North Star is our supply chain control process designed to increase transparency in the supply chain in high-risk countries. North Star helps us regularly monitor suppliers and manufacturers and perform quality inspections before and during production.

We visit our suppliers 11 times during the season. The audits are performed not only for quality control, but also to ensure that things are in accordance with the Code-of-conduct agreement. With regards to social responsibility, the audits validate 26* different points from the Code-of-Conduct agreement. Where necessary, corrective action will be taken on the basis of these results to improve working conditions or production quality. Photographs are taken during the inspection process to support the audit reporting. Audit reports are stored centrally and can be followed up if and when necessary.

In addition to ensuring that conditions conform to the applicable requirements, the audits also verify that our products are manufactured in the factories that we have been informed. Approximately 7% of all audit visits are unannounced, so that the supplier is not informed in advance of the auditor visits.

Altogether over 6000 visits to suppliers took place in 2020, when the visits to suppliers during the product development phase are included. We have over 300 employees solely responsible for this process in our own organization in China.

North Star also acts as a strong internal audit for verifying our processes and certifying the origin of the materials we use.

*) the audit looks at, for example:

• length of the supplier relationship

• use of clean energy

• plant capacity

• salary level in the area

• workforce size, different roles

• working conditions (air conditioning, fire safety, condition of buildings, number of supervisors, lighting, cleanliness, emergency instructions visible, occupational safety with regard to the use of machinery, etc.)