MODERN SLAVERY STATEMENT

Paladone Modern Slavery & Human Trafficking Statement 2024-25

INTRODUCTION

This statement sets out the steps taken by Paladone Group Holdings Ltd to prevent modern slavery and human trafficking in its business operations and supply chains. It has been prepared in line with the UK Modern Slavery Act 2015 and reflects guidance from the UN Guiding Principles on Business and Human Rights, the Ethical Trading Initiative (ETI) Base Code, and customer-specific codes of conduct. The statement covers the financial year from 1 July 2024 to 30 June 2025.

This statement also aligns with the six recommended reporting areas under UK Government guidance:

1. Organisational structure and supply chains
2. Policies
3. Risk assessment and due diligence
4. Training
5. Effectiveness (KPIs)
6. Governance and approval

Paladone is committed to maintaining and improving systems and processes to eliminate the risk of modern slavery within our operations and supply chains.
This statement has been approved by the Executive Team and Board of Directors of Paladone Group Holdings Ltd.

ORGANISATION STRUCTURE & SUPPLY CHAINS

Paladone Group Holdings Ltd comprises several business units, of which Paladone Products Ltd is the leading consumer‑facing brand, with an annual turnover of more than £80 million. Founded in Brighton in 1994, Paladone has grown into one of the world’s top suppliers of licensed and trend‑led lifestyle products, distributing to thousands of retailers across 80 countries. Our products are sold through specialty, online, department, fashion, and mass‑market channels, allowing fans to engage with the brands and trends they love.

CORPORATE FOOTPRINT AND WORKFORCE

Region	Sites	Headcount*	Key Functions
United Kingdom (HQ – Brighton & Shoreham)	Design studio, corporate offices, UK distribution centre	116	Product design, brand & marketing, finance, HR, UK warehousing
Hong Kong & China	Sourcing office, compliance & quality hub	46	Supplier onboarding, factory compliance audits, quality assurance
United States (New Jersey & Los Angeles)	Sales offices, 2× 3PL warehouses	24	US sales, customer service, logistics coordination
Continental Europe (France, Spain, Germany)	Remote sales & support	9	Market‑specific account management
Canada & Australia	Remote sales & support	3	Market‑specific account management
Philippines	Contractor team	7	Digital content, admin, operational support
Total	—	205	—

*Headcount includes the integration of WeCool Toys staff where onboarding is complete and includes contracted teams.

SUPPLY-CHAIN OVERVIEW

• Primary manufacturing base: ~65 tier‑1 factories in mainland China producing ceramics, textiles, plastics, electronics, and paper goods.
• Peak‑season recruitment: June–November. Temporary labour during this window is monitored closely for modern‑slavery indicators.
• Audit coverage: 100 % of tier‑1 factories hold a current SEDEX SMETA 6.1 or Amfori BSCI audit; 78 % are on semi‑announced cycles.
• Logistics partners: 1× 3PL in the UK, 1× 3PL in Germany, 2× 3PL in the US; plus WeCool Toys’ 3PL sites under onboarding review.
• Sub‑tier visibility: We have mapped 60 % of critical tier‑2 component suppliers (e.g., electronic sub‑assemblies, packaging converters) and will reach 80 % by FY 2025/26.

MANAGEMENT SYSTEMS

• Paladone operates an integrated Safety & Sustainability Management System (SMS) based on the HSE ‘Plan – Do – Check – Act’ cycle.
• In FY 2024/25 we achieved ISO 45001 (Occupational Health & Safety) and ISO 14001 (Environmental) certification for UK operations.

BRAND INTEGRATION & GROWTH

• The acquisition of WeCool Toys in 2024 expands our product reach and supplier base. Dedicated project teams are aligning policies, audits, and training so that WeCool’s operations meet Paladone’s ethical standards by year‑end.
• Entry into industry award programmes during 2025 demonstrates external recognition of our commitment to responsible sourcing.

RESPONSIBILITIES AND GOVERNANCE

Responsibility for our anti-slavery initiatives is as follows:

Policies: The Senior Vice President of Global Logistics and Technology in conjunction with the HR director are accountable for putting in place and reviewing policies and the process by which they were developed.

Risk assessments: Our compliance teams in conjunction with our HR team are responsible for assessing the company risks and analysis of where slavery has the potential to be present.

