Dinamica MIKO - CSR 2019

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2019 CSR Miko SRL

2019 Corporate Social Responsibility Report

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2019 CSR Miko SRL

n presenting Miko S.r.l. 2019 Sustainability report, my first thought goes to the present situation that has involved everyone, related to the sanitary emergency due to the Covid-19. After a first moment of disorientation, the desire to react and to face this unexpected and unpredictable challenge has come up and has grown with strength and determination.

A challenge that involves us as a company, as people, as a community as well as a Nation. Hence, the precise commitment and intention to be even more responsible and tutelary, considering the delicate present moment, in order to carry out promptly all those actions aimed to permit us to work safely for employees, collaborators, clients, as well as to work on new improvement targets to be reached, at a social, environmental and economic level.

Our third Sustainability Report describes the actions to take and the goals to achieve. Not only it describes with transparency the business processes and practices, and communicates the achievements reached so far, but it also demonstrates the real will to integrate sustainability more and more into the corporate strategy. Sustainability is, in fact, a very important value, as this emergency situation has confirmed.

Letter to the stakeholders

This document - written following the GRI Sustainability Reporting Standards guidelines issued by the “Global Reporting Initiative” that represents the main global reference standards for the sustainability performance reporting – defines what “being sustainable” means to us. It highlights the attention that the Group, to which Miko S.r.l. belongs, pays to the sustainable development in every sense, starting from the reuse of recycled materials and the reduction of pollutant emissions and of energy consumption, to the care for wellbeing and safety of those who collaborate with us every day.

We are happy to say that, together with many other Italian and foreign companies, we are giving our contribution to reach the United Nations Sustainable Development Goals, for the improvement of the present and future life conditions, aware that the social and environmental issues are part of the company business.

We therefore confirm the constant commitment to apply, in the conduct of our business, the best practices to pursue the company growth in harmony with the social and environmental context, respecting the values, the expectations and needs of all the Group’s stakeholders.

Thanking you for your attention to our letter, we wish you a pleasant reading!

CEO Lorenzo Terraneo

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2019 CSR Miko SRL

Sustainable Development Goals Miko, in carrying out its activity, is committed to contributing to achieving the goals of sustainable development established by the 2030 UN agenda in order to reach a better and more sustainable future at a global level.

In particular, the strategic objectives of Miko can be related to the following SDGs:

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2019 CSR Miko SRL

Ensure good health and well-being for everybody and for all ages.

Specific Targets: 3.8 Achieve a universal health coverage, including the protection from financial risks, access to essential services such as quality health care and access to essential, safe, quality effective medicines at affordable prices, and to vaccines for everyone; 3.9 By 2030, to reduce significantly the number of deaths and diseases related to chemicals and to contamination and pollution of the air, water and soil.

Obtain a quality, equal and inclusive education, as well as improving opportunities of permanent learning for everybody.

Specific Targets: 4.7 By 2030, ensure that all students acquire the knowledge and skills needed to promote sustainable development, including, among others, an education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development.

Achieve gender equality and empower all women and girls.

Ensure availability and sustainable management of water and sanitation for all.

Specific Targets: 5.1 End all forms of discrimination against all women and girls, everywhere;

Specific Targets: 6.3

y 2030, improve water quality by B eliminating dumping, reducing pollution and the release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally;

6.4

y 2030, substantially increase waterB use efficiency in all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity;

5.5 Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.

6.6 By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes.

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2019 CSR Miko SRL

Ensure access to affordable, reliable, sustainable and modern energy for all.

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

Specific Targets: 7.2

y 2030, increase substantially the share of B renewable energy in the global energy mix;

7.3 By 2030, double the global rate of improvement in energy efficiency.

Build resilient infrastructure, promote industrialization and foster innovation.

Specific Targets: 8.1

ustain per capita economic growth in S accordance with national circumstances;

8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labor-intensive sectors; 8.4

I mprove progressively, by 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation, in accordance with the 10year framework of programs on sustainable consumption and production, with developed countries taking the lead;

Specific Targets: 8.5

y 2030, achieve full and productive B employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value;

8.6 By 2030, substantially reduce the proportion of youth not in employment, education or training;

9.2 Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries; 9.4

y 2030, upgrade infrastructure and retrofit B industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes;

9.5

nhance scientific research, upgrade the E technological capabilities of industrial sectors in all countries, encouraging innovation and substantially increasing, by 2030, the number of research and development workers per 1 million people and public and private research and development spending.

8.8 Protect labor rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment.

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2019 CSR Miko SRL

Reduce inequality within and among countries.

Specific Targets: 10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

Make cities and human settlements inclusive, safe, resilient and sustainable.

Unsure sustainable consumption and production patterns.

Specific Targets: 11.7 By 2030, provide universal access to safe, inclusive and accessible, green and public spaces, in particular for women and children, older persons and persons with disabilities.

Specific Targets: 12.2 By 2030, achieve the sustainable management and efficient use of natural resources; 12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse; 12.6

ncourage companies, especially large and E transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle;

12.8 By 2030, ensure that people, everywhere, have the relevant information and awareness for sustainable development and lifestyles in harmony with nature.

Take urgent action to combat climate change and its impacts

Specific Targets: 13.3 Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning.

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2019 CSR Miko SRL

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

Specific Targets: 15.2

y 2020, promote the implementation B of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally.

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

Specific Targets: 16.5 Substantially reduce corruption and bribery in all their forms; 16.7 Ensure responsive, inclusive, participatory and representative decision-making at all levels.

From all this it is clear that Miko S.r.l. focuses its business on the even more transversal issues of sustainability.

Of the 17 objectives of the 2030 agenda, the company is committed to 13 of them, with numerous targets involved, especially those related to the social and environmental sphere.

At the beginning of each paragraph or chapter there are icons with the specific targets.

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2019 CSR Miko SRL

01 Corporate profile 02 Organization and governance 03 Strategy for sustainability 04 Profiles of social responsibility 05 Profiles of environmental responsibility

Index

06 Profiles of economic responsibility 07 Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Corporate profile

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Miko S.r.l. was established in 1997 and immediately set its HQs in Gorizia. At the beginning of its activity, the company was focused on the production of a non-woven fabric, mainly used in the furniture sector, thanks to the use of an advanced technology, different from the common weaving. Consisting in the dense union of artificial or synthetic fibers, held together through mechanical, thermal or chemical treatments, aimed at forming a uniform and resistant veil.

Thanks to the foresight and entrepreneurial spirit of the Corporate governance, as well as constant investments in research and development, it has been possible to refine and experiment other products, which culminate with the creation of Dinamica®, the first ecological microfiber with high performance, adaptable to multiple sectors of application, especially the automotive one. In fact, thanks to this new high-performance product, car interiors constitute almost the entire production by Miko S.r.l. and still represent a constantly growing market.

Moreover, thanks to the purchase of company shares by Sage Automotive Interiors in 2015, which represents one of the world leaders in the automotive sector for the supply of car interior fabrics, it has been possible to decisively continue the path of consolidation and growth of the Dinamica® brand, also by virtue of the solid and vast network that Sage Automotive has on a global scale.

For the company and product characteristics, the Company has been selected and chosen by some of the most important automotive manufacturers for car interiors, which make it distinctive both for its ecological credentials and for its product’s unrivaled technical qualities and unique aesthetic characteristics.

Who we are

Miko is present also in the sectors aerospace, furnishing, contract, marine and fashion.

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Our Headquarters Miko’s administrative and productive heart has been based in Gorizia, Italy, since the beginning of its activity. The building is equipped with photovoltaic panels and built in the respect of the most recent ergonomic requirements.

It is located in the industrial area of the city:

Via Giuseppe Ressel, 3 34170 GORIZIA – Italy Ph +39 0481 523232 F +39 0481 20668 info@dinamicamiko.it www.dinamicamiko.com

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

The company employs 93 workers divided among the administration and commercial departments (in the area dedicated to offices), production department (dyeing, finishing, quality control, recipe preparation, laboratory, service) and logistics (shipping and warehouse).

Social responsibility

Environmental responsibility

The Company has always considered fundamental the concept of efficiency, that follows constantly from all points of view, translating it primarily into the utmost care and attention to the state of its company spaces, so that all the infrastructures necessary for the functioning of the processes are readily accessible and maintained in an adequate state of efficiency, as well as guaranteeing the conformity of its products and services.

Economic responsibility

Goals for the future

The infrastructures consist of: • the building, with an office area, production area, laboratory, warehouse area, sanitary facilities and dining area, electrical and heating system, compressed air, treatment plant, IT infrastructure • production facilities and equipment • workstations • hardware equipment (PCs, peripherals, telephones, etc.)

• software

In the organization of its Headquarters, Miko S.r.l. has considered every aspect to make it functional, following the multidisciplinary approach, that involves the development and improvement of the site, the means and the equipment, the identification and the management of risks in the planning.

In the same way, the company has designed the layout of its own site considering: • optimization and synchronization of the flow of materials and relative movement • the optimization of the available spaces, which include a special quarantine area for suspect products, an area dedicated to the material to be reworked, the second- choice material and the waste material.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Miko S.r.l. considers the work environment, understood both from a physical, social and psychological point of view, essential for its staff for an efficient management of the workflow.

This aspect, in particular, has required an attentive and adequate management considering the Covid-19 emergency, that has implied the adoption of internal measures and protocols aimed at ensuring the safety and health of the employees.

