitors through its technical innovation and high standards of ethical business conduct. Underpinning this cultural drive is a strong ethical policy which is mandatory for all employees across the entire Group. Ultra educates its employees on anti-bribery and corruption policies, including gifts and hospitality practices. In the period, Ultra decided not to pursue business in areas where it was not satisfied that its ethical standards would be maintained.'








A22:

Does the company’s anti-corruption policy include a statement on the giving and receipt of hospitality that ensures that such transactions are bona fide and not a subterfuge for bribery?

Score:

2

Comments:

Based on public information, there is evidence that the company regulates the giving and receiving of hospitality, with set upper limits and an approval procedure in place.

References:

Public:

Gifts and Corporate Hospitality Policy (June 2011), pp.2-3:

‘Corporate hospitality and entertainment

Our policy is to participate in corporate hospitality and entertainment where this will promote good relationships with our business partners.

For example, entertaining business partners at social events during major trade shows would be acceptable. In addition, working lunches with business partners are appropriate, as long as they are in line with the expenses policy of your local Ultra business.

However, corporate hospitality and entertainment, including attendance at dinners or sporting events, should not be offered or accepted if:

it is on a scale which is disproportionate to the legitimate business value of the relationship; or

when you know they are not permitted to accept it; or

it in circumstances when acceptance would influence your business judgment or put you in a difficult position; or

pute or contravene the terms or the spirit of our equal opportunities/dignity at work policy.


If you unsure as to whether a particular invitation is appropriate, you should seek guidance from your Managing Director or President

Expenses policy

Each Ultra business has a local expenses policy. Employees in each business must adhere to that policy. In particular it is essential that employees should obtain receipts for expenses as required by the local policy.’

(p. 3):

‘Recording and disclosing

Each Ultra business must maintain a record of all gifts above £25 or $40 and all corporate hospitality above £100 or $160 whether these are given or received. These must be reported to the person who the Managing Director or President designates as having responsibility for maintaining this record.

Rakesh Sharma

Chief Executive

30 June 2011’


Anti-Corruption Policy (June 2011), pp.3-4:

4. GIFTS AND HOSPITALITY

4.1 This policy does not prohibit normal and appropriate hospitality (given and received) to or from third parties. However, corporate hospitality is subject to the Ultra Electronics Gifts and Corporate Hospitality Policy (see separate Policy document)

4.2 The giving or receipt of gifts is not prohibited, if the following requirements are met:

(a) It complies with the Ultra Electronics Gifts and Corporate Hospitality

Policy.

(b) it is not made with the intention of influencing a third party to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage, or in explicit or implicit exchange for favours or benefits;

(c) it complies with local law;

(d) it is given in our name, not in your name;

(e) it does not include cash or a cash equivalent (such as gift certificates or vouchers);

(f) it is appropriate in the circumstances. For example, in some countries it is customary for small gifts to be given at Christmas time;

(g) taking into account the reason for the gift, it is of an appropriate type and value and given at an appropriate time;

(h) it is given openly, not secretly; and

(i) gifts should not be offered to, or accepted from, government officials

or representatives, or politicians or political parties.

4.3 We appreciate that the practice of giving business gifts varies between countries and regions and what may be normal and acceptable in one region may not be in another. The




test to be applied is whether in all the circumstances the gift or hospitality is reasonable and justifiable. The intention behind the gift should always be considered.






(d) accept a gift or hospitality from a third party if you know or suspect that it is offered or provided with an expectation that a business advantage will be provided by us in return;





‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee’.







Ultra’s corporate ethics policy, encompassing gifts and hospitality, is the benchmark against which all Ultra’s businesses report on compliance on a monthly basis, with Board level review biannually’.

Company website: Corporate Responsibility

‘Behaviours for growth

The Group will continue to differentiate itself from its competitors through its technical





innovation and high standards of ethical business conduct. Underpinning this cultural drive is a strong ethical policy which is mandatory for all employees across the entire Group. Ultra educates its employees on anti-bribery and corruption policies, including gifts and hospitality practices. In the period, Ultra decided not to pursue business in areas where it was not satisfied that its ethical standards would be maintained.'





A23:

Does the company have a policy that explicitly prohibits facilitation payments?

Score:

2

Comments:

Based on public information, there is evidence that the company prohibits facilitation payments and provides guidance on what to do when asked for such payments.

References:

Public:


‘5. WHAT IS NOT ACCEPTABLE?


