Corporate social responsability report DP-Industries

dp industries

The dynamics of water

corporate social responsibility

Foreword The ISO 26000 international guideline “Guidance on Social Responsibility� was published in 2010. This document sets out the guiding principles underpinning the choices made by DP Industries regarding its social responsibility in the various fields of the NEN-ISO 26000 framework.

Corporate Social Responsibility at DP Industries

31 March 2014

Contents Self-Declaration

2

1. Introduction

3

2. Approach of the examination

3

3. Scope of the examination

3

4. Duration of the declaration's validity

3

5. The principles of social responsibility

4

5.1

Rendering an account

4

5.2

Transparency

4

5.3

Ethical conduct

4

5.4

Respect for the interests of stakeholders

4

5.5

Respect for the rule of law

5

5.6

Respect for international standards of conduct

5

5.7

Respect for human rights

5

6. The stakeholders

5

6.1

Identification of stakeholders

5

6.2

Involving the stakeholders

6

7. The core themes of CSR

6

7.1

Determining relevance

6

7.2

Determining significance

6

7.3

Prioritising CSR topics

7

8. Integration of social responsibility into the entire organisation

8

8.1

Chain responsibility and sphere of influence

8

8.2

Due diligence

8

8.3

Vision, mission, policy and strategy

8

8.4

Developing support and 'competence'

8

8.5

Integrating social responsibility into administrative processes, systems and procedures.

9

8.6

Communication and reporting

9

8.7

Monitoring activities and assessing performance

9

8.8

Selecting CSR initiatives and instruments

11

Appendix 1 Prioritisation matrix

12

Appendix 2 Corporate Code of Conduct

14

page 1

Corporate Social Responsibility at DP Industries

31 March 2014

Self-Declaration NEN-ISO 26000 regarding the Social Responsibility of Organisations.

The undersigned Mr. M. Schneider (Managing Director of DP Industries), hereby declares that NEN-ISO 26000 "Guidance on Social Responsibility" is being applied to DP Industries and that it was examined and assessed with the aid of the process described in the Dutch practical guideline NPR 9026+C1:2012.

The organisation declares that it applies the principles and guidelines of the NEN-ISO 26000:2010 standard continuously and to guarantee it. This application and guarantee are examined and assessed at least once a year in the context of this self-declaration.

With this self-declaration, the organisation sets out the principles underpinning the choices made regarding its social responsibility in the following fields: 1.

2.

3.

4.

Endorsing and applying the seven principles of C.S.R. Identifying and involving stakeholders.

The seven core themes and 37 CSR topics.

Integration of CSR into the organisation.

The results of this examination are set out in the various chapters of this document.

Alphen aan den Rijn, 31 March 2014

M. Schneider Managing Director DP Industries Postbus 28 2400 AA Alphen aan den Rijn t (+31) (0)172 48 83 88 f (+31) (0)172 46 89 67 dp@dp.nl www.dp.nl

page 2

Corporate Social Responsibility at DP Industries

31 March 2014

1. Introduction DP Industries has around 300 employees, and is located at Alphen aan den Rijn; since 1955 the firm has been developing, manufacturing and selling pumps and pressureraising installations, and providing after-sales care for those products. Since 2003, DP Industries has been part of the KSB Group. The KSB Group is one of the leading producers of pumps, valves and accompanying systems in the world. The organisation operates on the market under the name Duijvelaar Pompen (in The Netherlands) or DP-Pumps (abroad).

2. Approach of the examination DP Industries applies the guidelines of the NEN-ISO 26000 standard in support of its wish to prepare CSR within the organisation in concrete terms.

In order to support the self-declaration, the organisation has made use of the Dutch practical guideline NPR 9026 “Handleiding zelfverklaring NEN-ISO 26000� [Manual for the NEN-ISO 26000 self-declaration].

These practical guidelines, and in particular chapters 5 to 8 inclusive, have been adopted in order to give a description and foundation for the application of the NEN-ISO 26000 standard via the reference matrix from this guideline. The examination and reporting of the examination results were conducted by the Quality Assurance department. The examination results were tested by the organisation's management team. The Managing Director was responsible for the final approval of the examination results and the signing of the declaration.

3. Scope of the examination The self-declaration applies to the entire DP Industries organisation.

4. Duration of the declaration's validity Within the framework of this self-declaration, the Quality Assurance department will - at least once a year - examine and assess whether the organisation is operating in accordance with the principles of the NEN-ISO 26000 standard. In the event of changes to the relevant standards, law and regulations or the organisation's policy, the information in this document and the resulting self-declaration will be adapted and re-published.

page 3

Corporate Social Responsibility at DP Industries

31 March 2014

5. The principles of social responsibility NEN-ISO 26000 cites seven generic CSR principles. These principles constitute a basis for every decision and every activity of an organisation. The following paragraphs give an explanation of how DP Industries interprets these principles.

