Supplier Code of Conduct

RATCH Group Public Company Limited's Announcement

# 6/2023

On Supplier Code of Conduct

(1^st Revision)

Preface

RATCH Group Public Company Limited (Company) realizes the importance of balancing environmental, social, and governance (ESG) considerations in our business practices. The Company believes that responsible and sustainable operations are the key to long-term success and positive impacts. This Supplier Code of Conduct thus serves as the guidance framework to ensure that our suppliers perform in line with our commitment to ethical conduct, environmental stewardship, and social responsibility. Their compliance also supports the Company's collective contribution to a more equitable, resilient, and environmentally conscious society in response to the United Nations Global Compact, the United Nations Guiding Principles and Human Rights and Labor Organization's Declaration on Fundamental Principles and Rights at work. Aside, the Company gives priority to work with suppliers that embrace the Supplier Code of Conduct principles and continuously improve their operations. With this shared commitment, the Company will succeed in achieving a harmonious balance between profitability, social well-being, and environmental preservation.

Scope

This Supplier Code of Conduct is applicable to all suppliers who provide goods and services to RATCH Group. This includes direct suppliers as well as subcontractors and business partners involved with our supply chain. The Company's suppliers are expected to pass on these requirements to their own suppliers, to ensure a consistent commitment to this Supplier Code of Conduct throughout the entire supply chain.

Enforcement of the Supplier Code of Conduct

Compliance with this Code of Conduct is of utmost importance to the Company and it forms a major part in the considerations of trade conditions and contractual agreements for suppliers. The Supplier Code of Conduct will be reviewed on an annual basis or in light of significant events, to ensure its alignment with current business conditions.

The General Administration Department and other departments responsible and involved with the selection and signing of contracts for the Company, subsidiaries, and controlled entities are accountable for the enforcement of this Supplier Code of Conduct with their suppliers. They shall monitor suppliers' compliance and prepare compliance reports for the Chief Executive Officer every 2 years.

Communicating the Supplier Code of Conduct

The General Administration Department and other departments responsible and involved with the selection and contract signing for the Company, subsidiaries and controlled entities are held accountable for communicating the Supplier Code of Conduct to their suppliers. All suppliers shall receive a copy of the Supplier Code of Conduct and acknowledge it through a signed agreement. In case of any change to the Supplier Code of Conduct, relevant departments shall inform all suppliers of such change. In addition, Additionally, it is important to organize supplier training to ensure their awareness and understanding in the Supplier Code of Conduct's content and intention, which will lead them to correct actions aligned with the Company's expectations.

Putting Supplier Code of Conduct into practice

Management System

Suppliers shall demonstrate their commitment to develop and improve their practices and actions on environmental, social, and governance aspects in alignment with sustainability principles. They are expected to apply the guiding principles outlined in the Company's Supplier Code of Conduct.

Grievance and Complaint Procedure

Suppliers shall establish a fair and transparent grievance and complaint system and a clear problem-solving process. There shall be measures to protect the rights of complainants and relevant individuals and protect complainants against all forms of retaliation. Suppliers shall also appropriately store the information and supporting evidence.

Validation Procedure

The Company reserves the right to review this Supplier Code of Conduct through an internal audit and/or an external audit by external verifiers; and to seek suppliers' cooperation in improving their operations in accordance with the Company's Supplier Code of Conduct.

Continuous Improvement

The Company actively encourages and supports suppliers to continuously improve their operations in accordance with this Code of Conduct. Concerning any supplier refusing to comply with the principles outlined in this Supplier Code of Conduct or act against them, the Company may consider taking actions that include the termination of contracts or business connection.

