Principles and Policy on Responsible Business Conduct

The undersigned, Angelo Teresio Gregotti, legal representative of the company Aurifil s.r.l., with registered office at via S.Maria Valle 3/a, Milan, province (MI), Italy, guarantees the legality of business activities and compliance with all applicable local, national, and international laws and regulations or the criteria of the GOTS certification standard if these are more stringent than the legislation.

The company particularly guarantees compliance with environmental regulations and the protection of human rights and workers’ rights, and also the main conventions of the International Labour Organization (ILO) and the conditions provided for by national bargaining, avoiding causing, contributing to, encouraging, or supporting human rights violations through its activities.

This document sets out the ethical principles that the company commits to pursuing in its activities and prescribes the responsible business behaviors and practices that the company intends to adopt and promote among all parties involved in business activities, both directly and indirectly, to maintain conduct consistent with ethical principles.

To this end, all company personnel, from management to employees and collaborators performing functions for the company or on its behalf, whether employees or not, are required to read this document, align their behavior with what is defined herein, and act with honesty and integrity.

As far as possible, the company is committed to disseminating this document also among its business partners, inviting them and their subcontractors to adhere to the principles contained herein, suggesting correct behaviors and actions to avoid, and spreading such principles and ethical behaviors along the entire supply chain.

The company also commits to making this document public so that all other interested parties can access it.

Finally, the company commits to providing the necessary technical, economic, and professional resources to fully achieve the objectives of this document.

1. Principles and Code of Conduct

1.1 Human and Workers’ Rights

The company commits to respecting, protecting, and promoting the legislation in force for the protection of human and workers’ rights, and in particular to:

Not resort to forced or compulsory labor. No worker should be forced to work under threat of punishment, with the use of force or intimidation. Workers can voluntarily terminate their employment relationship after a reasonable notice period and are not required to deposit bonds or identity documents with the employer or third parties. Workers are free to leave the workplace at the end of their shift and are not required to pay fees or other costs for hiring or maintaining the job. Workers are not forced to use company-provided accommodation or transport.

Not resort to child labor. The company does not employ children below the age set by national laws for access to work or the age for compulsory schooling, and in any case below 15 years (or 14 years in the case of developing countries as per ILO Convention 138). If a child below the minimum age is employed by the company, it will take all appropriate measures to remove the child from the workplace and ensure appropriate remedy, including active support for access to education.

Protect young workers. Young workers (under 18 years of age) are not employed during nighttime hours or in conditions that compromise their health, safety, or moral integrity and/or damage their physical, mental, spiritual, moral, or social development. Young workers do not work more than 8 hours a day or beyond the national legal limit. They do not perform overtime work and enjoy a minimum consecutive rest period of 12 hours, in addition to regular weekly rest days. Continuous education or additional educational opportunities, such as vocational or technical training, are allowed.

Abstain from practicing and not tolerate discrimination, harassment, and violence. The company does not adopt, support, or tolerate discrimination in employment, including recruitment, hiring, training opportunities, working conditions, job assignments, compensation, benefits, promotions, discipline, termination, or retirement based on sex, gender identity, age, religion, marital status, parental status, race, caste, social background, illness, disability, pregnancy, ethnic and national origin, nationality, membership in worker organizations including unions, political affiliation, sexual orientation, or any other personal characteristic. The company promotes a harassment-free and violence-free environment where all individuals are treated with respect and dignity and encourages anonymous reporting of abuse or harsh treatment. The company will seriously address all accusations of discrimination, violence, and harassment, applying, if necessary, disciplinary measures up to termination for the perpetrators of such actions. The company’s disciplinary procedures are written and communicated to all workers.

Achieve gender equality. The company offers equal opportunities to all individuals, regardless of their gender, gender identity, and sexual orientation, in all aspects of training and professional and personal development. The company is committed to achieving gender equality through fair, just, and transparent recruitment, promotion, and remuneration procedures and practices. The company protects pregnant women, mothers, and their children, including their health and safety, workers with family responsibilities, from discrimination, dismissal, and career slowdowns.

Respect the right to freedom of association and collective bargaining. The company does not interfere with, obstruct, or prevent workers’ right to join or form unions or worker associations of their choice and to bargain collectively. The company commits to respecting collective bargaining agreements and allowing worker representatives access to the workplace to perform their representative functions.