5.1

Rendering an account DP Industries renders an account of itself regarding its impact on society, the economy and the environment. We do this in our annual financial report and annual social report, among other things. DP Industries has deliberately included the results of the CSR policy in the annual social report in order to demonstrate that CSR is an integral component of the company's strategy. The way in which we deal with any negative results in the above-mentioned fields is established in accordance with the requirements of our NEN-ISO 9001, NEN-ISO 14001 and BS-OHSAS 18001 certification.

5.2

Transparency Our organisation is transparent on decisions and activities that have an effect on the environment. We give an explanation of the policy and background of our organisation on our Internet site www.dp.nl. In addition, we are open in our communications regarding our performance in respect of the environment and working conditions.

5.3

Ethical conduct As a matter of fact, this is not something in isolation, but concerns the good quality of products and service.

It is also important to consider how we deal with the environment. What is our position with, for example, environmental pollution, child labour or conflicting interests?

DP Industries has answered this and many other questions by means of rules laid down in our Corporate Code of Conduct. We abide by these rules because they contribute to the success of our company, society and ourselves.

That Corporate Code of Conduct should be seen as our mutual point of departure. It helps us in carrying out our daily work in accordance with the standards and values of the organisation. This applies to every level of the organisation. We have published our Corporate Code of Conduct on our internet site www.dp.nl and it is also appended to this document as Appendix 2.

5.4

Respect for the interests of stakeholders Because stakeholders are influenced by the activities and decisions of our organisation, we consider their interests as far as possible when we take decisions. DP Industries respects the interests of stakeholders and responds to them.

In addition, our stakeholders can influence the activities of our organisation. For this reason it is extremely important to tread carefully here and respect the interests and wishes of the stakeholders. In paragraph 6.2 we go into more detail on how DP Industries identifies and involves the stakeholders in the organisation.

page 4

Corporate Social Responsibility at DP Industries

5.5

31 March 2014

Respect for the rule of law DP Industries respects the applicable laws and regulations in all the fields in which it operates. In order to determine which rules are relevant here for the organisation a periodical inventory is made of risky aspects within the organisation in accordance with the requirements of our NEN-ISO 9001, NEN-ISO 14001 and BS-OHSAS 18001 certification.

5.6

Respect for international standards of conduct In addition to complying with the applicable laws and regulations, DP Industries has the moral obligation to respect the international standards of conduct. Rules have been laid down in our organisation regarding those standards of conduct in the internal company guidelines deriving from our Corporate Code of Conduct. This concerns the guideline on compliance with the law on fair competition and the guideline on corruption.

5.7 Respect for human rights DP Industries respects and acknowledges the universal rights of Man and, as part of the KSB Group, is a member of the Global Compact Network. This is an international network of companies that have mutually-shared guidelines on the topic of human rights, working conditions, the environment and the renunciation of corruption and bribery. The network operates under the flag of the United Nations.

6. The stakeholders A stakeholder is a person or group of people who have an interest in the decisions or activities of an organisation. When acknowledging its social responsibility it behoves organisation to take account of the stakeholders in its chain of values and sphere of influence.

6.1

Identification of stakeholders DP Industries has identified the following stakeholders: 

Primary o Owner o Customers o Suppliers o Employees o Government



Secondary o Competitors o Educational Institutes o Employers' Organisations o Employees' Organisations o Banks and Insurance Companies

page 5

Corporate Social Responsibility at DP Industries

6.2

31 March 2014

Involving the stakeholders DP Industries involves the stakeholders in the organisation's activities in order to:       

gain understanding of the impact of the decisions and activities of the organisation on specific stakeholders; see whether the positive impact of the organisation on the environment can be increased and any negative impact reduced; assess the CSR performance of the organisation; discuss possible conflicts between the interests of the organisation, those of the stakeholders and the general social expectations, and if possible resolve them; honour the legal obligations that the organisation has vis-a-vis the stakeholders; be transparent in the activities and decisions of the organisation; form partnerships wherever possible that offer benefits for the organisation and the stakeholders.

7. The core themes of CSR In addition to the principles of social responsibility, the NEN-ISO 26000 standard also describes core themes that must be given attention in any organisation. Those core themes are then subdivided into 37 sub-themes - the so-called CSR topics. Appendix 1 of this document illustrates the prioritisation matrix that forms the basis of this self-declaration. Those 37 subthemes are further elaborated by specifying the relevance and significance for DP Industries of each of those themes.

