At Tytex, we recognize the significance of Environmental, Social, and Governance (ESG) principles in today's business landscape. ESG refers to the integration of sustainable practices and responsible decision-making into our operations. Here we would like to highlight the value of incorporating ESG practices into our business and how it aligns with our mission to deliver high-end medical garments and textiles.

WHY ESG MATTERS

Incorporating ESG practices is not only an ethical responsibility but also a strategic necessity. By prioritizing ESG, we enhance our ability to drive long-term value for our stakeholders, including clients, employees, investors, and the communities we serve. ESG is an integral part of our commitment to sustainable growth, innovation, and positive impact.

We also understand the importance of environmental stewardship in the textile industry. From the inception of our products in Denmark to their manufacturing in Slovakia, we strive to minimize our ecological footprint. Through responsible sourcing, energy efficiency measures, waste management programs, and continuous improvement in sustainable production processes, we aim to contribute to a healthier planet. We acknowledge there is still a lot of work to be done in regards to becoming truly sustainable and we are tirelessly working towards a better tomorrow. 

SOCIAL IMPACT AND GOVERNANCE

Our dedication to social responsibility extends beyond our products. We prioritize the well-being and safety of our employees, ensuring fair labor practices, a 

diverse and inclusive work environment, and ongoing training and development opportunities. We actively engage with local communities and support initiatives that promote health, education, and social welfare.

At Tytex, strong corporate governance and ethical business practices are fundamental. We maintain transparent and accountable decision-making processes while adhering to legal and regulatory requirements. Our board of directors oversees our commitment to integrity, risk management, and responsible business conduct. We believe in fostering a culture of trust, integrity, and ethical behavior throughout our organization.

ESG INTEGRATION

ESG is deeply embedded in our business operations. From the earliest stages of product design, we prioritize sustainability and ethical considerations. We engage our suppliers and partners to ensure they align with our ESG values, fostering responsible practices throughout the supply chain. By incorporating ESG factors into our strategic planning and investment decisions, we aim to create long-term value and mitigate risks.

By embracing ESG, we differentiate ourselves in the market, attracting clients who share our values and seek sustainable solutions. ESG integration drives innovation, enhances operational efficiency, mitigates risks, and strengthens our reputation as a responsible and forward-thinking company. Through ESG, we contribute to a more sustainable and equitable future while delivering high-end medical garments and textiles worldwide.

For more information about our ESG practices, please contact us.

ESG EXTRACT FROM MANAGEMENT REPORT 2022

ENVIRONMENTAL EXPOSURE

All products within the group are designed and produced with the least possible environmental impact on both the internal and external environment, within the given technical possibilities. This is achieved, among other things, by reducing the consumption of raw materials, chemicals, natural resources, and process water, thereby reducing the overall environmental impact of the product.

Furthermore, the group complies with applicable environmental, safety, and occupational health requirements, and there are no other factors believed to affect the external environmental conditions in relation to the group's environmental impact.

STATEMENT ON ESG - ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

BUSINESS MODEL

The group encompasses companies that specialize in medical textiles for the global healthcare sector. The activities are unified under the vision of "Making Healthcare More Human," where the group's employees in Europe and North America work daily on the development, production, and distribution of textile products that support the healthcare sector's treatment of various disorders, including chronic diseases.

A common goal for all of the group's products is to contribute to the following

• Dignity in relation to individuals' everyday lives as chronically ill patients, and more
• Help reduce discomfort for individuals to the greatest extent possible
• Facilitate quick rehabilitation after surgery
• High user-friendliness in daily life

The production of the individual textiles takes place at the group's three factories in Slovakia and is marketed by sales companies in Europe and North America.

The group aims to be a socially responsible company that promotes sustainable development. Therefore, social responsibility is an integral part of the commercial foundation for the management of all units within the group.

To ensure that the group achieves its ambitions of high levels of accountability, it has established a range of policies and standards for external supervision regarding corporate social responsibility. These policies and standards form the framework for the overall activities and will be continuously developed to ensure even more systematic follow-up and improved reporting. The policies are based on, at a minimum, compliance with applicable laws, relevant regulations, and international conventions.

