1st September 2022

To our stakeholders:

I am pleased to confirm that Mondottica Limited reaffirms its support of the Ten 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. Our adherence to the regulations, Directives and ISO Standards: Regulation (EU) 2017/745 of 5 April 2017 on Medical Devices ( Class 1) also supports our culture of continuous improvement in quality standards.

We also commit to share this information with our stakeholders using our primary channels of communication.

Yours Sincerely

Anthony Pessok
CEO

Mondottica's Ethical Code, reviewed and redistributed annually sets out our commitment and statement of support for the Universal Declaration of Human Rights, and compliance with the law supporting Human Rights and Fundamental Freedoms. Our values describe the positive behaviours expected from all staff, and which support and align with our Ethical Code and the way we do business.

Our collection of company policies including : Equality, Diversity & Inclusion, Data Protection & Privacy, Anti-bribery & corruption, Whistleblowing and Health & Safety provide clarity on our expectations to all and set out the actions we will take in the event of non-compliance.

We require our Suppliers to recommit to our Supplier code of Conduct on an annual basis which adheres to the Global Compact on Human Rights, and our Ethical Code is re-distributed and discussed with our business partners.

We work in collaboration with our Partners to commit to their Code of Conduct or Ours - whichever is a higher standard.

Finally, Mondottica was a contributor to the first 'Diversity and Inclusion' in the fashion industry report conducted this year in conjunction with the British Fashion Council.

For the coming year we will
- Initiate discussions with our Brand partners to identify any common Human Rights risks and collective ways to mitigate and address concerns.
- Review the findings and best practices from the first Diversity and Inclusion in the Fashion industry report and set tangible goals

We have developed an internal Human Rights risk assessment including Health and Safety risks to Staff, Customers and any risks through our product development.

Our expanded Health and Safety committee works at a local team level to drive a culture of Health and Safety within our UK premises, distributing the allocation of responsibilities throughout our business, and their work is audited annually by an external party.

All staff have received training from a third party on Human Rights issues including Health and Safety, Data Privacy, Equality and Diversity and Unconscious Bias. This training is underpinned by policies which must be acknowledged as 'Read and Understood'. Awareness and transparency is further raised through our anonymous 'suggestion form' and 'whistle-blower form' and a well publicised and clear grievance procedure. The reporting of genuine concerns is also externally available via our website within our published Code of Ethics

Our Diversity and Inclusion group, newly established within the last 12 months is gaining momentum, having published an Interfaith calendar, led discussions at team level to discuss feedback from Unconscious bias training and posted internal communications on Diversity within our Design process and on Trans-Gender models being used within our recent collaborative Brand imagery campaigns.

Our Human Resource team have conducted a Gender pay gap analysis for 2 years running, even though we fall below the statutory requirement to publish this data, and have taken steps to close the Gender pay gap for a small number of individuals within the business.

We monitor and evaluate performance through the following:

- Internal publishing of Diversity metrics with goals for progress
- Annual Health and Safety Audit of our UK premises by an external party with Zero findings for January 2022 and zero staff complaints within the last 12 months
- Monitoring of grievances and any subsequent disciplinary findings, of which there have been zero grievances during the last 12 months
- There are no current investigations, legal cases rulings or fines related to Human Rights issues
- Our 'People' metrics which include the above are shared annually with the Board of Directors

Our Code of Ethics explains our commitment to Environmental and Social governance issues to all those within our value chain.

We respect and ensure as a minimum we comply with the laws of the countries, regions, or states in which we operate including Labour laws, employment laws and rights. Our policies include zero tolerance on human trafficking, and ban all forms of forced, compulsory and child labour and zero tolerance on discrimination.

All employment is freely chosen and entered into willingly, and is governed by a robust contractual agreement offering higher than the minimum statutory employment rights within the UK. Contracts of employment are periodically reviewed by an independent employment lawyer and are discussed transparently and accompanied by a full job description, and an offer of employment providing both non-contractual and contractual benefits.

Our Code of Ethics is reviewed annually and redistributed to our suppliers, and business partners. This is supported by a Supplier code of conduct detailing specific requirements we place on our suppliers to commit to local labour rights. Our factory review during the last 12 months has reduced the number of factories we work with and re-enforced our requirements. Our Brand partners and major customers hold us to account by gaining our commitment to their code of conduct or other similar standard or requirement.