7.1

Determining relevance When determining the relevance of the various CSR topics for DP Industries, account is taken of:   

DP Industries' own activities and decisions; the activities and decisions of organisations within the chain of values and sphere of influence of DP Industries; the short and long-term objectives of DP Industries.

With the aid of these criteria the organisation has determined the relevance of the various topics in the prioritisation matrix.

7.2

Determining significance The significance of the CSR is also determined in the prioritisation matrix. The following criteria are used in this assessment:    

the extent to which the topic concerned affects the stakeholders and sustainable development; the effect of taking extra action or not on the topic concerned; the expectations and worries of the stakeholders regarding the topic concerned; the social expectations regarding the topic concerned.

With the aid of these criteria the organisation has determined the significance of the various topics in the prioritisation matrix.

page 6

Corporate Social Responsibility at DP Industries

7.3

31 March 2014

Prioritising CSR topics After the relevance and significance have been determined, the organisation's performance regarding the topics concerned is assessed in accordance with the process described in Chapter 2.

The priorities of the various CSR topics are determined as products of the relevance, the significance and the evaluated performance. The result of this gives insight into the CSR icons (subjects of which the organisation can be proud) and the points for attention (topics where the organisation would like to make improvements) in the CSR policy of the organisation.

The organisation has specified the following icon in the CSR policy: 

The creation of employment and development of skills.

DP Industries is involved in various training and employment programmes. With this it contributes to creating employment and developing skill in the community.

The organisation has specified the following two points for attention in the CSR policy: 

Prevention of complicity An organisation could be considered as complicit if it collaborates in committing illicit acts by third parties that are not in accordance with international standards of conduct or if the latter do not respect them. An organisation could also be considered complicit if it maintains silence over or profits from such illicit acts.

DP Industries has only a limited degree of insight into the social performance of organisations within the chain of values. Wherever possible, we wish to use our influence to prevent complicity. DP Industries will specify the extent to which the organisation's sphere of influence can be widened to improve the CSR performance of the chain.



Social policy It is true that DP Industries is involved in various training and employment programmes in the region, but is of the opinion that the organisation's social involvement can be increased further. In order to achieve this, the organisation's social policy will be accentuated.

In paragraph 8.7 the points for attention and the icon of CSR policy are explained in more detail.

page 7

Corporate Social Responsibility at DP Industries

31 March 2014

8. Integration of social responsibility into the entire organisation 8.1

Chain responsibility and sphere of influence The organisation's stakeholders are listed in paragraph 6.1.

DP Industries is responsible for the effects of its decisions and actions, but does not have the legal or formal authority to impose its requirements on those stakeholders.

However, DP Industries can try to raise the awareness of those organisations regarding social responsibility by means of drawing up contractual conditions, transferring knowledge and setting a good example.

8.2

Due diligence DP Industries lists and assesses the effects of its activities on society and the environment. Wherever those activities have a negative effect, appropriate preventive or corrective measures will be taken.

Responsibility for that listing and assessment rests with the Quality Assurance department. The employees of DP Industries are obliged to report situations in which such negative effects (might) arise to their superiors, who can then take the appropriate action. That obligation is included in their contract of employment and described in the various internal company guidelines. If necessary, the employees can also turn to an ombudsman appointed by the organisation.

8.3

Vision, mission, policy and strategy DP Industries has translated the notion of socially responsible enterprise into the mission and vision of the organisation: DP Industries is the 'competence' centre of the KSB Group for the development and production of RVS pumps. Internationally, DP is a leading manufacturer of RVS centrifugal pumps and pump installations, which are marketed under different brand names. Through constant knowledge-acquisition and innovation DP Industries has become the most successful provider of products and services for the transportation of clean and waste water on the Dutch market.

Socially responsible and sustainable enterprise is an essential component of our corporate processes and corporate culture. We translate this in our daily activities into environmentally-friendly policy, social initiatives and three major core values: "Say what you do; do what you say; be proud of your job; mutual respect." (source: DP Industries Quality Manual)

8.4

Developing support and 'competence' DP Industries tries to create (more) support for socially responsible enterprise with a number of separate actions. Those actions, which derive from the core themes in the NEN-ISO 26000 standard, are described in paragraph 8.7.

page 8

Corporate Social Responsibility at DP Industries

8.5

31 March 2014

Integrating social responsibility into administrative processes, systems and procedures.

DP Industries has translated the notion of socially responsible enterprise into the quality management system of the organisation: The quality management system is certified NEN-ISO 9001, NEN-ISO 14001 and BS-OHSAS 18001 and VCA standardisation. The coordination of the various CSR aspects within the conduct of the organisation's business is done by the Quality Assurance department.

