MODERN SLAVERY STATEMENT FOR THE FINANCIAL PERIOD 20191

INTRODUCTION
This document, whose content refers to the fiscal year of 12 months ended December 31, 2019, was approved by theBoard of Directors of Prada S.p.A. on June 22, 2020 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.

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, 2019, the Group’s products aresold in 70 countries around the world through 641 directly operated stores and a select network of luxury depar tment
stores, independent retailers and franchise stores. Also at December 31, 2019, the Group’s headcount amounted to13,988 employees.
Prada S.p.A., the parent company, is a joint-stock company, italian and listed on the Main 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., acompany domiciled in Milan (Italy), while the remaining shares are floating.

€3.2

Billion2019 Revenues

22

Industrial Sites
at December 31,2019641
DOS

at December 31,
2019

13,988

Employeesat December 31,
2019

ETHICAL PRINCIPLESOn March 15, 2019 the Board of Directors of Prada S.p.A.

and Rights at Work, and the Organization for Economic

approved the Sustainability Policy in which the Group

Co-operation and Development (OECD) Guidelines fordeclares its commitment to operate in full respect of theMultinational Enterprises.

value of the individual and for the human and workers’
rights, enshrined both in the regulations of the countries

The Board of Directors considers respect for ethicalin which it operates and in the international covenants

principles to be the foundation of the enterprise’s successand declarations - such as the United Nations Universaland represents an impor tant expression of Prada’s image

Declaration of Human Rights, the International Laborand reputation.

Organization (ILO) Declaration on Fundamental Principles

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 20192

The Prada Group operates in:

THE SUPPLY CHAIN• compliance with legislative and regulatory provisions in
all countries in which it operates;

The Prada Group’s business model is based on a value• legitimacy, loyalty, correctness and transparency;

chain that combines ar tisanal skills with the industrial• respect of the privacy;organization of production and distribution processes.

• respect for the value of the person;• respect for competition, as a crucial instrument in thedevelopment of the economic system;• respect for the environment while raising awarenessabout its protection.

As at December 31, 2019, the production of the Groupis entrusted to 22 manufacturing facilities located inEurope (19 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

Since 2007, these principles have been given formal

are controlled by Prada’s technicians in order to ensure,expression in the Prada Group’s Code of Ethics. The Codein addition to quality standards of the products, also thesets out the guiding principles of the organization, being one

compliance of the entire supply chain with the principlesof the main pillars of the Group’s governance model, and isof the Code of Ethics that all suppliers must subscribe.

also suppor ted by a set of procedures in order to turn thesevalues into daily actions. The adoption and application ofThe vast majority of the prototypes and samples, as well as

the Code of Ethics is essential for the achievement of thea par t of the finished products and the most delicate phases

Company’s primary objective, consisting in the creation ofof the production process, such as the cutting of hides,

value for the communities in which it operates.

the controls over all raw and semi-finished materials, also
those to be sent to suppliers, are produced at the Group’s

The Code of Ethics is promoted internally through theown facilities. During the years, the Group has madepublication of the document on the corporate intranet, byimpor tant investments to strengthen its internal industrial

sharing it with all new collaborators as well as being thecapacity and to reinforce the control over the value chain.

base of business relationships with all suppliers.

This was achieved by internalizing an additional numberof production processes, par ticularly the more technically

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 20193

complex ones, through the realization of new production

A supply chain mainly localized in Italy and in Europe

sites or the acquisition of the control of manufacturing

constitutes an asset also from a social responsibility

companies formerly suppliers of the Group: the Group’s

standpoint, as it allows easier control by the Italian parent

production sites were 12 up to 6 years ago while now theycompany. The working conditions of the employees areare 22.

regulated by the collective labor agreements (CCNL) inIn 2019, the Group collaborated with about 1,000 raw
materials and semi-manufactured products direct suppliers.
Almost 50% of them have worked with Prada for more than
10 years; 82% are Italian suppliers; the percentage rises
over 90% if the European Union area is considered. Theremaining par t is mainly represented by Asian suppliers
and out of these, the two 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 to establish longterm collaborations with suppliers in order to develop arelationship of mutual trust and transparency. At the sametime, Prada considers essential to root its supply chain
in Italy where the manufacturing sector represents anexcellence appreciated all over the world.