The environmental conditions of temperature, humidity, lighting, ventilation and hygiene are monitored and maintained through appropriate infrastructures and services provided externally.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Our story 2004

1997 Establishment of Miko S.r.l., founded 50% by Arofin Spa and 50% by Sitab Spa. Creation of Dinamica® by Miko: Asahi Kasei technology and dyeing and finishing by Miko S.r.l. Main sector: upholstery Target sectors: fashion and marine - Main market: Europe.

The first Malibu GMX380 with Dinamica® interiors is presented in the USA. Miko bet on the automotive industry: first steps towards a new commercial network. Main markets of interest: France, Germany, United Kingdom.

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

2007

Since mid-2008

New distribution of Miko's shares: Arofin 86% and Asahi Kasei 14%.

A Japanese Research and Development manager starts working at Miko (and then continues until 2013) to improve Dinamica® Auto and to develop new products. The first cars with Dinamica® interiors came out in Europe: Audi A4 RS6 and Passat R36.

Crisis in the automotive sector.

The first Mercedes programs started; PSA, Ford US, JLR, Smart, GM, VW and Opel followed.

More and more cars covered by Dinamica® interiors were presented all over the world at the most important car shows.

From 1998 to 2003

Since 2005

2008

2011

The upholstery sector grew rapidly: sold 578,000m Miko approaches Recaro, a company that produces car seats, and the secondary market. From Italy to the USA: Miko expands its automotive network in Detroit.

Crisis in the marine and upholstery sectors.

Mercedes chose Dinamica® for its programs. Other European OEMs (Original Equipment Manufacturers) were following.

Miko laboratory expanded with new machinery and technicians. The Company paid regular visits to Automotive customers with "tailor- made" presentations.

Miko opened a design department to present new collections, technologies and products.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Miko improved its EPD (Environmental Product Declaration) data for Dinamica® Auto: 5,6 kg of CO2 per sq.m. Miko worked to finalize future programs with VW Europe and China, Hyundai / KIA Korea and USA, Nissan Europe.

Target markets: China and Brazil.

Miko also started collaborating with KIA, Alfa Romeo, Chrysler, Mini and Volvo.

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

2018

2016

2014 2012

Strategy for sustainability

The car market continued to grow. The first new projects started with VW for the entire Golf, Polo, Tiguan, Touran, UP and Caddy. New customers were approached thanks to the Sage network that made Dinamica® closer and closer to the Ford brand.

During the year 2018 Sage was acquired by Asahi Kasei, in order to follow the entire supply chain even more closely and to further develop the Dinamica® brand. New automotive brands came into contact with Miko S.r.l. and some brands brought Dinamica® as a distinctive success factor in the launch of current projects, to highlight the sustainable approach of the respective car manufacturers.

2013

2015

2017

2019

Dyeing cycles increased from 200 to 300 meters dyed in the pipeline, reducing the consumption of energy, water and chemicals.

Miko adopted the Organization and Management Model (Supervisory Auditors) together with the important Code of Ethics and Conduct.

Miko doubled its turnover: 1,200,000 m. sold Main sector: automotive (87%) Target sector: aviation Major markets: Europe, North and South America, Asia and Australia.

Sage Automotive Interiors acquired a majority share in the Group, a choice given by the desire to have a more global approach to the car world by offering a better service to customers.

The microfiber in the automotive market grew of importance and Miko continued to grow. From Japan, the third new production line of the raw material was approved; it ensured Miko would reach new markets and increase its production and its turnover.

The growth continued and the programs with WV, Porsche and Audi increased.

At the end of the financial year, the emergency Coronavirus appeared.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Dinamica® by Miko

Miko’s commitment to environmental sustainability has always been a priority and has immediately been inserted into the company policy, intended as “if you produce, you have to do it in an eco-sustainable way, respecting the heath and the environment”. In line with this, Dinamica® microfiber fully represents this philosophy: it is the result of the technology developed by the giant Japanese company Asahi Kasei, dyed and finished by Miko, it is produced with recycled material, treated with water, without chemical substances and without dyes.

In all its phases, this product can be considered absolutely ecosustainable, since this special microfiber, unique on the market, is obtained from recycled polyester deriving from polyester fibers and PET. This means that for its production, it is ensured a low level of polluting emissions and of energy consumption.

It has been demonstrated that the CO2 emissions are reduced by 80% compared to the traditional petrolbased polyester production process and that the product is 100% recyclable at the end of its use.

Sustainable development goals

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2019 CSR Miko SRL

43,1kg

Corporate profile

Organization and governance

5,6kg

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

These characteristics are declared in the EPD® - Environmental Product Declaration, environmental certification defined by the ISO 14025, that quantifies the environmental performance of a product through proper parameters calculated with the analysis of the LCA - Life Cycle Assessment.

Thanks to its environmental commitment, Miko has obtained important recognitions, that confirm that it is a company with a greater approach towards environmental protection. In 2011, in fact, it obtained the Italian Environmental Business Award as Best Product of the Year, while in July 2013 it was recognized as National Champion for Italy in the European Business Awards 2013/14 and selected by the Jury to run for The Millicom Award in 2014, in the category Environmental & Corporate Sustainability.

Dinamica® microfiber is an extremely resistant material, and its characteristics make it perfect for different uses in various sectors. Not by chance, in the last years it has been successfully established in the automotive, where it is chosen by some of the most important car manufacturers at a global level.

Comparison of CO2 emissions between 1 m² of Dinamica® and 1 m² of real leather according to the registrations: Dinamica Auto: 5,6kg nr. S-P-00351 rev.2 (2014) Real Leather: 43,1kg nr. S-P-00344 rev. 2 (2014)

1 m2

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Organization and governance

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Company structure Miko S.r.l. is a limited liability company, has been acquired by Sage Global Automotive S.r.l., which is, in turn, controlled by Asahi Kasei Corporation.

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

2015 has been a decisive year for Miko as Sage Automotive Interiors, multinational company in the automotive sector for the supply of car interior fabrics, with Headquarters in South Carolina (USA), acquired the majority shares of the Miko Group together with Asahi Kasei Corporation, a Japanese industrial giant and a world leader in the production of substrates for the production of Dinamica®.

In Miko’s production process by, Asahi Kasei plays a decisive role, as the producer of manufactured raw product, essential to the productive activities of the Gorizia-based company.

Considering the fast growth of the latter, which has consequently increased also the requests of raw material to Asahi Kasei, in 2019 the plant of the third Japanese production line went into operation, to keep up with the requests. This expanding trend has permitted, before Covid, to make estimates of the production until 2022, and to foresee the need to activate a fourth production line.

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Considering the asset highlighted at the beginning of the paragraph, investments and decisions are made within Sage, with the clear aim to protect and ensure a solid future for the product and the company. In order to ensure the best collaboration among business realities, regular meetings are organized in the Headquarters in Gorizia as well as online conferences in order to analyze the activities carried out in the current month and to present those foreseen for the following one; at the beginning of the year, instead, budget assessment is carried out in order to ensure the necessary investments to be made in the various departments during the year.

If, on one side, Sage coordinates and tracks Miko’s activities, on the other side, it leaves Miko a sufficient margin of freedom, about the commercial and strategic choices, that continue to be made within the company.

Moreover, thanks to the vast commercial network and to Sage’s production plants located in Europe and in various countries of the world - North America, Brazil, China, Japan, Korea - Miko has had the opportunity to get a global push and to be represented also in new countries, taking benefit of a well-spread business reality, without making further commercial investments.

Two Sage‘s important aspects have to be considered: its strategy is finalized to the growth of the group all over the world, and the strong team spirit existing among the various offices in the world, which are not competing one another but show a highly collaborative approach.

These aspects set a solid basis for a continuously evolving process.

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

In line with the dynamic spirit of the group, in 2018 Sage Automotive group was acquired

by Asahi Kasei, to follow closer and closer the entire supply chain and develop better the Dinamica® brand. Therefore, Miko S.r.l. is currently 100% controlled by Asahi Kasei Corporation.

Since Asahi Kasei is based in Japan, it has a year-end closure that does not correspond to the calendar year, therefore also Miko S.r.l. since 2018 has aligned the timing of the year-end closure, that goes now from 1st April to 31st March of the following year.

The ownership by a unique group of the entire production chain of Dinamica® is a quite important competitive advantage for Miko’s development.

The company is managed by a Board of Directors consisting of 6 members, the President Pieper Dirk Raymond, the managing directors Terraneo Lorenzo, Terraneo Leopoldo, Reed Paige Allen and the advisors Russian Daniel Frank, Nakajima Yasuyoshi e Lowrance III Edgar Johnston.

In April 2018 the supervisory body represented by the Board of Auditors was replaced by a Single Auditor.