((b) give, promise to give, or offer, a payment, gift or hospitality to a government official, agent or representative to "facilitate" or expedite a routine procedure;’

(p. 4):

‘6. FACILITATION PAYMENTS AND KICKBACKS

6.1 We do not make, and will not accept, facilitation payments or "kickbacks" of any kind. Facilitation payments are typically small, unofficial payments made to secure or expedite a routine government action by a government official.

They are not commonly paid in the UK, but are common in some other jurisdictions.

6.2 If you are asked to make a payment on our behalf, you should always be mindful of what the payment is for and whether the amount requested is proportionate to the goods or services provided. You should always ask for a receipt which details the reason for the payment. If you have any suspicions, concerns or queries regarding a payment, you should raise these with your line manager.

6.3 Kickbacks are typically payments made in return for a business favour or advantage. All workers must avoid any activity that might lead to, or suggest, that a facilitation payment or kickback will be made or accepted by us.’





A24:

Does the company prohibit political contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent? Does the company record and publicly disclose all political contributions?

Score:

2

Comments:

Based on public information, there is evidence that the company prohibits political contributions.

References:

Public:


‘Ultra does not make contributions to political parties. Ultra Electronics (USA) Group Inc. has established a Political Action Committee (the “PAC”). The PAC is a voluntary, not-for-profit, unincorporated political association which allows eligible U.S. personnel and directors of Ultra companies in the U.S. to contribute personal funds to support and encourage the election to federal office of persons who support the business concerns of the Ultra Electronics corporate family, as well as its activities in the Defense, Energy, and Transportation markets. All contributions are made on an individual and voluntary basis. The PAC is operated in compliance with legal and regulatory requirements. Ultra only makes charitable donations that are legal and ethical under local laws and practices.

Ultra does not make contributions to political parties.’


Anti-Corruption and Bribery Policy (June 2011), p.1:

‘1.5 We have identified that Agents Agreements (including Resellers, Distributors,

Teaming Partners and Joint Venture Partners) are a particular risk for our business. To address those risks we maintain a list of all Agents Agreements and undertake further investigations into those Agents Agreements in territories which we have classed as being of high risk.

1.6 In this policy, third party means any individual or organisation you come into

contact with during the course of your work for us, and includes actual and potential clients,



customers, suppliers, distributors, business contacts, agents, advisers, and government and public bodies, including their advisors, representatives and officials, politicians and political parties.’

(p. 4): ‘7. DONATIONS

We do not make contributions to political parties. We only make charitable donations that are legal and ethical under local laws and practices. No donation in excess of the limit outlined in the Group Operating Manual must be offered or made without the prior approval of the Group Charities Committee.’



'Charitable and political contributions

The Group contributed £40,000 (2011: £58,000) to charities and made no contributions for political purposes in the year.'

Company website: Terms of Reference for Main Board

'11.1 Approval of policies, including:

o Statement of Policy on Ethics and Business Conduct

o Share dealing code

o Health and safety policy

o Environmental policy

o Communications policy, including procedures for the release of price sensitive information

o Corporate social responsibility policy

o Charitable donations policy

12. Other

12.1 The making of political donations.'




A25:

Does the company have a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent, and discloses the issues on which the company lobbies?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the company has a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent, or discloses the issues on which the company lobbies.

References:

Public:

NA


A25(a):

Does the company prohibit charitable contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent?

Score:

1

Comments:

Based on public information, there is evidence that the company regulates charitable contributions in order to prevent undue influence or other corrupt intent. However, there is no readily available evidence that the recipients of donations are publicly declared. The company therefore scores 1.

References:

Public:


‘7. DONATIONS

We do not make contributions to political parties. We only make charitable donations that are legal and ethical under local laws and practices. No donation in excess of the limit outlined in the Group Operating Manual must be offered or made without the prior approval of the Group Charities Committee.’



‘All charitable donations require the consent of the business’ MD/President. The Chief Executive’s consent is also required where the donation is greater than £2,500 (where there is no matching employee contribution) or greater than £10,000 (where there is a matching employee contribution’



'Charitable and political contributions

The Group contributed £40,000 (2011: £58,000) to charities and made no contributions for political purposes in the year.'





