REPORT ON DUE DILIGENCE
AND TRANSPARENCY IN RELATIONTO MINERALS AND METALS FROM
CONFLICT-AFFECTED AREAS AND
CHILD LABOURABOUT THISREPORT

This document addresses Audemars Piguet’s
due diligence and reporting compliance as
required by Art. 964j-l of the Swiss Code ofObligations and the Swiss Ordinance on Due
Diligence and Transparency in Relation toMinerals and Metals from Conflict-Affected
Areas and Child Labour (DDTrO). It covers theperiod from January 1 to December 31, 2023,
during which Audemars Piguet complied withthe due diligence obligations in relation tominerals and metals from Conflict-Affected andHigh-Risk Areas and in relation to child labour,
as further detailed in this report.

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ABOUT
AUDEMARS PIGUET

Audemars Piguet Holding SA (hereafter Audemars Piguet)
is a company limited by shares under Swiss law (Sociétéanonyme de droit Suisse) headquartered in Le Brassus,
Switzerland. A globally renowned Swiss watchmaker,
Audemars Piguet creates Haute Horlogerie watches
and provides personalised after-sales and maintenanceservices. The company operates three main production
sites, all located in Switzerland.
As the oldest watchmaking manufacturer still in the handsof its founding families, Audemars Piguet continues today
to work hand in hand with local manufacturers, fusing
ancestral savoir-faire with advanced technology to createshared value for its clients, employees and the wider
community that spans the globe. The entrepreneurial spirit
and values upheld by its founders remain at the core of thebrand’s identity. Ethical business practices play a crucialrole in how Audemars Piguet conducts its operations andcontributes to the long-term viability of the company.

3COMPLIANCEOVERVIEWOBLIGATION RELATED TO MINERALS AND METALSExemption regarding minerals and metals fromconflict areas
Audemars Piguet does not import tin (Sn), tantalum (Ta),or tungsten (W), commonly referred to as the “3 Ts.”The quantities used in machining by Audemars Piguet
in 2023 are below the thresholds set by the DDTrO.
The company is therefore exempt from the reporting
obligation under Article 964j paragraph 1, CO in the fieldof minerals and metals.

of fundamental values in the areas of human rights, labourrights, the environment, and the fight against corruption.
In addition, Audemars Piguet relies on the United Nations
Guiding Principles on Business and Human Rights, as wellas the OECD Due Diligence Guidance for Responsible
Business Conduct of May 30, 2018.
The continued adherence and strengthening of the
Human Rights Policy are driven by the company’s Due
Diligence Steering Committee (hereafter the Committee),comprising representatives from Sustainability, Legal,Responsible Sourcing, Procurement, Risk & Compliance.
In addition to a rigorous selection of suppliers and materials
used, a working group was set up in 2020 to ensure
traceability and due diligence of coloured gemstonesand gold. In 2023, its scope was expanded to include
all materials and services. The Committee’s mission is toestablish and verify the governance, documentation, andregulatory oversight necessary for Audemars Piguet toadhere to the highest standards of due diligence and risk
management across its various supply chains.

For gold (Au), Audemars Piguet has a strong approach
to tracing its supply of both recycled and mined gold andis able to demonstrate that the gold does not come fromconflict areas. Specifically, the company does not importores and exclusively sources “dégros” gold from Swissrefiners, who themselves adhere to the principles of due
diligence set by the Responsible Jewellery Council (RJC).
The mined gold exclusively comes from artisanal smallscale mines (“ASM”) located outside Conflict-Affectedand High-Risk Areas (CAHRAs) and only within theframework of the PX Impact® programme.

Commitment to Sustainable and Ethical Sourcing
Across the Supply Chain
Audemars Piguet is dedicated to cultivating secure,sustainable and ethical supply chains. The company
closely maps its value chain to ensure transparency andtraceability of the origin of materials in order to identify,
assess, and manage potential risks with direct suppliers
or other third-party partners through the value chain.

