MODERN SLAVERY ACT 2015 (UK)

This statement is made pursuant to section 54 of the Modern Slavery Act 2015. It sets out the steps that Lotus Bakeries NV’s UK subsidiaries have taken during the year ending 31 December 2024, and what steps we are looking to take going forward, to prevent modern slavery and human trafficking in its business and supply chain.

The UK subsidiary companies covered by this statement are:
• Lotus Bakeries UK ltd
• Natural Balance Foods Ltd
• Urban Fresh Foods Ltd
• The Kids Food Company Ltd
• Peter’s Yard Wholesale Ltd

Organisation structure and supply chain

Lotus Bakeries, founded in 1932, operates worldwide in the indulgent and natural snacking segment with brands including Lotus®, Biscoff®, nākd®, TREK®, BEAR®, Kiddylicious®, Peter’s Yard®, Dinosaurus®, Peijnenburg® and Annas®.  Headquartered in Belgium, Lotus Bakeries is a dynamic and internationally oriented company with production facilities in Belgium, the Netherlands, France, Sweden, South Africa and the United States. A third production facility is currently under construction in Thailand and will be operational by 2026. It has 23 own sales organizations in Europe, America, Asia and Australia. Lotus Bakeries also works with commercial partners in approximately fifty countries worldwide.  Lotus Bakeries has around 3,360 employees and achieved a revenue of EUR 1,232.0 million in 2024. The shares of Lotus Bakeries are listed on Euronext Brussels. The majority of shares are owned by the Boone and Stevens family.

Governance

Lotus Bakeries’ commitment to eradicating modern slavery within the UK subsidiaries is the responsibility of the General Managers of each of the entities, under the supervision of the Group Executive Committee.  Further, the General Managers report at least annually to the Board of Directors. Where matters exceed local level, the General Manager will report to the Group Executive Committee, who would in turn seek counsel from the Group Audit & Sustainability Committee on issues related to modern slavery.

Our Policies on slavery and human trafficking

Lotus Bakeries actively assumes its social responsibility. We are committed to ensuring ethical business practices throughout the organization and its supply chain.   Upholding business integrity and human rights is fundamental to building trust with our partners, communities and stakeholders, as pointed out in our Human Rights Policy. Our Guiding Principle is to abide by all international human rights standards, including, but not limited to, the UN Universal Declaration of Human Rights and the UN Guiding Principles on Business & Human Rights, the International Labor Organization's (ILO) Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises. Where local law and international standards are higher, Lotus Bakeries will follow the strictest standard.  The Code of Conduct was approved by the Board of Directors on April 2, 2020 and was implemented in the same year. As of 2021, every new employee who is recruited must sign this. This Code forms an integral part of the employment contract. Lotus Bakeries expects all its employees to act with integrity, honesty and fairness and in full compliance with the applicable laws, rules and regulations. The Code of Conduct contains six main principles which employees must respect at all times. These principles are further elaborated through dedicated policies and procedures. The full Code of Conduct is available in 12 different languages on our website: https://www.lotusbakeries.com/governancepractices-and-policies. The Code of Conduct reflects our zero-tolerance policy to the practices of child labour, forced or involuntary labour, debt bondage, bonded labour or modern slavery.   Lotus Bakeries further developed and rolled-out a human rights policy in 2023, which applies to all our operations and to all full-time, part-time, and temporary colleagues who are directly employed by Lotus Bakeries, including our directors and officers. The policy also extends to any subsidiaries or joint ventures where Lotus Bakeries has a majority interest or management control. The full Human Rights Policy as well as our Modern Slavery Statement are available on our website: https://www.lotusbakeries.com/governance-practices-and-policies . We expect our suppliers of packaging, raw materials, equipment and finished products to meet the principles set out in the Lotus Bakeries’ Code of Conduct. The Supplier Code of Conduct was implemented in 2020, is supplied in the language of the contract and is available in 12 languages. The suppliers of packaging, raw materials, equipment and finished products with whom Lotus Bakeries had a pre-existing framework contract, were asked to sign the Code of Conduct separately at the time. Since then, we have included this Code in our standard contracts with key suppliers. In 2024 96.4% of our key suppliers of finished products (external production), raw materials, packaging and equipment with whom Lotus Bakeries has concluded a written contract, have signed the Supplier Code of Conduct. Moreover, all our general purchase conditions contain a reference to the Supplier Code of Conduct, which is available on our website: https://www.lotusbakeries.com/governance-practicesand-policies . All employees of Lotus Bakeries - as well as all our suppliers - are encouraged to speak up if they encounter any conduct that concerns them, or that seems to violate Lotus Bakeries’ Code of Conduct, our policies or applicable laws and regulations, including perceived violations relating to human rights and modern slavery. In 2023, Lotus Bakeries implemented a new whistleblowing line which can be accessed by anyone via our website (https://www.lotusbakeries.com/governance-practices-andpolicies ) and through which anonymous reporting is possible, confidentiality is assured, and accurate follow-up of the legal obligations is guaranteed. Lotus Bakeries greatly values the help of employees and others who identify and speak up about potential concerns that need to be addressed. People who speak up are protected and will not suffer any form of retaliation for raising concerns in good faith about suspected misconduct. Lotus Bakeries has developed a Whistleblowing Policy which explains how one can raise concerns about suspected misconduct in confidence and without fear of retaliation. It also describes how such concerns are treated. The Whistleblowing Policy can be found on our website: https://www.lotusbakeries.com/governance-practices-and-policies .

