MODERN SLAVERY STATEMENT FOR THE FINANCIAL PERIOD 2020
1

INTRODUCTION
This document, whose content refers to the fiscal year of 12 months ended December 31, 2020, was approved by theBoard of Directors of Prada S.p.A. on April 16, 2021 and describes the measures taken by the Prada Group (hereinafteralso “the Group” or “Prada”) to ensure, as required by the UK “Modern Slavery Act 2015 - Section 54”, the absence ofany form of “modern slavery, forced labor and human trafficking” within its organization and along its supply chain.
This statement is also made on behalf of the following companies controlled by the Prada Group: Prada Retail UK Ltd andChurch & Co Ltd.

THE PRADA GROUP
The Prada Group operates in the luxury goods industry with the Prada, Miu Miu, Church’s and Car Shoe brands in thedesign, production and distribution of luxury handbags, leather goods, footwear, apparel and accessories. The Groupalso operates in the eyewear and fragrance industries under specific licensing agreements and, with the acquisition ofPasticceria Marchesi 1824, has made its entry into the food sector. As of December 31, 2020, the Group’s products are soldin 70 countries around the world through 633 Directly Operated Stores (DOS) and a select network of luxury depar tment
stores, independent retailers and franchise stores. Also at December 31, 2020, the Group’s headcount amounted to12,858 employees.
Prada S.p.A., the parent company, is a joint-stock company with limited liability, domiciled in Italy and listed on theMain Board of the Hong Kong Stock Exchange. At the date of this repor t, 80% of the share capital of € 255,882,400.00
is owned by Prada Holding S.p.A., a company domiciled in Milan (Italy), while the remaining shares are floating.

€2.4Billion

2020
Revenues

12,858
Employees

at December 31,
2020

23
Industrial sites
at December 31,
2020

633
DOS

at December 31,
2020

ETHICAL PRINCIPLES
Sustainability is a core element of the Prada Group’s

the international covenants and declarations - such as theidentity, and deeply embedded within its strategy, as Prada

United Nations Universal Declaration of Human Rights,

believes that only a company founded on these principles

the International Labor Organization (ILO) Declaration

can achieve financial growth that also benefits society ason Fundamental Principles and Rights at Work, and thea whole.

Organization for Economic Co-operation and Development(OECD) Guidelines for Multinational Enterprises.

Also for this reason, at the beginning of 2019 the Boardof Directors of Prada S.p.A. approved the Sustainability

The Board of Directors considers respect for ethical

Policy in which the Group declares its commitment toprinciples to be the foundation of the enterprise’s success

operate in full respect of the value of the individual andand represents an impor tant expression of Prada’s image

for the human and workers’ rights, enshrined both in theand reputation.

regulations of the countries in which it operates and in

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 20202

The Prada Group operates in:

THE SUPPLY CHAIN• compliance with legislative and regulatory provisions in

The Prada Group's business model is based on a value

all countries in which it operates;• legitimacy, loyalty, correctness and transparency;

chain that combines ar tisanal skills with the industrialorganization of production and distribution processes.

• respect of the privacy;• respect for the value of the person;

As at December 31, 2020, the production of the Group• respect for competition, as a crucial instrument in theis entrusted to 23 manufacturing facilities located indevelopment of the economic system;• respect for the environment while raising awarenessabout its protection.

Europe (20 of them in Italy) and to a network of external
producers carefully selected for their craftsmanship,quality and reliability. All stages of the production process
are controlled by Prada’s technicians in order to ensure,

Since 2007, these principles have been given formal

in addition to quality standards of the products, also theexpression in the Prada Group’s Code of Ethics. The Codecompliance of the entire supply chain with the principles

sets out the guiding principles of the organization, being oneof the Code of Ethics that all suppliers must subscribe.

of the main pillars of the Group’s governance model, and isalso suppor ted by a set of procedures in order to turn these

The vast majority of the prototypes and samples, as well asvalues into daily actions. The adoption and application ofa par t of the finished products and the most delicate phases

the Code of Ethics is essential for the achievement of theof the production process, such as the cutting of hides,

Company’s primary objective, consisting in the creation of

the controls over all raw and semi-finished materials, also

value for the communities in which it operates.

those to be sent to suppliers, are produced at the Group'sown facilities. During the years, the Group has madeThe Code of Ethics is promoted internally through theimpor tant investments to strengthen its internal industrial

publication of the document on the corporate intranet, bycapacity and to reinforce the control over the value chain.