The group collaborates closely with its suppliers and partners to continuously promote their social responsibility. Therefore, the group has developed a Code of Conduct, which is a set of guidelines that form the basis for dialogue with suppliers and for monitoring their work on responsibility. The guidelines are reflected in the Code of Conduct, which also emphasizes respect for human rights, labor rights, the environment, and anti-corruption.

ENVIRONMENTAL AND CLIMATE IMPACT

The group's overall policy is to reduce negative environmental and climate impacts. As part of the group's environmental and climate policy, the group focuses on the climate impact of the group's production and transportation of medical textiles. The energy consumption associated with the production and transportation of the company's products is considered a risk to the group's production costs and a negative climate impact.

In 2022, the group has focused on how the company can reduce overall energy consumption and has identified a number of areas of focus that will improve the company's environmental impact. To ensure a structured approach to environmental matters, the group has implemented an environmental management system according to the international standard ISO 14001 in the company's own production in Slovakia, certified by Bureau Veritas.

Through the ISO 14001 registration, due diligence processes for ongoing environmental assessment of the group's production activities have been implemented. During the production of the group's products, continuous measures and environmental impacts are monitored, and corrective actions are taken when necessary.

Furthermore, the group is certified to meet the textile standard OEKO-TEX®, which offers certificates to companies in the textile and leather industry with the purpose of verifying health and environmental aspects. Independent institutes test the textiles to ensure that there are no harmful substances in the products, ensuring their safe use in accordance with internationally standardized guidelines. The group was last tested according to the OEKO-TEX® Standard 100 in December 2022, and 95% of the group's products are covered by this certification.

Throughout the financial year 2022, the group has simultaneously worked on reducing energy consumption and climate impact through the acquisition of production equipment with low energy consumption in new investments and the replacement of older production equipment/techniques.

Not all objectives were achieved in 2022, but there has been satisfactory progress in all parameters. As part of the group's work on recycling of residual materials, energy consumption, transportation, and logistics, the management continually assesses, through a risk assessment, the extent to which the group has a negative impact on the climate. Based on ongoing monitoring, the management will evaluate the implementation of new initiatives that can further reduce the climate impact. As such goals are developed, the group will also report on these goals.

HUMAN RIGHTS, SOCIAL CONDITIONS, AND EMPLOYEE RELATIONS

The group places crucial emphasis on a safe and healthy physical and mental work environment for all employees. Efforts are made for well-being and a good social environment. Written policies and procedures exist for health and safety in the workplace. The work environment is continuously audited for compliance with SEDEX (Social Accountability and Ethical Trade) and local authorities according to applicable local laws. The work is organized in accordance with international human rights and labor rights as described in The International Bill of Human Rights and the eight core conventions of The International Labour Organization. The group strives to avoid negative impacts on human rights and labor rights and is committed to addressing and ensuring remediation if the group becomes involved in such negative impacts. The group respects the privacy of employees, business partners, and customers. Furthermore, the group is committed to ensuring accountability in the design, production, and testing of products to avoid harm to life, human safety and health, or negative impacts on the environment. The group complies with applicable legislation and agreements in each country regarding wages, working hours, rest, vacation, sickness, maternity leave, and other employment conditions. In addition to employment-related matters, the group has established procedures to prevent and follow up on any work-related accidents in connection with the group's textile production. In terms of education, the long-term goal towards 2030 is to be a positive contributor by ensuring education and upskilling of more employees in the group.

The level and objective of sick leave should be seen in light of several activities (including doctor visits) in Slovakia being considered as sick leave. The global COVID-19 pandemic continued in Q1 2022 as the primary factor for the objective of a sick leave rate below 8.0% not being met. The set targets are expected to be achieved in 2023. As part of the group's work on human rights, social conditions, and employee relations, the management continually assesses, through a risk assessment, any potential negative impacts that can be addressed by the group. Based on this assessment, the management determines whether the development warrants the implementation of new initiatives that can further reduce the negative impact on human rights, social conditions, and employee relations. As such goals are developed, the group will also report on these goals.