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Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

BOARD OF DIRECTORS COMPLIANCE ORGANIZATION Dlgs 231/01 smi

PRESIDENT

SOLE AUDITOR

GENERAL MANAGER

EMPLOYER

MANAGEMENT REPRESENTATIVE INT / EXT QUALITY MANAGER (IATF 16949)

PROJECT MANAGEMENT MANAGER

Quality Assurance MANAGEMENT REPRESENTATIVE (ISO 14001)

Safety Manager

EPD MANAGEMENT REPRESENTATIVE

Company Doctor

GAMMA PROJECT MANAGEMENT

Employee Safety Representative

Sistri / Waste

Production Manager

R & D Manager

Production Assistant Maintenance Assistant

Laboratory Manager

Laboratory Assistant

Finanance & Administration Manager

Finance & Warehouse Controller Account Receivable

Maintenance Manager Technical Dept Process Engineer

SAFETY DELEGATE ex art. 16 Dlgs 81/08 smi

IT MANAGER

WWT

Plant Manager

ENVIROMENTAL DELEGATE

Sales Manager

Key Account Manager

Customer Service Office

Marketing & Design Manager

Marketing & Design Staff

Supply Chain Manager

Supplier management

HR Manager

HR Staff

Warehouse & Outside contractor dept

Logistics Staff Service Accounting Office

Shipment dept

Date 10.01.2019

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Compliance with the regulations In carrying out its activities, Miko S.r.l. must comply with various standards, regarding different regulation measures: • those linked to Italian legislation, in particular the Civil Code and the regulations concerning environment and safety • industry standards, consisting of all those laws, decrees, regulations and directives that define the construction characteristics of road vehicles • the non-mandatory standards required or strongly desired by the main stakeholders and customers, such as the IATF 16949 certification and the EPD® - Environmental Product Declaration • IATFS 16949:2016 certification (Quality System for the automotive sector), UNI EN ISO 14001:2015 certification (Environmental Management System), UNI EN ISO 9001:2015 certification (Quality Management System) • the Öeko-Tex Standard 100 certification class 1 (in the furnishing sector, the compliance with this product certification is a guarantee of great quality and safety, for products suitable for direct contact with the skin) • the cruelty-free and “PETA-approved Vegan” product certification given by PETA (People for the Ethical Treatment of Animals), the world’s largest animal protection organization • the 231/2001 organizational model together with the Code of Ethics

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Certifications and risk management In line with its sensitivity in dealing with the reduction of the environmental impact, Miko S.r.l. adopts the aforementioned certifications, thus confirming its concrete policy in terms of quality – environment – safety - EPD®.

In relation to the management of environmental risks and related communications, since 2010 the company has adopted a "Life Cycle Thinking" approach, through the EPD® Management System, with the following goals: • to communicate objective, accurate and scientifically proven environmental data on products • to track the environmental impacts related to the entire life cycle of the products through the LCA method • to improve the environmental performance of products through eco-design and the principles of the circular economy • to activate partnerships with the entire supply chain to obtain information on the environmental performance of the materials during the various phases and to assess potential improvements • to guide stakeholders towards a responsible behavior of their activities from an environmental point of view

Sustainable development goals

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Registration nr. S-P-00351 Registration nr. S-P-00788 EPD® - Environmental Product Declaration www.environdec.com

IAFT 16949 certification Quality Management System for the automotive sector

UNI EN ISO 14001 certification Environmental Management System

UNI EN ISO 9001 certification Quality Management System

As far as the safety is concerned, together with the quality management system, related to the UNI EN ISO 9001, UNI EN ISO 14001 and to the specific IATF 16949 standard for the automotive sector, all safety matters are of primary importance for the company. For this reason, Miko S.r.l. has adopted the Organizational and Management Model in compliance with Legislative Decree 231/01 (Administrative liability of legal persons) and the related Code of Ethics, both revised in September 2018.

Öeko-Tex Standard 100 certification: class 1

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

The "precautionary principle", adopted by the European Commission, has been chosen also by Miko as an operational parameter, not only while planning new processes or products, but every day during the various production phases and in carrying out all the activities, in order to pursue continuous improvement.

This principle leads to take preventive actions in case of negative effects on the environment, but the data at disposal do not allow a full risk evaluation.

In general, the economic and market goals are pursued on three levels, that is to say respecting legal provisions about the environment; ensuring the commitment to continuous improvement of company processes and products; preventing the pollution by managing risks throughout the production processes.

More precisely, the company focuses its attention on the following aspects: • the approach adopted by the management to achieve the goals is transversal, that is to say aimed to seize the opportunities but also to identify the risks linked to the context • customer satisfaction, and therefore market risk, is constantly monitored with a service of customer satisfaction for a correct management of the complaints and periodic satisfaction questionnaires • new products are developed keeping in mind the aspects and the environmental impacts that could follow • the staff is constantly trained and motivated, also on the environment and accident prevention topics, and under the ethical profile, in order to develop a correct, dignified and respectful behavior inside and outside the company

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Ethical profile

Social responsibility

Environmental responsibility

Economic responsibility

With the clear aim to declare and highlight, both outside inside, the company’s approach towards the reduction of pollutants, the preservation of the environment, the commitment to continuous improvement, accident prevention, the fight against climate change and sustainable development Miko S.r.l. has drawn up its own Code of Ethics, that is constantly updated.

This fundamental document is aimed at ensuring correctness and transparency in the conduct of business and in business activities and at protecting the company’s position and image.

In fact, the Ethical Code is given to each employee and to each supplier, in order to help collaborators be more responsible and stimulate an ethical behavior from a social and environmental point of view.

Sustainable development goals

Goals for the future

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2019 CSR Miko SRL

The ethical principles, contained in the present document, that have guided and still guide the production, naturally derive from the management of the entire organization, starting from values that are strongly felt by the management, by the department managers and transmitted to all the staff:

Corporate profile

Organization and governance

Strategy for sustainability

Consistency It is one of the company pillars; not only Miko S.r.l. is constantly committed to creating and bettering Dinamica® product, to confirm it to be more and more a highly-sustainable product, but also the values and principles underlying the preservation of the environment permeate the entire organization

Determination

the company adopts a behavior of fairness and honesty, both inside the company itself, with the employers, and outside, maintaining the commitments made in the relations with suppliers, consumers and competitors

In few year Miko S.r.l. has revolutionized the world of microfiber thanks to the strong determination of the management, of the founder and of those who believe and have pursed with determination the possibility to change this industry, through a new way of conceiving car interiors, with environmentally friendly materials

TRANSPARENCY

Passion

Miko S.r.l. acts transparently towards consumers and customers, in particular through its Life Cycle Thinking-oriented approach

Eessential ingredient of each business successful story – in particular of this one – we can say that it is passion and resolution towards the process, passion and attention towards its own collaborators, passion and determination to reach the results

Loyalty

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Protection of environment and efficient and use of natural resources

Miko S.r.l. shares the vision of the company as “the company’s assets” and promotes its values:

Economic responsibility

Goals for the future

Development of the community

Respect for human rights Fight against corruption

Valorisation of work, employment and working conditions

Good tax governance

Protection of consumers

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Management of customer relations Customers’ needs

Privacy

The core business of the company is the automotive sector. It has represented and still represents a significant opportunity for the company’s continuous development. At the same time, it requires a high level of competence and innovative investment in terms of means / infrastructure, by the organization.

Miko S.r.l. in the management of privacy, complies with Reg. (UE) 2016/679 of 27 April 2016 (GDPR). The data are processed according to the principles of lawfulness, correctness and transparency.

and appropriately protected and cannot be used, communicated or disclosed, neither inside nor outside the company, unless in compliance with current legislation and company procedures.

Miko S.r.l. avoids the collection and processing of personal data that violate the right to privacy, limiting the collection of personal data to information that is essential to provide the services and the products and that is provided with the voluntary and informed agreement of the consumer.

Miko S.r.l. stipulates confidentiality agreements with some employees and managers with multi-year agreements for the non-disclosure of information. In this sense, Miko S.r.l. adopts all technical and organizational measures to guarantee adequate security of the data processed.

Employees are required to take all necessary measures to protect Miko’s intangible assets equity; in particular, with reference to theft, loss, improper use, destruction or accidental damage.

Due to Covid-19 emergency, since March 2020 safety procedures anti- Covid have been established and implemented, and employees have been informed that they can ask for “fragility of health”. All further data, in particular the sensitive ones, that have been collected, in order to adopt all measures to prevent and contain the infection of Covid-19, have been treated in compliance with the current Privacy rules.

Therefore, the specific requirements of customers represent a critical issue, which Miko S.r.l. has faced over time structuring the company in order to be able to meet both technical, organizational and service requirements. As already highlighted, in the company an ISO TS / IATF 16949 quality management system is in function and it provides documented procedures for the correct analysis and management of CSRs. Technological innovation is part of Miko’s DNA: it always shows an approach of continuous optimization of the production process, continuous search for new raw materials, innovative solutions from the design point of view and in compliance with the impacts on safety and health, as well as environment preservation.

Information, data, knowledge acquired, processed and managed by employees in the course of their work must remain strictly confidential

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Evaluation of customer satisfaction Another fundamental aspect taken into consideration by the company is the monitoring of the information related to the customer’s perception of how the organization has satisfied its requirements through:

Handling complaints Also the proper management of customer complaints and the periodic monitoring of their level of satisfaction aims at identifying opportunities for improvement and at taking appropriate corrective actions so as to increase customer satisfaction over time.

Although the product has been mature and consolidated for years, Miko S.r.l. adopts measures to prevent, monitor and resolve complaints, through a series of actions: • employees are given questionnaires to report critical issues and complaints and to promote the commitment to participate in their resolution • if complaints are mainly related to errors caused by the operator during quality control, they are promptly resolved by sending to the customer pieces of compliant fabric • if the damage is caused by the customer himself, Miko S.r.l. passes on the correct guidelines for its resolution • each complaint is followed by an adequate internal corrective action to avoid repeating it In 2019 the percentage of the complaint with respect to the meters sold was 0,034%. The complaints did not bring the company to alert states or production stops for the customer. The product validation activities conducted by the company laboratory have shown compliance with the requirements requested by the customer and by the regulations.

• customer satisfaction questionnaires given periodically to all customers • the preparation of performance indicators • the monitoring of non-conformities detected in all phases of service delivery, that since 2018 have organized the audits once a week.