Investigations/due diligence: The Senior Vice President of Global Logistics and Technology and HR director have overall accountability for investigations and due diligence.  The responsibility of carrying out investigations may be delegated to compliance and HR teams in relation to known or suspected instances of slavery and human trafficking.

Training: The HR Director has overall accountability for training direct employees and agency workers within the UK.  The Global Learning and Development Manager develops and delivers internal training including inductions for new starters.  L&D also sources specific external training and manages e-learning in relation to modern slavery.  The Head of Global Vendor Compliance & Sustainability monitors training of suppliers to ensure awareness of our supplier code of conduct, and modern slavery.

RELATED LEGISLATIONS

• Modern Slavery Act (2015/UK)
• EU Directive on Preventing and Combatting Trafficking in Human Beings (2011/36/EU)
• Trafficking Victims Protection Act (US)
• Protocol to Prevent, Suppress and Punish Trafficking in Persons (2000)
• UN Guiding Principles on Business and Human Rights (2011)
• Australian Modern Slavery Act (2018)

POLICIES AND CONTROLS

The term Modern Slavery is used to encapsulate slavery, child labour (as defined by the International Labour Organisation) and forced or compulsory labour, as well as human trafficking. Paladone prohibits the use of forced, debt bonded, involuntary prison labour, slavery or human trafficking in its business or supply chain which is enforced through our Supplier Code of Conduct (COC).

Paladone maintains and enforces the following policies to identify and mitigate modern slavery risks:

• Whistleblowing Policy – Encourages staff and partners to report concerns without retaliation.
• Employee Code of Conduct – Promotes ethical behaviour and sets expected standards.
• Supplier Code of Conduct – Requires suppliers to meet ethical standards aligned with the ETI Base Code. Serious breaches lead to termination of contracts.
• Responsible Recruitment Policy – Ensures the ethical recruitment of agency and direct staff, with strict vetting of labour providers.
• Our suppliers are subject to an audit both by our Asia-based Compliance team and via nominated third parties. We are members of SEDEX and BSCI, and therefore expect a transparent and cooperative attitude from our suppliers to work together towards improving conditions for the people that make our products. For detailed information on our code, please see visit our website Supplier Code of Conduct – Paladone

All policies are reviewed regularly and updated as necessary. In 2025, we updated our Supplier Framework Agreement to include our Code of Conduct and revised our Responsible Recruitment policy using the Stronger Together toolkits.

RISK ASSESSMENT AND DUE DILIGENCE CONTROLS

We undertake risk assessment and due diligence when considering onboarding new suppliers and conduct regularly reviews on our existing suppliers. Our due diligence and reviews include conducting supplier audits or assessments through our own- and third-party auditors, which have a greater degree of focus on slavery and human trafficking where general risks are identified.

RISK ASSESSMENT – HIGH RISK AREAS IDENTIFIED

Paladone’s Compliance and HR teams have conducted a risk assessment to identify high risk areas of the business and have identified the factories we work with in the Far East and temporary warehouse workers in the UK and USA as the highest risk of modern slavery.

FAR EAST FACTORIES

We have identified that recruitment of temporary and migrant workers at peak times (June September) are exposed to the highest risk of exploitation. We have also mapped the locations of the factories we work with against the number and nature of non-compliances found on audits to identify the factories and areas to focus on as a priority. Through training we are aware that non-compliances such as the below can all be potential red flags of risks of modern slavery:

• lack of worker representation
• improper recruitment practices
• unfair fees or deductions from wages
• poor dormitory conditions
• retaining of ID documents
• unfair contracts
• excessive working hours

We track the factories we work with through a database of detailed information from third party and Paladone audits. We have developed a grading system which enables us to rate factories based on their audit standard and work closely with them to rectify any issues found and drive continuous improvement. Our preferred audit standards are SEDEX Members Ethical Trade Audit (SMETA) and Amfori BSCI. SMETA audit framework is built around the ETI Base Code and is widely recognised by the industry. Its audit format covers Modern Slavery and Human Trafficking dedicated sections in its latest audit format SMETA 6.1 which includes:

• Universal rights covering UNGP
• Management systems and code implementation
• Responsible Recruitment
• Entitlement to Work & Immigration
• Sub-Contracting and Home working

SMETA audits can be announced or semi-announced and we build relationships to encourage factories to work towards semi-announced & unannounced audits as it demonstrates a higher level of compliance.

