APPLICATION OF THE DANFOSS GROUP CODE OF ETHICS AND THE ORGANISATION, MANAGEMENT AND CONTROL MODEL OF DANFOSS POWER SOLUTIONS S.R.L.

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1 APPLICATION OF THE DANFOSS GROUP CODE OF ETHICS AND THE ORGANISATION, MANAGEMENT AND CONTROL MODEL OF DANFOSS POWER SOLUTIONS S.R.L. A management procedure has been adopted for reports received by the COMPLIANCE OFFICER. Furthermore, special information channels have been set up to enable the notification of breaches of the Danfoss Group Code of Ethics and the Organisation, Management and Control Model. Address: ORGANISMO DI VIGILANZA (COMPLIANCE OFFICER) c/o Via Rinaldi, Reggio Emilia, Italy odvdanfosspowersolutions@pec.it

2 MANAGEMENT PROCEDURE FOR REPORTS RECEIVED BY THE COMPLIANCE OFFICER 1. PURPOSE The aim of this procedure is to set up information channels for thorough monitoring of reports sent to the COMPLIANCE OFFICER regarding issues of corporate administrative liability (breaches of procedures, the Danfoss Group Code of Ethics and the Management, Organisation and Control Model). 2. DEFINITIONS 2.1 Report Any notification whose subject relates to presumed observations, irregularities, breaches, behaviour and censurable misconduct or any other practice that does not conform to the provisions of the Danfoss Group Code of Ethics and Organisation, Management and Control Model, liable to cause damage, including to the company image, attributable to employees, members of corporate bodies (board of directors, board of statutory auditors, independent auditors) or to third parties (partners, customers, suppliers, consultants, collaborators). 2.2 Anonymous report Any report where the particulars of the reporting person are not explicitly communicated or cannot be traced. 2.3 Report made in bad faith A report that does not correspond to fact, made for the sole purpose of damaging or, in all events, causing prejudice to the employees and members of corporate bodies. 2.4 Reporting persons Reports may be sent by the following persons: employees (including managers), members of corporate bodies, partners (persons/entities with commercial relations), suppliers (persons/entities supplying the company) and collaborators (persons with trade relations providing ongoing services) of 2.5 Reported persons Reports may concern employees (including managers), members of corporate bodies, partners, suppliers, collaborators and shareholders. 2.6 Receiving parties Receiving parties are members of the COMPLIANCE OFFICER and heads of department, who should in all cases forward to the Supervisory Body all original documents received, according to the criteria of confidentiality to protect the efficacy of investigations and the honour of the persons affected by the report.

3 3. GUARANTEES 3.1 Assurance of anonymity All organisational departments of involved in the receipt and processing of reports should guarantee the absolute confidentiality and anonymity of reporting persons. Danfoss will punish any form of threat or retaliation against reporting persons. 3.2 Anonymity Reports made by anonymous persons will be taken into consideration, but will undergo special checks. 3.3 Reports made in bad faith Danfoss will intervene to prevent offensive and libellous attitudes. The Supervisory Body guarantees proper action against reports made in bad faith, prohibiting such conduct and informing the company in the event of proven bad faith. 4. PROCEDURE 4.1 Notification The communication channels set up by Danfoss to facilitate reports are, by way of example but not limited to: ) Post (Organismo di Vigilanza (Supervisory Body) c/o Via Rinaldi, Reggio Emilia) 1 post box located in the company notice board area, in a room open to the public but protected from view (called the Cassetta Segnalazioni all Organismo di Vigilanza COMPLIANCE OFFICER's Report Box) 4.2 Preliminary inquiries If any reports are not addressed directly to the COMPLIANCE OFFICER, the recipients of the report (employees, members of corporate bodies, independent auditors) should send them immediately to COMPLIANCE OFFICER in their original format. The COMPLIANCE OFFICER will receive and make a note of each report in a special document called the Reports Log. 4.3 Investigation The COMPLIANCE OFFICER has the powers to decide whether or not to proceed with further checks, justifying its decision in writing in the COMPLIANCE OFFICER's Meeting Log Book. All reports are subject to preliminary verification. After the investigation, the COMPLIANCE OFFICER updates the Reports Log and, if the decision is made not to proceed for specific reasons, the report is archived.

4 4.4 Audit Auditing activities are handled by the COMPLIANCE OFFICER alongside the heads of department, by evaluating individual circumstances: a. communicating the results of their investigations in writing to the heads of department, where verification reveals aspects that could be improved; b. obtaining from the department heads the Evidence Sheets, where activities that might be improved are reported, as well as specific changes that should be made in order to eliminate critical issues. c. reporting, again on the Evidence sheets, any behaviour/action that does not correspond to the Model or company procedures in order to: i. acquire all the elements needed to communicate to the relevant bodies so that assessments can be made and disciplinary measures can be implemented; ii. prevent a recurrence of the event and, for this purpose, provide guidance for the removal of flaws in the system. The activities mentioned in item c. will be communicated as soon as possible in writing to the board of directors by the COMPLIANCE OFFICER. The COMPLIANCE OFFICER will also request the support of corporate bodies able to collaborate in activities to investigate and identify appropriate actions to prevent the recurrence of such circumstances. 4.5 Follow-up By consulting with the heads of relevant departments, the COMPLIANCE OFFICER guarantees the monitoring of the progress of the action plan as reported in point 4.4 above. At the end of these activities, the COMPLIANCE OFFICER updates the Reports Log. 5. REPORTS The COMPLIANCE OFFICER submits on a minimum six-month basis, a written report to the Board of Directors and the independent auditors outlining the reports received during the period and stating how work is proceeding on the reports received. Furthermore, the COMPLIANCE OFFICER will also that persons submitting the report are properly informed of the outcome of its preliminary inquiries.

5 6. STORAGE All information, notifications and reports are kept by the COMPLIANCE OFFICER in a special archive (electronic and paper), called the Reports Log, which is treated to the highest standards of security/confidentiality used by Danfoss Power Solutions. Access to the archive is only allowed to members of the COMPLIANCE OFFICER. The processing of the data of the persons involved and/or referred to in reports is protected in accordance with applicable law and corporate privacy procedures.