• management of customer complaints related to company products • increase in the number of customers By analyzing the customer satisfaction, the company is able to anticipate the customers’ needs and to provide the products that can satisfy them, thanks to the capitalization of the experience gained and to the use of the best technologies available on the market, fundamental for the innovation process of the products.

03 30

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Sustainability strategy

31

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

The relationship with stakeholders

Environmental responsibility

Economic responsibility

Goals for the future

The company strategies start from analyzing the context and from listening attentively to the various stakeholders; then they are elaborated and declined in the three responsibilities for sustainable development: environmental, economic and social.

Being able to find and understand the needs and expectations of the various corporate stakeholders is fundamental for a governance system focused on corporate social responsibility, and it requires the ability to integrate into its own company strategy, based on creating value, the sustainability issues.

32

2019 CSR Miko SRL

On the basis of this requirement and using as an operational tool its quality manual for context analysis, Miko S.r.l. has identified both external and internal factors that are relevant for its aims and its strategic directions.

Moreover, to make sure to maintain an up-to-date perception about the aforementioned elements, these factors are regularly monitored and reviewed at least once a year, usually within the Management Review activity. Such activity is also functional to set up, if necessary, corrective actions to continuously improve the quality of management.

Corporate profile

Organization and governance

Strategy for sustainability

The company objectives for the three dimensions of sustainable development are declinable for Miko S.r.l. along the economic, environmental and social dimensions.

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Environmental responsibility To develop a responsible approach aimed at reducing the impact of activities on the environment. To raise in a strategic way the ability to create innovative products built in a supply chain that finds its competitive characterization in environmental sustainability.

Economic responsibility To pursue the economic results in order to increase the value of the company and to make new investments in sustainable innovation. To make the main economic impacts of its own activities transparent.

Social responsibility To improve the quality of work by placing people at the center of the company management and by enhancing safety and hygiene practices in the workplace. To develop its own investment policy taking into account the relationship with the territory.

33

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The material aspects of sustainability To listen to the various stakeholders is very important for Miko S.r.l., and this is the starting point to identify the issues to focus the sustainability report on. In fact, by analyzing of the outcomes of the engagement activities, it is possible to identify the materiality of the aspects relevant for the stakeholders and measure their impact. And thanks to the analysis of materiality, it is possible to implement the action plans necessary to achieve the improvement goals.

In the following scheme the main stakeholders of Miko S.r.l. are listed with their instruments and initiatives to develop the dialogue and the correct relations with the territory.

34

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

STAKEHOLDER

TOOLS AND INITIATIVES

Customers

• Customer satisfaction surveys • Publication of the Sustainability Report • Continuous revision of the Code of Ethics organizational model 231 • Comparisons with competitors by taking into consideration objective and nonsubjective parameters • The company communication is based on the sustainability of the Dinamica® product •O pening of corrective actions in the event of customer complaints •C onfidentiality agreements with collaborators and employees

Members

• Organization of shareholders' meeting and the BoD • Exclusive meetings • Annual publications of budgets and program budgets • Publication of the sustainability report • Revision of the Code of Ethics and organizational model 231

35

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

STAKEHOLDER

TOOLS AND INITIATIVES

Collaborators

•L istening activities brought on by the Human Resources Office with a dedicated desk and the presence of a supervisory body, independent from the company •P rogramming of internal training and courses with external teachers • Agreements with RSU •F lexible working hours and transparent management of parental and extraordinary leave • I ncentive plan and various indemnities, benefits and wage supplements beyond the ccnl •M aximum attention to the occupational hygiene and safety management system with higher measures than those required • Administration of questionnaires to express freedom of opinion and expression •E qual employment opportunities for all employees based on specific professional qualifications and performance skills

(Employees and not)

36

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

STAKEHOLDER

TOOLS AND INITIATIVES

Local community and environment

• Educational initiatives through the website and information material to raise the awareness about the correct consumption of resources and the recycling of materials • Initiatives with university students, middle schools and high schools based in Gorizia, in terms of sustainability and social reporting • Participation with the schools to meetings focused on fashion and circular economy • Purchase and production of electricity from renewable sources • Commitment in the reduction and zeroing of Co2 emissions • Initiatives and sponsorship especially in the sports world, to contribute to a • healthy and environmentally friendly lifestyle • Important investments in R&D to reduce the environmental impact of the product.

The goal is to improve environmental performance, with the same product for the customer, but better in terms of savings / recycling • MW photovoltaic system that allows it to self-produce part of the electricity needs.

• Dinamica® is made with significant percentages of recycled material • With the LCA studies on the Dinamica® product, the carbon footprint of the product has been calculated throughout the life cycle, and all direct and indirect emission sources have been identified to evaluate constant improvement actions

37

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

STAKEHOLDER

TOOLS AND INITIATIVES

Public administration and control bodies

• Access to the requested information • Procedures to manage the relationships • Transparent publication of the results of the checks and analysis by external parties

Suppliers

• Procedures regulated through the quality management system • Continuous comparison with the major supplier of raw materials to create increasingly eco-sustainable products, investing heavily in R&D

Banks

• Continuous reports and constant communications on company performance • Compliance with commitments • Production of requested material and documents

04 38

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Profiles of social responsibility Sustainable development goals

39

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Our collaborators Great attention is paid to relations with and between employees and collaborators; the goal is to maintain a corporate climate that stimulates the mutual respect, the desire for personal training and the safety of workplaces, machinery and practices.

Miko’s commitment in relation to employees is attested by introducing into the company some Best Practices which can be summarized as follows: • opening of a front office of the Human Resources Office • planning of internal training and courses with external teachers • agreements with RSU • flexible working hours and transparent management of parental and extraordinary leave • incentive plan • correct management of career progress • utmost attention to the occupational hygiene and safety management system through the provision of measures higher than those required by law • in the workplace, the temperature, humidity, lighting, ventilation and hygiene are monitored and maintained through adequate infrastructures and services • existence of a supervisory body independent of the company

• presence of the Code of Ethics, read and shared also by each collaborator • administration of questionnaires to express freedom of opinion and expression • agreement with a private clinic for exams and visits paid to employees and collaborators • possibility for the workers to hold the meetings and assemblies considered necessary, even beyond the hours envisaged by the CCNL (provided that the production activity is not blocked) • various indemnities, benefits and wage subsidies provided beyond the National Collective Labor Agreement • equal job opportunities based on specific professional qualifications and skills • selection, hiring and management practices of employees organized according to competence and merit, without any discrimination in relation to race, religious and / or political beliefs, sex, age, lineage, personal disabilities, in compliance with the laws and of the regulations in force.

40

2019 CSR Miko SRL

Corporate profile

Organization and governance

About the composition of our staff we represent in schemes and, sometimes, in graphic form, some statistics necessary to make further considerations.

Strategy for sustainability

Social responsibility

Male

75% 70 Men

Female

Eployees

Of which new hires

Employees Of which new hires

20-30

12

2

4

30-40

12

4

8

1

20

40-50

25

8

1

33

50-60

21

4

Total

23 Women

10

16

2

23

1

1

23

Goals for the future

2

93

Compared to the previous period, there is an over 10% increase in staff, that shows the increase of production.

The distribution of the corporate population by age shows a prevalence of the male gender in the period in question, while the female gender represents 25% of the total. There are no concerns in relation to any discriminatory actions in progress, as these figures can be easily explained given the type of activity carried out by the company, which leads to offering more employment positions in sectors / areas less attractive to women. In recent years, however, in Miko S.r.l. numerous women have been hired, including in the production department.

+10% 42 increase in employment compared to the previous period

70

Economic responsibility

Total

Age

>60

25%

Environmental responsibility

average age of personnel

The average age of the personnel is 42 (years old): just below 40 for women, while just below 43 for men. The figure indicates the presence in the company of a workforce that is still young but formed by people with a consolidated experience (gained above all within the same company) who have been joined by people more recently hired.

41

2019 CSR Miko SRL

Length of service

On 31/03/2019

0-3 years

44

4-6 years

17

7-11 years

16

12-15 years

1

16-20 years

9

>= 20 years

6

Total

93

Corporate profile

Organization and governance

Strategy for sustainability

As highlighted in the scheme above, there is a high number of personnel with length of service 0-3 years, due not by a frequent turn-over, but by the strong company growth, that, in the last years, has requested new hires. Nevertheless, the average seniority of service is about 6 years and the personnel’s turn-over is not a critical factor, since it is highlighted a high level of loyalty from the employees.

Social responsibility

Environmental responsibility

Economic responsibility

Employees with full-time contract

Employees with part-time contract

Employees have been hired on the basis of the national collective labor

Employees with part-time contract are 5 and with a full-time contract are 77 and they represent almost 83% of the total company structure. 100% of employees have been hired on the basis of the national collective labor agreement for the sector.

Goals for the future

42

2019 CSR Miko SRL

Corporate profile

Former Province

City

Gorizia

Capriva del Friuli

2

Gorizia

Cormons

2

Gorizia

Farra d’Isonzo

2

Gorizia

Gradisca d'Isonzo

5

Gorizia

Monfalcone

1

Gorizia

Moraro

1

Gorizia

Mossa

1

Gorizia

Romans d’Isonzo

1

Gorizia

Ronchi dei Legionari

5

Gorizia

Sagrado

2

Gorizia

San Canzian d'Isonzo

1

Gorizia

San Lorenzo Isontino

1

Gorizia

San Pier d’Isonzo

1

Gorizia

Savogna d'Isonzo

3

Gorizia

Staranzano

2

Gorizia

Turriaco

2

Gorizia

Gorizia

46

Udine

Buttrio

1

Udine

Fiumicello

2

Udine

Palmanova

2

Udine

Tarcento

1

Udine

Torreano

1

Pordenone

Sacile

1

Trieste

Trieste

1

Venezia

Mira

1

Slovenia Total employees Former Prov. Gorizia

Nr. employees

5 78

Total employees FVG (not GO)

9

Total employees out of FVG

1

Total employees out of Italy

5

Organization and governance

Strategy for sustainability

The previous table shows that 84% of the personnel lives in the former province of Gorizia, proving Miko’s link with the territory.

