pg. 12

"• Serious compliance breaches where the supplier is given one month to resolve the serious compliance breach, and a follow-up audit is scheduled to confirm that the issue has been resolved. Identification of a zero tolerance breach or serious compliance breach triggers the immediate establishment of a committee bringing together the Kering audit team and the relevant House(s) to decide on the future of the relationship with the supplier: immediate shutdown of the approval process if the supplier is in the process of being activated but has not started working; and discussions about the possibility of remediation and support for the supplier or about the need to terminate the contractual relationship if the supplier is working on one or more orders. The brand is the ultimate decisionmaker on the most appropriate response;

• Observations. These give rise to a corrective action plan and are the subject of a dedicated checklist at the next audit. The supplier has six months to remedy the observation."