Ensure safe and healthy working conditions. The company takes appropriate measures and implements systems to prevent accidents, injuries, and illnesses associated with work activities or occurring during work, minimizing, as far as reasonably practicable, the causes of workplace hazards. The company provides special protection concerning health and safety to vulnerable categories of workers such as – but not limited to – young workers, new mothers and pregnant women, and persons with disabilities. The company provides adequate fire protection and ensures the resilience, stability, and safety of buildings and equipment, including residential facilities where provided.

Recognize fair remuneration. Wages and benefits paid by the company for regular working hours meet, at a minimum, national legal standards or sector benchmarks, whichever is higher. In any case, wages should always be sufficient to meet basic needs and provide discretionary income. The company pays a premium for overtime work.

Comply with working hours regulations. The company ensures that working hours comply with national laws, collective bargaining agreements, and sector benchmarks, whichever offers greater protection for workers. Workers are not required to work more than 8 hours a day or 48 hours per week on a regular basis (excluding overtime), and daily and weekly rest periods are guaranteed. Overtime is voluntary, does not exceed 12 hours per week, and is not required regularly.

Refrain from precarious work contracts. The company is committed to establishing recognized and regular employment relationships in accordance with national legislation and international labor standards. The company avoids the use of labor-only contracts, subcontracting, home working agreements, apprenticeship schemes with no real intent to impart skills or provide regular employment, excessive use of fixed-term or seasonal contracts to circumvent obligations to employees under labor or social security laws and regulations derived from a regular employment relationship.

Ensure equal treatment of migrant workers. The company refrains from implementing discriminatory treatment towards migrant workers compared to local workers. The company does not withhold migrant workers’ travel documents and provides them with a written employment contract in a language understandable to the worker with clear information on the terms and conditions of employment. If the company provides food, accommodation, transport, or other services to such workers, these must be provided at a rate not higher than the market rate.

Ensure equal treatment of home workers. The company refrains from implementing discriminatory treatment towards home workers compared to those working at the company’s premises. The company commits to offering home workers the same protections and treatments as those working at the company’s premises.

Protect minorities. The company is committed to respecting the human rights of individuals belonging to specific groups or populations at risk of particular vulnerability and who have specific protection, including indigenous populations, women, national or ethnic, religious, and linguistic minorities, children, persons with disabilities, and migrant workers and their families.

The company requires all personnel to contribute to respecting human rights by refraining from behavior contrary to the company policy, monitoring any abuses that may occur within the company, immediately stopping any behavior contrary to such rights, and taking all necessary precautions within their competence to prevent risks to their health and safety and that of others and to prevent accidents in the company.

1.2 Environmental Protection (Environmental and Chemical Policy)

The company commits to respecting the legislation in force for environmental protection and reducing its environmental impact, and in particular to:

Monitor and reduce energy and water consumption. The company commits to collecting data on energy and water consumption and setting and achieving consumption reduction targets. It also commits, where possible, to increasing the use of renewable energy sources.

Monitor and properly dispose of wastewater. The company commits to collecting data on the amount of wastewater produced through its activities and ensures that such wastewater receives adequate treatment before entering the water flow, to meet minimum requirements set by national or local laws or the chosen standard, whichever is more stringent.

Monitor greenhouse gas emissions. The company commits to identifying sources of greenhouse gas emissions into the atmosphere and collecting data on such emissions to monitor them. The company also commits to identifying measures to reduce such emissions, as much as possible.

Monitor and properly dispose of solid waste. The company commits to collecting data on the amount of waste produced, disposing of such waste in compliance with local and national regulations, and reducing waste production, promoting, where possible, reuse and recycling practices. The company ensures not to incinerate waste on-site and not to dispose of waste in uncontrolled landfills.

Ensure responsible management of chemicals used in the processing of certified products. If the company uses chemical inputs for the processing of certified products, it commits to collecting and maintaining information on the management and safe use of such inputs to prevent harm to the people using them and the environment.

The company requires all personnel to contribute to environmental protection by ensuring that their activities have the least possible impact on the environment, using resources responsibly and carefully, handling chemicals with maximum attention to their safe use, and avoiding dispersing them into the environment.

1.3 Consumer and Customer Protection

The company commits to acting in accordance with fair business, marketing, and advertising practices towards its customers and consumers, adopting reasonable measures to ensure the quality and reliability of the products and/or services offered. In particular, the company commits to ensuring that products and/or services offered meet legal requirements and those of the GOTS standard. It also commits to providing accurate, verifiable, and clear information on the products and/or services offered.

The company requires all personnel to collaborate in producing products and/or services that meet customer expectations and comply with the relevant regulations, reporting any anomalies and refraining from providing misleading or deceptive information.

