Audit Committee Overview

BAE SYSTEMS • • Product Trading Policies The policy applies to BAE Systems plc, its wholly owned subsidiaries and all other companies and entities controlled by BAE Systems plc have a substantially equivalent policy applicable. Our Product Trading Policy helps our line leaders and employees apply the Responsible Trading Principles in practice. It requires them to assess business opportunities according to the level of risk associated with: The type of product and its intended use. The end user The country of sale • Product Trading Evaluation Criteria Does the Product fulfil its intended purpose and match the customer's stated requirement? Does the Product conform to BAE Systems Product Safety Policy? Is the Product able to distinguish planned from unintended targets? Is it proportionate to the role and necessary for its intended purpose? Can it reasonably be anticipated that the Product will be controlled or prohibited in the foreseeable future? Is the Product an entirely new class of weapon or capability? Is there a significant, specific, and foreseeable risk of the Product being diverted or transferred to an unapproved user or utilised for an unauthorised purpose? Does the Product create a significant lasting adverse environmental or health impact over and above that reasonably necessary in its manufacture, storage, deployment, use, or disposal? Can the Product's end use reasonably be expected to violate civil liberties or human rights? Can customers be reasonably expected to maintain and use the Product safely through life? Is there a reasonable or foreseeable risk that the customer or end user may be subject to regime change or that foreign policy changes such that the reputation of the Company might become damaged? Is the Company able to supply the Product? Copyright© 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. 39

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