Social responsibility

Roles/functions

Environmental responsibility

Economic responsibility

Men

Women

Goals for the future

Apprentices

Workers

Friuli Venezia Giulia

Office workers

87

employees

Veneto

1

Managers

Senjor executives

employees

Slovenia

5

employees

As highlighted above, there is gender equality among the various roles, including management, apart for the production department, which is more relevant to male staff.

43

2019 CSR Miko SRL

Corporate profile

Organization and governance

The employees receive periodically from the company a survey questionnaire on the internal satisfaction to improve the working atmosphere.

The questionnaire contains some matters divided by the potential improvement areas; it is to evaluate the company organization and to promptly meet the staff needs.

The questionnaires have questions with numerical scale answers, in order to verify the efficiency of the organization through some performance indicators (KPI – Key Performance Indicator). This evaluation permits to find out corrective actions to improve the value registered by the indicators themselves.

Among the different items of the questionnaire handed over to employees during the first months of 2020, we show some questions and the averages of the answers, using a scale ranging from the minimum score “0 = NOT AT ALL” to the maximum score “6 = TOTALLY”:

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Does your direct superior follow you and help you in reaching your goals and in pursuing his/her own duties, also in case of unexpected or personal difficulties?

Average value of response: 4,55

Does the training received allow you to do your duties at best?

Average value of response: 4,77 Are you committed to signaling critical elements and problems both from inside and outside (customers’ complaints) and to actively participating to their solutions with planned corrective actions?

The answers show an active involvement of all the staff at different levels, both in a training phase and in a work consolidation phase, as well as towards the customers to improve the service.

Average value of response: 5,4

Goals for the future

44

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Managing human resources: training and incentive and evaluation policies The human resources management policies adopted by the company include the following activities:

• d efinition of skills – structured methods are used, in particular the balance of competences, to identify the skills required in each area, and the training needs, as well as to ensure that resources with adequate level of training and skills are made available to departments • identification of training and educational needs - a list of the skills necessary for the correct performance of the activities is developed for each job, including the minimum requirements about study and experience • staff training - the training necessary to fill the identified skills gaps is provided, which may consist of operational support till the achievement of autonomy or of internal / external training courses

• v erification of the effectiveness of the training carried out through daily practice and at random using operational tools or exams • awareness and awareness-raising of the staff on the importance of quality, technological innovation and of contribution of each person to achieve the established objectives and targets for quality, environment and EPD® • pursuit of personal satisfaction by motivating the employees in achieving quality goals and in reaching continuous improvement, through the use of incentives linked to supplying services to customers and to reducing waste, as well as to improving the processes

Sustainable development goals

45

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Course name

Support to a new employee / job The planning of training is formalized every year during the drafting of the company goals and is kept updated by the Management. In planning training activities, particular attention is given to customers’ needs and to the prevention of accidents and environmental accidents.

Particular attention is paid to the general and specific training given to each new employee.

LOTO training (electric) Internal courses related to apprenticeship External courses related to apprenticeship Conf. spaces and pollutants Production management software

Miko S.r.l. provides and promotes activities that empower staff to Quality and encourage active participation in the promotion effort of the Quality itself (work groups, improvement proposals, etc.). In addition, the company facilitates processes of personal development even regardless of the company function of employment.

Course on VAT Course on Supply Chain IATF Training Specific safety compulsory training General safety compulsory training Update Safety training Human Resources Course Safety/ leadership workshop RLS Update Update supervisors

The following is a summary table of the main training courses in which the staff participated in the time period considered: 01/04/2019 – 31/03/2020

Forklift operators compulsory update Forklift operators FMEA course (body in charge) FMEA course (internal) Sage internal organization Total training hrs

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Hrs attended M

Hrs attended F

Course – total hrs

400 22,5 0 75 8 7,5 8 48 8 148 28 54 0 20 8 30 28 24 0 16 0

600 0 50 0 0 3 8 16 4 0 12 0 44 8 0 6 0 0 16 0 36

1000 22,5 50 75 8 10,5 16 64 12 148 40 54 44 28 8 36 28 24 16 16 36 1.736

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

To further support the staff, an incentive program has been set up to achieve the Quality objectives.

As established by the Supplementary Company Agreement pursuant to art. 12 of the CCNL apparel industry of 4 February 2014 signed on 09/19/2017 for the period 2017 - 2019 and approved by the trade unions and the corporate RSU, Miko S.r.l. provides a participation bonus as a variable element of the remuneration which is divided into 4 parameters:

• profitability linked to the MOL index • productivity linked to the ratio between the meters produced and the days of production • safety and the environment corporate decorum with respect to certain assigned tasks • quality linked to an indicator on nonconformities

The participation bonus is calculated differently if the employee has a part-time or full-time contract and is also paid in the form of corporate welfare.

The Company keeps employees informed on a monthly basis about the performance of the company by posting the indicators in production.

As written above, Miko S.r.l. has adopted a work organization and company policies regarding the hiring, management, remuneration, incentive, training and enhancement of male and female personnel so that no discrimination can emerge.

The company, through the adoption of specific conduct policies, is committed to combating the phenomenon of moral and psycho-physical harassment in the workplace.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Work climate and company well-being According to Miko S.r.l., the efficient management of the workflow depends on the work environment, considered from a physical, social and psychological point of view.

And for this reason, the company invests constantly in the search for a better corporate climate. Thanks to the large production premises, and to the constant monitoring of temperature, humidity, ventilation and hygiene, working conditions are more than comfortable.

This is confirmed also by the latest questionnaires for internal satisfaction surveys.

The presence of a Code of Ethics represents a guide of conduct for all internal as well as external relationships. As already mentioned, it is in fact read and signed by all the personnel employed.

The internal satisfaction survey questionnaire was created to improve the company organization, but also to respond to staff needs. Miko S.r.l., among the various actions in progress, has the ambition to present, in a clear and simple way, to all the staff the corporate goals and to bring them closer to the personal ones.

The Organization, Management and Control Model (OMM) was adopted in accordance with Legislative Decree 231/01 which aims, among other things, at guaranteeing non-discrimination on opinions, religions or nationalities of staff and equal opportunities for all employees based on specific professional qualifications and performance skills. Always in relation to Corporate Social Responsibility, the Organizational Model includes the anticorruption policy, the code of conduct for employees and the "whistleblowing" policy.

The competent staff select, hire and manage employees according to criteria of competence and merit, without any discrimination in relation to race, religious and / or political beliefs, sex, age, lineage, personal disabilities, in compliance with the laws and regulations in force. A supervisory external body, to which employees can refer, has been established.

We must also remember that in Miko S.r.l .: • there are 3 RSUs, a posted trade union official and an RSL • there is a promotion of freedom of association (around twenty • people are members of the trade union) • each hired employee receives a book with the national collective • agreement for the Italian fashion system • also, with regard to the chain of suppliers, possible cases of • damage to the rights of freedom of association or non-application of the envisaged collective agreements are evaluated

Sustainable development goals

48

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Policies for corporate welfare

There are several corporate welfare initiatives in Miko S.r.l. among which:

• activation of ‘smart working to facilitate those with particular personal situations or women with at-risk maternity • activation of other forms to reconcile work and family life • activation of an agreement with an occupational health office to guarantee favorable prices for tests and individual visits to employees with benefits displayed on the notice board at the headquarters • agreement for compensation replacing a meal of 5 euros for all employees, even for those who live near the work site • guarantee of the right to study, granting working hours to allow the attendance of possible courses • creation of a Carling team to favor team building, composed of Miko’s personnel called “The Dynamic ones”.

Sustainable development goals

49

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Occupational health and safety policies

Economic responsibility

Goals for the future

The continuous search for operating conditions in respect of the health and safety of personnel and collaborators is a fundamental principle for all activities and a constant way of understanding the work of the company.

For this reason, Miko S.r.l. is committed to preventing accidents at work and the causes of prejudice to the health of workers, continuously improving their performance in terms of safety and health at work.

Occupational health and safety risks are analyzed in the Risk Assessment Document (DVR). There are specific risks with reference to each individual task, divided into physical, chemical and ergonomic ones. Daily and weekly, visual inspections are carried out on some pressurized machines, to a significantly greater extent than what is required by current legislation, with the compilation of the relative reports.

Sustainable development goals

50

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

For laboratory workers, diphoterine (or anti-diphoterine) is used, a substance that helps prevent serious damage from chemical risks; this substance replaces water through dispensers and eyewash.

Some showers have also been installed in correspondence of the acid / soda discharge department.

In case of an accident of any kind, all departments of the Sage group and the Board of Directors are notified. The report of the event must be presented in a special internal form, which is analyzed by the whole group, and data and corrective actions are displayed; they must be applied to the entire staff of the production department. A communication is sent to all the plants through the Sage intranet portal using the 5 W technique, to avoid other future accidents.

The RSPP, a professionally qualified external auditor, has established the next investments in safety (for training and technology) with a training plan on health and safety, for each person.