8.6

Communication and reporting DP Industries reports every year on the performance and key figures in the field of social policy in the annual social report. This annual social report is sent to the various primary stakeholders and will be published as from 2014 on www.dp.nl.

In addition, the various aspects of the organisation's CSR policy are communicated via the organisation's internal communication channels (staff magazine) and, of course, via this self-declaration.

Various processes are described in the organisation's quality management system for resolving conflicts with stakeholders. Primarily, the procedure relates to the procedure for customer complaints, but there are also processes described about the organisation's communications with other stakeholders, such as the government and the employees (confidant(e) and ombudsman).

Monitoring activities and assessing performance DP Industries has integrated various Critical Process Indicators (CPI) into is business management for measuring and assessing the organisation's performance in the field of quality, working conditions and environmental aspects. These indicators are measured each month and assessed every two months by the organisation's management. In the text below, a number of relevant indicators are explained in more detail, together with the results achieved.

DP Industries subscribes to the objectives of the Kyoto Protocol and aims to achieve the highest energy-efficiency in all its products and technologies. Moreover, the processes and working environment within the organisation are so designed that the use of energy and raw materials is reduced as far as possible. Over the last ten years, this has resulted in a reduction of energy consumption and a drop in the production of waste (measured per pump manufactured). This is graphically shown in the graphs below: 0,80 0,70 0,60 GJ/pump

8.7

0,50 0,40 0,30 0,20 0,10 0,00 2003

Graph 1

2004

2005

2006

2007

2008

2009

Energy consumption per pump manufactured

page 9

2010

2011

2012

2013

2014

kg/pump

Corporate Social Responsibility at DP Industries

5,00 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 2003

Graph 2

2004

2005

31 March 2014

2006

2007

2008

2009

2010

2011

2012

2013

2014

Energy consumption per pump manufactured

For optimum working conditions, DP Industries has evolved its own E.H.S. policy (Environmental Health and Safety), which is integrated into the organisation's quality management system. An important indicator for the situation of the working conditions is the degree of absenteeism in the organisation.

In the graph below, the absenteeism of the last ten years is compared with the average absenteeism in this branch of industry as a whole.

DP Industries

percentage of absenteeism

5

Graph 3

Metaal-electro

4 3 2 1 0 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Absenteeism v. benchmark

DP Industries is an officially recognised teaching company and offers opportunities to apprentices and graduates from various Middle and Higher education institutions. In this way the organisation not only makes a contribution to the development of the community in general, but also a contribution to promoting technical professions and training in particular. In addition, the organisation also offers workplaces for people who belong to the target group of the Law on social work provision and other arrangements for subsidised employment. The organisation considers this aspect of the CSR policy as a CSR icon and is proud of this role, which it can play in the community.

page 10

Corporate Social Responsibility at DP Industries

31 March 2014

As already mentioned in paragraph 7.3, two matters have emerged from the organisation's CSR policy which the organisation would like to improve. The following actions have been set in motion to achieve that improvement: 

Prevention of complicity DP Industries has, when selecting and assessing the standard suppliers, already taken stock of the performance of those organisations as regards quality, working conditions and environment.

In order to further stimulate socially responsible enterprise among the suppliers, an additional stock-taking of the performance of those organisations in the field of socially responsible enterprise will take place.

The result of that stock-taking can have consequences for the future relationship of the supplier concerned with DP Industries. The standard suppliers will also be requested to adhere to the Corporate Code of Conduct of DP Industries, if they don't have their own code of conduct.



Social policy In order to give a practical application to the organisation's social involvement, an internal campaign has been started to find a suitable social initiative (a good aim).

DP Industries has made a budget available to support such an initiative both financially and practically. The basic principle underlying this campaign is that all employees of the organisation be given the opportunity, in competition form, come up with a social initiative and defend it before a selection committee. That commission will ultimately select a suitable initiative with the aid of criteria established beforehand.

8.8

Selecting CSR initiatives and instruments As already mentioned in paragraph 5.7, DP Industries is, as part of the KSB Group, a member of the Global Compact Network. In order to make clear to the stakeholders the efforts of DP in this regard, the organisation has decided to draw up this self-declaration in accordance with the Dutch Practical Guideline NPR 9026 “Handleiding zelfverklaring NEN-ISO 26000”.

