THE PRADA GROUPM O D E R N S L AV E R Y S TAT E M E N T
for financial period 2017
INTRODUCTION
This document was approved by the Board of Directors of Prada S.p.A. on May 23, 2018
and describes the measures taken by the Prada Group (hereinafter also “the Group” or“Prada”) to ensure, as required by the UK “Modern Slavery Act 2015 - Section 54”, theabsence of any form of “modern slavery, forced labor and human trafficking” within
its organization and outside along its own supply chain. The content of this statement
refers to the 11 months fiscal year ended December 31, 2017.
THE PRADA GROUP
The Prada Group operates in the luxury goods industry with the Prada, Miu Miu,
Church’s and Car Shoe brands in the design, production and distribution of luxury
handbags, leather goods, footwear, apparel and accessories. The Group also operates
in the eyewear and fragrance industries under specific licensing agreements and, withthe acquisition of Pasticceria Marchesi 1824, has made its entry into the food sector.
As of December 31, 2017, the Group’s products are sold in 70 countries around theworld through 625 directly operated stores and a select network of depar tment stores,independent retailers, franchise stores and on-line distributors (e-tailers) operating in
the high-end market segment.

Prada S.p.A., the parent company, is a joint-stock company, registered and domiciled inItaly and listed on the Main Board of the Hong Kong Stock Exchange. At the date of thisrepor t, 80% of the share capital is owned by Prada Holding S.p.A., a company domiciledin Italy, while the remaining shares are floating.
THE SUPPLY CHAIN
The Group’s business model is based on a value chain that combines production process
technologies with ar tisanal skills.
The production of the Group is entrusted to 21 manufacturing facilities located in1

Europe (18 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 directly managed and controlled: from the choice to purchasing materials, evenfor external suppliers, to the coordination of internal and external production. This
integration between the manufacturing cycle phases enables the Group to translate
its innovative fashion concepts into commercial products while maintaining productive
flexibility and technical control over know-how as well as quality and ethical standards
throughout the supply chain.

Since the star t of the Group, almost all prototypes and models have been realized
within the Company, as well as an ever-increasing par t of production. In recent years,
the Group has made impor tant investments to fur ther strengthen the industrial divisionand to reinforce the control over the value chain. This was achieved by internalizing anadditional number of production processes, par ticularly the more technically complex
ones, through the realization of new production sites or the acquisition of the control ofmanufacturing companies formerly suppliers of the Group. This internalization process
has led to an increase in the workforce of over 450 units in three years (from 2,114 units
in 2015 to 2,570 in 2017), extending to the new employees the high quality standards
assured by the Group.

In 2017, the Group collaborated with about 930 1 raw materials and semi-manufactured
products suppliers. About 52% of them have worked with Prada for more than 10 years
and 80% are Italian suppliers; the percentage rises to about 90% if the European Unionarea is considered. The remaining par t is mainly represented by Asian suppliers and outof these, the two main ones are international operators, also listed on the Hong Kong
Stock Exchange, with whom the Group has been working since about 10 years. A key
par t of the strategy is to establish long-term relationships with suppliers in order todevelop a relationship of mutual trust and transparency.

The supply chain of the Prada Group is completed with operators not related to the1. To the end of this analysis, only suppliers that worked with the Group in 2017 totaling transactions higher thanEuro 30 thousand were taken into account.
2production cycle, among which – quoted for materiality - the suppliers of commercial
spaces, logistic services, media spaces, and services providers located in the countries
in which the Group operates with its retail activities. Generally, these suppliers arerepresented by large and primary companies.

The Prada Group believes that the risk of modern slavery within its organization isalmost non-existent, while it deemed that same risk as overall low along its industrial
supply chain. The geographic location of the suppliers selected by the Group, as well as
the profound knowledge of the same in term of duration and quality of the establishedpar tnerships, reduces the possibility that conditions or pre-conditions exist such as toconstitute risks of modern slavery, forced labor and human trafficking.

