Modern Slavery Statement

UK Modern Slavery Act Statement for the financial year ended 31 March 2021

This statement has been published in accordance with the UK Modern Slavery Act 2015 and sets out the steps that discoverIE Group plc and its Group companies ("discoverIE") have taken in the financial year ended 31 March 2021 to prevent modern slavery and human trafficking in discoverIE's business and supply chains. It has been approved by the Board of Directors of discoverIE Group plc.

discoverIE is committed to ensuring that no forms of modern slavery, servitude, forced or compulsory labour and human trafficking exist in its business operations or its supply chains. We do not tolerate modern slavery or human trafficking in any part of our business and we expect the same high standards from our third-party suppliers and contractors.

This statement describes the steps we have taken over the past year as well as those we plan to take in future, to prevent modern slavery and human trafficking in our business operations and our supply chains. In the last year, we have developed further, and refined, our risk management and environmental, social and governance ("ESG") programmes and further details can be found on our website and in our 2021 Annual Report. We will continue to develop and refine these over the coming years to deliver on our commitment by implementing the steps described below.

About discoverIE

The Group is an international leader in customised electronics, focusing on markets with sustained growth prospects and increasing electronic content, where there is an essential need for discoverIE's products. discoverIE designs, manufactures and supplies customer-specific electronic products around the world. discoverIE Group plc is listed on the London Stock Exchange (LSE: DSCV). Currently, there are c. 4,200 employees across the Group. discoverIE has two divisions: Design & Manufacturing and Custom Supply.

Design & Manufacturing

The Design & Manufacturing division supplies highly differentiated, innovative components for electronic applications. The businesses which comprise the Design & Manufacturing division are Control Products Inc, Contour, Cursor Controls, Flux, Foss, Hectronic, Hobart Electronics, Limitor, MTC, Myrra, Noratel, Phoenix America, Plitron, Positek, Santon, Sens-Tech, Stortech and Variohm. The Group acquired Phoenix America in October 2020, Limitor in February 2021 and Control Products Inc in May 2021. The steps that discoverIE took to assess any potential modern slavery risks as part of the acquisition processes of these businesses are discussed below.

The Design & Manufacturing division has operating and manufacturing facilities in a number of jurisdictions, including Canada, China, Denmark, Finland, Germany, Hungary, India, Mexico, the Netherlands, Norway, Poland, Slovakia, South Korea, Sri Lanka, Sweden, Thailand, the UK and the USA. It also has operational presence in France and Hong Kong. Over 80% of the products are manufactured in-house, with the balance being manufactured by approved third party contractors.

Custom Supply

The Custom Supply division provides customised electronic, photonic and medical products for technically demanding applications in industrial, medical and healthcare markets. The business operates similarly to the Design & Manufacturing division, but mostly with third party suppliers rather than with products manufactured in-house. The Custom Supply division is comprised of Acal BFi and Vertec. Acal BFi UK entities include Acal BFi UK Limited and Acal BFi Central Procurement UK Limited.

The Custom Supply division has operating facilities in the following jurisdictions: Belgium, Denmark, Finland, France, Italy, the Netherlands, Norway, South Africa and Sweden. It also has manufacturing and central operational facilities in Germany and the UK, the primary UK central entity being Acal BFi Central Procurement UK Limited.

Supply Chains

The Group's supply chains are diverse, both geographically (Europe, North America and Asia), and in the nature of the suppliers we work with (size and products supplied). Typically, discoverIE has long and established working relationships with our suppliers, from whom we source raw materials for manufacturing purposes as well as electronic, photonic and medical products.

We continue to work on the identification of any potential modern slavery risks in our supply chains and how we might improve our policies and support direct industry action to cause remediation if ever needed. We welcome customer or other stakeholder dialogue toward ensuring the high standards to which we strive.

We are aware that some of the geographical areas in which the Group operates present higher modern slavery risks than others. We seek to mitigate this risk by carrying out due diligence as well as putting in place appropriate procedures and processes.

We are committed to ensuring that there is transparency in our own business and to addressing modern slavery issues should they ever arise. We expect the same high standards in our supply chains.

Further details on the discoverIE Group can be found at www.discoverIEplc.com.

OUR POLICIES

The discoverIE Group promotes ESG policies and procedures across the Group which take into account the interests of the Group's employees, the need to foster responsible business relationships with suppliers, customers and others, the impact of the Group's operations on workers, the community and the environment, and the maintenance of high standards of business conduct. These ESG policies are part of the Group’s framework for ensuring that our businesses operate transparently and with integrity and enable mitigation of risk, including potential modern slavery risks.

Our policies and procedures include the following:

  • Anti-Bribery and Corruption Programme
  • Business ethics
  • Whistleblowing
  • Health and Safety
  • Board Diversity Policy

As well as the existing codes of conduct already in place across the Group, the Group will be rolling out a new Group-wide Supplier Code of Conduct in the coming months and then conducting additional audits of our top suppliers against that Code.

This will be in addition to local operating companies' policies, procedures and codes of conduct, all of which remain under review.

RISK ASSESSMENT PROCESSES

discoverIE has risk management, internal audit and due diligence processes in place to support the identification, assessment and management of risks associated with both existing and newly acquired companies and the development of relationships with new suppliers. As noted above, additional audits of our top suppliers will be conducted on a Group-wide basis in the coming year.

discoverIE maintains a Group risk register, which includes an evaluation of the risks associated with supply chains and labour practices, such as modern slavery risks.

As with all policies and procedures, due diligence processes on existing and new suppliers are regularly reviewed to ensure they remain appropriate and fit-for-purpose.

Supplier Assessment

With regards to workers of suppliers and contractors onsite at discoverIE facilities, such as cleaners, security guards, etc., we work to ensure their legal rights are supported throughout our contractual terms.

Acquisitions

As part of the acquisition process, we undertake thorough financial, legal and commercial due diligence on companies we acquire, such as employee and customer contracts, general regulatory compliance and employment practices. Post-acquisition, the Senior Internal Auditor meets with local management to provide awareness and training on all Group policies. Where an acquisition is a bolt-on for an existing business, training is provided by the relevant operating company’s senior management, with oversight provided by Group. Following the acquisitions of Phoenix America, Limitor and Control Products Inc, our ESG policies and their incorporation were discussed with the senior management of those businesses.

Any potential risks relating to modern slavery that are identified during due diligence are incorporated in the post-acquisition integration plans with a view to removing the risk.

Training

We expect our employees to be conversant with and to fully observe Group policies and procedures, including those on modern slavery, anti-bribery and corruption, whistleblowing, health and safety and business ethics.

To supplement this, the Group has previously engaged external Supply Chains Human Rights consultants to brief key members of our top management on some of the potential risks in our global and Asia supply chains. Similar training will be considered in future.

OUR EFFECTIVENESS IN ELIMINATING MODERN SLAVERY

We will continue to review our internal processes to ensure that our own operations are free from modern slavery, so far as possible, and that we have robust systems in place to identify and manage such issues within our supply chains and businesses.

Nick Jefferies
Group Chief Executive, discoverIE Group plc
Date: 26 July 2021