sharing it with all new collaborators as well as being theThis was achieved by internalizing an additional number

base of business relationships with all suppliers.

of production processes, par ticularly the more technically

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 20203

complex ones, through the realization of new production
sites or the acquisition of the control of manufacturing
companies formerly suppliers of the Group: the Group's
production sites were 12 up to 7 years ago while now theyare 23.
In 2020, the Group collaborated with about 790 raw
materials and semi-manufactured products direct suppliers.
Almost 56% of them have worked with Prada for more than
10 years; around 81% are Italian suppliers; the percentage
rises up to almost 92% if the European Union area isconsidered. The remaining par t is mainly represented by
Asian suppliers and out of these, two among the main ones
are international operators, also listed on the Hong Kong
Stock Exchange, with whom the Group has been working
for more than 10 years. A key par t of the strategy is toestablish long-term collaborations with suppliers in orderto develop a relationship of mutual trust and transparency
and to share mutual growth and a common strategic
objective, reducing the risk of non-compliance with theGroup's Code of Ethics and the current regulations.

The CCNL regulates the rights, guarantees and obligations

At the same time, Prada considers essential to root itsof all workers belonging to a specific sector, in terms of pay

supply chain in Italy where the manufacturing sector

and regulatory provisions, such as guaranteed minimum

represents an excellence appreciated all over the world.

wages, working hours, holidays, seniority treatment,

Such proximity enables the Group to per form a constanttreatment of over time, holiday and night-time work (withmonitoring activity, even daily for the main suppliers, forthe related pay increases), the duration of the trial period

the purpose of control and risk management.

and notice period, sick leave, maternity leave, accident
leave and the disciplinary code.

G E O G R A P H I CA L D I S T R I B U T I O N O F T H E S U P P LY C H A I N

The supply chain of the Prada Group is completed withoperators not related to the production cycle, among which

8% extra eu– as an example - the suppliers of commercial spaces,

11% europe
81% i ta ly

logistic services, media spaces, and services providers
linked to the management of stores in the countries where

D U R AT I O N O F C O L L A B O R AT I V E R E L AT I O N S H I P S
WITH SUPPLIERS

the Group operates with its retail activities; suppliers that,generally, are represented by large and primary companies.

21% < 5 years

The Prada Group believes that the risk of modern slavery

23%

within its organization is non-existent, while it deemed that

5-10 years
56% > 10 years

same risk as overall low along its external industrial supply
chain. The geographic location of the suppliers selected

A supply chain mainly localized in Italy and in Europe

by the Group, as well as the profound knowledge of theconstitutes an asset also from a social responsibility

same in terms of duration and quality of the establishedstandpoint, as it allows easier control by the Italian parent

par tnerships, combined with the systematic control of thecompany. The working conditions of the employees arequality of the production at the suppliers’ sites, reduces theregulated by the collective labor agreements (CCNL) inrisk of conditions or pre-conditions such as to constituteforce and that are stipulated at a national level between

circumstances of modern slavery, forced labor and humantrade unions and associations representing companies.

trafficking.

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2020

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RISK ASSESSMENT AND DUE DILIGENCE
In the last years, the Prada Group placed par ticular focus
on the identification and evaluation of the enterprise risks,
as well as on the improvement of a system of procedures
aimed at mitigating and managing the risks consistently
with Group’s objectives. At the same time, many effor ts
have been directed toward raising awareness in thepurchasing structures of more responsible management of
the industrial supply chain.
To this end, in early 2017 the Group adopted a "Qualified
Vendor List" procedure to define the responsibilities
and operational criteria required to evaluate the ethical,
technical and economical reliability of its suppliers. The
list is par t of the controls needed to initiate and continue
with the supply relationship, as set out in the procurement
policy, which calls for mitigating risks of non-compliancethrough additional checks and accountability.
With respect to ethical issues, the accreditation andmaintenance of a supplier 's qualification are confirmed

temporary shutdown of industrial activities, the updating

through requested documents, attestations and self-of the information suffered delays that were gradually

cer tifications that ensure compliance with the laws on

recovered when the activities resumed.

remuneration, social security, taxes, occupational healthand safety, the environment, privacy and the governanceAlthough the Prada Group considers the risk of non-model. Finally, the Code of Ethics must be signed in ordercompliance throughout its direct supply chain to be low,

to work with Prada.

