A. Business Culture Values – Principles

• Presentation
• Our Vision
• Our Mission
• Our Values
• Business Culture Values

B. Business Culture Rules -Instructions for Proper Business Behavior

Introduction

1. Stakeholders – How We Conduct Ourselves With Our Business Associates
1.1 Antitrust And Fair Competition
1.2 Improper Payments
1.3 Gifts And Gratuities

2. Accountability – We Safeguard Our Company’s Assets
2.1 Use Of Company Assets
2.2 Information Systems, E-Mail And Internet
2.3 Proprietary And Confidential Information
2.4 Insider Trading And Inside Information
2.5 Reliable Reporting

3. Conflicts Of Interest And Additional Business Connections

4. Fair Cooperation – How We Choose And Work With Business Partners

5. Compliance With The Law And Cooperation With Governments
5.1 Working With Government Officials

6. Mutual Respect – How We Build A Comfortable Work Environment
6.1 Diversity And Equal Opportunity Employment
6.2 Protection Against Harassment And Sexual Harassment
6.3 Mutual Respect And Privacy
6.4 Customer And Supplier Privacy
6.5 Health And Safety
6.6 Political Activity In The Work Environment

7. Responsibility – How We Interact With The Wider Society
7.1 Respecting The Law
7.2 Protecting The Environment And Quality Of Life
7.3 Caring About The Community

8. Reporting Non-Compliance Of This Code
8.1 Submission Of Complaints

9. Application To Members Of The Board Directors
 

C. Business Culture Procedures – Implementation and Supervision

• Management and Control
• Obligation to Implementation
• Training program

D. Netafim's Corporate Whistleblower Policy

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A. Business Culture Values – Principles

1. Presentation
Netafim’s business culture is based on the laws and procedures enforced in Israel and in the international community. It creates an inclusive set of organizational behavior rules, which is inspired by the basic values of the founders generation, kibutz members farmers and engineers, the leaders in the irrigation field in Israel. The company is committed to follow all laws, regulations and rules relevant to its activity, while maintaining universal moral values and rules for proper administration.

This document constitutes the code of Netafim’s “business culture values":

It presents the company’s business culture values, specifies the directions and instructions for every field of activity, and provides a definition and instructions for implementation for the position and responsibilities of the person in charge of the business culture in the company.As part of the company’s general commitment, each individual in the company has to follow the instructions specified in the “business culture values".

2. Our Vision
Netafim will fully leverage the potential of drip and micro-irrigation to efficiently utilize the world’s most precious resources – arable land, water and energy – for ensuring global food security and environmental.

3. Our Mission

• Successfully tackle the daily irrigation requirement challenges at each worldwide site.
• Anticipate the ambitions, goals and needs of current and potential clients, and provide a creative and competitive solution.
• Provide clients with uncompromising comprehensive and reliable solutions and services, enabling them to derive maximum yield and profit from their crops.

4. Our Values
Maintaining “Netafim’s Spirit"
Notwithstanding today's mega-corporate competitiveness, along with expansion of our international activity and strengthening of our global position, Netafim continues to maintain a unique spirit of mutual cooperation, dedication, loyalty and support vis-à-vis our employees and clients.

Knowledge Sharing
We share with our clients the knowledge, experience, expertise and innovativeness accumulated over decades that have enabled us to create proven, efficient irrigation technologies in arid territories. Our familiarity with diverse cultures and growing methods, along with the roots we've planted worldwide, create an optimal infrastructure for continuous growth and development, enabling us to share know-how with our agronomists across the globe.

Commitment for quality
Netafim is committed to the highest standards of performance, efficiency and quality, as well as to uncompromising service and dedication to our clients. Our steadfastness in adhering to these principles is a key to our long-term success.

Constant learning
Creativity, curiosity, desire for knowledge, and openness to new ideas enable us to change and improve the irrigation market. We implement a “learning organization" culture in order to transform hundreds of new ideas into practical solutions. This is expressed in our continuous training programs and professional courses for employees, and in our willingness to acquire knowledge from clients, suppliers and colleagues.