Due Diligence Processes for slavery and human trafficking

The Supplier Code of Conduct includes an obligation for the supplier to provide documentation that Lotus Bakeries can use as a basis for conducting due diligence on its suppliers and verifying compliance with the Supplier Code of Conduct. While due diligence on suppliers has traditionally focused on food quality and safety audits, Lotus Bakeries is developing ways to monitor the proper enforcement of other key areas in the Code of Conduct. Efforts are being made to integrate these considerations into a comprehensive due diligence approach.   In 2024, we have assessed a selected group of suppliers representing more than 40% of our procurement expenditure on the risk of child labour using UNICEF’s Children’s Rights in the Workplace index as a reliable, objective and independent tool. If the UNICEF index for the suppliers country in scope was classified as ‘basic’, then no further investigation was done. If the countries where classified as ‘enhanced risk’ or ‘heightened risk’, additional documentation was requested to assess the risk of child labour. Child labour was not identified as a significant risk at these suppliers. We plan to repeat this assessment annually and extend the target group as well as the type of risks we assess. Lotus Bakeries will expect suppliers to take corrective actions necessary to address any identified gaps.

Risk assessment and management  

Lotus Bakeries has implemented a continuous risk management process aimed at ensuring that risks are identified, assessed, prioritised, controlled and monitored in such a way that they can be kept at an acceptable level. The risk management process is aligned with the implementation of the strategic, operational and financial objectives of Lotus Bakeries. The entire risk management process is based on the COSO Enterprise Risk Management framework. The enterprise risk management of Lotus Bakeries consists of the following key components:

• Risk identification: this involves identifying the sources of risk that could impact the Lotus Bakeries Group.
• Risk assessment: once risks have been identified, it is important to assess their impact and likelihood of occurrence. This helps to prioritise the most critical risks and determine the appropriate response.
• Risk mitigation: after risks have been identified and assessed, strategies are developed to mitigate or manage those risks. This may include implementing process improvements, implementing controls, or transferring risk through insurance.
• Risk monitoring: ongoing monitoring of risks is critical to ensure that the Lotus Bakeries Group is prepared for potential threats and to assess the effectiveness of risk mitigation strategies.
• Communication and training: effective communication and training are essential for an ERM program to be successful. All employees should understand their role in identifying and managing risk and should be trained on how to do so.

On a periodic basis, risks are assessed, monitored and adjusted by the Group Executive Committee. The defined risk management matrix is discussed with and reported to the Group Audit & Sustainability Committee.   For each of the identified principal risks, a risk owner is appointed who ensures a concrete action plan is implemented to mitigate the potential impact of the risks throughout the Lotus Bakeries Group. The risk owner is also responsible for the follow-up of the defined actions. The results are reported periodically to the Group Audit & Sustainability Committee.  One of the principal risks considered is compliance with laws, regulations and ethical standards in all jurisdictions in which Lotus Bakeries operates globally, including human rights and modern slavery.

Key performance indicators to measure effectiveness of stems being taken

If we discover an indicator of forced labour or human rights abuse, we will respond in a manner proportionate to the nature and extent of the situation. Serious incidents will require immediate and decisive action and may result in the termination of the employment or business relationship. For less serious incidents, we will allow reasonable time for remediation.  

There were no indicators of forced labour, slavery or human trafficking or any other abuse of human rights identified in 2024.

Training

We have extensively communicated the principles set out in our Code of Conduct as well as the Human Rights Policy, to all employees via our intranet system. We require our own workforce to respect the dignity and human rights of colleagues and all other people they come into contact with in the course of their work.

Equally, the appropriate instructions are communicated to our suppliers during the commercial negotiations prior to entering into a final agreement.

This statement has been approved by the Boards of Lotus Bakeries UK Ltd, Natural Balance Foods Ltd, Urban Fresh Foods Ltd, The Kids Food Company Ltd and Peter’s Yard Wholesale Ltd.