Company website: Terms of Reference of the Board of Sub-Committee

'11.1 Approval of policies, including:

o Statement of Policy on Ethics and Business Conduct

o Share dealing code

o Health and safety policy

o Environmental policy

o Communications policy, including procedures for the release of price sensitive information

o Corporate social responsibility policy

o Charitable donations policy

12. Other

12.1 The making of political donations.'


A26:

Does the company provide written guidance to help Board members and

employees understand and implement the firm’s ethics and anti-corruption

agenda?

Score:

1

Comments:

Based on public information, there is some evidence that the company provides guidance on anti-corruption to employees. However, it is not clear from publicly available evidence that this includes scenarios and examples to ensure better understanding of the policies in place. The company therefore scores 1.

References:

Public:

Anti-Corruption and Bribery Policy (June 2011).

Gifts and Corporate Hospitality Policy (June 2011).


‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee.’




A27:

Does the company have a training programme that explicitly covers anti-corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company has a training programme that covers anti-corruption.

References:

Public: Code of Ethics and Business Conduct, p.1:

‘Responsibilities

In particular, Managing Directors and Presidents must ensure that:

(…)

. Through appropriate communication and/or training programmes, employees are aware of and understand the Ethics Code’.



(p.2): ‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee. Conflicts of interest (situations in which competing interests may impair an employee’s ability to make objective and unbiased business decisions on behalf of the company) are sought to be avoided through Ultra’s internal approvals and financial processes. Employees are encouraged to discuss potential or actual conflicts of interest with their Line Manager. Ultra adopts a rigorous integration process for newly acquired


businesses which includes training on Ultra’s policies. All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.

(p.6): ‘All employees and Directors are required to complete Ultra’s on-line anti-bribery training within one week of joining Ultra. Businesses confirm compliance with this requirement through the monthly Business Performance Reports. Any non-compliance with this requirement is investigated by the Company Secretary & General Counsel. Additional bespoke anti-bribery training is provided for those in higher risk roles, for example those who carry out overseas business. Ultra adopts a zero tolerance approach to bribery and corruption. Training on Ultra’s Compliance Policies is conducted periodically throughout the year by the Company Secretary & General Counsel. Commercial Managers within the businesses also conduct bespoke training on Ultra’s Compliance Policies within their respective businesses’.



‘13. TRAINING AND COMMUNICATION

13.1 Training on this policy forms part of the induction process for all new workers.

All existing workers for whom this is relevant will receive regular, appropriate

training on how to implement and adhere to this policy.’

(pp.6-7): ‘14.2 The Group Company Secretary has primary and day-to-day responsibility for

implementing this policy and for monitoring its use and effectiveness and dealing with any queries on its interpretation. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.’


Annual report (2013), p.45:


Ultra is committed to ethical business conduct. In this regard, the Group:

. complies with legal and ethical standards in all countries in which it operates

. provides guidance and training to employees

. has the benefit of an independent Ethics Overview Committee which offers advice and guidance

. Meeting legal and ethical standards

. Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable





laws and regulations of the countries in which it does business. Ultra is committed to operating in accordance with all legislative requirements, including those pertaining to anti-bribery and corruption practices, relevant national export control

regulations and competition and anti-trust laws. Ultra has a corporate ethics policy, which encompasses a gifts and hospitality policy. All the Ultra’s businesses are required to report on compliance with the corporate ethics policy monthly.

. In addition, the Board reviews compliance with the corporate ethics policy twice a year.

. Providing guidance and trainingto employees

. The Group has continued to strengthen its policies, processes and training to ensure employees have the clear guidance they need in identifying and managing ethical matters.

A Group-wide independent, confidential web- and telephone-based hotline anonymously enables all employees to report concerns about possible improprieties and other compliance issues.

Reports made to the hotline are compiled by the independent operator and forwarded to the Chairman of the Audit Committee (or for US businesses, forwarded to the Directors of the Special Security Arrangement Board or Proxy Board as appropriate) for action. Any employee found to be in breach of the ethics policy is subject to appropriate disciplinary action.

Independent Ethics Overview Committee

An independent Ethics Overview Committee provides independent guidance, advice to, and scrutiny of Ultra’s businesses. The Committee provides assurance that Ultra’s business is being conducted in line with the Group’s policies, processes and in accordance with relevant legislation. It does this through discussions with senior managers, receiving reports and visits to Ultra businesses.

The Committee comprises six permanent members, three of whom, including the Chairman, are independent. To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively within the remit of the independent members.'


A28:

Is anti-corruption training provided in all countries where the company operates or has company sites?

