Modern Slavery Statement

Preamble

GSLT Holdings Limited is the parent company of the Palace Skateboards group (“Group” or “Palace”).

This statement has been published in accordance with the Modern Slavery Act 2015. The Group’s previous Modern Slavery statement was published on 29 January 2021, and related to the period 1 February 2019 to 31 December 2020 (the “2020/21 Statement”). The challenges presented by the COVID-19 pandemic meant that the Group was unable to publish the 2020/21 Statement within the usual time frame due to reduced capacity. The 2020/21 Statement was, however, published in accordance with then applicable UK guidance.

This Statement is published on 25 February 2022 and relates to the period 1 January 2021 to 31 January 2022 (the “Period”). This slightly longer reporting period is to realign with our financial year.

Introduction from Gareth Skewis, CEO and Lev Tanju, Creative Director of the Palace Skateboards Group

It is important to us and everybody at Palace that our products are produced by individuals that enjoy the fundamental rights of being treated with dignity and respect and are not deprived of their liberty through exploitation. Palace has zero tolerance of any modern slavery or human trafficking violations.

We have close relationships with a number of long-term suppliers and prior to the COVID-19 pandemic we visited them often. However, we are aware that our supply chains are long and complex, so we do not always have direct relationships or knowledge of every facility that contributes to the production of our goods.

We believe in promoting human rights throughout our business and our supply chain and are committed to improving our practices and putting in place formal systems to combat modern slavery and human trafficking. We are still in the early stages of this work and hope to continually make progress each year.

Our business

Palace is a skateboarding brand that designs, develops, and retails clothing, footwear, accessories and skateboards. The Group has over 140 employees worldwide, including 54 in our London head office team, and has operations in the UK, US and Japan.

Our co-branded projects are an integral part of our business and as such we choose our partners very carefully. Our co-branded partners are reputable businesses who are responsible for their supply chains.

We have four retail stores around the world, in London (UK), New York City (USA), Los Angeles (USA), and Tokyo (Japan), with corporate entities in each territory.

The Group run’s its own fulfilment and warehousing in London (UK) and New Jersey (USA), and outsources those operations to a third party in the Netherlands, Los Angeles and Japan.

Our employees are a very important part of Palace and its success and we do our utmost to ensure that they are well looked after and fairly treated. We have engaged human resource advisors in every territory where we have direct employees to ensure that we comply with local laws and regulations.

We believe that the right to health care is a fundamental right so provide health care insurance for our employees in the US and Japan, and access to private health care insurance in the UK and Europe.

Policies Relating to Slavery and Human Trafficking

We are committed to the principle of ensuring that there is no modern slavery or human trafficking in our supply chains or any part of our business. Our Anti-slavery and Human Trafficking Policy reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking is not taking place in our supply chains.

To further ensure our ethics and values are shared by the facilities that directly make our finished goods (our “Tier 1 Factories”) and the businesses that coordinate the production of our finished goods through Tier 1 Factories (our “suppliers”), Palace requires all our suppliers and Tier 1 factories to adhere to our Ethical Code of Conduct (the “Code”) which is based on the Ethical Trade Initiatives (ETI) Base Code available here. The Code sets out the minimum working conditions and ethical standards we require. It is built on the conventions of the International Labour Organisation (ILO) and contains the foundations for fair labour practices. We require all new suppliers and Tier 1 factories to adhere to The Code and for all our existing suppliers and Tier 1 Factories to reconfirm their adherence every two years and ensure these standards are implemented within their own operations and throughout their supply chain.

Risk Assessment and Due Diligence

As is typical in the fashion industry, our product supply chain poses the biggest risk of modern slavery and trafficking within our business. As such, during the Period we have continued to concentrate on working with our suppliers to map our Tier 1 Factories.

During the Period, Palace worked with over 30 Tier 1 Factories. These factories are based in 9 countries: China, India, Poland, Portugal, South Korea, Spain, UK, USA and Vietnam.

Social audits are an important part of both risk assessment and due diligence. We require all our Tier 1 Factories to have an independent third-party social audit that is in line with the Code. We are working with our first-tier to ensure that this is enforced but the COVID-19 pandemic has delayed our efforts and some of our Tier 1 Factories were unable to conduct audits this year due to factory shutdowns.

The Tier 1 Factories that make 80% of our products (by cost) have completed and provided social audits in line with the Code and our requirements. As the COVID-19 pandemic begins to enter the endemic phase and factory shutdowns become less frequent, we anticipate that the remaining Tier 1 Factories will be audited in the next period. We will continue to support our suppliers and Tier 1 Factories to ensure this is the case.