Amfori BSCI offers a code of conduct that contains a set of values and principles which help members enhance their own policies and practices. The UN Guiding Principle on Business and Human Rights, the International Labour Organization, the Organization for Economic Co-operations and Development, and other international rules are all in compliance with these principles.

TEMPORARY WAREHOUSE WORKERS

Our main Paladone UK warehouse, employs agency workers at busy periods. We are aware this is another high-risk area; as we have less control over how agencies have recruited the staff, whether they have taken illegal deductions or deposits and whether they have carried out checks to ensure workers are not victims of human trafficking or forced labour. To minimise this risk Paladone’s HR department conducts interviews with any new agency and uses only specified, reputable employment companies to source labour, always verifying their practices before accepting workers.

An audit is carried out annually to ensure that standards are being maintained and worker interviews are carried out to ensure they understand their rights and to check they are being treated in accordance with the ethical standards agreed.  We have issued all temporary workers with a handbook which covers their rights and useful helplines and an introduction to modern slavery, which is issued prior to them commencing work.

INTEGRATION OF WECOOL TOYS

Paladone has initiated the alignment of WeCool Toys’ operations with our policies. The integration includes:

• Ethical audits for suppliers
• Training for WeCool Toys operatives
• Mapping and assessing new distribution and warehousing partners
• Policy onboarding and due diligence

Progress will be fully reported in the 2025/26 statement.

TRAINING ON MODERN SLAVERY

We require compliance teams who deal with due diligence, quality management and compliance within our supply chain as well as HR teams and key warehouse personnel within our company to complete training on modern slavery.  In addition to this, all new starters to our business are made aware of modern slavery within their induction, which includes what it is, how to spot the signs and how to report a suspected incident.

Our modern slavery training covers:

• how to identify the signs of slavery and human trafficking.
• what initial steps should be taken if slavery or human trafficking is suspected.
• how to escalate potential slavery or human trafficking issues to the relevant parties within our organisation.
• what external help is available, for example through the Modern Slavery Helpline, Gangmasters and Labour Abuse Authority and “Stronger together” initiative.
• what messages, business incentives or guidance can be given to suppliers and other business partners and contractors to implement anti-slavery policies; and
• what steps our company should take if suppliers or contractors do not implement antislavery policies in high-risk scenarios, including their removal from our supply chains.

AWARENESS-RAISING PROGRAMME

As well as training staff, we have raised awareness of modern slavery issues by putting up posters across our premises.  All agency workers are given a health and safety induction on day one, as part of this modern slavery and key indicator signs are highlighted alongside who they can go to for help.

The posters explain to staff:

• the basic principles of the Modern Slavery Act 2015.
• what employees can do to flag up potential slavery or human trafficking issues to the relevant parties within our organisation; and
• what external help is available, for example through the Modern Slavery Helpline

ACTIVITIES, KPI’s AND MANAGEMENT OF MODERN SLAVERY IN 2024/25

AREA	KEY ACTIVITIES
Policy	Supplier Framework Agreement has been updated since our last statement, includes our Code of conduct, which all suppliers must sign to show their commitment to uphold best practice prior to commencement of business.
Procedure	The modern slavery and human trafficking sections have been incorporated into our factory audit procedure.
Training	Several employees have completed Online Modern slavery training courses, which helped raise awareness, better spot the signs and increase confidence in reporting modern slavery when potential cases are encountered. Our factory compliance team have completed a webinar provided by Stronger together with views of lessons learnt from high-risk sectors. Launched updated SharePoint pages for all staff to access, to share policy and training, information, and best practice procedures. Launch of Agency handbook, to be issued to all temporary staff entering the UK warehouse. Modern Slavery Champion training issued to teams dealing with the global supply chain and temporary workers.
Action	Our compliance team based in the far east continue to perform regular factory visits & assessments in addition to 3rd party audits, to conduct more informal workers interviews for better understanding on the working conditions and provide more awareness to factory management on modern slavery. Supplier engagement on comprehensive corrective action plans on all identified non-compliance issues beginning with thorough root cause analysis, required of all our global supply chain.
Investigations	Continuously investigate the root causes of non-compliances discovered from factories’ social audits, closely work with factory management for improvement.
Investment	Invested into better reporting tool to enable us to track non-compliances from audits, conduct further analysis by sections on root causes and close off them more efficiently and effectively.
Agency Audit	Audit of the Agency completed in September of 2024. Audit found no non-conformities remaining after a few policies were retrieved from their head office.
Agency worker interviews	Agency worker interviews were conducted in October of 2024 when the warehouse was at its peak. The only discrepancies found between the agency and the agency workers was that they were unaware of the agency worker handbook and some of the workers had difficulty understanding the pay scale and pension deductions.
Incidents	One suspected case of modern slavery within the Agency workers on site in the UK, investigated as had no access to money. It was a lost/stolen card. Support and intervention offered. Check backs were completed and the individual then had access to their money.
Agency induction walkarounds	These are now completed by the H&S team and therefore more emphasis is given on mental health and modern slavery within these inductions.