Score:

2

Comments:

Based on public information, there is evidence that the company provides online training on anti-corruption and that training is provided to all employees.

References:


‘Responsibilities


(…)




(p.2): ‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee. Conflicts of interest (situations in which competing interests may impair an employee’s ability to make objective and unbiased business decisions on behalf of the company) are sought to be avoided through Ultra’s internal approvals and financial processes. Employees are encouraged to discuss potential or actual conflicts of interest with their Line Manager. Ultra adopts a rigorous integration process for newly acquired


businesses which includes training on Ultra’s policies. All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.









Meeting legal and ethical standards

Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business. Ultra is committed to operating in accordance with all legislative requirements, including those pertaining to anti-bribery and corruption practices, relevant national export control regulations and competition and anti-trust laws. Ultra has a corporate ethics policy, which encompasses a gifts and hospitality policy. All the Ultra’s businesses are required to report on compliance with the corporate ethics policy monthly.

In addition, the Board reviews compliance with the corporate ethics policy twice a year.

Providing guidance and trainingto employees

The Group has continued to strengthen its policies, processes and training to ensure employees have the clear guidance they need in identifying and managing ethical matters.


Reports made to the hotline are compiled by the independent operator and forwarded to the Chairman of the Audit Committee (or for US businesses, forwarded to the Directors of



the Special Security Arrangement Board or Proxy Board as appropriate) for action. Any employee found to be in breach of the ethics policy is subject to appropriate disciplinary action.



The Committee comprises six permanent members, three of whom, including the Chairman, are independent. To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively within the remit of the independent members’.


A29:

Does the company provide targeted anti-corruption training to members of the Board?

Score:

1

Comments:

Based on public information, there is evidence that the company provides anti-corruption training to Directors. However, it is not clear how often this training is refreshed. The company therefore scores 1.

References:


‘Responsibilities


(…)




(p.2): ‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee. Conflicts of interest (situations in which competing interests may impair an employee’s ability to make objective and unbiased business decisions on behalf of the company) are sought to be avoided through Ultra’s internal approvals and financial processes. Employees are encouraged to discuss potential or actual conflicts of interest with


their Line Manager. Ultra adopts a rigorous integration process for newly acquired businesses which includes training on Ultra’s policies. All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.





A30:

Does the company provide tailored ethics and anti-corruption training for employees in sensitive positions?

Score:

1

Comments:

Based on public information, there is evidence that the company provides tailored anti-corruption training to employees in higher risk positions, such as the ones conducting business overseas. However, it is unclear which other positions might receive this training. The company therefore scores 1.

References:

Public: Code of Ethics and Business Conduct, p.6: ‘All employees and Directors are required to complete Ultra’s on-line anti-bribery training within one week of joining Ultra. Businesses confirm compliance with this requirement through the monthly Business Performance Reports. Any non-compliance with this requirement is investigated by the Company Secretary & General Counsel. Additional bespoke anti-bribery training is provided for those in higher risk roles, for example those who carry out overseas business. Ultra adopts a zero tolerance approach to bribery and corruption. Training on Ultra’s Compliance Policies is conducted periodically throughout the year by the Company Secretary & General Counsel. Commercial Managers within the businesses also conduct bespoke training on Ultra’s Compliance Policies within their respective businesses’.










A31:

Does the company have a clear and formal process by which employees declare conflicts of interest?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the company has a clear and formal process by which employees declare conflicts of interest. TI notes that employees are instructed to discuss conflicts of interest with a line manager. However, there is no evidence that this is done in writing.

References:

Public:

TI notes:


‘Ultra’s Compliance Policies (including Anti-Bribery, Competition & Anti-Trust, and Gifts & Hospitality) provide guidance to Ultra’s employees on legal and ethical matters. Ultra’s Compliance Policies are stored on Ultra’s intranet which can be accessed by every employee. Conflicts of interest (situations in which competing interests may impair an employee’s ability to make objective and unbiased business decisions on behalf of the company) are sought to be avoided through Ultra’s internal approvals and financial processes. Employees are encouraged to discuss potential or actual conflicts of interest with their Line Manager. Ultra adopts a rigorous integration process for newly acquired businesses which includes training on Ultra’s policies. All policies are reviewed and updated (as required) annually by the Company Secretary & General Counsel. In addition, any reported breach of Ultra’s policies and/or corruption would result in a review of Ultra’s ethics processes and procedures’.