POLICIES AND ETHICAL PRINCIPLES
The Board of Directors considers respect for ethical principles to be the foundationof the enterprise’s success and represents an impor tant expression of its image andreputation. The Prada Group operates in:•compliance with legislative and regulatory provisions in all countries in which itoperates;•

legitimacy, loyalty, correctness and transparency;•

respect of the privacy;•

respect for the value of the person;•

respect for competition, as a crucial instrument in the development of the economicsystem;•respect for the environment and raising awareness about its protection.

Since 2007, these principles have been given formal expression in the PRADA Group’s
Code of Ethics (https://www.pradagroup.com/en/group/social-responsibility.html). The
Code sets out the guiding principles of the organization, being one of the main pillars of
the Group’s governance model, and is also suppor ted by a set of procedures in order toturn these values into daily actions. The adoption and application of the Code of Ethics isessential for the achievement of the Company’s primary objective, consisting in the creationof value for shareholders, employees, customers and for the community as a whole.
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The Code of Ethics is promoted internally through the publication of the document on
the corporate intranet, by its distribution to the new collaborators as well as being thebase of business relationships with all suppliers.

RISK ASSESSMENT AND DUE DILIGENCE
In the last years, the Prada Group placed par ticular focus on the identification andevaluation 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.

Within this framework, the Prada Group has adopted the “Group’s qualified vendorlist” procedure to redefine the responsibilities and operational behaviors required toevaluate ethical, technical and economical reliability. Specifically for ethical issues, theaccreditation and maintenance of a supplier ’s qualification are based on the collectionof documents, attestations and self-cer tifications that ensure compliance with the law
on remuneration, social security, taxation, health and safety, the environment, privacy
and the governance model. Finally, the signing of the Code of Ethics is a fundamental
prerequisite for working with Prada.

This information is subject to periodic updates and systematic checks to ensure veracity
and consistency. Such controls, conducted by purchasing structures or business areas
focused on various topics, are carried out on a sample basis or when a problem isencountered. The procedure may include fur ther inquiries in the case of doubt of lackof self-cer tification of compliance with labor, safety in the workplace and social security
contribution laws. This type of control is coupled with visits by industrial divisions
to suppliers (almost daily for the most impor tant ones) which, apar t from ensuring
compliance with technical and commercial agreements, provide additional comfor t
regarding working conditions. In the case of non-compliance that can be remedied, thesupplier may be temporarily suspended, while for more serious cases of non-compliancewith ethical, technical and economical requirements, the contract may be terminatedimmediately. Together with the Qualified Vendor List procedure, there is also the Purchasing
Procedure which, by requiring additional checks and responsibility’s assumptions in orderto start and continue a collaboration relationship, further reduces the risk of default.
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The application of this procedure, which was the subject of a major overhaul in 2016,
was launched in early 2017 with suppliers operating in the industrial area of the parentcompany (representing about 80% of manufacturing collaborations). As at December
31, 2017, on a por tion of just under 2/3 of the suppliers, the checks requested by theQualified Vendor List procedure were completed to ensure regularity on issues related
to social responsibility. The extension of coverage to the remaining par t is currently
underway and the management is confident of increasing it in the shor t-term.
During the period of application of the procedure, no cases of non-compliance emerged
which led to the suspension of the collaboration relationship.

OUTLOOK
For the Prada Group acting responsibly means directing economic results towards amore sustainable development, considering the impact of its activities both inside andoutside the organization. Respect for human rights, a value at the base of the Group’sactivities and firmly stated in the Code of Ethics, is integrated into daily operations andrelations through a shared approach with commercial par tners and an adequate system
of internal procedures. In par ticular, as far as the supply chain is concerned, the Groupis committed to the application of the aforementioned Qualified Vendor List procedure,
as well as its gradual extension and updating.
By Order of the Board

Prada S.p.A.
Carlo Mazzi
Chairman
Milan (Italy), May 23, 20185