Commitment to Protecting the Environment And Quality Of Life
We are committed to developing water-saving methods and systems. We are full-fledged partners in promoting and increasing global food production for hungry populations. We are an inseparable and integral part of worldwide efforts to protect the environment.

5. Business Culture Values

The following are the guiding values of Netafim:

Moral behavior: honesty, reliability, integrity, respect for
others and proper business behavior.
Considering the company, its employees, clients and suppliers to be full partners in fulfilling the company’s goals and
obligations.

Decency in all of Netafim’s relations: with its clients, suppliers, competitors, government and public elements as well as its employees.

Maintain high quality of products and processes and improve constantly by utilizing a general quality system.

Strictly follow all rules, agreements and business culture rules of the company.

Monitoring and confirmation that all laws and rules are being followed.

Considering the client to be the main asset of the company and therefore being committed to his satisfaction and loyalty.

Viewing the employees as the key to the company’s success. As such, Netafim is committed to their promotion, support and their solidarity with the company and its goals, while providing an equal treatment to all employees regardless of their age, sex and origin.

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B. Business Culture Rules – Instructions for Proper Business Behavior

Introduction

Dear Colleagues

The Code of Business Conduct represents Netafim’s “business culture values" and serves as a moral compass for our daily work. It was written to help all employees and directors understand the behavioral guidelines according to which we conduct our business and interact with each other. Our business culture is based on the laws and regulations enforced in all the international locations in which we operate. This code creates an inclusive set of organizational principles inspired by the basic values of the company’s founders: fairness, hard work, integrity and uncompromising commitment to quality.

As we expand and strengthen our global position, we continue to maintain our unique spirit of cooperation, dedication, loyalty and support among Netafim’s employees and towards our clients.

At the same time, we continually strive to maintain the highest standards of business conduct and governance that make Netafim a better place to work and a trust worthy business partner.
Each one's commitment to follow these guidelines is expected, so please review this document carefully in order to understand our expectations.

As a valued member of the Netafim team, you represent the company wherever you are. We all need to hold ourselves personally responsible for full compliance with these standards. For any questions or comments, do not hesitate to contact your direct manager or head of human resources in your unit

Regards,

IGAL AISENBERG
PRESIDENT & CEO

Netafim conducts its relations with integrity, responsibility, honesty, reliability and decency, while obeying local laws and following the rules of proper business behavior. This commitment applies to each and every one of the company’s employees and directors. We are all expected to maintain honest and moral behavior in our work practices by adhering to the Code in all our activities, whether internally with our colleagues, or externally with customers, suppliers, partners, shareholders and all other Netafim stakeholders.

Netafim strives to ensure that we all constantly adhere to the following principles as specified in the Code:

1. Stakeholders – how we conduct ourselves with our business associates

The growth and achievement of our stakerholdres (customers suppliers, consultants and dealers) – is essential to our own business success. By ensuring reciprocal and mutually beneficial relations with these parties, we pave the way for our continued success and for mutually beneficial and satisfying relationships.

1.1 Antitrust and Fair competition
Competition is part of Netafim’s business activity, and drives us to improve and leverage our advantages in the market. It is Netafim’s policy to adhere strictly to all applicable fair competition laws in our global operations. To maintain our reputation for fair competition and to ensure that our customers trust us, we must comply with fundamental principles:

• We compete openly and independently in every market. We do not make any agreements with competitors to fix or set prices or allocate products, markets, territories or customers.
• We do not engage any other unfair method of competition or deceptive acts or practices.

1.2 Improper payments
Netafim’s reputation for honesty and integrity must not be put at risk by offering illegal payments to any public or other officials of any non-government organizations. Netafim will not permit bribes or improper payments, as such are illegal.

1.3 Gifts and gratuities
We maintain and strengthen our credibility and integrity by refusing to accept gifts or entertainment from business partners and not offering similar favors to customers, suppliers or other third parties, except in accordance with this policy. All our business decisions are to be made based on merit alone and no conflict of interest or granting of benefits exists in the relationships between employees and parties outside the company with whom they have business relationships.