An integral part of our Production team’s role is regular visits to our suppliers and Tier 1 Factories around the world, to not only discuss orders but to build relationships and monitor social compliance. The COVID-19 pandemic meant that we did not visit any factories in 2020 or 2021, relying on virtual meetings and email correspondence only. We will begin visiting factories again when safe to do so, to maintain and foster transparent relationships with our suppliers.

Palace is aware that incidences of slavery and trafficking can also occur closer to home. We have a network of suppliers supporting the operations of our business, including logistics, transport, and delivery. Our warehouse in London and our main warehouse in the US are operated by the Group and staffed by direct employees – when additional temporary workers are required, they are hired through reputable agencies. Our warehouse in the Netherlands, Japan and satellite US warehouse are run by well-regarded third parties and adhere to decent working and employment practices.

Review and Next Steps

We can confirm that Palace has received no reports or incidents of modern slavery or human trafficking in our supply chains.

As Palace grows as a business, we are committed to acknowledging our responsibility as a brand. In the Period we have retained external expertise to help implement our policies, supplier mapping, and improve our supply chain transparency, and develop our social compliance goals.

We committed to carrying out the following steps during the Period and will continue to build on these goals over the next year:

1. Work with third party, independent organisations to assess our supply lines and bring
   additional insights as to how we can further tackle human trafficking and slavery.
   
   Continue to map our Tier 1 Factories and begin to map the factories that provide processes
   such as printing, dyeing, or washing (Tier 2 Factories).
   
   Supplement our commercial agreements with third parties to ensure they are required to
   comply with our anti-slavery and human trafficking policy and the Code.
   
   We continue to work with an external specialist to assess our supply chain risk, map our Tier 1 Factories and review their compliance standards.
   
   Due to the ongoing effects of COVID-19 and the difficulties that factory shutdowns imposed, we did not map our Tier 2 Factories in the Period.
   
   However, we have implemented a rigorous onboarding process in all our commercial agreements with third parties and co-branded projects to ensure that the suppliers that they work with are compliant with our Code as a minimum.
   
   GOAL FOR FY2023
   
   We will continue this work in 2022 and will work closely with our suppliers and Tier 1 Factories to begin to map our Tier 2 Factories.
   
   
2. Work with third party, independent organisations to audit our Tier 1 Factories and assess their compliance with our Modern Slavery policies.
   
   Introduce an onboarding process that ensures all new factories understand and adhere to the Code before beginning work with Palace.
   
   Tier 1 Factories that make 80% products (by cost) have been audited to our standards within the last two years. We introduced a rigorous onboarding process for all new suppliers ensuring that they adhere to our standards and adhere to the Code from the very beginning of our relationship.
   
   GOAL FOR FY2023
   
   During the next period we will concentrate on ensuring the remaining un-audited Tier 1 Factories are audited inline with the Code.
   
   
3. Continue to monitor, evaluate and review our suppliers and ensure they comply with our anti-slavery and human trafficking policy.
   
   We have made no changes to our anti-slavery and human trafficking policy during the Period. We have merged our modern slavery supplier questionnaire with our new supplier onboarding questionnaire to minimise the paperwork our suppliers need to complete, whilst ensuring compliance is addressed from the outset of our relationships . As we now receive more frequent audit information it is no longer necessary for our suppliers to fill in the supplier MS questionnaire annually.
   
   GOAL FOR FY2023
   
   We will continue to review our anti-slavery and human trafficking policy and supplier onboarding questionnaire to ensure they remain robust and relevant.
   
   
4. Extend our training programme throughout our business to alert all of our employees, in particular our supplier facing employees to the risks of Modern Slavery.
   
   To ensure a high level of understanding of the risks of modern slavery and human trafficking in our supply chains and our business in 2020 we introduced online training to all our UK and US based teams to raise awareness of these issues. This has given our teams an understanding of the steps that can be taken to reduce the risk of modern slavery in our supply chains.
   
   In this period we have included this training as part of the induction programme for all new starters.
   
   GOAL FOR FY2023
   
   We will continue to ensure that all new employees take this training as part of their induction and all existing employees will be required to take this training every two years.

COVID-19 Response

During this Period the COVID-19 pandemic continued to impact manufacturing supply chains globally and has caused many factories to shut down for long periods of time. We have continued to work with our suppliers closely to understand any issues they face and have made allowances for late orders wherever possible.

Board approval

This statement was approved by the board of GSLT Holdings Limited.