OBLIGATION RELATED TO CHILD LABOUR
Human Rights Governance
Audemars Piguet is committed to respecting humanrights throughout its value chain and has a zero-tolerance
policy on human rights violations. This commitment iscarried through its governance structure both internallyand externally.
The company’s commitments are in line with the tenprinciples of the United Nations Global Compact, which
invite companies to adopt, support, and implement a set4

Sustainable Development Charter
In 2015, Audemars Piguet established a Sustainable
Development Charter (SDC), which incorporates theprinciple of eliminating child labour in the supply chain(article 2.1), in line with International Labour Organization(ILO) Conventions 138 and 182.
The SDC structures the commercial relationship
Audemars Piguet has with its suppliers. The suppliercommits to accepting the entire content of the SDC andto disseminating it to its own suppliers. Upon further
revision in 2021, the SDC requires suppliers to comply
with all applicable laws and regulations regarding conflictminerals and metals (tin, tantalum, tungsten, gold) toensure transparent and conflict-free sourcing (article 1.3).
Audemars Piguet monitors and oversees the acceptanceand implementation of the SDC by its suppliers.

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SUPPLY CHAIN
MANAGEMENTVALUE CHAIN MAPPING
Audemars Piguet’s value chain includes:•Sourcing of raw materials from suppliers,••

Transformation and/or procurement from suppliers
and intermediaries of components and/or semifinished and/or finished products and services,

Watch manufacturing by Audemars Piguet at its
three production sites located in Switzerland,•Logistics, sales to retailers and end-clients, aswell as customer service worldwide.

RAWMATERIALSSUPPLY & PROCESSING

MANUFACTURING

DISTRIBUTION &CUSTOMER SERVICE

Indirect
Intermediaries
ClientsRawmaterial
suppliers

Component /finishedproductsuppliers

AP Production
3 sites inSwitzerland

DirectExternal to AP

After-sales service

Internal to AP

Direct suppliers are those who provide components
and raw materials related to watch manufacturing,
including suppliers of packaging materials.

Indirect suppliers are those who provide products,machinery, services, and intellectual services thatenable the company’s operations.

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Raw Materials Guidelines
In 2023, Audemars Piguet formalised the Raw Materials
Guidelines to centralise all its requirements for the various
materials used. This guide, already utilised internally, will
be rolled out to its partners along with the S-CoC. It
aims to strengthen the company’s responsible sourcing
practices, including the use of recognised certifications,
support for fair trade practices, and active efforts toprevent human rights violations. It also emphasises
transparency and traceability to enhance visibility within
the supply chain.

Supplier Engagement
The Sustainable Development charter has always included
the principle of eliminating child labour in the supply chain(article 2.1), in line with International Labour Organization(ILO) Conventions 138 and 182. Furthermore, since its
revision in 2021, the SDC requires suppliers to comply
with all applicable laws and regulations regarding conflictminerals and metals (tin, tantalum, tungsten, gold) toensure a transparent and independent supply free fromany armed conflict (article 1.3).
As part of continual improvements, Audemars Piguet
plans to evolve the SDC in 2024, renaming it the “Supplier
Code of Conduct” (S-CoC). Like the SDC, the S-CoC will
be signed by all suppliers when they wish to initiate or
renew a commercial relationship with Audemars Piguet.
The S-CoC will strengthen environmental requirements
and follow the recommendations requested in theframework of the Due Diligence Steering Committee,
especially regarding human rights (integrating the ILO Tool).
To ensure full uptake of the S-CoC commitments,Audemars Piguet will provide key communicationmaterials and support to suppliers to ensure their proper
understanding, transmission, and application of theS-CoC to various stakeholders. Similar efforts aroundthe SDC proved successful: following the launch of an
ambitious supplier engagement programme in 2022,
framed within the Swiss Triple Impact (STI), more than 60
suppliers had made commitments related to the United
Nations Sustainable Development Goals, including
human rights, by the end of 2023.

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RISK
MANAGEMENT

Risk assessment, risk mitigation and traceability are fundamental elements of Audemars Piguet’s businessactivities and an area where the company will continue to expand its efforts, guided by a risk-based approach.
RISK ASSESSMENT
To assess any potential risks or deviations from policy,
Audemars Piguet periodically conducts on-site visits
and audits to identify possible and actual impacts. A key
strength in this area is the company’s ability to count on
long-term and trusting relationships with its partners andsuppliers, which enables access to strategic information interms of origins, traceability, and cooperation throughoutthe supply chain. Risks assessments focus in particularon salient human rights risks such as child labour, torture,or inhumane treatment, and dangerous or illegal work.
These risks are regularly audited by independent thirdparty expert in their fields.

1. Its purchasing power in terms of annual volumes,

3. Its impact on human rights within various supplychains.
Factors considered by Audemars Piguet to identify
various risks include:•Risks of specific sectoral activities (mining activities,animal farming, etc.).