• We do not give or receive cash gifts.
• We only offer gifts or entertainment to create good will and sound working relationships.
• We are allowed to accept or give the following gifts, provided that our integrity is not compromised, such as token advertising accessories, a gift of reasonable value given to an employee marking a personal event , per governing policies.
• Any other gift or a proposal for a gift must be reported to the
• local HR or Managing Director.

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2. Accountability – We safeguard our company’s assets

Netafim’s intellectual and material assets are its financial infrastructure and strength. The company’s assets are for the use of the company and its employees for the purpose of promoting company’s interests. By attempting to financially or personally benefit from these assets or use them for an activity that is irrelevant to work, we can potentially harm the company.

2.1 Use of company assets
We respect the company’s assets. All our physical assets, intellectual property rights and information must be handled with care to avoid loss, theft or damage, which can have a direct impact on the Company’s profitability.

• We protect the Company’s assets, treat them as if they were our own and ensure their efficient use.
• We only use company assets for Netafim’s business purposes.
• We may use company assets for reasonable personal use if it does not conflict with company interests, this Code or Netafim’s rules and policies.
• We must report about any change of condition of company assets, including location, damage or loss, to our supervisors.
• We must immediately report any suspected incident of fraud or theft for investigation.

2.2 Information systems, e-mail and Internet
Netafim provides us with information systems to help us work efficiently and professionally.

• We use the computer systems properly and professionally, to prevent any damage to valuable equipment.
• We may not use software that is not authorized by Netafim’s IT department or not legally purchased or received.
• We comply with all Netafim’s information security principles in order to protect confidentiality and prevent loss.

2.3 Proprietary and Confidential information
Netafim’s intellectual assets consist of the knowledge and information accumulated in all its fields of activity, both professional and managerial, and includes patents, exclusive developments and unique work methods.
It is Netafim’s policy that all information developed or shared as a result of the company’s activities and business processes is proprietary to Netafim and must be treated as confidential. Proprietary information includes intellectual assets such as trade secrets, patents, trademarks, copyrights, business, marketing and service plans, manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. It also includes internal correspondence and computer passwords.

Confidential information includes all non-public information about Netafim, its customers and suppliers, which might be of use to our competitors, or harmful to the Company or its customers and suppliers if disclosed. Unauthorized use or distribution of this information violates Company policy and could also be illegal and result in civil or even criminal penalties. If any such information (such as a computer, portable disc or other media) is lost or stolen, it is imperative to report this loss immediately to a supervisor.

• We protect Netafim’s information and do not pass on unauthorized company, customer or supplier information that is not public to other elements.
• We maintain the confidentiality of confidential information entrusted to us by the Company, customers or suppliers.
• We do not use proprietary and confidential information for our own personal benefit.
• If we are contacted by any representative of the media, or other outside group, for information about Netafim or any of its business associates, we should direct the request to the Public Relations (PR) Manager or CEO as only an official spokesperson may comment about Netafim to the media or provide information to outsiders, as per Netafim’s Media and PR policy.
• Requests for information from government entities, such as subpoenas or any other official inquiries should be referred to your manager and the Compliance Officer.

2.4. Insider trading and inside information
Insider trading refers to a practice where someone inside the company or a related party trades in securities (the company’s or a third party’s) based on non-public information obtained during the performance of their duties for the company.
Inside information is information that investors consider information important in deciding whether to buy or sell a company’s securities. Because inside information may be valuable to investors, it is governed by laws designed to preserve public confidence in the integrity of the securities markets in many countries.

• We do not use or share confidential information about Netafim (or any other company that we learn about in the course of our work) with others, including a co-worker, family member or friend, for stock trading or for other purpose except the conduct of our business.
• We do not share inside information with other Netafim employees unless they need to know and are aware of their obligations in handling the information.

If you have any questions, please consult the Legal Department.

2.5 Reliable Reporting
For Netafim to be able to make responsible business decisions and to meet our legal and regulatory obligations, we need to have honest and accurate recording and reporting of information, including time sheets, sales records and expense reports.

