OUTFIT7 INVESTMENTS LIMITED
MODERN SLAVERY AND HUMAN TRAFFICKING STATEMENT 2021
Outfit7 Investments Limited, the sole holding company in the Outfit7 Group, issued this Modern Slavery and Human Trafficking statement (hereinafter: "Statement") pursuant to Section 54, Part 6 of the United Kingdom Public General Act: Modern Slavery Act 2015, in order to set out the steps taken to prevent slavery and human trafficking from taking place within Outfit7's business or its supply chains.
This Statement is made on behalf of the following subsidiaries of Outfit7 Investments Limited: Outfit7 Limited, Outfit7 Brit Limited, Ekipa2 d.o.o., Outfit7 BCN, S.R.L., Beijing Outfit7 Technology Consulting Co. Ltd. (collectively: "Outfit7 Group" or "Outfit7"). The actions and operations set out below are effective across the Outfit7 Group.
Outfit7 has no tolerance of the use of slavery or human trafficking within its operations and its supply chains and is committed to acting ethically and with integrity to combat slavery and human trafficking.
People are the foundation at Outfit7. And the group's focus on creative expression and entrepreneurial spirit is the key to its continuing success.
Bringing together experienced, talented professionals in diverse fields, the team works in offices across continents to entertain the world. And they're growing fast!
Outfit7 employs more than 350 employees worldwide (information dated year end 2020; all are desk job workers), which are employed in functions such as Finance, IT, Data and Analytics, Sales, Legal, HR, Office Support, Marketing, R&D Design, R&D Tech, and Product.
Where are Outfit7's Offices Located?
Outfit7's subsidiary offices are located in Cyprus, United Kingdom, Slovenia, Spain and China. To offer more insight, we prepared a chart of Outfit7 offices that consists of active and employing companies of the group.
What is Outfit7's Business All About?
We are engaged in the development of entertainment brands and their monetization through various channels, including mobile applications (which are monetized through in-app purchases, advertising sales, and affiliate networks), consumer product licensing and merchandise programs, and the creation of video content and its distribution through online media and other channels.
The main asset of Outfit7 is intellectual property (hereinafter "IP") in the form of the Talking Tom and Friends character brands. The IP is exploited through various channels, including:
- creation of software applications featuring the brands and monetization of the software applications through (i) the sale of the software applications and (ii) the sale of media space (advertising) within software applications;
- licensing of character brands to third-party licensees, who manage a network of high-quality partners for manufacturing and sales operations, to create merchandise featuring the brands (such as apparel, toys, school supplies, plush and other accessories);
- creation of video content featuring the brands and monetization of the content through either the sale of the content or the sale of advertising within/alongside the content;
- licensing of brands to third parties for them to create various content featuring the brands and monetize the content;
- creation of video content and its distribution through online channels like YouTube (animated series episodes and mini episodes, gameplay trailers, user generated content, etc.); and
- broadcasting of video content (animated series) on TV channels (e.g. Boomerang in the UK and ASPAC).
Also, preparations are taking place for the production of a full-scale movie, with negotiations and partnerships already in progress.
Who is the Responsible Person for this Statement?
Yanhao Wu, Director of Outfit7 Investments Limited.
Policies in Relation to Modern Slavery and Human Trafficking
Our internal policies (such as our anti-harassment, anti-corruption, and health and safety at work policies) reflect our commitment to act ethically and with integrity. We also have a policy in place that enables employees to report concerns regarding workplace discrimination, violence, or harassment. The policy is designed to ensure that any matters raised are investigated without fear of retaliation.
Outfit7 is committed to being a fair employer and ensures that salaries remain competitive within the market. We also offer our employees the opportunity to participate in a profit-sharing scheme and each month we reward one employee that has gone the extra mile, taking work ethics into consideration, as well as work effort (this reward system is based on employee nominations).
In our offices we work to ensure a relaxing, safe, and healthy work environment. Work equipment and healthy foods of high quality are available to our employees throughout the day and employees are encouraged to engage in a healthy lifestyle, which did not change during COVID-19 pandemic.
Risk Assessment and the Due Diligence Process
Historically, we have considered slavery and human trafficking risks in our business operations worldwide. The majority of Outfit7 operations represent a low risk in relation to slavery and human trafficking as many of Outfit7's suppliers are operating in specialized areas (such as software development), as opposed to low-skilled industries. In 2020, we created a map of consumer product licensing operations which indicates Outfit7 production territory and products presence.
