Published: May 11, 2023

BIXLERS INC. SUPPLY CHAIN DUE DILIGENCE ANNUAL REPORT - 2023

 At BIXLERS INC., we strive to be an industry leader in sustainable and ethical practices in our business and supply chain. It is with this goal in mind that we have established our Annual Supply Chain Due Diligence Report, introduced with the objective to offer transparent information to all our stakeholders, by disclosing the result of our ongoing effort and commitment toward responsible sourcing practices.

The report covers the following three-step framework:

1. Company management systems
2. Supply chain risk identification and assessment
3. Strategy to respond to identified risks

STEP 1: Company Management Systems

To ensure the responsible and ethical sourcing of materials, the following policies and procedures were verified by an independent third-party auditing firm (SCS Global Services) on April 10^th, 12^th, 13^th, 14^th and 20^th 2023:

Supply Chain Policy

Our Supply Chain Policy puts forth guidelines and procedures with respect to:

• Human rights and Labour practices in accordance with the Universal Declaration of Human Rights and the International Labour Organization Declaration (a United Nations agency) on Fundamental Principles and Rights at Work
• Legal compliance
• Anti-Corruption and Bribery, Anti-money laundering
• Mechanism enabling stakeholders to voice concerns about the jewelry supply chain
• Workplace health and safety

Internal Management

Compliance officers have been appointed to manage the company's due diligence policies and procedures. Kate Boucher and Marielle Burchett are the senior managers accountable for overseeing supply chain due diligence procedures and the gatekeepers for onboarding new suppliers.

System of Controls and Transparency Over the Supply Chain

We have aligned our supply chain controls and transparency for precious metals, diamonds, and colored gemstones with the Code of Practice guidelines from the Responsible Jewellery Council and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

We have implemented the Know Your Counterparty (KYC) process, which involves collecting and verifying information about suppliers, including ownership and company information. This allows us to identify and address any potential risks in their supply chain, and to establish controls to promote transparency and ethical practices.

The following forms and questionnaires have been shared to gather information from our suppliers and to communicate our expectations:

• KYC Questionnaire form: A request for information regarding the supplier’s counterparty details, legality of business, beneficial owners, AML, and KYC regulations.
• Supplier Risk Assessment form: A request for information to identify, analyze and address any potential risks and develop mitigation plans to reduce or eliminate said risks.
• Supplier Risk Assessment Tracker: An internal tool allowing us to track supplier’s responses and identify areas of improvement to manage and monitor the risks associated with said suppliers. All information received is documented, reviewed, and managed by our Supply chain Compliance Officers (Kate Boucher and Marielle Burchett).

Strengthen Company Engagement with Suppliers

The supplier onboarding procedures have been introduced to all members involved in purchasing to ensure that we partner with suppliers who embrace responsible and ethical business practices. This will allow us to establish a strong foundation at an early stage of our business relationship with the suppliers.

Grievances

A grievance procedure was introduced to enable different stakeholders to voice concerns regarding circumstances in the supply chain. All concerns can be sent to our appointed supply chain Compliance Officers. All concerns received will be documented and investigated, and where applicable, corrective actions will be taken.

STEP 2: Supply chain risk identification and assessment

As part of our annual evaluation, all our suppliers have been directed to complete the Know Your Counterparty (KYC) form and the Supplier Risk Assessment form, allowing us to verify their business legitimacy, business practices, ownership, and legality of business operations as they pertain to the following:

• Anti-Money Laundering (AML)
• Legal compliance and certifications
• Human rights and labor practices
• Workplace health and safety
• Environmental management
• Supply chain due diligence and responsible sourcing
  • Conflict-Affected and High-Risk Areas (CAHRAs)
  • Undisclosed synthetic diamonds (if applicable)

CAHRA Identification Protocol for Suppliers

At BIXLERS Inc., we follow the OECD’s definition of Conflict-Affected and High-Risk Areas, which is as follows:

Conflict-affected and high-risk areas are identified by the presence of armed conflict, widespread violence or other risks of harm to people. Armed conflict may take a variety of forms, such as a conflict of international or non-international character, which may involve two or more states, or may consist of wars of liberation, or insurgencies, civil wars, etc. High-risk areas may include areas of political instability or repression, institutional weakness, insecurity, collapse of civil infrastructure and widespread violence. Such areas are often characterised by widespread human rights abuses and violations of national or international law.¹

On an annual basis, the compliance officers will evaluate the CAHRA (Conflict-Affected and High-Risk Areas) status of all suppliers using the following qualitative analysis:

• An evaluation of the supplier’s operational locations against the EU’s CAHRA list.
• A search of reports published by applicable governments, international organizations, non-governmental organizations (NGOs), the EU Commission, and the media.
• A search of the supplier’s name and the beneficial ownership on the OFAC SDN International Sanctions List.
• A review of the U.S. Department of State’s Annual Country Report on Human Rights to search for specific cases of state corruption, human rights abuses, or other risk factors.

STEP 3: Strategy to respond to identified risks

Assessment of Supplier’s Due Diligence Practices

If during the annual evaluation, information is discovered that indicates a direct or intentional relationship between a supplier and human rights violation, finance of armed conflict or terrorism, or any other violation of responsible business practices, the Compliance Officers will notify all purchasing personnel to immediately cease business with the said supplier until further investigation of the supplier is conducted to collect additional information on the circumstances surrounding the infraction in question.

Strategy to Respond to Identified Risks

No risks have been identified so far based on KYC or AML and the collection of information is still in progress. Therefore, this section is not applicable. Bixlers will continue to review and assess its due diligence practices for continued improvement.

• 1^st communication was sent on April 19^th, 2023
• 2^nd follow-up communication was sent on May 3^rd, 2023