thanks to its geographical location and the duration andquality of the relationships established, it is aware that first-

This information asset undergoes systematic first-level andtier suppliers use subcontracting, and of the reputational

second-level controls, including interim ones, to ensure

and legal risks associated with that, including in terms

that the information is updated, true and consistent. Suchof human rights. For this reason, in 2019 the Group setcontrols, which involve documents and are per formed by

up a “Supplier Inspectorate” to tighten the controls overthe procurement structures or business areas specialized

the supply chain and respond to the growing demand forin the various topics, are also conducted upon notificationtransparency and accountability in the production andof potential situations of crisis, breaches or anomalies;

sourcing practices. The Group formalized the inspecting

in these circumstances, the procedure involves additional

activity in July 2020 with a dedicated procedure.

analysis, targeted controls or an immediate encounter withthe par ties involved.

Theworkteam

consists

ofrepresentatives

oftheadministrative, occupational safety, compliance and human
The procedure, initially applied to suppliers in theresource functions and assists production division managers

manufacturing area, has now been implemented with thewith controls at supplier and/or sub-supplier premises,

engineering and logistics suppliers and is gradually being

reviewing documents and checking the observance of theextended to the other business areas. In 2020, due toGroup's ethical principles and proper application of labor,

the COVID-19 public health emergency, which led to thetax, occupational safety and environmental regulations.

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2020

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The inspection plan includes a risk assessment, conducted

time, termination of the supply relationship is evaluated.

in the first phase by the various managers, also according

The team limited its activity to Italy; it began at the end

to the composition of the industrial supply chain in terms ofof 2019 and in just a few months it covered most of thesupply and subcontracting, and any critical issues detected

manufacturing suppliers in the Leather Goods Division,by them or by the functions responsible for the second-

both first-tier and second-tier suppliers.

level controls during the periodic inspections required by
the Qualified Vendor List procedure.

However, in March 2020 the activity was suspended inorder to deal with the COVID-19 public health emergency

The analysis per formed during the inspections, which follow

which struck Italy first among the European countries. Thea six-month schedule, completes other controls carriedinspections resumed in October, and covered approximately

out in previous phases and those foreseen by the Qualified

half of the Footwear division supply chain by the end ofVendor List procedure, thus strengthening the control over

the year.

the industrial supply chain, ensuring compliance with theThe inspections effectively confirmed what the managers of

Code of Ethics and current regulations.

the production divisions had already perceived; most issues
were found at the sub-contracting level, with the Leather

The results of the inspections are repor ted to the various

Goods Division experiencing more than the Footwear

managers so that a corrective action plan (Remediation

Division. The controls over first-tier suppliers were morePlan) can be drawn up in the event of breaches or par tial

encouraging, as they confirmed the effectiveness of thebreaches of the criteria standards, and corrective actions

streamlining decisions of recent years.

are identified that the supplier must implement over a
period of time that varies according to the irregularity

The breaches found in the sub-contracting relationships

found. In the event of serious breach, or the supplier 's

regardedinability to ensure a positive outcome in the prescribed

the workplace, occupational safety and the work force

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2020

primarilysocialsecurity

andtax

aspects,

6

employed

in

terms

ofcontractualconditions

andFor these reasons, in recent years the Group has under taken

actual working hours. These situations led to, in the mosta constant review and rationalization of its industrial

serious cases repor ted in the Leather Goods supply chain,suppliers to minimize its risk profile.

the termination of some first-tier and second-tier supplyrelationships. When the breaches were not deemed serious,

During 2021, on the basis of the “Qualified Vendor List"

the Leather Goods Division required corrective actions

procedure, the Supplier Inspectorate will complete its

as an essential condition for continuance of the supply

inspections of the Footwear Division supply chain, andrelationship, to be implemented within a set time frame.

will extend them to the Clothing Division. Specific controls

The breaches identified in the Footwear Division during thewill be per formed on the suppliers and sub-contractors

inspections under taken during the period under analysis

inspected in 2019 and 2020 for which slight breaches wereare still being evaluated as of December 31, 2020.

found, in order to check their effective solution.

OUTLOOK
For the Prada Group, the selection of its suppliers isfundamental for reaching the highest standards of productexcellence, but also for transmitting its high ethicalstandards through the entire value chain, in order tocreating shared value in the medium and long-term.

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2020

Chairman of the Board of Directors of Prada S.p.A.
Carlo Mazzi
Milan (Italy), April 16, 2021

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