FUTURE PLANS TO TACKLE MODERN SLAVERY IN 2025/26

• To develop a “Workforce Incident Reporting Procedure” for supervisors, workers, and recruiters to report suspected cases of exploitation and unfair treatment. This includes issues such as worker violence, abusive behaviour, bullying, bribery, corruption, discrimination, harassment, victimisation, modern slavery, and hidden labour exploitation.
• To clearly identify and define the individual roles and responsibilities of HR, functional Heads, Investigating Managers, compliance teams who support operational due diligence steps addressing exploitation risks and ensure their roles and responsibilities are communicated to relevant colleagues.
• To develop further our anti bribery and corruption policies, ensuring that we can demonstrate compliance and tracking of any incidents.
• To extend the provision of “Modern Slavery Champion(s)” to maintain peer engagement and raise awareness of modern slavery and hidden labour exploitation within the general workforce as well as including the global third-party operations.
• To develop and implement a “Responsible Recruitment Policy” using the toolkits from Stronger Together.
• To Continue to screen any new suppliers by desktop audits & on-site visit with fully completed reports to assess the labour condition before a partnership is confirmed.
• Encourage more suppliers to join the SEDEX /Amfori BSCI memberships, conduct annual audit & make improvements as per Corrective Action Plan set up by the auditors. Closely monitor our suppliers’ non-compliances closure performance, for those who are not cooperative to make improvement, Paladone will terminate the business.
• Develop our supply chain mapping to increase our understanding of risk within our global supply chain.
• Reevaluate the risk assessments for 3PL’s factories and warehousing.
• Investigate the audits for the 3PL’s factories and warehousing
• Exchange policies with the 3PL factories and warehouses
• Incorporate WeCool Toys into Modern slavery.
• Investigate portals and resources to aid people in 3PL warehousing and factories for global solutions like the ‘Just good work’ app.
• To develop further the training provided around modern slavery to include the role and responsibilities of supervisors and team managers in spotting the signs of exploitation and how to handle and report suspected cases.
• Work closer with Stronger together to become a partner with them, qualification criteria is met by Paladone Group Holdings Ltd.
• Extend the training of Modern Slavery champions by utilising the training provided by Stronger together.

MEASURING EFFECTIVENESS FOR 2025/26

To measure the effectiveness of our anti-slavery initiatives, we track the following KPIs:

• % of suppliers audited annually
• % of corrective actions closed within target timelines
• of employees trained in modern slavery awareness
• Audit result improvements over time
• Number of reports or concerns raised and resolved

CHANGES TO THE BUSINESS THAT NEED TO BE INCLUDED FOR 2024/25

In 2024 Paladone Group Holding Ltd acquired WeCool Toys this integration process is aiming for completion for the end of the financial year and therefore WeCool Toys and their supply chain activities will need to be aligned with our policies. This will be achieved and reported on within 2024/25.

This will outline

• Distribution suppliers
• Warehousing services
• Factories
• Bring WeCool Toys in line with Paladone Group Holdings Ltd Modern Slavery policies and procedures
• Training with WeCool Toys operatives
• Audits for WeCool Toys suppliers

PUBLIC DISCLOSURE

Paladone has published this statement on the UK Government’s Modern Slavery Statement Registry in support of upcoming legal obligations to enhance transparency.

APPROVAL

This statement is made pursuant to Section 54(1) of the Modern Slavery Act 2015 for the financial year ending 30 June 2025. It was approved by the Board of Directors of Paladone Group Holdings Ltd on July 5th 2025.