page 11

Corporate Social Responsibility at DP Industries

Appendix 1

31 March 2014

Prioritisation matrix

key topics

relevance

significance

performance

great

great

very good

great

considerable

Risk situations regarding human rights

considerable

Prevention of complicity

support

priority

explanation

Administration of the organisation Code of Conduct, QM1 paragraph 5.3, TĂźV certificate

none

good

Code of Conduct

none

considerable

good

Compliance official, Ombudsman

none

great

considerable

reasonable

Code of Conduct

Direct

considerable

considerable

good

Confidence committee, Compliance official, Ombudsman

none

great

considerable

reasonable

QM paragraph 6.2

eventually

Attention point 1: Questionnaire A-suppliers

Civil and political rights

considerable

considerable

reasonable

Code of Conduct

eventually

Attention point 1: Questionnaire A-suppliers

Economic, social and cultural rights

considerable

considerable

reasonable

Code of Conduct

eventually

Attention point 1: Questionnaire A-suppliers

great

considerable

reasonable

Code of Conduct

eventually

Attention point 1: Questionnaire Asuppliers

Employment and labour relations

great

considerable

good

Annual social report

none

Working conditions and social protection

great

considerable

good

Annual social report

none

considerable

considerable

good

Annual social report

none

OHSAS 18001 certificate, VCA certificate, Annual Social Report, KPI HR01

none

Administration of the organisation Human rights

Appropriate scrupulousness

Resolving complaints

Discrimination and vulnerable groups

Fundamental principles and labour laws

Attention point 1: Questionnaire A-suppliers

Working practice

Social dialogue

Health and safety at work

great

great

very good

Personal development and onthe-job training

great

great

good

Training plan

eventually

The environment

1

Prevention of environmental pollution

great

considerable

good

ISO14001 certificate

none

Sustainable use of resources

considerable

considerable

good

ISO14001 certificate, KPI Q03

none

Mitigation of and adaptation to climate change

considerable

considerable

moderate

www.duurzamelevera ncier.nl

eventually

Protection of the environment, biodiversity and restoration of natural habitats

considerable

some

reasonable

ISO14001 certificate

none

QM = Quality Manual of DP Industries

page 12

CSR Icon

Corporate Social Responsibility at DP Industries

key topics

relevance

31 March 2014

significance

performance

support

priority

explanation

Doing business honestly

Anti-corruption

Responsible political involvement

Fair competition

Promoting social responsibility in the value chain

Respect for property rights

great

considerable

very good

Code of Conduct, Guideline on preventing corruption

none

considerable

some

good

Code of Conduct, Guideline on preventing corruption

none

great

great

good

considerable

considerable

reasonable

great

considerable

good

Code of Conduct, Guideline on compliance with competition law Code of Conduct, Guideline on compliance with competition law Code of Conduct, Guideline on compliance with competition law

none

eventually

Attention point 1: Questionnaire A-suppliers

none

Consumer affairs

good

Code of Conduct, Guideline on preventing corruption, Delivery terms & conditions

none

great

good

Declaration of conformity , Operating instructions

eventually

considerable

great

good

Sales documentation, TPG

none

considerable

considerable

good

QM para. 7.4.10, QM App. 1, KPI Q01

none

great

considerable

good

Code of Conduct

none

Access to essential facilities

considerable

considerable

good

Sales documentation, Sales policy

none

Information and awareness

considerable

considerable

good

Operating instructions

none

Honest marketing, factual and unprejudiced information and honest dealings when concluding contracts

great

great

Protecting the health and safety of consumers

great

Sustainable consumption Services to consumers, support, resolving complaints and disputes Privacy and protection of consumer information

Involvement in and development of the community

considerable

some

moderate

Education and culture

considerable

considerable

good

Officially recognised teaching company

none

CSR Icon

The creation of employment and development of skills.

great

considerable

good

Engaging SWA staff

none

CSR Icon

Development and access to technology

great

considerable

good

Sales documentation

none

considerable

considerable

good

Annual social report

none

great

considerable

good

Declaration of Conformity

none

considerable

some

moderate

Creating prosperity and income

Health

Social investments

page 13

Code of Conduct

Code of Conduct

eventually

Attention point 2: Social policy

Involvement in the community

eventually

Attention point 2: Social policy

Corporate Social Responsibility at DP Industries

31 March 2014

Appendix 2 Corporate Code of Conduct In this Annex you will find the Code of Conduct which has been developed by the board of the KSB Group. DP Industries is part of this since 2003.

Why we need a Code of Conduct Dear employees, In the global competitive environment, our customers and business partners expect, in addition to high-quality products and services, professional and honest behaviour that includes compliance with legal regulations and ethical standards. By meeting these expectations we cement confidence in our company and the KSB brand. At the same time, we maintain the values that have characterised KSB’s activity for decades.

We are jointly responsible for our company’s reputation. Improper behaviour by even one person can damage our reputation for a long time. That is why we need a binding concept of what defines our shared understanding of professional and honest business behaviour. We have summarised the relevant guidelines and key rules in the following Code of Conduct. We will keep a close eye on future developments in the legal and business environment and adapt the Code as required.