•

External analyses identified by Audemars Piguet(NGO reports, press articles, specialised reviews,audits, etc.).

•Site visit reports and meetings with experts inthese supply chains.

Suppliers classified as having a “high” residual risk level
are to be analysed by the Committee, which in turn will
decide under which conditions to continue the commercialrelationship. For suppliers with “medium & low” risk levels,
risk management measures are taken accordingly.

2. Its impact on the environment,

Risks related to the country of origin based onreference public analyses such as the Children’sRights in the Workplace Index and the ConflictAffected and High-Risk Areas (CAHRAs) list.

Risks identified in internal analyses commissionedby Audemars Piguet (e.g., raw material risk studies,materiality matrix, audits, etc.).

This analysis made it possible to identify and therefore
prioritise five materials qualified as “sensitive”: gold,diamonds, coloured stones, leather, and wood. In 2023,
this analysis was extended to all raw materials used byAudemars Piguet and confirmed the relevance of the five“sensitive” materials.

Since 2020, the company has conducted an annual risk
analysis based on:••RISK MITIGATIONGeneral Approach
The risk analysis process described above considers theimpact on human rights within various supply chains,including the risk related to child labour. In addition tothe fact that 98% of the sites of Audemars Piguet’s tier
1 and tier 2 suppliers (subcontractors and suppliers ofAudemars Piguet’s suppliers) are in Switzerland and8

to obtain RJC certification and follow the OECD Due
Diligence Guidance for Responsible Supply Chains ofMinerals from Conflict-Affected and High-Risk Areas.
Audemars Piguet does not source diamonds from
Conflict-Affected or High-Risk Areas (CAHRAs) nor from
Russia and Sierra Leone. In the absence of certification,
third-party audits ensuring high transparency andethical practices are conducted up to the mine. RJC
certification includes a prohibition of child labour.

neighbouring France – thus presenting low risks in termsof child labour – Audemars Piguet has implemented
mitigation measures.
If the assessment of the “Atlas of Children’s Rights andBusiness” classifies a country of origin or an activity
in the “Enhanced” or “Heightened” categories in the
Workplace Index, Market Index, or Community Index, aSMETA 4-pillar audit or equivalent may also be required
for suppliers of “non-sensitive” materials.

Coloured Gemstones (Emeralds,Sapphires, Rubies):
Audemars Piguet exclusively works withcoloured gemstones of known origin. It collaborates
with tier 1 suppliers certified by RJC. The origins of
gemstones are systematically requested from thesupplier. For gemstones lacking certification within their
supply chains, prioritised tracing programmes have beenin place since 2021, achieving full traceability coverage.
Independent third-party audits verifying Audemars Piguet’s
requirements, including the absence of child labour, areconducted for each actor in the supply chain.

In addition to external audits, site visits may be conducted
at regular intervals by internal Audemars Piguet experts
to maintain connections with various stakeholders in thesupply chain, whether they involve sensitive materials
or not.
SPECIFIC MITIGATION MEASURES REGARDINGSENSITIVE MATERIALSThe risk analysis conducted in 2020 and again reevaluatedin 2023 identified and prioritised five materials classified
as “sensitive”: gold, diamonds, coloured gemstones,leather, and wood.

Wood and Its Derivatives:
For wood and its derivatives (paper,cork), Forest Stewardship Council (FSC)
certification is required. Programme for the Endorsementof Forest Certification (PEFC) or Swiss Wood certifications
are also accepted. Wood type and origin are systematicallyrequested, and compliance with the Convention on
International Trade in Endangered Species of Wild Floraand Fauna (CITES) authorised species list is ensured.
FSC and PEFC certifications include an assessement ofchild labour risks.

Gold:
Audemars
Piguetsourcesgoldexclusively from Swiss refiners that are
RJC COP certified and have implemented due diligenceprocesses. RJC certification covers the prohibition ofchild labour.
For the residual part of ASM mined gold used inproduction, the origin of the mine is known. On-site
visits and verification of processes in place locally did nothighlight risks of child labour.

Leather:
Since January 2022, all leather strap suppliers
are AQC certified (Association for Quality
Assurance of Leather Bracelet Manufacturers). Tanneries
are all AQC and/or Leather Working Group (LWG) certified.
Alligator leather used for straps exclusively comes fromAmerican farms regularly audited by third parties. Thebovine leathers used for the main collections’ straps
primarily come from Europe.