COMBATING CORRUPTION AND BRIBERY

The group does not tolerate bribery or any forms of corruption and has developed guidelines for ethical conduct that are audited by third parties as part of SEDEX (Social Accountability and Ethical Trade). In addition to the current guidelines and external audits, the company has a whistleblower scheme where employees and business partners can report any violation of the group's guidelines for ethical conduct. In 2021, all employees were informed of updated guidelines for ethical conduct, following the legal requirement for a whistleblower scheme. There is a risk of corruption and bribery in the interaction with the group's supply chain. No violations of the guidelines for ethical conduct were detected in 2022, and in the coming years, the group will handle any reported violations of the guidelines through the whistleblower scheme.

ACCOUNTING PRACTICES FOR ESG REPORTING

The group's ESG reporting includes alternative performance indicators in addition to revenue. These factors express the company's production quantities, whereby emissions and energy consumption are normalized relative to a given quantity produced, such as the quantity of the company's product in tons, kilograms, etc., to calculate emission and energy intensity. For all reporting, this factor is calculated based on the actual quantity produced, including sub-processes that companies use in their own processes, rather than the quantities sold. This is done because energy consumption, and thus emissions, follow the quantity produced, not the quantity sold, which is found in the financial data section of the group's financial statements. Consumption data for the companies in the group is collected from energy bills and other sources to calculate energy consumption. Measurement points for other aspects, including human rights, social conditions, and employee relations, are reported in actual figures and in accordance with The International Bill of Human Rights and the eight core conventions of The International Labour Organization. The total number of accidents, defined as accidents at work leading to absence beyond the day of the accident, is measured. The accident frequency rate is calculated for accidents occurring at work or while performing work related to employment. Measurement is made of the proportion of women in management positions, as well as women in senior management. Managers are defined as individuals with personnel responsibility, while senior management is defined as members of the executive board or senior management group. The proportion of suppliers who have formally confirmed their compliance with the Code of Conduct is measured relative to the value of purchases from the suppliers. Approval is obtained if the supplier has either signed the company's Code of Conduct or has their own policy/Code of Conduct that meets the requirements of the company's Code of Conduct. For anti-corruption, measurement is made of the relevant workforce, typically management, sales, procurement, and others with external contacts, who have formally confirmed their adherence to the policy. The whistleblower scheme applies to the entire group, and reporting is done for the group as a whole. Categorization is made between the total number of reports, cases within the scope of the scheme, cases that have led to preventive/corrective actions, and cases that have been transferred to an external authority. Reporting is done for the calendar year, so reports made within the calendar year will be counted, but if the case is transferred to the following year, it will only be reported as either preventive/corrective actions or transfer to an external authority in the subsequent year.

GOALS AND POLICIES FOR UNDERREPRESENTED GENDER

The company believes that diversity among employees, including equal gender representation, positively contributes to the work environment and strengthens the company's performance and competitiveness. At all levels of the company, efforts are made to ensure equal opportunities for men and women. The company has a goal of achieving gender balance in the board of directors and executive management. Currently, the board consists of two men and one woman, while the executive management consists of one member, a man. The company strives, if possible, to achieve an equal distribution in the board, meaning having one woman on the board, thus fulfilling the company's objective.

Furthermore, it is the company's objective to have no underrepresented gender in other management levels. As of the end of 2022, there are 13 managers in middle management, approximately 46% of whom are women and approximately 54% are men. Therefore, it is also assessed that the objective of gender equality in the company's other management levels has been achieved. In relation to hiring and recruitment for management positions, the goal is to have both male and female candidates. This principle applies to both internal job postings and external recruitment.

STATEMENT ON THE COMPANY'S DATA ETHICS

IT systems, networks, and related processes are critical to the company's ability to deliver its products. This makes the company vulnerable to system failures, cyber-attacks, and operational disruptions. Therefore, the company depends on continuous development and implementation of improvements to ensure its continued ability to deliver its products and has intensified its efforts in this area in 2022. As part of its operations, the company collects and utilizes data to serve its stakeholders and to continuously develop and implement improvements to the IT infrastructure. The following guidelines describe how this is carried out.