The KSB Code of Conduct offers orientation and assistance but also contains the binding requirements our actions need to be based on. Fully committed to these rules, we expect consistent adherence to the following “core values” from our managers and employees at all levels and will monitor this in an appropriate manner.

We are confident that you will all comply with the requirements laid down in this Code of Conduct.

Dr. Wolfgang Schmitt Chairman of the Board of Management of KSB Aktiengesellschaft

page 14

Corporate Social Responsibility at DP Industries

31 March 2014

1. Purpose and scope It is basically a matter of course that companies, their representatives, managers and employees act in compliance with the applicable laws. Ensuring that this is the case is becoming ever more difficult due to the myriad of requirements and the increasing number of legal provisions and regulations. All activities that help to ensure behaviour by a company and its employees that meets the regulations and laws in day-to-day practice and to prevent incorrect behaviour are referred to as “compliance�. This also includes observing contractual agreements and voluntarily agreed commitments.

The Code of Conduct constitutes the basis of compliance activities at KSB. It describes the key legal and business policy principles that we use in our relationships with customers, suppliers and other business partners as well as our internal cooperation. It also determines our conduct on financial markets and in the various countries in which we work. The Code aims to support employees in their day-to-day work.

Proper conduct particularly involves acting with integrity, reliability and transparency. Your observance of these core values is as much a requirement for justifying the trust our business partners place in us and being a successful market player as is the high quality of our products and services. KSB’s reputation is more important than the individual success of any particular business transaction or person.

The Code of Conduct is compulsory for all employees at all levels. It covers all organisational units and Group companies where KSB Aktiengesellschaft directly or indirectly holds an interest of more than 50%. If the interest held is lower we will encourage the relevant company to adhere to similar standards.

Some of the requirements listed in the KSB Code of Conduct are supplemented and set out in greater detail by Group Guidelines, e.g. for cartel law and preventing corruption. These documents are available both on the KSB intranet and with the anagement of KSB Group companies; it is the responsibility of each employee to be familiar with the Group Guidelines relevant to his or her activity.

In some countries business practices do not meet the requirements of this Code of Conduct. Nevertheless, we expect our employees to use these rules for guidance on the basis of the relevant applicable laws. Regional regulations shall have priority if and to the extent that they exceed these requirements; the relevant regional Management shall outline any variations.

page 15

Corporate Social Responsibility at DP Industries

31 March 2014

2. Basic rules of conduct 2.1 Working with each other The relationships between managers, colleagues and employees in all corporate divisions and regions should be characterized by professionalism, mutual respect and fairness. In this we take account of cultural differences. It is our declared goal to not disadvantage anybody based on such individual characteristics as age, race, religion, skin colour, gender, sexual orientation, disability, national origin, heritage or marital status. In the working environment we do not tolerate discrimination, harassment or reprisals. This also applies to our contacts with people outside KSB, for example job applicants.

2.2 Acting as role models The members of the Board of Management and Supervisory Board of KSB Aktiengesellschaft as well as the representatives of Group companies and others who exercise management responsibility shall act as role models for others. They are expected to observe the principles laid down in this Code of Conduct with special commitment, as well as provide support and ensure they are complied with in everyday work life.

2.3 Communication and transparency Reports and communication to those within the company, business partners, investors, the public, official organisations and authorities shall be understandable, truthful and submitted in good time; they must also be in compliance with the applicable laws and regulations. Our financial statements shall correctly document business transactions.

In order to avoid a lack of clarity and/or misunderstandings, only expressly authorised people can provide company statements. This applies in particular to communication with the media, investors and analysts.

We cooperate with official organisations and authorities and support their work – whilst maintaining our rights.

As a matter of principle we do not provide information on customer relationships, matters relating to an individual employee, competitors or ongoing investigations; as a matter of principle we do not comment on rumours.

2.4 Managing Business Law-abiding behaviour We operate our business in such a manner as to comply with the applicable laws, other binding regulations and obligations that we have entered voluntarily. It is in particular the responsibility of the relevant line manager to give employees all the necessary instructions and support, e.g. access to all internal guidelines, and if necessary to explain them.

page 16

Corporate Social Responsibility at DP Industries

31 March 2014

Preventive legal advice In order to reduce risks employees should obtain advice from the relevant Legal Affairs department if there are legal issues in question.

Use of company resources Each employee shall handle the company’s resources, such as machinery, fixtures and office materials, responsibly. Private use shall be prohibited as a matter of principle and shall require approval in each individual case. In particular, the Group’s guidelines governing the use of telecommunication resources and computers shall be complied with.