• We are responsible for ensuring the honesty and accuracy of all company records, books, information and accounts, for example, expense claims, time records, and other business transactions. If you are not sure whether a certain expense is legitimate, ask your direct manager.
• We maintain all of the company's books, records, accounts and financial statements in reasonable detail, appropriately reflect the Company's transactions and conform both to applicable legal requirements and to the Company's system of internal controls.
• We do not maintain unrecorded or “off the books” funds or assets unless permitted by applicable laws or regulations, and we do not establish any undisclosed or unrecorded account or fund for any purpose.
• We always retain or destroy records according to the Company's record retention policies. In the event of litigation or governmental investigation, please consult the Legal Department.

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3. Conflicts of interest and additional business connections

Employees should be free from any interest, influence or relationship which might conflict, or appear to conflict, with the best interests of Netafim or the effectiveness of their job performance. Employees must therefore avoid any investment, or association, which interferes, or might reasonably be thought to interfere, with their best judgment in the performance of their job duties and other actions affecting Netafim. Any employee, who has specific questions regarding the propriety of a particular action, should speak with his or her manager.
A conflict of interest exists when a person’s private interest interferes in any way with the interests of the Company. A conflict situation can arise when an employee takes actions or has interests that may make it difficult to perform his or her work objectively and effectively, such as:

• Working for a competitor, customer or supplier while being employed by Netafim
• An employee or members of his or her family receiving improper personal benefits as a result of his or her position in the Company.

4. Fair Cooperation – How we choose and work with business partners

It is essential that we protect our reputation outside of the company. A crucial element in maintaining and enhancing this reputation is ensuring that we conduct ourselves appropriately and honorably with our business colleagues, suppliers, dealers and consultants.

Just as we expect to be treated fairly and equitably by our customers, so should we deal with our suppliers, dealers and consultants. We select these parties based solely on quality, cost, reliability and service factors, and in accordance with the company’s procedures.

• We do not let our business dealings on behalf of the company be influenced by personal or family interests. We do not accept gifts, entertainment, or favors from a supplier that might compromise, or appear to compromise, our purchase decision.

5. Compliance with the Law and Cooperation with Governments

As a responsible global company, it is essential for us to always maintain the highest ethical standards when we interact with the governments in the regions in which we operate. Our ability to operate freely and our success in each region, to a large extent, depend on maintaining cordial and ethical relations with the governments of these countries.

5.1 Working with government officials

• We are truthful and accurate in interactions with government officials and are responsible for observance of applicable laws and regulations when dealing with a government or its employees
• We may only contact government officials on behalf of the company if it is our specified job.
• We do not make any improper payments to any government directly or indirectly to secure, maintain, or direct business, or for any other purpose, including securing government licenses and permits.
• We must refer any subpoena, court order, official inquiry or request for customer information from law enforcement or government agencies to the Legal Department.

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6. Mutual Respect – How we build a comfortable work environment

Our success as an organization relies heavily upon the environment that we create for ourselves, and the mutual respect we show each other every day in the work place. We strive to maintain and foster a work environment that makes every employee feel at home and at ease.

6.1 Diversity and equal opportunity employment
Netafim’s diversity is an asset, and we celebrate our multi-cultural work environment comprised of employees from all over the world in locations around the globe. We embrace every employee, regardless of gender, nationality, religion, age, sexual orientation, physical ability, or any other aspect of diversity.

• We conduct our business activities with co-workers, customers, stakeholders and business colleagues with respect for all people without regard to differences or similarities.
• We hire employees based only on their abilities, qualifications, experience, training, work history, and overall job suitability.
• We do not engage in or support discrimination in hiring, compensation, access to training, promotion, termination or retirement based on gender, age, personal status, pregnancy, ethnic and national origin, religion, disability, sexual orientation, union membership or political opinions or affiliation.

6.2 Protection against harassment and sexual harassment
We strive to create a work environment that is completely free of any form of harassment, including:

• Slurs, intimidating or aggressive acts or words;
• Derogatory jokes or inappropriate gestures;
• Unwelcome physical or verbal conduct or communication;
• Display of offensive material associated with gender, religion, race, nationality, sexual orientation or physical ability.