Contents

1. Human rights and labor practices

1. Respect for Human Rights
   Suppliers shall respect human rights principles and shall not engage in any form of discrimination based on race, skin color, gender, language, religion, education, tradition and culture, social status, property, residence, political opinions, or any other characteristics which shall be protected under the principles. All suppliers shall follow the human rights principles described in Company's Human Rights Policy.
2. Forced Labor
   Suppliers shall not engage with forced, bonded, or any form of involuntary labor that includes forced labor, descent-based slavery, debt-bonded labor, and human trafficking. Human trafficking refers to the recruitment, transportation, transfer, harboring, or receipt of persons through the use of threat, force, coercion, abduction, fraud, deception, abuse of power or vulnerability, the giving and receiving of payments or benefits to obtain the control over another person, for the purpose of sexual exploitation, forced labor and services, or slavery.
3. Child Labor
   Suppliers shall comply with local and international legislation regarding the minimum age for employment. The minimum age shall be set in accordance with international standards such as the International Labor Organization (ILO)'s Declaration on Fundamental Principles and Rights at Work.
4. Pay and Benefits
   Suppliers shall comply with labor legislation concerning pay, welfare, and benefits. The compensation given to their employees shall be comparable or equivalent to industry standards and suppliers shall ensure that their employees can meet their basic needs and their families'.
5. Working Period
   Suppliers shall uphold the labor law governing employees' working hours, overtime, holidays, and applicable leave. Overtime and work on holidays shall be voluntary and agreed upon by workers. Suppliers shall also follow industry best practices related to working periods.
6. Discrimination and Harassment
   Suppliers shall treat all individuals equally and non-discriminatorily, regardless of race, color, religion, gender, gender identity, sexual orientation, national origin, age, disability, or any other protected characteristics. Discriminatory practices in hiring, promotion, training, and other employment-related choices are strictly prohibited. Suppliers shall maintain work environment free from harassment, either verbal, physical or visual. Harassment based on protected traits, such as sexual or racial harassment, is illegal.
7. Treatment of Female Workers
   Suppliers shall protect female workers from harmful or unsafe work. Pregnant workers shall be entitled to legal protection and benefits.
8. Freedom of Association and Collective Bargaining
   Suppliers shall respect workers' freedom to form, associate with, and join a trade union, without interference or prejudice. Workers shall be entitled to the rights to take part in collective bargaining, without punishment or reprisal. Suppliers shall recognize and respect workers' right to negotiate and sign collective bargaining agreements with worker representatives or trade unions to establish employment terms and conditions fair to all sides.
9. Prevention of Impacts on Community and Society
   Suppliers shall demonstrate responsibility by preventing possible negative impacts on community and society and shall not commit any act that harms Company's reputation or undermines confidence. Suppliers shall also promote and support the employment of local workers.
10. Management of Partners in Suppliers' Supply Chain
    Suppliers shall give importance to their suppliers', sub-contractors', or business partners' operations and legal compliance. Suppliers shall assess possible risks posed by suppliers, sub-suppliers, or business partners, evaluate their performance, and take corrective actions to address issues of concern.
11. Occupational Heath Safety and Work Environment
    
    1. Safe Work Environment
       Suppliers shall ensure a safe and hygienic work environment by providing adequate facilities and welfare at their operating areas, offices, and third-party facilities. The work environment and equipment shall meet hygiene standards as well as safety and occupational health regulations. Preventive measures shall be in place to minimize work-related accidents or illnesses, and first-aid and emergency treatments shall be made available.
    2. Security Management
       Suppliers shall comply with laws and recognized industrial standards relating to safety, occupational health, and the environment. They shall not neglect any actions that may compromise workers' safety and hygiene or fall below legal requirements and the Company's rules. Suppliers shall strictly demand the use of safety equipment, provide safety training to workers, and establish a system for the reporting of safety and hygiene issues.
    3. Preparation for Emergencies
       Suppliers shall conduct risk assessments; identify potential emergency situations such as fire, explosion, chemical leaks, or natural disasters; and establish preventive, mitigating, and corrective measures. Suppliers shall give importance to the assessment of workers' readiness and equipment and organize training that educates workers about emergency response plans, so as to ensure appropriate and prompt reactions in light of accidents or emergencies.