ITALIAEU
EXTRA EU8%

trade unions and associations representing companies. TheCCNL regulates the rights, guarantees and obligations of all
workers belonging to a specific sector, in terms of pay andregulatory provisions, such as guaranteed minimum wages,
working hours, holidays, seniority treatment, treatment ofover time, holiday and night-time work (with the related
pay increases), the duration of the trial period and notice
period, sick leave, maternity leave, accident leave and thedisciplinary code.
The supply chain of the Prada Group is completed withoperators not related to the production cycle, among
which, as an example, the suppliers of commercial spaces,
logistic services, media spaces, and services providers
linked to the management of stores in the countries where

GEOGRAPHICAL DISTRIBUTION OF THE
SUPPLY CHAIN

10%

force and that are stipulated at a national level between

the Group operates with its retail activities; suppliers that,generally, are represented by large and primary companies.
The Prada Group believes that the risk of modern slavery
within its organization is non-existent, while it deemed thatsame risk as overall low along its external industrial supplychain. The geographic location of the suppliers selectedby the Group, as well as the profound knowledge of thesame in terms of duration and quality of the establishedpar tnerships, combined with the systematic control of the82%

quality of the production at the suppliers’ sites, reduces therisk of conditions or pre-conditions such as to constitutecircumstances of modern slavery, forced labor and human

DURATION OF COLLABORATIVERELATIONSHIPS WITH SUPPLIERS

trafficking.

> 10 YEARS
5-10 YEARS

19%< 5 YEARS

49%
32%

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2019

4

RISK ASSESSMENT AND DUE DILIGENCE

basis or when a problem is encountered. The procedure
also includes fur ther inquiries in case of potential non-In the last years, the Prada Group placed par ticular focus

compliance in the documentation.

on the identification and evaluation of the enterprise risks,
as well as on the improvement of a system of proceduresThis type of control is coupled with visits by industrial

aimed at mitigating and managing the risks consistently

divisions to suppliers (almost daily for the most impor tantwith Group’s objectives.

ones) which, even if aimed at ensuring compliancewith the quality of the products and with commercial

Within this framework, the Prada Group has adopted theagreements, provide additional confirmation regarding

Group’s “Qualified Vendor List” (QDV) procedure to redefine

working conditions. In case of a non-compliance that can

the responsibilities and operational behaviors required

be remedied, the supplier may be temporarily suspended

to evaluate ethical, technical and economical reliability.

until the corrective actions are implemented, while forSpecifically for ethical issues, the accreditation andcases that are more serious the contract may be terminatedmaintenance of a supplier ’s qualification are based on theimmediately.

request of documents, attestations and self-cer tifications
that ensure, for sub-suppliers as well, compliance withThis procedure, implemented in early 2017 to suppliers

the law on remuneration, social security, taxation, healthoperating in the industrial area, has been gradually extended

and safety, the environment, privacy and the governanceto businesses not strictly involved in the production cycle,

model. As mentioned, the signing of the Code of Ethics isreaching full coverage of all Industrial, Engineering anda fundamental prerequisite for working with Prada.

Logistics suppliers 1 at December 31, 2019. Fur thermore,during the year, internal controls were regularly carriedThis information is subject to periodic updates andout, both on first and second level, to ensure the periodic

systematic checks, also intra-year, to ensure veracity andupdating of the information and documentation requiredconsistency. Such controls of a documental nature, andby the procedure, and aimed at excluding potential risks

conducted by purchasing structures or business areasof non-compliance.

specialized on the several issues, are carried out on a sample

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2019

1 For the purposes of this analysis, only suppliers with which purchases of more thanEuro 50 thousand were conducted in 2019 have been considered.

5

The Prada Group considers the risk of non-compliance

OUTLOOK

throughout its direct supply chain to be low thanks, notonly to the geographical location of the suppliers, but also

In its journey towards an inclusive development, whichthanks, as already mentioned, to the in-depth knowledge

excludes modern slavery along its value chain, the Pradaof such suppliers obtained as a result of the duration andGroup firmly believes that the strengthening of thequality of the relationships established.

“Qualified Vendor List” procedure is an adequate measure
to minimize its risk profile.

During 2019 controls over the observance of the Group’s

Never theless, the Group intends to confirm its commitment“Qualified Vendor List” procedure were fur ther intensified

towith checks on a wider sample of suppliers on the complianceassessments of its supply chain and continue the monitoringof documentation produced, made available by the supplyvisits to its suppliers with the aim of completing, withinchain and entered in the QVL.

the first months of 2020, those already star ted at the end

Such controls were entrusted to an internal function setof 2019 in the Leather Goods Division. Moreover, Prada

up specifically for such purpose with personnel from thewill under take a similar activity for all suppliers of thecompetent business areas for the various types of controls,Clothing and Footwear divisions.

socialsustainability,constantlyupdate

itsrisk

such as the administration, human resources, safety andindustrial depar tments.
The role of this professional team, working in close
collaboration with the Industrial Divisions, is to provide
technical and specialized suppor t to verify the labor, tax,
health and safety and environmental regulatory complianceof the supply chain through visits to suppliers, planned ina systematic and organized manner. In 2019, the teamstar ted to conduct its monitoring visits to all suppliers of
the Leather Goods Division.

MODERN SL AVERY STATEMENT FOR THE FINANCIAL PERIOD 2019

Chairman of the Board of Directors of Prada S.p.A.
Carlo Mazzi
Milan (Italy), June 22, 20206