GUD : Modern Slavery Statement

For personal use only

13 January 2022

Manager

Company Announcements

ASX Limited

Level 4, 20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam

RE:	Modern Slavery Statement

Please find enclosed a copy of GUD Holdings Limited's Modern Slavery Statement for the year ended 30 June 2021, which was recently published on the Australian Border Force's Register.

Please contact me if you have any queries.

Approved for release by the Company Secretary.

Yours faithfully

Malcolm G Tyler

Company Secretary

Direct: [phone]

Email:[e-mail]

Enc

For personal use only

GUD MODERN SLAVERY STATEMENT 2021

For personal use only

GUD LEVERAGES ITS COMMERCIAL INFLUENCE WITH SUPPLIERS AROUND THE WORLD TO EMPHASISE THE IMPORTANCE OF UNIVERSAL HUMAN RIGHTS.

WE BELIEVE THAT BY MAKING ETHICAL SOURCING AND MODERN SLAVERY ISSUES PART OF THE DISCUSSION WE CAN IMPROVE GLOBAL WORKING CONDITIONS.

This Modern Slavery Statement is published in compliance with Australian Modern Slavery Act 2018 (Cth) for GUD Holdings Limited ('GUD') headquartered in Melbourne, Australia. It covers the financial year 1 July 2020 to 30 June 2021 and is a joint statement applying to all wholly owned GUD subsidiary companies listed in the 2020/21 Annual Report conducting business in Australia as listed on page 31.

IN THIS STATEMENT		Modern Slavery Risks	18
Introduction		• Supply Chain Risk
	• GUD's Risk Matrix - Assessment of Country Risk	19
• Message from our Managing Director and
	• Modern Slavery Risks	20
Chief Executive Officer	3
• Executive Summary	4	Impact
GUD		•	Effectiveness of Actions	21
	•	Monitoring Progress	24
• About GUD Group	5
•	Training	25
• GUD Products	7
• Covid-19 Impact	26
• Our Suppliers	8
• GUD Innovation	10	Looking Forward
Ethical Sourcing Program		•	Challenges	27
	• Speak Up	28
• Ethical Sourcing Governance	11
•	2022 Ethical Sourcing Program Objectives	29
• GUD Ethical Sourcing Code	13
• Beyond Compliance	14	Annexures
• Supply Chain Implementation of Ethical Sourcing Code	15	• Annexure 1 - Mandatory Criteria Check-List	30
• Consultation Process	17	• Annexure 2 - GUD Group Companies	31

GUD2 GUDHoldingsHoldin Limitedimited ModernABNSlavery99 004Statement400 2021891

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INTRODUCTION

MESSAGE FROM OUR MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

We are proud to present this Modern Slavery Statement which captures the activities of GUD and its wholly owned subsidiaries in the financial year ended 30 June 2021 (FY 21).

The effectiveness of GUD's Ethical Sourcing Program is built on the strength of its commercial relationships and partnership with suppliers from all around the world.

Modern slavery is a universal human rights issue. While the reach of one country's law may be limited by its national borders, commercial relationships transcend geographical boundaries.

GUD's tiered Ethical Sourcing Code starts with the foundation of requiring compliance with ethical labour practices which protect the essential freedoms of workers as required by the Modern Slavery Act 2018 (Cth). To this baseline, GUD introduces additional standards which range from the protection of health and safety and non-discriminatory practices through to meeting environmental and sustainability standards. GUD leverages its commercial influence with suppliers to require commitment to the Code, wherever they are located.

By engaging with suppliers - through deep due diligence, awareness raising, education and change practices - GUD businesses seek to eradicate modern slavery practices, rather than immediately severing ties with non-compliant suppliers and potentially pushing the problem underground.

That way GUD seeks to create sustainable and lasting change which makes a real difference to the conditions of workers in our global supply chains.

As GUD continues to add to its dynamic portfolio of businesses, and new businesses are brought within our Ethical Sourcing Program (including our recently created Friction and 4WD Units), we extend GUD's reach and transformative influence into our partners' supply chains.