DATA COLLECTION

The company collects data to ensure the delivery of medical textile products to the healthcare sector and to provide customer service in case of complaints or inquiries regarding specific orders, as well as specific regulatory requirements for healthcare products. As a starting point, customer data will be collected in connection with the sale and delivery of products and services. The data used by the company can be both personally identifiable and non-personally identifiable. This may include data such as name, address, phone number, email address, etc. Customer data is primarily collected through the company's ERP system, but the company may also use an external provider for data collection and processing. In cases where data collection and processing involve personally identifiable data and the respective provider is a data processor or the company shares relevant data with a third party (e.g., a carrier), a data processing agreement will be in place to ensure that the provider only processes personally identifiable data in accordance with applicable laws and instructions. Data is stored primarily within the company's internal systems whenever possible.

DATA USAGE

The company primarily utilizes the collected data for order processing, including order confirmation and delivery, as well as any subsequent complaints or inquiries. Data collected by the company or external providers on behalf of the company is not sold to third parties. The use of data in daily operations and data storage is operationalized and systematized through internal procedures and policies across the company. The guidelines for data ethics apply to all managers and employees within the company. Managers have a particular responsibility to lead by example and ensure that all employees are informed about and comply with the guidelines. The company prioritizes ensuring that employees are well-informed about data ethics, data security, and the handling of personal data.

An open and non-judgmental culture among employees is encouraged, where openness about mistakes and issues leads to improvement. Challenges and dilemmas may arise in relation to data processing. The prerequisite for such a culture is that employees feel comfortable coming forward and admitting or pointing out errors, for example, through reporting operational incidents or using the company's newly established whistleblower system. Security In the implementation of new IT systems and technologies in general, the company's IT department will be involved and responsible for ensuring IT security. Additionally, an assessment will always be made to determine if the used and stored data contains personally identifiable information. If this is the case, the company's GDPR (General Data Protection Regulation) responsible party will be involved to ensure compliance with data protection regulations.

DATA DELETION

The company provides guarantees for its products, and for this purpose, it maintains access to non-personally identifiable data such as order specifications, delivery addresses, etc., for a relevant period. Customers have the right to access the data that the company stores about them and to request the correction or deletion of this data if it is incorrect, incomplete, or irrelevant. Any customer wishing to exercise this right should contact the company's sales organization. Furthermore, the company ensures that this data is not retained for a longer period than necessary for the purposes for which the information is processed. Customers can also exercise the right to be "forgotten," which means that their personal data is deleted when the data is anonymized by removing the connection to the customer's identity.

RESPONSIBILITY

The overall responsibility for decisions, application, and implementation of new technologies, as well as the use of non-personally identifiable and personally identifiable data, lies with the company's management.

ISO 14001

We are proud to showcase our commitment to environmental sustainability and our initiatives in line with ISO 14001, the international standard for environmental management systems.

At Tytex, we understand the vital importance of protecting the environment and minimizing our ecological footprint. By implementing ISO 14001, we have established a comprehensive framework to effectively organize our work and meet the certification requirements.

WHY DO WE DO IT?

The answer is simple: we believe in responsible business practices and strive to make a positive impact on the environment. ISO 14001 provides us with a structured approach to identify, manage, and continuously improve our environmental performance.

By adhering to ISO 14001, we ensure that all our employees and management are informed about their actions' environmental impact. Through this standard, we measure our environmental footprint and take concrete actions to mitigate and improve it.

The benefits we see from implementing ISO 14001 are numerous. First and foremost, we are able to reduce costs associated with waste management. By optimizing our processes and adopting sustainable practices, we minimize waste generation and effectively manage its disposal. This not only reduces our environmental impact but also contributes to our bottom line.

Furthermore, ISO 14001 helps us identify and mitigate environmental risks. By conducting thorough assessments, we proactively address potential hazards and implement preventive measures to safeguard the environment. This risk reduction approach ensures that we are prepared to handle any challenges that may arise and protects the ecosystems in which we operate.

Compliance with environmental regulations is another significant advantage of ISO 14001. By aligning our practices with the requirements of this international standard, we ensure that we meet or exceed the applicable environmental laws and regulations. This commitment to compliance fosters trust with our stakeholders and demonstrates our dedication to environmental stewardship.

THE FUTURE

Looking ahead, we see tremendous potential and multiple perspectives for growth and innovation through ISO 14001. As we continue to integrate sustainability into our operations, we aim to explore new opportunities for resource efficiency, renewable energy utilization, and the development of eco-friendly products and services. ISO 14001 serves as a guiding framework, helping us navigate these avenues and make meaningful contributions to a more sustainable future.