2018

01/01/2019 al 31/03/2019

01/04/2019 a 31/03/2020

1

0

1

Severity index (days accidents X 1000 h/ worked)

0,04

0,00

0,00

Severity index (nr. accidents per 1Ml h/worked)

7,38

0,00

0,00

Nr of accidents

man

eployees

man (administrated)

Goals for the future

51

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

The anti-Covid 19 safety policies At the end of January 2020 the news about the presence of Coronavirus in Wuhan in China started to spread, and in the following month, unfortunately, the virus started to affect Europe, in particular Italy. Following the first indications given by WHO, Miko S.r.l. has started to think what to do in order to be able to go on producing, in total safety for employees and collaborators.

A list of initiatives has been written down and put into practice and, since 09/03/2020 it is been revised and updated every week with the new dispositions given by the bodies in charge, with the procedures to contain the spread of the virus, for example the equipment of dpi, the activation of ‘smart working’ and the procedures for the personnel who work from the company site.

Environmental responsibility

Economic responsibility

Goals for the future

52

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The relationship with the territory Miko S.r.l. has a very tight relationship with the territory where it is based. For this reason, it is committed to promoting some important initiatives linked to the local area.

The company is active with both financial sponsorships and sponsorships with supplies of objects and materials, intending to raise awareness on sustainability issues.

Sustainable development goals

53

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The company policies on the territory are addressed to different bodies and associations:

• U dinese “Primavera”. Boys aged 17 to 20 who compete at a national level • Scuderia Villorba Corse hat organizes races (also for women) on tracks for luxury cars; in addition to donations, Miko supplies fabrics for car interiors • A.S.D. Dinamo Gorizia, silver C series, basketball team • University, Faculty of Economics, which have increased the visits to the company thanks to the publication of the sustainability report and the policies addressed to corporate sustainability.

Several PhD students have written their thesis on this topic • Associazione Regionale Tersicorea.

School of Dance, founded in 1989, as a permanent center for training, diffusion and production of the contemporary dance and the theatre.

Referring to the distribution scheme of global gross value added to the following paragraph 6.2, the total donations distributed in the territory by Miko S.r.l. amount to € 394.438.

54

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Miko S.r.l. sponsors and participates in events related to the world of car interior designers, for example young interior designers who once a year in China are awarded the BEST ECOSOLUTION AWARD, within the car show held in the Chinese territory.

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

And finally, not to forget, the interest and the will to preserve Bosco Sacile, that will lead to the opening of an area that schools and families will be able to visit (see chapter on environmental responsibility).

During the emergency for Coronavirus, Miko S.r.l. has handed over freely equipment and materials for individual protection to the churches, different bodies and city townhalls in the territory that were in need for their community of people.

At the University of Reutlingen (near Stuttgart), specialized in interior design for cars, a presentation of the product is carried out once a year to last-year students ready to start an internship at the car manufacturers.

Miko S.r.l. often and with pleasure talks about its case-history both to the academic world and to the business community, for example Miko was present on 31/03/2020 participating via streaming to the meeting “The faces of sustainability”, step in Udine of the “Forum on CSR and social innovation” and, on 29/11/2019 to the event “Fashion, innovation and circular economy” held at Centro Giovani Innovation Young in Monfalcone (GO - Italy).

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2019 CSR Miko SRL

Corporate profile

Relations with banking istitutions Miko S.r.l. has cultivated over the years a series of important relationships with financial intermediaries. In any case, Miko continues to finance itself mainly with its own means and makes minimal use of the banking world, a condition that allows Miko to support the research and development activities it has decided to pursue.

The main financial partners are highlighted in the following table:

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Credit institutions

Branch/agency

Unicredit Spa

Gorizia

Cassa di Risparmio del Friuli Venezia Giulia

Gorizia

Crédit Agricole FriulAdria Spa

Gorizia

Banca Monte dei Paschi di Siena Spa

Gorizia

Wells Fargo Bank N.A. London Branch

London

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Environmental responsibility profiles Sustainable development goals

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

17% — 58% Use from 17% to 58% of recycled material to produce Dinamica®.

Use of neutral and non-toxic dyes.

Photovoltaic system from 1 MW installed on the roof of the plant

The water for the production is taken from a pumping well and treated in an internal purification plant

Use of the Life Cycle Assessment methodology EPD® certification obtained in 2013

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Reduction of energy, water and chemical consumption used in the various stages of production

-80% Reduction of energy consumption and CO2 emissions by 80% compared to traditional microfiber productions

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

The commitment of Miko S.r.l. to the environment has been clear since its foundation in 1997, applying the principles of the circular economy with the main goal of limiting the use of virgin raw materials in favor of secondary raw materials.

In the case of Dinamica®, we can speak of real upcycling as plastic waste (PET) becomes a raw material of higher value than that possessed in the previous life.

Dinamica® is, in fact, applied to products for the luxury, design and hi-tech segment. Furthermore, to guarantee circularity throughout the microfiber life cycle, Miko S.r.l. is advancing some proposals to recycle Dinamica® at the end of its life and transform it into products always addressed to the automotive sector, such as panels for thermal and acoustic insulation.

A sustainable supply chain

Miko’s attention to environmental issues is proven by the certification of the Environmental Management System (EMS) in accordance with the ISO 14001 standard, which allows systemic monitoring of the impacts due to the activities carried out in the various production phases and which guarantees the regulatory compliance of the organization.

To maintain the environmental certification, the organization has to fulfill numerous requirements: the planning and monitoring of environmental aspects related to atmospheric emissions, waste water discharges, acoustic pollution, waste, energy, water resources, soil and subsoil protection, as well as the periodic communication of the results of this activity to the competent authorities.

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

As it is also explained in the previous chapters, Miko S.r.l. considers the environment, the fight against climate change and sustainable development as strategic factors in the operation and development of its activities and fundamental to consolidate its leadership in the automotive, furnishing and aviation markets. It is committed to protecting the environment, improving and promoting the environmental performance of products and services and, ultimately, to creating value for the Company through these activities.

The main commitments include: • pursuing the improvement of environmental performance, verifying that the impacts of its activities, products and services are in line with a conscious economic growth respecting the territory and ecological balance • motivating workers to develop, at every level, the sense of responsibility towards the environment, towards their own health and that of their colleagues, also through training courses • ensuring compliance with Quality, Safety and Environment • preventing risks at the source, ie while designing, while choosing the materials, while identifying methods and technologies During the considered period, new machinery and equipment in laboratory have been acquired to empower tests on products and find out new methods of fabric treatments.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The relationship with suppliers Miko S.r.l. gives particular attention to external activities related to the purchase of goods and services or to supplies, over which it can exercise an influence in material terms (indirect impacts).

The management of indirect environmental impacts is applied during the definition of the contract for the supply of goods and services and may include: • requirements of competence of suppliers or contractors also with regard to their possible Quality or Environmental system certification • exchange of information, procedures and operating instructions in relation to the services performed

The significance of indirect impacts (product end-of-life management, waste coming from suppliers and other environmental aspects related to the supply, the use of dangerous substances and preparations, etc.) is evaluated in the following operating conditions: • Planning and development • Packaging and transport of products • Distribution, use and end of life of the products • Supply • Supply of chemical products • Environmental competence requirements and practices used by contractors and suppliers • News and accident reports

Part of the resources invested in Research and Development are used to establish partnerships with Asahi Kasei, the supplier of raw materials, with the aim of increasing the product environmental performance by adopting solutions that include, for example, a greater use of recycled fibers. One of the projects born from this collaboration has led to the creation of Dinamica Auto Pure, a new product for the car where even the internal scrim of the raw support comes from recycled fibers.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

A production in the respect of the environment Dinamica® is a microfiber for the automotive and furniture sectors produced with recycled materials. Its production process avoids the extraction of virgin raw materials because it is based on the recycling of waste that would otherwise be destined for disposal in landfills or incineration. The recycled polyester contained in Dinamica® derives from polyester fibers (T-shirts, fabrics, fibers) and PET (bottles, plastic, etc.).

Recycling polyester means reducing energy and CO2 emissions into the atmosphere by 80% compared to the traditional petrol-based polyester production process.

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The content range of recycled material in the Dinamica products varies from 17 to 58% according to the type of raw material used for a specific product variant.

Moreover, unlike normal production cycles, solvents harmful to health and the environment are not added. During dyeing, the use of neutral and non-toxic dyes is a further guarantee of respect for health and environment.

In order to always supply cutting-edge products in the field of high-quality microfibers, Miko S.r.l. is advancing the idea of gradually replacing the Auto product with Auto Pure in order to guarantee its customers a microfiber with increasingly higher technical and environmental performance as well as an everincreasing content of recycled fibers.

This product has already attracted the interest of some car manufacturers especially for the electric car segment, where there is a continuous search for components and accessories that limit the use of virgin raw materials.

Since 2014, Miko has been using a system of internal recycling of the water used for the washing and has invested in the revamping of the wastewater treatment plant; it ensures a high level of purification and a reduction of the reagents used, by adopting the most modern technologies on the market.

In order to further improve its environmental performance and promote the systematic reduction of the product's carbon footprint, in recent years Miko S.r.l. has developed important projects that have contributed to optimizing production cycles, leading to a significant reduction in energy consumption, water and chemicals used in the various stages of production.