1.4 Prohibition of Bribes and Corruption

The company, in its business dealings, abstains from illegal or collusive practices and behaviors, does not make illicit payments, and does not promote attempts at corruption and favoritism. Such behaviors, in fact, damage society by distorting both the rules of fair competition and the reasons that should underpin decisions, thus compromising the successful outcome of business activities and causing negative impacts both on the market and on society as a whole. Moreover, such behaviors could result in criminal penalties for both the company and the personnel responsible for such behaviors.

The company strictly prohibits all personnel from engaging in corruption in their activities and from offering, promising, paying, requesting, or receiving bribes or other undue advantages for themselves or others, either directly or indirectly, as a reward for improper actions. No type of corruption or facilitation payment is allowed to expedite routine administrative matters.

1.5 Responsible Procurement Practices

The company commits to preventing its contribution to negative impacts through its procurement practices and promoting a supply chain that respects human and workers’ rights and the environment. It commits, as far as possible, to establishing stable contracts and fair supply conditions with its suppliers.

The company requires its personnel involved in the selection and management of suppliers and supplies and in ordering raw materials and finished products to adhere to the supply conditions stipulated in the contract.

1.6 Transparency in Accounting Records

The company commits to maintaining proper accounting and correct financial reporting, in line with current legal provisions, to ensure the necessary transparency and correctness to instill confidence in its activities.

To achieve this goal, the company asks all involved personnel to actively collaborate in building and maintaining the reliability of the company and its operations, maintaining accurate, timely, complete, correct, and understandable accounting records, prepared with diligence and honesty. The recording of false or misleading information and data is categorically prohibited. All payments must be supported by an invoice and a contract or order containing sufficient details to reflect the services performed and must be recorded accurately and promptly.

1.7 Confidentiality of Personal Information

The company ensures the confidentiality of all information in its possession and compliance with personal data management regulations to avoid the communication or dissemination of personal data without the consent of the interested party.

The company invites all personnel to treat with absolute confidentiality the data, news, and confidential information they may become aware of in the course of their work activities.

1.8 Reporting Violations (Whistle-blowing)

The company has established a mechanism for reporting violations of this document, anonymous, non-discriminatory, and easily accessible. The company commits to taking appropriate measures to protect from retaliation, discrimination, or penalization individuals who report violations and to treat all information received regarding violations of this document with the utmost seriousness and taking the necessary actions.

The person responsible for whistleblowing reports is Mr. Tiziano Butti. Reports can also be sent by email to: tiziano.butti@studioauriga.it.

1.9 Sanctions System

Behaviors that violate the principles established in the Code of Conduct will be subject to disciplinary sanctions in accordance with current legislation and/or the employment contract, regardless of any legal action against the author of such behaviors.

2. Policy on Responsible Business Conduct

The commitments described in this document, reflecting the criteria of the GOTS standard, are implemented through a due diligence process that the company commits to using to identify, prevent, mitigate, and account for negative impacts, actual and potential, on human rights, workers’ rights, the environment, and ethical business conduct that its operations, supply chain, and other business relationships may have.

Due diligence is a preventive, dynamic, risk-based process informed by meaningful stakeholder engagement, appropriate to the circumstances, involving multiple processes and objectives, ensuring continuous communication, may involve risk-based prioritization, and must not cause a discharge of responsibility.

The company commits to:

Using due diligence in decision-making processes related to issues pertaining to the GOTS standard criteria, following the six steps:

Integration of the due diligence process into its policies and management systems;

Identification of actual or potential negative impacts associated with its activities through risk assessment;

Development of strategies to cease, prevent, or mitigate negative impacts;

Monitoring the implementation of due diligence and its results;

Communication of information on how impacts have been addressed;

Adoption of any necessary remediation actions;

Conducting due diligence on the most significant risks associated with the company’s activities and supply chain, prioritizing actions based on risk probability and potential harm severity and consulting potentially affected stakeholders. The company requires the same due diligence commitment from its business partners, including suppliers, licensees, purchasing agents, logistics service providers, and other intermediaries. The company also requires suppliers to transfer the request for due diligence to their suppliers.

Meaningfully engaging stakeholders, both internal and external, in the due diligence process. This means timely communication, conducted in good faith, two-way and responsive;

Listening to and addressing all complaints, submitted through legitimate processes, regarding the company’s activities or any harm caused by the company or its supply chain;

Participating in or cooperating with legitimate remediation processes if the company’s activities or supply chain have caused harm to people or the environment.

The company commits to periodically reviewing and possibly updating the Policy on Responsible Conduct and in any case whenever the need arises.