Innovative products and solutions are of great importance for the development of the company. Inventions made by employees or third parties for the company must be legally protected by reasonable means. No employee may disclose information on the company’s know-how and expertise (e.g. design drawings) or business secrets to project partners or other third parties without being expressly authorised to do so.

Corruption, bribery When competing for orders KSB bases its decisions on objective economic criteria such as quality and price. Our employees are not permitted to offer or give third parties direct or indirect advantages to exert an unfair influence on economic decisions, whether through financial payments or other means. No employee may use his or her employment to demand, accept or otherwise acquire unfair advantages. Employees who sign contracts with consultants, agents or similar third parties must ensure that the latter also comply with these rules.

Gifts, favours, hospitality or other benefits may only be given or accepted if they do not infringe applicable laws or KSB guidelines and neither damage the public reputation of KSB nor the probity of the employee if they become known publicly.

In cases of doubt, the matter must be discussed and agreed with the line manager or the relevant Compliance Officer.

2.5 Business relationships Awarding contracts KSB maintains fair dealings with all business partners. Suppliers and service providers are selected using objective and traceable criteria as well as on the basis of comparing quotations.

page 17

Corporate Social Responsibility at DP Industries

31 March 2014

Business incentives Commissions or benefits (e.g. discounts or price reductions) related to goods and services are permissible business incentives. Their use always requires – in addition to comprehensive documentation – great care and the observation of the relevant legal provisions and regulations.

Payments Payment for goods and services received shall be made directly to the relevant contractual partner and in general in the country where it is based.

Cash payments should not be made except in documented individual cases.

Before agreeing on other payment arrangements the relevant Legal Affairs department or company representatives (Advisory Board, Board of Management etc.) must be informed.

2.6 Conflicts of interest Secondary employment Holding a second job that is not simply of marginal scope requires the prior consent of the relevant Human Resources department. Secondary employment with customers, suppliers or competitors always requires prior consent. Consent will not be given as a matter of principle if the secondary employment may adversely affect work performance, contradicts the employee’s duties or if there is a risk of a conflict of interests.

Interests held in competitor, customer and supplier companies Material interests held by employees in a competitor, customer or supplier company of KSB require the consent of the Human Resources department Material interests held by close family members in a competitor, customer or supplier company must be notified to the responsible Compliance Officer if there is the possibility of a conflict of interests for the employee. Spouses, registered partners, children receiving support and other relatives with whom the employee has lived in the same household for at least a year at the time the stake is purchased are defined as close family members. A material interest is defined as 10% of the shares or more, for listed companies 1% or more.

Transactions with employees or family members There should be no KSB transactions with employees or their family members if they have not been agreed individually in advance by the employee’s line manager or the relevant Management of the company. It should be ensured that the employee concerned is not involved in making the decision.

page 18

Corporate Social Responsibility at DP Industries

31 March 2014

Business opportunities No employee may exploit KSB business opportunities to his or her own advantage or the advantage of third parties.

2.7 Insiderinformatie Insider information shall always be treated in strict confidence and relates to facts the knowledge of which could affect an investor’s decision about the purchase or sale of listed shares (or derivatives thereof). This applies, for example, to knowledge about material planned acquisitions or sell-offs, strategic alliances, major agreements or likely differences in corporate profits to those published.

In line with the legal provisions and regulations applicable in this context, KSB employees must ensure that no insider information is used when trading shares or derivatives (including that relating to business partners) and that this information is not disclosed to third parties.

2.8 Confidentiality Information that KSB has not made public (e.g. technical knowhow and expertise) shall be treated in strict confidence as a matter of principle. It must not be disclosed to unauthorised third parties (including family members and friends) during or after the end of the employment relationship.

It is prohibited to use confidential business information during or after the end of the employment relationship for personal advantage, the advantage of third parties or the disadvantage of KSB. Each employee shall handle confidential data responsibly and with foresight, for example store it carefully rather than “leave it lying around”, in order to protect it from access by third parties.

2.9 Social commitment KSB’s social commitment includes making donations, mainly for social or cultural purposes. Donations are made in a transparent manner and free of personal interests on the basis of traceable criteria and the corresponding internal guidelines. All donation processes are documented.

As a matter of principle KSB does not get involved in partypolitical activities.

This includes financial support and benefits for parties, political organisations and their representatives as well as activities or events on behalf of or on the premises of KSB. However, our employees are always free to get involved appropriately in political activities as private individuals and citizens – outside working hours.

page 19

Corporate Social Responsibility at DP Industries

31 March 2014

3. Special issues 3.1 Competition and cartel law When dealing with competitors and business partners we follow the rules of fair competition. These are the basic requirement for performance-based market regulations. Any and all actions that aim to create an economic advantage in a manner that contravenes competition law or using cartel agreements are prohibited.