GUD will continue to develop and deepen its Ethical Sourcing Program in FY22, as we manage the challenges of Covid-19 travel restraints by introducing a new IT platform to support management of the program and independent auditing to promote greater transparency and accountability of our suppliers.

Graeme Whickman

Chief Executive Officer and Managing Director

GUD Holdings Limited Modern Slavery Statement 2021 3

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INTRODUCTION

EXECUTIVE

SUMMARY

From the commencement of GUD's Ethical Sourcing Program in 2018, GUD has taken a head-on approach to tackling the challenges of identifying and addressing modern slavery risks in its supply chains. Applying innovation and creativity to the task, GUD's approach is to encourage accountability through direct and targeted engagement with our suppliers.

For personal

GUD created a uniquely tiered Ethical Sourcing Code split into Bronze, Silver and Gold tiers reflecting that not all ethical standards are the same. The prohibition of 'modern slavery' practices are addressed at the Bronze entry level and assume prime importance. Bronze tier standards ensure workers' freedoms and humane treatment as legislated by the Modern Slavery Act 2018 (Cth) and also includes labour standards for appropriate pay, benefits and leave entitlements for workers.

From this foundation, GUD's Ethical Sourcing Code layers other important standards. Silver tier compliance is awarded to suppliers which achieve health, safety and non-discrimination standards. Gold tier involves compliance with specific environ- mental, sustainability and business ethics standards.

The task of securing confirmation of Code compliance within GUD's suppliers is addressed through individually targeted efforts. All suppliers are required, as a minimum, to meet the Bronze tier standards and commit to and working through to Gold.

Code compliance is confirmed by completion of an in depth Self-Assessment Questionnaire which calculates the level of Code compliance and identifies areas for action and improve- ment. Formal declarations contractually bind each supplier to maintain compliance with the Code, including the need to repeat the Self-Assessment Questionnaire bi-annually.

As well as introducing these measures with all new suppliers, GUD's businesses have been engaged in a graduated roll-out of the Code within their supply chain over the last two years.

Progress objectives for Code implementation with GUD's tier 1 suppliers1 are set each year to ensure continual progress towards 100% compliance. Targets are linked to both a percentage of annual spend and country risk indicated by supplier location. The risk of modern slavery practices by country is determined using a weighted index developed by GUD's Ethical Sourcing Working Group, using range of reference data from specialist sources.

In this reporting period, GUD businesses met or exceeded their FY21 targets. Collectively, 98% of suppliers in high risk countries2 and 90% of suppliers in medium risk countries were engaged in the Ethical Sourcing Program - with the majority of these suppliers achieving Gold tier compliance.

GUD's Ethical Sourcing Program is continually being enhanced with the development of resources and tested protocols around supplier engagement, together with ongoing education and training. The strength of the Program was confirmed in early 2021 when it was successfully integrated into GUD's new businesses in just under 3 months.

Using engagement, education and influence with its supply chain GUD businesses have influenced a general lifting of ethical sourcing standards and continue to create significant change in supplier practices.

Into FY22, GUD will be transitioning individual supplier engagement and management of the Ethical Sourcing Program to a common IT platform and supplementing self-reported assessments with selected independent audits. It is expected that Code compliance with all tier 1 product and component suppliers in high and medium risk countries will be achieved, and significant inroads made to rolling out the Code with suppliers in low risk countries. Other focus areas for FY22 will include in the Program service providers in high risk industries (such as cleaners and freight providers).

The ongoing impact of Covid-19 presents challenges and heightens the need to focus on risks. Throughout the reporting period and going forward GUD will utilise collaboration opportunities within our industry to deepen our insights as to where to identify modern slavery risks and ways to manage or remediate such risks.

1. A tier 1 supplier is a supplier of products or components directly engaged by a GUD business. Commencing FY23 GUD expects to progress Code implementation with tier 2 suppliers.
2. Refer to GUD's Risk Matrix - Assessment of Country Risk on page 19.

4 GUD Holdings Limited Modern Slavery Statement 2021