For more information about our ISO 14001 initiatives, please contact us.

ISO 13485:2016

We also proudly adhere to ISO 13485:2016, a globally recognized standard for quality management systems in the medical device industry. This directive sets forth specific requirements for organizations involved in various stages of the medical device life-cycle, including design, production, distribution, installation, and servicing.

WHY WE DO IT

At Tytex, we recognize the significance of adhering to ISO 13485:2016. By implementing this standard, we prioritize the safety and effectiveness of our medical devices, as well as the satisfaction of our customers. It demonstrates our commitment to quality, regulatory compliance, and continuous improvement in all aspects of our operations.

ISO 13485:2016 provides us with a comprehensive framework that ensures we consistently provide medical devices and related services that meet customer expectations and comply with applicable regulatory requirements. Regardless of our size or type, we benefit from this standard to enhance our quality management system and deliver the highest level of quality in the industry.

THE FUTURE

Looking to the future, we anticipate further developments in the medical device industry and regulatory landscape. As technology advances and new challenges emerge, ISO 13485:2016 will continue to evolve to address these changes. At Tytex, we are dedicated to staying at the forefront of industry standards and ensuring our quality management system remains up-to-date and aligned with the latest requirements.

We understand the importance of continuous improvement and staying ahead of the curve. By embracing future developments and advancements in the medical device industry, we can better serve our customers and patients. Our commitment to ISO 13485:2016 reflects our proactive approach to meet the evolving needs of the healthcare industry and maintain the highest standards of quality and safety.

Tytex takes pride in implementing ISO 13485:2016 as a guiding framework that enables us to provide safe, reliable, and high-quality medical devices and services. It underscores our commitment to excellence, regulatory compliance, and the well-being of our customers and patients.

For more information about our ISO 13485:2016 initiatives, please contact us.

ISO 9001: ENSURING QUALITY EXCELLENCE

ISO 9001 is an internationally recognized standard that outlines the criteria for a quality management system. It is applicable to organizations of all sizes and industries, and while certification is not mandatory, it serves as a testament to a company's commitment to quality. With over one million certified companies and organizations across 170 countries, ISO 9001 has become the gold standard for quality management.

The standard is built upon key quality management principles, including a strong customer focus, top management involvement, a process-oriented approach, and a culture of continuous improvement. These principles, elaborated in ISO's quality management principles, form the foundation for organizations to consistently deliver high-quality products and services.

WHY WE DO IT: CUSTOMER SATISFACTION AND BUSINESS BENEFITS

At Tytex, we have embraced ISO 9001 as a strategic initiative to ensure customer satisfaction and unlock various business benefits. By adhering to the principles of ISO 9001, we establish a customer-centric approach that drives our operations and decision-making processes as we understand that meeting and exceeding customer expectations is crucial for long-term success.

Implementing ISO 9001 enables us to streamline our processes, identify areas for improvement, and enhance overall efficiency. By adopting a systematic and

standardized approach to quality management, we can consistently deliver products and services that meet or exceed customer requirements. This results in enhanced customer satisfaction, increased customer loyalty, and improved business performance.

THE FUTURE: CONTINUOUS IMPROVEMENT AND BEYOND

As we move forward, we see our ISO 9001 initiatives as an ongoing journey of continuous improvement. We are committed to maintaining our certification and constantly enhancing our quality management system to stay at the forefront of industry best practices. Our goal is to exceed customer expectations and maintain our position as a trusted provider of high-quality products and services.

Furthermore, we recognize that ISO 9001 is not just a quality management standard but also a platform for innovation and growth. By leveraging the principles of ISO 9001, we aim to drive innovation, foster a culture of learning and development, and explore new opportunities for business expansion. We are dedicated to embracing emerging technologies, adapting to changing customer needs, and staying ahead of market trends.

In conclusion, ISO 9001 plays a pivotal role in our organization's commitment to quality excellence. It empowers us to consistently deliver exceptional products and services, satisfy our customers, and achieve sustainable business growth. As we continue our ISO 9001 journey, we remain dedicated to continuous improvement, innovation, and exceeding customer expectations.