This relates in particular to agreements among competitors to fix or control prices, boycott certain suppliers or customers, share customers or markets or restrict the production or sale of products.

Infringing current competition law can result in substantial fines, risk of damages and loss of image that harm our company and its position in the marketplace. In addition, the affected employees themselves will have to expect legal consequences.

3.2 International trade and export control KSB observes applicable international trade provisions. These include customs regulations and trade and production controls. Each employee shall follow the internal rules on export control as well as the legal provisions and regulations.

Without approval by the relevant authorities, KSB does not export or import materials, products or technologies that are subject to statutory control and require import or export permits.

3.3 Tax Laws As an internationally operating Group, KSB observes all relevant tax law provisions. It does not support improper behaviour by business partners.

We set transfer prices using globally recognised principles and compare them with the terms and conditions of external third parties.

Employees on international assignments are obliged to comply with the tax laws that apply to them personally in line with our deployment regulations.

3.4 Environmental protection Compliance with high environmental standards is an important element of our corporate policy. With an effective environmental protection approach, KSB bears its corporate responsibility not only to secure the health of its employees but also the natural basis for life for everybody.

page 20

Corporate Social Responsibility at DP Industries

31 March 2014

3.5 Occupational health and safety KSB is committed to providing a safe working environment for employees.

The strict observance of the relevant regulations on occupational health and equipment safety is a basic prerequisite for responsible cooperation in the company. We also counteract risks by voluntary, preventive measures.

3.6 Safety and quality of products As a leading technology company, KSB provides customers with innovative solutions for their needs. We research, develop and work to in the perfect condition of our products and services. Meeting the high safety and quality requirements of our customers is one of the key corporate objectives.

3.7 Data privacy and protection As a result of the intensive use of IT systems, the business activity of KSB is heavily dependent on their operation and availability. In order to limit the resulting potential risks the applicable guidelines on IT security must be observed strictly.

3.8 IT-security As a result of the intensive use of IT systems, the business activity of KSB is heavily dependent on their operation and availability. In order to limit the resulting potential risks the applicable guidelines on IT security must be observed strictly.

4. Implementation Each KSB employee consciously and actively contributes to implementing the principles of the Code of Conduct correctly in his or her area of work. The aim is to avoid problems as defined by the Code or to identify them early on and find a quick solution. Employees who have questions on specific situations can refer to the following at any time.

Information and control duties by line managers Each line manager ensures that employees are informed about the content of the KSB Code of Conduct and comply with its stipulations. Employees can discuss any questions with their line manager or relevant Compliance Officer.

Employee duty of notification if variances become known If Group employees are or become aware of infringements of the KSB Code of Conduct, they are expected to inform their line manager or the relevant Compliance Officer.

page 21

Corporate Social Responsibility at DP Industries

31 March 2014

Group Compliance Officer The Group Compliance Officer, Dr. H. Stefan Wiss (Tel.: +49 6233 86-2266; hans-stefan.wiss@ksb.com), supports the implementation of the Code of Conduct throughout the Group. In this function he reports directly to the Chairman of the Board of Management but does not receive instructions from him. In addition, other Compliance Officers may be appointed, e.g. with specific technical or regional responsibilities.

If the Group Compliance Officer determines that there is reasonable initial suspicion of an infringement of the provisions of the Code of Conduct he may request other Group departments to assist in clarifying the matter. Information on any incorrect behaviour will be treated anonymously on request in order to avoid disadvantages for the person providing the information.

Ombudsman If employees are or become aware of facts relating to criminal or cartel law, instead of the relevant Compliance Officer they may also inform the law firm commissioned for this purpose by KSB. The law firm will forward such information to the Group Compliance Officer but without naming the informant in order to ensure confidentiality in such cases (ombudsman system). Contact can be made from any country, either in German or English, and both by telephone and in writing. The contact is: Dr. AndrĂŠ Grosze Vorholt Luther Rechtsanwaltsgesellschaft mbH Landshuter Allee 6 80637 Munich Germany Mobile +49 152 01624700 Fax +49 89 23714-110 E-mail: andre.groszevorholt@luther-lawfirm.com

Sanctions en consequences Infringements of the KSB Code of Conduct may result in employment, civil or criminal law consequences for the employee concerned and will also be treated in line with the usual corporate practice.

KSB Aktiengesellschaft Legal Affairs and Intellectual Property ¡ 67225 Frankenthal (Germany) www.ksb.com

page 22

dp industries P.O. Box 28 2400 AA Alphen aan den Rijn Holland t +31 172 488 388 f +31 172 468 967 dp@dp-pumps.com www.dp-pumps.com