Our internally developed risk assessment covers areas of risk and preventative measures for: Minimum wage compliance, equal pay, objective employment related decisions, protection from all staff from harassment, abuse or threat, company participation in forced, bonded or child labour, and the right to organise work.

Specific goals for the upcoming year:
- Identify opportunities to expand our internal risk assessment to our Product Development partners in key countries of operation

We have developed an internal risk assessment to address labour risks as above.

All staff have received training from a third party on labour laws including Health and Safety, Whistleblowing, Discrimination, Modern Slavery and Human Trafficking, and this training is underpinned by policies which must be acknowledged as 'Read and Understood'. We insist on 100% completion of all training. Awareness and transparency is further raised through our anonymous 'suggestion form' and 'whistleblower form' and a well publicised and clear grievance procedure. The reporting of genuine concerns is also externally available via our website within our publicised Code of Ethics. Further our full collection of employment policies include Family friendly policies ( maternity/paternity/adoption/flexible working), Attendance, Holiday, Social media, first aid, Training and Education support all of which are designed to give clarity and transparency of employment with us. All of our employment policies are written in line with Xpert HR external best practice.

Team leaders and managers have been invited to a series of informal coaching and development sessions to ensure full understanding of employment policies, and to promote their responsibility for the protection of labour rights. All recruitment is carried out using internal guidelines for consistency and objectivity of selection criteria and with HR/Independent assessment, and right to work checks are 100% fulfilled.

Our HR team periodically review and assess the validity of Job descriptions through internal discussion and review, and external market rate review for comparable jobs, and this is aligned with the gender pay gap analysis already described. The HR team are an integral part of daily operations within the business, ensuring that they attend team meetings on a frequent basis to observe fairness and identify risk areas.

Our annual factory review ensures adherence of our own standards and that of our Brand partners and within the last 12 months we have ensured that at least one of the following certifications are in force within all of our factories: SMETA ( Sedex Members Ethical Trade Audit), BSCI ( Business Social Compliance Initiative) or WRAP (Worldwide Responsible Accredited Production).

We monitor and evaluate performance through the following:

- Internal publishing of Diversity metrics with goals for progress
- Annual Health and Safety Audit of our UK premises by an external party with Zero findings for January 2022 and zero staff complaints within the last 12 months
- Monitoring of grievances and any subsequent disciplinary findings, of which there have been zero grievances during the last 12 months
- There are no current investigations, legal cases rulings or fines related to Labour issues
- Our 'People' metrics which include the above are shared annually with the Board of Directors

The Mondottica Ethical Code; reviewed and redistributed annually sets out our commitment to the UN Global Compact and the Ten principles including 7,8 and 9 relating to the Environment.

Since September 2021 we have developed knowledge and partnerships on the sustainable processes and design materials available to include in our product, packaging and POS. This includes the use of an increased and measurable amount of bio-based and certified recycled content. We are committed to engaging with our Brand partners to drive strategy to increase the use of sustainable materials and set targets for future production.

We value and prefer suppliers with one of the following sustainability awards: ISCC (International Sustainability and Carbon Certification), cGMP ( Current Good Manufacturing practices, Carbon Neutral Organisation and ECOVADIS silver.

Our recently published Environmental Policy sets our goals for reducing our impact on people and planet and take actions to reduce or remove any negative impact our operations may have. This policy is a commitment to our goal to obtain Investors in the Environment status within the next 12 months and includes our commitment to achieving Net Zero emissions within our direct operations by 2027, monitoring our key resource usage, continually improving our waste and recycling processes, and offsetting our measured carbon footprint through recognised environmental projects until we reach net zero for direct operations.

Our internal sustainability group has been focussed on 5 key areas:

Product, Packaging & POS, People, Partnerships and Energy.
Members of these groups come from all teams within the business to ensure allocation of responsibility and accountability.

We have raised awareness through a cross-functional company wide sustainability group, which meet approximately every 8 weeks to identify initiatives to reduce waste, ensure responsible resource usage, set and monitor targets for improvement, develop future sustainable product and influence our partners.

