Reporting Year: Q1 2025 – Q1 2026

1. Purpose and Scope

This statement summarises how Karl Faller implemented its human rights and supply chain due diligence in accordance with the UN Guiding Principles on Business and Human Rights (UNGP), and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance) 5-Step Framework during the period Q1 2025 – Q1 2026.

2. Governance & Policy Commitments

Karl Faller has:

• A Human Rights Policy reflecting internationally recognised standards.
• A Supply Chain Policy aligned with Annex II of the OECD Guidance.
• A defined management structure for due diligence, including senior-level oversight.
• Record-keeping systems to retain due diligence, supplier and transaction documentation for the required period.

These commitments are communicated to relevant employees and business partners and integrated into supplier onboarding and internal procedures

3. Human Rights Due Diligence

Implementation

Karl Faller conducted a structured human rights due diligence review covering: recruitment and employment practices, working hours and wages, non-discrimination, grievance mechanisms, workplace conduct, and key in-scope suppliers. The assessment drew on internal policies and records, supplier due diligence information and grievance/incident logs.

Findings

• No actual human rights risks or impacts were identified in our operations or in-scope supply chain during 2025, based on available information and our risk-based assessment.
• Existing grievance channels remained accessible; no human-rights-related complaints were received.

Karl Faller will continue periodic reassessments, staff awareness, and supplier monitoring so emerging risks can be identified and addressed.

4. Responsible Sourcing Due Diligence – OECD 5-Step Framework for Downstream Companies

Step 1 – Establish Strong Company Management Systems

During 2025, Karl Faller:

• Maintained and implemented its supply chain due diligence policy for relevant coloured gemstones. (Natural rubies, sapphires and emeralds)
• Confirmed management responsibilities for the due diligence programme at senior and operational levels.
• Operated record-keeping systems capturing supplier information, KYC, contracts, specifications and sourcing decisions.

Step 2 – Identify and Assess Risk in the Supply Chain

Karl Faller:

• Mapped its upstream supply chain to identify the geographical origin of all in-scope materials.
• Assessed suppliers’ due diligence practices using questionnaires.
• Applied a documented risk assessment methodology considering origin, product type and OECD red-flag indicators.

Outcome: During this reporting period, we identified that a portion of the rubies sourced originated from a recognised Conflict-Affected and High-Risk Area (CAHRA). Enhanced due diligence was conducted, and no evidence of upstream adverse impacts was identified. Appropriate controls are in place to manage and mitigate potential risks, and this source will continue to be closely monitored to ensure that risks remain low.

Step 3 – Design and Implement a Strategy to Respond to Identified Risks

• A risk management framework (including escalation, engagement, enhanced due diligence, and potential disengagement) is established and approved.
• Risk mitigation and monitoring are already in place for identified high-risk sources.
• Routine monitoring of supplier information and certifications continues to ensure early detection of any change in risk profile.

Karl Faller will maintain and enhance its due diligence systems and update this summary annually in line with COP 6, COP 7 and the OECD Guidance.