We continue to follow a risk-based approach – we impose contractual obligations on certain partners (as further outlined below). Where we believe there is a risk connected to partners' operations, we also undertake measures such as gathering information on partners' operations and checking their references. We will carry out due diligence checks on all partners where we will believe there is a risk of exposure to slavery and human trafficking. More specifically, as a part of our due diligence process, we prepared and presented our key consumer product licensing partners with a questionnaire addressing various compliance topics (including modern slavery and human trafficking) for the consumer product licensing partners to fill it out when entering into a (new or refreshed) contract.
We are aware that consumer product licensing and merchandising operations pose a certain higher risk with regards to the topic. We strive to mitigate the risk in the manufacturing operations of our consumer product licensing partners by imposing contractual obligations on them that regulate the working conditions of their manufacturers and through monitoring processes. In order to maintain high standards for decent and humane working conditions in the manufacturing operations of such licensing partners, Outfit7 has established specific manufacturing guidelines for such partners around the world. The selection process requires all factories in a contractual relationship with such licensing partners to operate in compliance with local laws and, in addition, to meet the specific Standards of Manufacturing Practices ("the Standards") set out by Outfit7 through a monitored certification process. The Standards regulate such issues as Forced Labor, Child Labor, Harassment or Abuse, Nondiscrimination, Health and Safety, Freedom of Association and Collective Bargaining, Wages and Benefits, Hours of Work/Overtime, Environment, and Bribery. They also impose an obligation on the manufacturer to post the Standards in a common area that is accessible to all employees and to provide employees the opportunity to report non-compliance with the Standards, free from punishment or prejudice. Moreover, the Standards impose an obligation on the manufacturer to allow Outfit7 to make unannounced inspections of each factory and to provide, upon request, documentation required for an audit inspection.
Due to COVID-19 pandemic, we had to adjust our working conditions to ensure that our employees are working in a safe working environment and accordingly limit the risks of COVID-19 presence in the company. For this reason, we have established work from home arrangement in all offices, taking into consideration the local government's guidelines. In this respect, we have cooperated with specialized external counsels on safe working conditions during pandemic for both working in the office and working from home. We formed an in-house COVID-19 workforce consisting of mostly legal advisors and HR specialists, who monitor new local measures and implement them internally. Moreover, we continued to focus on our employees' wellbeing – during the pandemic we introduced an online exercise program and a delivery option of fresh and healthy meals to the employee's home address where possible.
In order to raise awareness and understanding of the modern slavery and human trafficking risk and improve effectiveness within Outfit7 Group, we organized a modern slavery refresher training program for Outfit7 employees, whereas in the following reporting periods we will continue to consider the need to expand the scope of the training. Training was performed for employees that are involved in business operations that pose a certain higher risk, or work for a department or Outfit7 subsidiary where a connection to the topic was recognized, and for personnel responsible for overseeing modern slavery risk (e.g. Licensing, App Sales, HR, Legal, Management). Approximately 30 % of the training participants have based on their job position a direct impact on business dealings. Training was held by an external expert on modern slavery and human trafficking, Ardea International Ltd., from UK. In light of the COVID-19 crisis, discussions during the training also highlighted the impact of COVID-19 pandemic on modern slavery.
Further, we reviewed Outfit7's internal policies that relate to modern slavery and human trafficking and will pursue updating them (where necessary) during the following reporting periods.
In the following reporting period, we will continue to carry out checks of our business operations when we believe there is a risk of exposure to slavery and human trafficking (for example, in case of a change of our consumer product licensing partners, further consideration in this area will be triggered).
We will continue to make necessary updates to Outfit7's internal policies that relate to modern slavery and human trafficking as well as introduce new that will consider tackling modern slavery and human trafficking within Outfit7 supply chains.
This Statement covers the steps taken by Outfit7 during the 2020 reporting period and outlines the steps planned for the following reporting period. The financial year of Outfit7 Investments Limited begins on January 1st and ends on December 31st.
We have communicated this Statement to Outfit7 employees via our internal communication platform to ensure that there is a high level of understanding of the risks of slavery and human trafficking to our business and supply chains.
This Statement is signed by
Yanhao Wu, Director of Outfit7 Investments Limited
On 27 June, 2021