Key activities within the last 12 months include:
- Production of a sustainability metric dashboard of key performance indicators.
- Launched 1 collection where 100% of product has a sustainable element
- Collaborated with Brands to identify and influence a higher use of sustainable material within future launches
- Reviewed all case materials to identify where sustainable substitutes can be switched
- Reviewed all our print laminate to ensure all printing in the UK is 100% recyclable
- Measure our CO2 Emissions for scope 1,2 and 3 and set targets for Net Zero
- Reviewed and reduced the amount of point of sale material that is ordered, used and sent to landfill
- Implemented paper free processes within some departments
- Moved all fleet vehicles to hybrid

Additionally our internal Environmental risk assessment has reviewed:
- Environmental damage through production processes, air pollution, waste, water treatment, water usage
- How we deal with an environmental emergency
- Use of chemical or other dangerous substances
- co2 emissions

Through our environmental risk assessment, we have identified the risk of any environmental incident from our direct operations and determined this as low. There are zero investigations, legal cases, rulings or fines related to any environmental issue.
Any printing or solvent spillage from small scale in house printing is managed through COSSH and using small quantity containers, and audited through an external health and safety annual review.
There are no potential hazards or risks that are reportable to the environment agency identified through our operations via the Health and safety audit. We do not transport dangerous products and comply with our obligations under the Packaging Waste regulations 2007, for which we are under the tonnage threshold for registration. We are however prioritising the reduction of Point of Sale material, which we have identified as a landfill risk.

Our energy usage is reduced on a like for like year basis (2019), and we are monitoring paper usage, water and waste during this first year of reporting.
We have set 2027 as our target for Net Carbon emissions within scope 1&2 and in the meantime will offset our carbon emissions from 2023.

Our metrics are supplied to our Board periodically.

The Mondottica Code of Ethics sets our our commitment to doing good business and to the UN Global compact and specifically Principle 10. The code of Ethics is published on our Website. This is supported further by a written and published Anti Bribery policy which requires all staff to confirm they have 'read and understood' the requirements and standards. The policy details advice and procedures for specific situations relating to bribery, extortion or facilitation payments.

The policy is reviewed and republished annually and complimented by specific anti-bribery and corruption training for all staff, and a mechanism to raise anonymous concerns through our Whistle-blower form, available both internally and to external partners.

Our Ethical code, Anti Bribery policy, and supplier code of conduct : which all require staff, partners and suppliers to adhere to our anti-corruption principles; are redistributed annually with a renewed request for commitment.

Specific goals in the area of anti-corruption for the upcoming year:
- Implement a territory by territory risk assessment for commercial partners

During the last 12 months, we have developed and implemented our internal risk assessment which addresses the risk of corruption in our business practices, how we protect our business contacts and partners from anti-corruption or unethical behaviour, ensuring that our internal procedures are aligned with our policies and commitments, and ensuring there is no force or threat in our business relationships.

This has involved discussion and allocation of actions across and between commercial, finance and HR teams, and an on-line platform has been used to deliver specific anti-bribery and corruption training, along with raising awareness of our Whistle-blower reporting mechanism through our own internal communication platform.

There are no internal issues or anonymous concerns raised through our reporting mechanisms and our annual external financial audit raised no concerns. We have a zero tolerance approach to bribery and corruption and any issued raised would be investigated and dealt with through our written procedures either within our Disciplinary policy, Anti-Bribery or Whistle-blower policy

We monitor and evaluate our anti-corruption performance through regular internal audit and a measurement of the incidence of events relating to bribery and corruption.

We have no investigations, legal cases, rulings, fines or other relevant events to declare.
The probability of any of the identified risk areas occurring has been assigned as unlikely. Nevertheless we are committed to making improvements to further strengthen the awareness and mitigate all risks. The measures by which we manage this are:
% of staff and commercial partners re-committing to our code of ethics, anti-bribery policy and supplier code of conduct
% of training completed
Financial background checks on new commercial partners
Control of company processes to deliver goods overseas
External documentation and customs checks via a reputable third party
Monitoring of customer behaviour by Operations teams