Regarding its energy needs, Miko S.r.l. covers part of them with the renewable energy coming from the 1 MW photovoltaic plant located on the roof of the production plant, further evidence of its commitment to the application of the basic principles of circular economy.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

At the Gorizia site, the following elements are used: • methane gas for steam production and for direct heating and sanitary water • electricity, mainly used for the production, partly renewable, generated by the photovoltaic plant placed on the roof of the production plant and partly purchased from an external supplier

Water consumption related to the commercial and administrative structure can be subdivided from consumption exclusively referred to production. In fact, the supply for productive purposes derives from a regularly authorized pumping well, present inside the property of Miko S.r.l. while the supply for civil uses derives from a supply contract with the local aqueduct.

Gas and electricity consumption

The water withdrawn for productive use is treated in a purification plant present inside Miko S.r.l.

Investment is being made in a new additional sewage treatment plant that follows the increase in production capacity.

Consumption

u.m.

Fuel consumption

Natural gas

Electricity consumption

Self-produced electricity (PV)

Sold electricity

Totale di energia consumata

GJ

GJ

Purchased electricity

GJ

Sold electricity (PV)

GJ

GJ

Goals for the future

2019

65.957 3.101 12.215 469 81.273

Withdrawn water

u.m.

Underground water

m3

Water from the aqueduct

m3

Total volume of water withdrawn

m3

2019

316.520 1.071 317.591

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Corporate profile

Furthermore, the partnership between Miko S.r.l. and Etifor, a spin-off of the University of Padua, is going on. The project is focused on the complete restoration and conservation of Bosco Sacile (Udine area), through reforestation and forest improvement interventions that guarantee the capture and conservation within 5 years of 5,600 tCO2 / year, that is 100% of the annual environmental impact of Miko Srl.

Organization and governance

Strategy for sustainability

Social responsibility

“If we could travel in time, we would discover that the Veneto-Friulian plain once looked completely different from what it is today. Instead of boundless agricultural land, highways and cities with their gray industrial areas, we would find ourselves immersed in boundless forests, with majestic oaks that often exceeded 30 meters in height.

Over the centuries, however, most of these forests have been destroyed to make room for man and his activities or to satisfy the demand for timber.

Fortunately, however, not all is lost, and still today we can find some strips of those woods that, proud and patient, have survived until today, centuries-old witnesses of a great past glory.

One of the largest and most important woods that have survived to the present day is certainly the “Bosco Sacile” in Carlino, in the Province of Udine (Italy). This wood is a real source of biodiversity: among oaks, hornbeams and ash trees, many rare or endangered animal and plant species find home - such as the ‘Falco subbuteo’, the Italian crested newt, the lataste frog or the kingfisher - living together with the roe deer and the other inhabitants of the forest. For this reason, the forest is included among the Special Protection Areas and is part of the Natura 2000 network, the key instrument of the European Union to protect biodiversity which brings together an ecological network spread throughout the European Union territory.

However, human hands have not spared even this little gem of the Friuli plain. In the past, as if the damage of the strong wind of 2017 and wild boars were not enough, the Bosco Sacile has also been damaged by illegal and unsustainable cuttings - the consequences of which are felt even today, with new young trees struggling to grow back - and subsequently abandoned for over 15 years.

Fortunatately, however, in 2019 half of the forest was acquired by a new owner who is absolutely determined to restore it to its former glory, taking care of each of its 66,675 trees. This is how the Bosco Sacile recovery project was born: a visionary project, which dreams of a forest - as large as 115 football fields - open to citizens, where men and nature can coexist, respecting each other and in harmony with one another. the other. A wood where our

Environmental responsibility

Economic responsibility

Goals for the future

kids can do environmental education activities, where on spring Sundays we can go and gather wild herbs to give a touch of magic to our cuisine and, if we're lucky, even a nice truffle. In other words: a living forest.

Thus, the activities started at full speed. Etifor, a spin-off of the University of Padua in charge of managing the works for the improvement of the forest, has undertaken a process of consultation with the population and the institutions that represent it, meeting the Municipality of Carlino, the Friuli-Venezia Giulia Region, the associations of truffle farmers and other associations. These consultations are one of the most important steps for planning activities, because the good management of a forest has to consider not only the environmental implications, but also the social and economic ones.

This is the basic idea of ​​FSC® certification: a tool designed by the Forest Stewardship Council (an international non-profit organization) to ensure responsible management of forests around the world. And obtaining this certification is an essential factor for the project, which is why this activity has already been planned for June 2020.

Therefore, we are already working and building the foundations of the project.

A project that, without the contribution of Miko Dinamica – that, always committed to social and environmental responsibility, has decided to take care of it - could have never been started. A project whose long-term success is in our hands: in the hands of nature lovers, whether they are from Carlino or from the other side of the world, who through WOWnature can contribute to the rebirth of Bosco Sacile. "

Lucio Brotto ETIFOR SRL Spin-off of the University of Padua

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Life Cycle Assessment and EPD® Process Certification Registration nr. S-P-00351 Registration nr. S-P-00788 www.environdec.com

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Miko Srl, since 2011, has adopted an approach oriented to Life Cycle Thinking and credible communication of the environmental performance of its products through the use of the Life Cycle Assessment (LCA) methodology and Environmental Product Declarations (EPD®).

With the aim of making systematic the method applied for the EPD® certification of the Dinamica® Auto line (EPD nr. S-P-00351) to all the company's products, Miko S.r.l. obtained the certification of the EPD® Process in 2013.

The certification of this management system gives Miko S.r.l. the possibility to internally manage the process of verification and certification of environmental product declarations (EPD®) for all its products, including the new Nabuk line, renewed on 13/01/2020.

This approach contributes to the development of eco-design, the design of products that are environmentally friendly.

In this perspective, the strategic goals pursued by Miko are the following: • to communicate objective, accurate and scientifically proven environmental data on its products • to track the environmental impacts related to the life cycle of the products using the LCA method • to improve the environmental performance of products through eco-design, in synergy with environmental policy objectives • to activate partnerships with its customers and suppliers in order to obtain information on the environmental performance of the products during the various stages of the supply chain and to evaluate the possibilities for improvement • to direct the interested parties, through specific initiatives, towards a responsible management of their activities from an environmental point of view, and to update employees on the most important environmental issues

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2019 CSR Miko SRL

Corporate profile

Strategy for sustainability

Scope 1 - Direct

emissions associated to the sources owned by the company given by the combustion of methane gas used in production and for the production of sanitary water Scope 2 - I ndirect emissions associated to the generation of purchased and consumed electricity.

Non-hazardous waste

ton

ton

TOTAL Greenhouse gas emission

ton

Economic responsibility

Disposal method

u.m.

Recovery

kg

Landfill

kg

Total non-hazardous

kg

Recovery

kg

Landfill

kg

Total hazardous

kg

2019

3.690 Hazardous waste

Greenhouse gas emission Indirect from electricity (Scope 2) location based

Environmental responsibility

Goals for the future

Total weight of waste by type and disposal method

Greenhouse gas emission u.m.

Social responsibility

Regarding waste, see the table explaining the type and disposal methods below:

The greenhouse gas emissions generated by Miko's activities essentially consist of carbon dioxide and are divided as follows:

Greenhouse gas emission Direct (Scope 1)

Organization and governance

938 4.627

The normalized GHG emissions are 1,463 kg CO2 per linear meter of Dinamica®.

Total waste

kg

2019

219.560 871.960 1.091.520 1.075 59 1.134 1.092.654

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Communicating sustainability to customers

Miko S.r.l. supplies microfiber fabric mainly for the automotive market and to a small extent for the furniture market.

The geographical sales areas are, in order of volume: Europe, North America and Asia.

Customers consist of OEMs (with which programs are developed and agreements are defined) and TIER 1 (direct customers in the automotive supply chain appointed by the OEM).

Their expectations and needs are above all linked to the delivery of the material within the established times and with the quality of environmental performance required.

ISO TS / IATF 16949 certification is a mandatory request. Customers also expect the company to offer increasingly advanced solutions in terms of design and functional and performance characteristics, as well as environmental ones, on its products.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

The presentation of the new Mercedes AVTR, held in January 2020 at Las Vegas with James Camerun, has confirmed the great ability of Miko to differentiate itself. On that occasion, the use of the VEGAN Dinamica® was presented; it has the certification by PETA (Pet for animals), that ensures the non-involvement of animals in the production cycle. This material has not only arisen great interest and involvement, but above all it projects the company in a more and more sustainable and competitive future.

Miko’s customers appreciate the one-to-one relationship, clear communication and transparent complaints handling.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Communication with the customer

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Miko S.r.l. uses different channels of communication:

• Website (that provides information about certifications ISO 9001, ISO TS/ IATF 16949, ISO 14001, EPD, ÖekoTex Standard 100 class 1 and MOG ex 231/01) • social Networks • email addresses (info@dinamicamiko. it and press@dinamicamiko.it in order to be able to manage any kind of information request from anywhere) • one-to-one relationships with the customer • customer satisfaction surveys

The staff is trained and able to interact in an optimal way with the customer; the main reference people are the key account managers. Communication with the customer is carefully taken care of and is aimed at strongly avoiding any deceptive, misleading, fraudulent or inequitable, unclear or ambiguous practice, including omissions of important information.

The information is shared in a transparent way, so that it is easily accessible and comparable, and provides the basis for an informed choice by the

consumer. Miko S.r.l. promotes an efficient education that allows consumers to understand the impact of their choices of products and services on their wellbeing and on the environment, considering the entire life cycle of the product, and to decide on the basis of a correct knowledge.

Possible comparisons with competitors are made only considering objective parameters with no subjective reference.