'Conflicts of interest

The Group has in place procedures for managing conflicts of interest. Ultra’s Articles of Association also contain provisions to allow the Directors to authorise potential conflicts of interest so that a Director is not in breach of his or her duty under company law. If Directors become aware that they have an interest, directly or indirectly, in an existing or proposed


transaction with Ultra, they should notify the Board in line with the Articles of Association. Directors have a continuing duty to update any changes to their conflicts of interest.'


A32:

Is the company explicit in its commitment to apply disciplinary procedures to employees, Directors and Board members found to have engaged in corrupt activities?

Score:

2

Comments:

Based on public information, there is evidence that the company is explicit in its commitment to apply disciplinary procedures to all employees found to have engaged in corrupt activities. The Anti-Corruption and Bribery Policy also applies to directors. The company therefore scores 2.

References:

Public:


‘2. WHO IS COVERED BY THE POLICY?

This policy applies to all individuals working at all levels and grades, including senior managers, officers, directors, employees (whether permanent, fixed term or temporary), consultants, contractors, trainees, seconded staff, home workers, casual workers and agency staff, volunteers, interns, agents, sponsors, or any other person associated with us, or any of our subsidiaries or their employees, wherever located (collectively referred to as workers in this policy).’

(pp. 3-4): ‘5. WHAT IS NOT ACCEPTABLE?


(e) threaten or retaliate against another worker who has refused to commit a bribery offence or who has raised concerns under this policy;


(p. 5): ‘8.4 Any employee who breaches this policy will face disciplinary action, which could result in dismissal for gross misconduct. We reserve our right to terminate our contractual relationship with other workers if they breach this policy.’












-Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and regulations of the countries in which it does business.

-Ultra is committed to operating in accordance with all legislative requirements, including those pertaining to anti-bribery and corruption practices, relevant national export control regulations and competition and anti-trust laws.

-Ultra has a corporate ethics policy, which encompasses a gifts and hospitality policy. All the Ultra’s businesses are required to report on compliance with the corporate ethics policy monthly.


Providing guidance and training to employees








A33:

Does the company have multiple, well-publicised channels that are easily accessible and secure, to guarantee confidentiality or anonymity where requested by the employee (e.g. web, phone, in person), to report concerns or instances of suspected corrupt activity?

Score:

2

Comments:

Based on public information, there is evidence that the company has multiple, well-publicised channels that are easily accessible and secure, to guarantee confidentiality or anonymity where requested by the employee, to report concerns or instances of suspected corrupt activity. In particular, the Employee Helpline is independently operated and facilitates anonymous reporting.

References:


‘Employees are encouraged to report any instances of non-compliance with Ultra’s Compliance Policies through their Line Manager. However, Ultra recognizes that employees may not always feel able to do so. Ultra has, since 2010, operated an anonymous and confidential phone and internet based reporting system called the Ultra Electronics Employee Helpline, which is independently managed by a company called Ethics Point. The system is designed to enhance communication and enable Ultra to promote safety, security and ethical behaviour. All reports registered through Ethics Point are reviewed and responded to in a timely and appropriate manner. The responsibility for handling reports rests with Ultra’s senior, independent Non-Executive Director (other than US security-related issues which are routed through the outside directors of the Special Security Arrangement Board or Proxy Board). No retaliatory action is taken against employees for making reports in good faith through Ethics Point’.


‘10. HOW TO RAISE A CONCERN

You are encouraged to raise concerns about any issue or suspicion of


malpractice at the earliest possible stage. If you are unsure whether a

particular act constitutes bribery or corruption, or if you have any other

queries, these should be raised with your line manager or through the Ultra

Electronics Employee Hotline.’
















The Committee comprises six permanent members, three of whom, including the Chairman, are independent. To maintain the highest degree of impartiality, the independent members of the Committee are self-selecting. The appointment of the Chairman is also exclusively


within the remit of the independent members.'


A33(a):

Are the whistleblowing channels available to all employees in all geographies?

Score:

1

Comments:

Based on public information, there is evidence that across geographies, all employees have access to the Employee Hotline. The company therefore scores 1. To score higher the company would need to provide evidence that across geographies, all employees have access to more than one reporting channel.

References:










A33(b):

Does the company have formal and comprehensive mechanisms to assure itself that whistleblowing by employees is not deterred, and that whistleblowers are treated supportively?