2. Environment

1. Greenhouse Gas Emission and Energy Consumption
   Suppliers must be proactive in reducing greenhouse gas (GHG) emissions in accordance with applicable legislation. This involves accurate emission measuring, monitoring, and reporting. The Company encourages suppliers to set GHG emission reduction targets and share the target with the Company. Furthermore, suppliers shall adopt processes and technologies that increase energy efficiency, promote the use of energy-saving equipment, implement energy management systems, and optimize energy consumption across their operations. Suppliers are also encouraged to switch to renewable energy sources.
2. Pollution Prevention and Waste Management
   Suppliers are responsible for implementing measures that reduce pollution and hazardous substances released to the environment. The measures include the best practices for pollution prevention; and the proper management, storage, and disposal of hazardous materials. Suppliers shall actively emphasize waste reduction and recycling activities to minimize the amount of generated waste.
3. Management of Hazardous Materials and Product Safety
   Suppliers shall set procedures and measures to control the use of hazardous materials and chemicals. They shall safely store, handle, dispose of, or destroy these materials in accordance with legal requirements. Additionally, suppliers shall provide comprehensive training to workers regarding safe work procedures to minimize risks involving work with hazardous materials.
4. Efficient resource utilization
   Suppliers shall optimize natural resources that include water, energy, raw materials, and packaging materials. They shall adopt best practices in improving the utilization efficiency and reducing waste generation throughout their operations.
5. Biodiversity
   The Company expects suppliers to protect and preserve the ecosystems in their operational locations. They shall avoid any activities that may harm or destroy wetlands, forests, or other vital ecosystems.
6. Zero deforestation
   Suppliers shall commit to zero deforestation practices for both their own operations and their supply chain. They shall avoid any activities that contribute to the destruction of wildlife habitats, deforestation, and land degradation. Suppliers shall promote sustainable agricultural methods, such as agroforestry and organic farming. Furthermore, they need proactive measures to preserve and protect forests.

3. Business Ethics

1. Fight against Corruption and Conflict of Interest
   Suppliers shall fully comply with all applicable anti-corruption laws and international agreements. They shall refrain from soliciting, paying, or accepting bribes or other unethical benefits to gain an unfair competitive advantage. Suppliers shall avoid situations that may give rise to conflict of interest. Suppliers shall disclose the information on potential conflict of interest such as familial ties or financial interests that could compromise objectivity or impartiality.
2. Giving of Gift, Souvenir, and Reception
   Supplier shall strictly comply with the Company's policy on the giving and receiving of gifts, souvenirs, and commemorative items. Suppliers shall not offer gifts, souvenirs or receptions to Company's employees, workers, external examiners, or other individuals associated with the Company, with the intention to influence their decisions for suppliers' gain.
3. Anti-Competition
   Suppliers shall strictly comply with all applicable antitrust and competition laws, rules, and regulations. They shall not join anti-competition agreements, collusive actions, bid-rigging, price-fixing, and any other practices that restrict healthy competition.
4. Business Transparency
   Suppliers shall provide the Company with accurate and clear information about their operations and supply chain. They shall disclose the details regarding sources of materials, subcontractors' attributes, and relevant certificates or sustainability requirements.
5. Protection of Confidential Information and Personal Data
   Suppliers are obliged to protect and safeguard all types of Company's information in accordance with contractual obligations and relevant laws. They shall treat personal data as confidential information that must not be disclosed to others without the Company's written consent. Suppliers shall appropriately implement security measures and systems to ensure the proper safeguarding of such information in accordance with applicable laws and international standards.
6. Product Responsibility and Quality Management
   Suppliers shall give an assurance that their products and services are produced under all applicable safety and quality standards. The products must contain zero defect, are safe and function accordingly to prescribed standards. To ensure product integrity, suppliers shall establish rigorous quality control and testing procedures before delivering products to the Company. Suppliers shall also take necessary precautions to protect the products from damage during transit.
7. Protection of Intellectual Property
   Suppliers shall respect and refrain from infringing the intellectual property rights of others and the Company. Suppliers shall use the Company intellectual property and trade secrets, the Company's partners and others strictly in accordance with the terms of use. Disclosure of intellectual property without Company's authorization or consent is strictly prohibited.

Announcement Date: 31 July 2023

Chief Executive Officer