Dear Business Partners,

With its "Passion for Denim, Passion for Life" sustainability path, I am pleased to confirm that Calik Denim reaffirms its support of the Eight Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Serhat Karaduman
General Manager

• No discrimination is allowed within the scope of our business ethics rules.
• Within the scope of our business ethics rules, women and gender equality are given importance.
• Within the scope of legal procedures, 3% of our staff is employed with a disability.
• Human trafficking is a crime and our company takes a determined stance on this issue.
• Within the company, no discrimination is made between employees, suppliers, customers and other stakeholders for reasons such as religion, language, race, gender, political opinion, financial and social status.
• Our goal is to increase the number of female employees in the near future.
• Our employees have the right to work after retirement.
• Our target in the near future is to provide trainings and seminars on the importance of human rights.
• Our wage system is being reviewed with the practice of equal pay for equal work.
• It is our target in the near future to revise our working environments in accordance with the work processes, health and welfare of our employees.

• Participated in the Target Gender Equality program within the scope of human rights, gender equality and diversity practices
• If the worker is not satisfied with any practice within the company, they can call the ethics hotline.
• If the employee is not satisfied with any practice within the company, they can apply to the legal authorities.

• Compliance of workers' rights with legal procedures is audited by internal and external audits.
• It can be measured by training hours per person.
• The number of ethical line call are measured.

• Child workers under the age of 18 cannot be employed in the company.
• Forced labor is not allowed within the company. Forced labor has been prevented by both contract and legal regulations.
• There are no immigrant employees in the company.
• No discrimination is allowed within the scope of our business ethics rules.
• All employee rights are protected under the law no. 4857.
• Occupational health and safety of all employees is protected by Law No. 6331.
• The rights of workers are protected by the collective bargaining agreement.
• The rights of workers are protected by the trade union.
• Occupational health and safety practices are the strategic priority of our company.
• Our wage system is being reviewed with the practice of equal pay for equal work.

• Employee rights are protected by legal procedures, employment contract and trade union.
• The trade union raises awareness of employees about their rights.
• If the worker is not satisfied with any practice within the company, they can call the ethics hotline.
• If the worker is not satisfied with any practice within the company, they can send email to Human Resources Management
• If the employee is not satisfied with any practice within the company, they can apply to the legal authorities.
• Workers can submit their suggestions to suggestion boxes within the company.
• Occupational health and safety experts and doctors inform employees about workplace health and safety rules.
• Our employee rights are clearly stated in contracts and in the employee handbook.
• Employees can access all procedures and documents through our QDMS system
• Employees are regularly informed through occupational health and safety trainings.

• Compliance of workers' rights with legal procedures is audited by internal and external audits.
• The number of ethical line calls, suggestion boxes and suggestion mails are measured.
• The number of occupational accidents is tracked and measured.
• Measured by regulatory and preventive actions.

• We conduct cradle-to-gate life cycle assessment studies for all of our products to assess the company's environmental footprint and impact.
• As Calik Denim, we have a written company policy on environmental issues, including the prevention and management of environmental risks.
• We can summarize our sustainability targets on environmental issues until 2025 as follows.
o Target 1. Reducing carbon emissions per unit production by 20%
o Target 2. Increasing renewable energy generation by 10% compared to 2020
o Target 3. Increasing electricity purchases from renewable sources to %50
o Target 4. Reducing water consumption per unit production by 30%

• As Calik Denim Sustainability Team, we regularly provide sustainability and water saving trainings to raise awareness of our employees on environmental protection.
• We have an in-house zero waste annex that we set up to reduce waste materials and consumption or resources.
• In addition to our activities organized within the scope of ISO 5001 energy management, we also have energy efficiency studies with our customers.
• As Calik Denim, we attach great importance to the development of environmentally friendly technologies. In this context, we design processes that consume less water, energy and chemicals.
• We created a methodology to raise awareness among suppliers by asking about the environmental footprint of products or services. We recently shared it with our suppliers.
• We have an environmental management system to identify, monitor and control the company's environmental performance.
• The distribution of responsibilities for the protection of the environment within the company is made within the scope of the environmental management system. In addition to these, the occupational health and safety team and the sustainability team also support the consolidation of these responsibilities with awareness trainings.

• As Calik Denim, we attach great importance to the environmental issue and we strive to take continuous actions. We follow these actions with the following methods.
o Following our ISO 50001 energy management system and ISO 140001 environmental management system certificates and related actions
o The sustainability committees we formed within Calik Denim and the activities carried out by these committees

• We fulfill all our legal obligations. However, any legal issue that may arise is followed by our legal department.
• Although the developments regarding our targets are progressing regularly, we have canceled our coal boilers and become fully operational with our natural gas boilers. Thus, our carbon emissions have decreased considerably compared to production with coal.
• Sustainability studies are presented to the senior management every 3 months.
• Our environmental performance is audited once a year within the scope of Higg FEM. In addition, there are occasional customer audits.

• As Calik Denim's Finance Team, we have highly awareness of risk of corruption and possible undesireble outcomes of transactions if there is no barriers to people and any system which we work with.
• A risk assessment is the first step towards establishing an effective and meaningful anti-corruption activities.
• In order to reduce risk of corruption, bribery and extortion firstly, we set company policy and declarate to existing finance employees and new candidates. On the other hand, the labor contracts refer to these policies and protocholes of precautions and actions of corruption, bribery and extortion etc. related threats.
• Our main goal is to show zero tolerance to any actions that may cause corruption and misappropriation which would damage our reputation and also cost commercial losses in any kind.

• Communication and training are our top priority application methods.
• The employees are well trained how to react and behave in case they are exposed and face any kind of bribery and corruption related threats. Precautions to be taken are determined in advance and distributed to employees.
• Live examples and are examined and taking suggestions to prevent possible damages. Work ethics is one of the most importann training section.
• Both online and face to face trainings are organised to be up date for new corruption ways used in the World.
• Due diligence is conducted periodically, risks are identified and authorizations are made through teamwork.

• Internal and independent audit are conducted to be specified to find inadequacies from both within company and outside of organisation. In this audit studies we can ensure consistency anti-corruption commitment. Calik Denim is under audit of Public institutions such as, Ministry of Customs and Trade and Ministry Treasure and Finance, these audit repors are examined management and necessary actions are taken to fight corruption.
• Due to the pandemic, home office work style became more popular, although the issue of information security has gained importance, cyber attack and fraud cases are being investigated.