Score:

1

Comments:

Based on public information, there is some evidence that the company has mechanisms to assure itself that whistleblowing by employees is not deterred, through the process of monitoring and review. However, there is no further evidence of formal monitoring indicators, statistics and independent employee surveys. The company therefore scores 1.

References:











(p. 7): ‘15. MONITORING AND REVIEW


implementation of this policy, regularly considering its suitability, adequacy

and effectiveness. Any improvements identified will be made as soon as

possible. Internal control systems and procedures will be subject to regular

audits to provide assurance that they are effective in countering bribery and

corruption.

15.2 All workers are responsible for the success of this policy and should ensure

they use it to disclose any suspected danger or wrongdoing.

15.3 Workers are invited to comment on this policy and suggest ways in which it

might be improved. Comments, suggestions and queries should be

addressed to the Group Company Secretary.’








Ultra requires all employees, businesses and third parties, who act on Ultra’s behalf, to comply fully with the Group’s standards of business ethics and with the applicable laws and

regulations of the countries in which it does business. Ultra is committed to operating in accordance with all legislative requirements, including those pertaining to anti-bribery and corruption practices, relevant national export control regulations and competition and anti-

trust laws. Ultra has a corporate ethics policy, which encompasses a gifts and hospitality policy. All the Ultra’s businesses are required to report on compliance with the corporate ethics policy monthly.





Reports made to the hotline are compiled by the independent operator and forwarded to the Chairman of the Audit Committee (or for US businesses, forwarded to the Directors of


the Special Security Arrangement Board or Proxy Board as appropriate) for action. Any employee found to be in breach of the ethics policy is subject to appropriate disciplinary action.





A34:

Does the company have well-publicised resources available to all employees where help and advice can be sought on corruption-related issues?

Score:

2

Comments:

Based on public information, there is evidence of well-publicised resources for employees to receive help and advice on corruption-related issues. These resources include line managers, the General Counsel or using the company hotline.

References:

Public:


‘8. YOUR RESPONSIBILITIES

8.1 You must ensure that you read, understand and comply with this policy.5

8.2 The prevention, detection and reporting of bribery and other forms of

corruption are the responsibility of all those working for us or under our

control. All workers are required to avoid any activity that might lead to, or

suggest, a breach of this policy.

8.3 You must notify your manager as soon as possible if you believe or suspect

that a conflict with this policy has occurred, or may occur in the future. If you

feel unable to tell your line manager about this you should use the Ultra

Electronics Employee Hotline. For example, if a client or potential client offers

you something to gain a business advantage with us, or indicates to you that

a gift or payment is required to secure their business. Further "red flags" that

may indicate bribery or corruption are set out in the Schedule.’

(pp.5-6):







Electronics Employee Hotline.


A35:

Is there a commitment to non-retaliation for bona fide reporting of corruption?

Score:

1

Comments:

Based on public information, there is evidence that the company is committed to non-retaliation for reporting of violations in good faith. However, it is not explicitly clear whether disciplinary measures will be applied in cases of retaliation. The company therefore scores 1.

References:


‘No retaliatory action is taken against employees for making reports in good faith through Ethics Point’.



‘5. WHAT IS NOT ACCEPTABLE?


(e) threaten or retaliate against another worker who has refused to commit a bribery offence or who has raised concerns under this policy;’

(p. 6): ‘12. PROTECTION

12.1 Workers who refuse to accept or offer a bribe, or those who raise concerns or

report another's wrongdoing, are sometimes worried about possible

repercussions. We aim to encourage openness and will support anyone who

raises genuine concerns in good faith under this policy, even if they turn out

to be mistaken.

12.2 We are committed to ensuring no one suffers any detrimental treatment as a

result of refusing to take part in bribery or corruption, or because of reporting

in good faith their suspicion that an actual or potential bribery or other



corruption offence has taken place, or may take place in the future.

Detrimental treatment includes dismissal, disciplinary action, threats or other

unfavourable treatment connected with raising a concern. If you believe that

you have suffered any such treatment, you should inform the Group Company

Secretary or the Ultra Electronics Employee Hotline immediately. If the matter

is not remedied, and you are an employee, you should raise it formally using

your local business’ Grievance Procedure.’





Information Sources:

Company Website:

http://www.ultra-electronics.com/



Code of Ethics and Business Conduct:




Gifts and Corporate Hospitality (June 2011):


Annual Report (2012):


Annual Report (2013):


http://www.ultra-electronics.com/











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