MK Sign & Sell

DUE DILIGENCE ANNUAL REPORT

Company Name:
MK Luxury Group
Date:
6/27/2022
Reporting period:
1/1/2021 – 12/31/2021
1. Company Management Systems

1.A Company System and supply Chain Policy
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MK Luxury Group commits itself to the principles for responsible sourcing regarding the supply chain of conflict minerals, including precious metals and diamonds, as well as social responsibilities in accordance with the RJC guidelines. MK is aware that the choice and control of its suppliers is of a key importance for a business activity focusing on sustainability.
MK emphasizes to reasonably ensure that the precious metals and diamonds in its supply chain originate from legal and ethical sources, that the precious metals and diamonds are not associated from conflict-Affected and high-risk areas.
We have established published our Supply Chain Policy and annual Report on the company’s website for easy access to stake holders. Best Business Practice endeavors has been communicated and sent to active our suppliers. Policy and procedures based on risk of CAHRA(s) is implemented.
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1.B Internal Management System
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The Procurement Compliance Officer has been assigned with responsibility for compliance of ethical sourcing and carry out supply chain due diligence. The Compliance Officer is assigned with the right competence and knowledge to manage the entire process and has a direct reporting line to the executive management.
Management also ensures that our standards are applied through-out our organization.
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1.C System of Controls
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Due diligence of our supply chain comprises mainly of the measures required by RJC guidance. Our internal management has implemented the Supplier Code of Conduct, Due diligence procedures for managing risks in their supply chain and Supplier information sheet.
We established an effective and comprehensive compliance systems based on strong KYC due diligence practices to comply with the regulations set forth.
A mechanism is implemented which verifies watch-list/sanctions list and ensure the business counterparty and/or its beneficial owners are not listed on relevant government lists for individuals or organizations implicated in fraud, involvement with prohibited organization and/or those financing conflicts.
We follows are due diligence process by verifying the location of the Business Counterparty with the Countries and Areas listed under CAHRA to determine if the risk of source being located under Conflict-Affected and High-Risk Area and raised RED Flag and to refrain from Business relationships from these areas.
The document files for all Due Diligence is maintained for minimum of 5 years.
The process of due diligence documented above helps in mitigating risk and traceability.
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1.D Strengthen engagement with suppliers.
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We aim to establish long-term relationships, communicating our expectations and helping suppliers to build capacity for due diligence. We communicate with our suppliers on an ongoing basis for an ever improved and ethical supply chain.
We are reviewing our due diligence checks annually based on risk assessment we conducted in our KYC check.
We continued to be actively engaged with RJC guidelines
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1.E Establish grievance policy
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MK encourage any external stakeholders to use our grievance mechanism. Everyone, including employees, is provided with an opportunity to raise concern. Such concerns are treated discreetly and strictly confidential.The following Grievance mechanism is available in our website.MK has established this grievance procedure to hear concerns about circumstances in the supply chain involving diamonds and gold from conflict-affected and high-risk areas.Concerns can be raised by interested parties via email to: Avi@mkluxurygroup.com
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2. Identify and assess risk in the supply chain

We majorly source our products from reputable suppliers, eliminating potential risk of any kind including CAHRA.
Approach to assessing risk of our suppliers has been through desktop study analysis by viewing the best practices followed by suppliers.
The KYC process and information obtained from suppliers is verified against watch/sanctioned list and verification of the location of the Business Counterparty and source location with the countries and Areas listed under CAHRA.
We implemented a documented system for identifying high and low risk mineral sources in our supply chain. The approach to assessing our high and low risk minerals has been through an analysis of Conflict, Human Rights and Governance that are marked by CAHRA. We used the list of resources directly from RJC Due Diligence Toolkit as well as other sources in identifying CAHRAs. We first identified in our analysis the Business Counterparty and the source location. Second, for each source location we assessed if it is a high or low risk by studying the various resources information and surveys provided by RJC Due Diligence Toolkit and their impacts on our Business Counterparty locations. The assessment of high and low risk was conducted on Human Rights, Conflict and Governance for each of our Business Counterparty source location. As a way of example, we used Heidelberg Conflict Barometer and Global Peace Index to assess high and low risk in area of conflict.
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Step 3: Design and implement a strategy to respond to identified risks (if applicable)

3.A Report findings of the supply chain risk assessment:
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The Controller of MKLG is provided with risk assessments, data and any relevant documents
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3.B Risk management plan:
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Steps implemented to respond to risks and its impacts
Identified the type of risk covered by Annex II of the OECD Guidelines Assess the severity of the risk and its impacts Establish mitigation measures, weather the risk can be mitigated or minimized and/or communicated with suppliers Review and monitor risk If risk cannot be mitigated or minimized, discontinued relationships with supplier after 6 months
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  • Identified the type of risk covered by Annex II of the OECD Guidelines
  • Assess the severity of the risk and its impacts
  • Establish mitigation measures, weather the risk can be mitigated or minimized and/or communicated with suppliers
  • Review and monitor risk
  • If risk cannot be mitigated or minimized, discontinued relationships with supplier after 6 months

3.C Implement the risk management plan and monitor performance of risk mitigation efforts:
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Implemented a plan, provided in documented template below, to track the effectiveness of mitigation measures with a timeline in place.
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Company Name
Effective date
Supplier name (if applicable)
Supplier address
Type of material
Type of risk
Description of risk
Risk severity
Mitigation measures agreed
Stakeholders consulted
Feedback from stakeholders
Review frequency
Plan completion date
Risk mitigated (yes/no)
Summary results of mitigation plan
Follow up action

3.D Internal training:
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All employees involved in purchasing and sourcing products are trained in accordance with the Company’s supply chain policy.
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3.E Communications:
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We have communicated our Code of Conduct and Supply Chain Policy with our stakeholders We regularly engage with suppliers on implementation of responsible business practices. We encourage stakeholders to undertake due diligence on supply chain for responsible sourcing
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