For each kilogram of gold purchased, Audemars Piguet
contributes to two ASM mine support programmes: PX
Impact® and Swiss Better Gold. These funds support
miners’ families in health, education, or living condition
improvement projects.
Diamonds:
Audemars Piguet collaborates with aselect number of long-standing partners
meeting strict quality, due diligence, and traceability
requirements. All direct partners are RJC certified, andAudemars Piguet encourages indirect partners (tier 2)

Leather suppliers must be LWG certified. Both AQCand LWG certifications include an assessement of childlabour risks.

9GRIEVANCEMECHANISM

Audemars Piguet provides a grievance mechanism
allowing any employee, supply chain actor or
stakeholder to confidentially and without any fear ofreprisal, voice any concerns over the supply chain or
any newly identified risk.

In 2023, to keep up with recent legislative developments
within the company, a similar mechanism (accessiblefrom the group’s website) was implemented for external
parties to ensure this mechanism is available across its
entire value chain. In this context, and with the aim ofincreasing reporting on issues such as human rights
violations, child labour, and environmental damage,
Audemars Piguet is launching a phased awarenessprogramme for its suppliers.

The platform, called Speakupline, is available 24/7 in all
relevant languages. Managed by an independent thirdparty, it aims to protect employees and tier 1 suppliers
who report acts or situations that could harm thecommon interest or violate Audemars Piguet’s code ofprofessional ethics, especially if these employees do nottrust the usual hierarchical communication channels or
fear potential retaliation. This independent third party
is responsible for translating and/or anonymising theallegations, as well as assessing the severity of the alert.
All qualified alerts are forwarded to the Internal Audit
department, which conducts investigations as necessary.

In 2023, Audemars Piguet received no complaints
regarding child labour in its operations or its supply chain.

To ensure the independence of the investigation, theinternal audit operates directly with the agreement andunder the supervision of the Audit Committee, and if
necessary, the Board of Directors.

10COOPERATIONWITH STAKEHOLDERS

Understanding the needs of its stakeholders is crucial
to how Audemars Piguet operates. Whether it is with
employees, clients, suppliers, or partners, the company
strives to maintain a collaborative approach andcontinuous dialogue to evolve and generate value forall parties involved. It plans and participates in specificactivities for each stakeholder and invites feedback
to know what is important to them and what can beimproved.
Over the past several years, Audemars Piguet has
strengthened its commitment to fostering positivechange in the supply chain through long-standing
collaborations with institutions and organisations to set
the highest responsible standards in the industry.
•

Federation of Swiss Watch Industry (FH) (memberfor +20 years)•

Responsible Jewellery Council (RJC) (membersince 2015)•

Association for Quality Assurance of Leather
Bracelet (AQC) (contributor since 2016)•Forest Stewardship Council (FSC) (certified since2017)•B Lab Switzerland (contributor since 2019)•Swiss Better Gold (SBG) (member since 2019)•The Coloured Gemstones Working(CGWG) (member since 2022)

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CONTINUOUS
IMPROVEMENT COMMITMENT

To ensure prompt information acquisition and stayabreast of developments that could impact Audemars
Piguet’s diligence, a vigilant stance is taken towards
selected suppliers. Whenever a supplier dealing withcritical materials is identified, continuous surveillance is
executed through automated monitoring tools. Any hintof practices deviating from the Sustainable Development
Charter or due diligence procedures is promptly relayed
to the Committee, which determines appropriate actions
vis-à-vis the supplier. A comprehensive summary of thisvigilance is presented at each Committee session.
The company embodies a robust culture of continuous
improvement, recognising that adherence to due
diligence principles necessitates ongoing staff training
on supply chain intricacies. Given the ever-evolving
regulatory landscape, best practices, and market
demands, periodic evaluations of our due diligenceprocess ensure adaptation and refinement.
Audemars Piguet is committed to continuously
improving its monitoring, risk management system, anddue diligence process and to evolving them within theorganisation as well as with all its business partners.
This inaugural report, designed for iterative refinement,
will be regularly updated to meet the stringent standardsof the DDTrO.
This report was adopted by the Board of Directors onMay 22, 2024.
Alessandro Bogliolo
Chairman of the Board of Directors

Olivier Audemars
Vice Chairman of the Board of Directors
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