To ensure the protection of all employees, we maintain a strict sexual harassment policy. Sexual harassment may involve unwelcome sexual advances, either physical or verbal. Verbal sexual harassment may include requests for sexual favors, graphic verbal commentaries about an individual’s body or describing an individual in a sexually degrading manner. Even the display of sexually suggestive objects or pictures in the workplace is considered sexual harassment.

Netafim will not tolerate any type of retaliation against an employee filing a harassment complaint in good faith. We ensure that no one making a good faith report of harassment or unfair treatment will suffer any negative employment consequences.

6.3 Mutual respect and privacy
We respect the privacy of personal information of employees, customers, contractors or vendors all times. We do, however, have to balance this need for privacy with our need to collect and maintain essential information, which is gathered for business, legal, and contractual purposes only. It is kept strictly confidential and only given to those who have a legal right or legitimate business need to know.

• We ensure that any personal information about co-workers that we have access to is not misused or improperly disclosed.
• We do not claim any privacy privileges for communications transacted through the Netafim facilities, beyond those provided by local legislation.
• Netafim may supervise the use of e-mail and the Internet subject to local legislation. All e-mail and Internet communications made through Netafim facilities are treated as Netafim business information and so may be accessed, retrieved, monitored and disclosed.
• Subject to applicable laws, Netafim may search employee property, such as briefcases, purses, and private vehicles brought onto its premises, when we have good reason to believe that this property contains evidence of employee wrongdoing.

6.4 Customer and Supplier Privacy
Maintaining the privacy of our customers and suppliers is an ethical and legal requirement.

• We only use information that our customers have given to us for authorized business purposes.
• If we are entrusted with private information about customers or suppliers, we ensure that it is not misused or improperly disclosed.

6.5 Health and safety
We have taken it upon ourselves to maintain the highest health, safety and environmental standards to protect the lives and good health of our employees.

• We follow the safety procedures and protect ourselves, our co-workers, the community and the environment.
• We report dangerous conditions and other unacceptable health, safety, or environmental equipment, practices or conditions immediately so that workplace accidents are minimized and corrective actions can be taken.
• We do not engage in violence or threatening behavior while working on Netafim business either on or off the premises.
• We do not use, possess, purchase, manufacture, sell, or distribute illegal drugs or controlled substances while on Netafim property or while engaging in any Netafim activity.
• We report to work in condition to perform our duties, free from the influence of illegal drugs or alcohol.
• If we witness or become aware of an incident or threat of violence or substance abuse, or have concerns for our own safety or that of others, we immediately report the situation to a manager.

6.6 Political activity in the work environment
Netafim recognizes the right of each employee to have a personal political opinion. However, in the interests of maintaining a congenial, conflict-free work environment, we do not conduct any political activity during work hours in the work environment, or use of any of the company’s assets for promoting a certain goal or a political opinion.

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7. Responsibility – How we interact with the wider society

We make ourselves a stronger, more trustworthy company by taking responsibility for our place in society, respecting the communities in which we operate and observing the laws of the countries in which we operate.

7.1 Respecting the law
Our ethical and moral standards are based on obeying the letter and spirit of the law.

• We respect and obey the laws, rules and regulations of the cities, states and countries in which we operate.
• If we provide services at a customer’s premises, we observe the customer’s rules and policies (e.g., in relation to safety regulations).
• If we are uncertain about any of the legal rules involving the Company’s business, we should consult with the Company’s Legal Department before taking any actions.

If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about these conflicts, you should ask the Legal Department how to handle the situation.

7.2 Protecting the environment and quality of life
At Netafim, we strive to create a sustainable future for our customers and the countries they live in. We are committed to developing methods and systems for saving water and acting as full partners in the effort to promote and increase the global production of food for the welfare of hungry populations.

• We aim to reduce the impact of our actions on the environment and take appropriate initiatives to improve the environment and quality of life in the communities and countries in which we operate.
• We treat all our stakeholders in a socially responsible manner and promote open dialogue with them about our economic, social and environmental contributions and performance.

7.3 Caring about the community

Our success depends on the communities and the environement in which we operate. Corporate Social Responsibility (CSR) is integral to our values and defines the way we go about our business.