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Profiles of economic responsibility

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Revenue

Economic and financial performance

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Gross Operating Margin

€ 122.533.139 € 109.577.648

€ 81.024.489

Miko S.r.l. closed the last financial year / report with a profit of Euro 21.916.737, registering a 14% increase compared with the 12 months of the previous financial year (that last 15 months because it has been necessary to put off the closure of the financial year to 31 March, in order to be aligned with the closure date of all the companies controlled by the Japanese group "Asahi Kasei”. ). Profit margins show also for the last year positive values.

€ 32.475.859 € 29.905.754 € 20.317.197

2019/2020

2018/2019

2017

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2019 CSR Miko SRL

For the financial years 2020-2019, 2019-2018 and 2017, a scheme is presented below; it highlights some of the main economic margins and financial indicators of the three years. In addition, the main indicators of corporate profitability are shown; they attest the performance achieved by the company.

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

31/03/2020

31/03/2019

31/12/2017

Revenue

€ 109.577.648

€ 122.533.139

€ 81.024.489

Gross Operating Margin

€ 29.905.754

€ 32.475.859

€ 20.317.197

Operating Profit

€ 29.999.638

€ 32.500.235

€ 20.187.607

Operating Profit (loss)

€ 21.916.737

€ 23.952.319

€ 14.374.210

Fixed activities

€ 8.614.466

€ 7.835.771

€ 7.902.608

Total equity

€ 33.256.125

€ 33.821.046

€ 19.868.727

€ 8.657.667

€ 19.783.637

€ 5.230.751

Net financial position

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Profitability indexes

ROE net

ROE gross

ROI

ROS

31/03/2020

31/03/2019

31/12/2017

Definition of indicator

1,93

2,43

2,62

2,67

3,33

3,61

0,48

0,48

0,43

Operating Profit (Equity + Financial Debt)

0,28

0,27

0,25

Operating Profit Revenue from Sales

Net Profit / Equity

Net Profit / Gross Assets

The indicators for the assets and financial analysis, taken from the report on the management of the Financial Statements, highlight clearly as Miko S.r.l. has an important ability to manage its activities while respecting a full balance from a financial point of view. In particular, a substantial capitalization of the company emerges to guarantee its solidity.

Goals for the future

75

Capital ratios Primary margin of structure

Primary ratio of structure

Secondary margin of structure

Secondary ratio of structure

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

31/03/2020

31/03/2019

31/12/2017

Definition of indicator

Financial indexes

31/03/2020

31/03/2019

31/12/2017

Definition of indicator

€ 24.641.659

€ 25.985.275

€ 11.966.119

Equity / Fixed Asstes

Primary Liquidity

1,19

1,36

0,95

Immediate liquidity / Current liabilities

2,51

Equity / Fixed Asstes

Secondary Liquidity

1,98

1,83

1,55

(Immediate liquidity + deferred liquidity) / Current liabilities

€ 13.939.791

(Equity + consolidated liabilities) / Fixed assets

Indebtedness

0,83

1,01

1,32

Third part equity / Equity

2,76

(Equity + consolidated liabilities) / Fixed assets

Covered ratio of fixed assets

4,00

4,49

2,72

Equity / Net fixed assets

3,86

€ 26.656.701

4,09

4,32

€ 27.780.673

4,55

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

€ 33.821.046 € 33.256.125

€ 19.783.637

€ 19.868.727

€ 8.657.667 € 5.230.751

2019/2020 Equity and Net Financial Position

2018/2019 Equity

2017

Net Financial Position

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Distribution of the Gross Global Value Added

The value added is a quantity that gives the idea of the company ability to create economic wealth and to distribute it to its stakeholders.

From a methodological point of view, Global Value Added (G.V.A.) is the reference basis of this Sustainability Report. Quantified with this method, it has an informative value of social type aimed to highlight both the formation process of this indicator and its distribution, expressing in monetary quantities the relationships between the company and some of the main stakeholders that the company influences with its activities:

• Members • HumanResources • State, bodies and institutions • Funding bodies • Community • Business system In the following table, an analytic rielaboration of the Income Statement that quantifies the amount of the Gross Global Value Added, is presented. To help the reader understand the impact that the indicator has on the stakeholders, the Gross Value Added is highlighted in a graphic form, subdivided by its destination.

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Table for the distribution of Global Gross Value Added (in thousands of Euros) DETERMINATION OF GLOBAL VALUE ADDED REVENUES CONSUMPTIONS NET ACCESSORY AND EXTRAORDINARY COMPONENTS GLOBAL GROSS VALUE ADDED

2019 - 2020

2018 - 2019

2017

€ 109.750 € 75.002 € 1.165 € 35.913

€ 122.039 € 84.101 € 1.401 € 39.339

€ 79.087 € 55.144 € 322 € 24.265

€ 4.700 € 4.700 € 4.298 € 3.331 € 967 € 8.353 €2 € 39 € 8.312 € 39 € 39 € 394 € 394 € 18.128 € 912 € 17.216 € 35.913

€ 18.000 € 18.000 € 4.688 € 3.615 € 1.073 € 9.003 €2 € 48 € 8.952 € 56 € 56 € 391 € 391 € 7.200 € 1.248 € 5.952 € 39.399

€ 10.000 € 10.000 € 3.328 € 2.617 € 711 € 5.494 €2 € 39 € 5.453 € 61 € 61 € 179 € 179 € 5.203 € 829 € 4.374 € 24.265

DIVIDED AMONG: MEMBERS Dividends distributed to members HUMAN RESOURCES Direct remunerations Indirect remunerations STATE, BODIES AND INSTITUTIONS Taxes and indirect taxes and property taxes paid to the State Taxes and indirect taxes and property taxes paid to municipalities Corporation tax FUNDING BODIES Financial costs for receivable capital COMMUNITY Donations CORPORATE SYSTEM Value and adjustments on fixed assets Reserves and retained earnings GLOBAL GROSS VALUE ADDED

Goals for the future

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

50,48%

Corporate system

23,26%

State, bodies and institutions

13,09%

Members

11,97%

Human resources

1,10%

Community

0,11%

Funding bodies

07 82

2019 CSR Miko SRL

Corporate profile

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Future goals

Goals for the future

Given the sustainability policies

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2019 CSR Miko SRL

Corporate profile

Organization and governance

Goals taken from CSR 2018

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Results

a. Investment in projects for the restoration and preservation of national areas with the consequent obtaining of an environmental certification

a. Partnership with Etifor, a spin-off of University of Padua, to develop the project for the restoration and preservation of Bosco Sacile, through reforestation and forest improvement interventions that ensure the capture and conservation within 5 years of 5.600 tCO2/year, that is 100% of the environmental impact of Miko Srl.

b. Investment for a new finishing line

b. Completed during the financial year

c. EPD Nabuk update

c. Updated on 13/01/2020

d. Publication of the 2nd sustainability report

d. Completed and published in a specific section of the company website

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2019 CSR Miko SRL

Corporate profile

Miko invests annually significant resources in the implementation of projects related to environmental sustainability. In addition to maintaining the System certifications and the EPD Process, the company is committed to the continuous search for initiatives that can increase protection measures and responsible management of the environment.

Regarding the social and economic sustainability Miko S.r.l. is always at the forefront for the diffusion of a culture of corporate responsibility linked to the territory and to collaborators, favoring the relationships with schools and universities, the participation to public initiatives on CSR, le associations, the well-being and the safety of its own collaborators.

These are some of the fundamental principles for the economic growth, not only for the company, but also for the community.

Organization and governance

Strategy for sustainability

Social responsibility

Environmental responsibility

Economic responsibility

Goals for the future

Area of the objectives from csr 2019

Deliberate action

Production and safety in the workplace

• Conclusion of the investment for the new water purification plant • Constant update of the anti-Covid protocol with possible work in ‘smart-working’ and particular attention to people with frailties • New changing rooms for the personnel • Purchase of new equipment for the R&D laboratory

Environmental Sustainibility

• Continuation with the investment in the Bosco Sacile project, for the restoration and preservation of the forest and the obtaining of an environmental certification

Social Sustainibility

• Organization of training courses to improve the comprehension of the Social Report and of the corporate responsibility from the personnel • Review of the general part of the MOG and Code of Ethics • Maintaining an open dialogue with Universities

Report

• CSR update contextualizing the SDGs • Assurance of CSR

These are the projects for the two-year period 2020-2021 related to the social/ economic/environmental sphere. Some of them have already been activated, others are about to start and are currently inserted among the priority goals.

It has to be specified that, following the new global emergency Coronavirus, when writing the present report some important consequences are foreseen at a global economic level as well as the decrease of purchase. As a consequence of that, the objectives and their allocated budget, defined in February 2020 for the current year, have been in part reduces, and some of them have been put off to the following period.

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2019 CSR Miko SRL

The 2019 Sustainability Report by Miko S.r.l. intends to provide a representation of the social, environmental and economic impacts of the Company. The information contained in the document reports the activities carried out from 01/04/2019 to 31/03/2020, unless otherwise specified and no comparisons with the previous year were made, since the previous period was 15 months long.

This third Report has been drafted according to the principles and editorial criteria established at international level that are called GRI Standards.

Credits Editorial coordination: Miko S.r.l. – Mrs. Benedetta Terraneo Accounting Consulting: Hospitality Team S.r.l. Società Benefit – Mrs. Lara Citon Graphic project: Punktone!

Photographs: Internal Archive & Ph. Massimo Crivellari Date update: 31 March 2020 The report is available on the website: www.dinamicamiko.it