8. Reporting non-compliance of this code
The Code can only be effective if it is upheld by all employees in the company.

If anyone observes illegal or unethical behavior, they must report it to supervisors, managers or other appropriate personnel. Failure to report such existing or potentially wrongful behavior is itself a violation of this Code. Netafim’s policy prohibits retaliation for reports of misconduct by others made in good faith by employees. The Company will take appropriate action to investigate any reported violations of this Code. If a violation has occurred, the Company will take appropriate preventive, disciplinary or legal.

Disciplinary measures may apply to any supervisor who directs or approves such actions, or has knowledge of them and does not promptly correct them. Employees are expected to cooperate in internal investigations of misconduct.

• 8.1 Submission of Complaints
  
• Complaints about violations of the law or of the Code can be submitted in any form to your direct manager, to the head of human resources in the relevant unit or via the means specified in Netafim's "Whistleblower Policy".
• We will not allow any retaliation against reporters of violations; however, we understand the need for anonymity in certain situations and we welcome anonymous reports of violations. To ensure the anonymity of all complaints and specifically complaints regarding accounting practices, internal accounting controls and auditing matters, all complaints can also be reported to our independent internal auditing firm. All reports submitted to the internal auditing firm will be reported to the chairman of the Board of Directors Audit Committee. Employees must be aware, however, that anonymous reports may be more difficult to investigate.
• It is essential that you bring any concerns to the attention of the company so that problems can be resolved quickly before serious harm is done.
• It is a breach of this Code to fail to report a violation or suspected violation that you may know about, or to refuse to cooperate with the investigation of a suspected violation.

9. Application to Members of the Board Directors

This Code of Business Conduct applies to members of the board of directors of the Company and references in this Code to employees include members of the board of directors.
 

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C. Business Ethics Procedures – Implementation and Control

The Business Ethics Code document presents the company’s ideology including instructions for its implementation in terms of conducts and actions to be reflected in company’s management practices. Following are the controlling methods for the implementation of these instructions:

Management and Control

HR manager is responsible for the Business Ethics Code implementation. The person appointed by HR manager as in charge of code’s effectuation will be responsible for the following actions:

A. Building training program that will promote assimilation of code rules by all company employees.

B. Keeping the code updated by introducing necessary recommended changes.

C. Advising employees on issues concerning business conduct or specific rules in the code.

D. Dealing with violations of code’s rules will include:

Encouraging employees to report on code violations.
Formulating an accessible and confidential reporting procedure.
Protecting the reporting employee from current or potential harassments.
Controlling complaint handling procedure
Update the reporting employee regarding complaint handling process and results.

Obligation to Implementation
It is upon the responsibility of all the Netafim employees at all levels and fields of responsibility to implement the code, follow its rules and lead a proper business conduct. As part of this obligation, the employees shall follow the following rules and principles:

A. Memorize the values of the Business Ethics Code.

B. Follow its rules.

C. Be alert to violations of code rules.

D. Refrain from situations, which might lead to illegal or immoral activity, and prevent such actions conducted by others.

E. Consult with the person in charge of the code on any queries.

Training program

A. Training sessions dealing with the principles and rules of the Business Ethics Code will be an integral part of the company’s general training activity.

B. HR manager will present the messages to the management members. The latter, following a top-down process, will instruct their subordinate managers and so on to the last employee.

C. Prior to training commencement, the CEO will circulate a letter stressing the importance of the code and the expectations to be met by each of the employees.

D. Training will be conducted in organic teams.

E. The message to the managers should be clear – they are personally committed to strictly following ethics code rules. However, it is recommended that company employees be appointed in charge of critical issues in the ethics code such as sexual harassment (as required by Israeli law).

F. The managers will convey the messages to their employees using a presentation to be prepared by the team in charge of the ethics code.  Information portfolios will be handed out during the training sessions whereas the principal issues be displayed in the presentation (brief video film should be considered)

G. Training sessions will be relatively short (up to two hours).

H. Training sessions will present a number of relevant business dilemmas to be discussed in groups.

I. At the end of the training, each employee will receive a copy of the ethics code to be read and signed as a commitment to follow.

J. A brief test (similar to the one used in sales training) can be used at the end of training to ensure the messages have been clearly and properly conveyed.

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