Conflict Minerals Report of Nayax Ltd.

 

Introduction

 

This Conflict Minerals Report of Nayax Ltd. (the "company" or "Nayax") for the year ended December 31, 2024 is submitted to comply with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the "Rule"), adopted by the Securities and Exchange Commission ("SEC") to implement reporting and disclosure requirements related to Conflict Minerals. The Rule defines "Conflict Minerals" as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten ("3TG"). Pursuant to Rule 13p-1, SEC registrants are mandated to fulfill specific reporting obligations if their products incorporate Conflict Minerals that are necessary to the functionality or production of said products ("Necessary Conflict Minerals"). If the SEC registrant has reason to believe that any of these Conflict Minerals may have originated from the Democratic Republic of the Congo (the "DRC") or any adjoining country sharing an internationally recognized border with the DRC (collectively, "Covered Countries"), or if the registrant is unable to ascertain the country of origin of these Conflict Minerals, the registrant is obligated to file a Conflict Minerals Report with the SEC. This report must detail the due diligence measures undertaken to determine the source and chain of custody of the Conflict Minerals.

 

This Report relates to the process undertaken for Nayax's products that were manufactured or contracted to be manufactured during the calendar year 2024 and that may contain 3TG that are necessary to the functionality or production of such products manufactured or to the products contracted to be manufactured.

 

This Conflict Minerals Report contains forward-looking statements. These statements include statements regarding Nayax's leadership current expectations and assumptions regarding the future implementation of our due diligence process. These forward-looking statements are not a guarantee of performance and are subject to certain risks, uncertainties, assumptions and other factors.

 

Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise.

 

Company Overview

 

The Nayax Group is a global commerce enablement, payments, and loyalty platform designed to help merchants increase their revenue while decreasing their operational costs. Our comprehensive solution includes localized cashless payment acceptance, a management suite, and consumer engagement tools, enabling merchants to conduct commerce anywhere, at any time. As part of our mission to improve customers’ revenue potential and operational efficiency, we are committed to ethical business practices and social responsibility. This includes addressing the issue of Conflict Minerals in our supply chain.

 

In connection with the Rule, Nayax has adopted a policy with respect to our sourcing of Conflict Minerals (the “Conflict Minerals Policy”). The Conflict Minerals Policy can be found on our website at: https://www.nayax.com/conflict-minerals-policy/.

 

 By adhering to its Conflict Minerals Policy, Nayax aims to contribute to the global effort to eliminate the use of Conflict Minerals that finance armed conflict and human rights abuses.

 

1. Reasonable Country of Origin Inquiry

 

We conducted an analysis of our products and found that 3TG could potentially be found in our products that were manufactured or contracted to be manufactured in 2024, and that the 3TG is or could be necessary to the functionality or production of our products. These products include our VPOS Touch reader and Onyx reader.

 

Therefore, in compliance with regulatory requirements and our Conflict Minerals Policy, Nayax conducted a good faith, reasonable country of origin inquiry ("RCOI") to determine whether any of the Necessary Conflict Minerals contained in our products originated from Covered Countries or came from recycled or scrap sources. This inquiry involved reaching out to our suppliers and requesting information regarding the sourcing of these minerals by completion of the standard Conflict Minerals Reporting Template (“CMRT”) as published by the Responsible Minerals Initiative ("RMI").

 

We have determined that requiring our direct suppliers to complete the CMRT, along with following the steps outlined in the "Due Diligence" section below, represents our reasonable efforts to identify the mines or sources of origin for Necessary Conflict Minerals in our supply chain.

 

2. Due Diligence

 

Our responsible sourcing efforts were designed to align, in all material respects, with the Organization for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (2016) and related supplements (the “OECD Guidance”).

 

The six steps defined in the OECD Due Diligence Guidance are: Establish Strong Company Management Systems, Identify and Assess Risk in the Supply Chain, Manage Risks, Carry Out Independent Third-Party Audit of Supply Chain Due Diligence, Report on Supply Chain Due Diligence, Establish a Grievance Mechanism.

 

The actions taken by Nayax according to each step of the OECD Guidance are outlined below:

 

2.1. Establish Strong Company Management Systems

 

Nayax has developed and implemented a Conflict Minerals Policy that commits to the responsible sourcing of minerals. To ensure accountability in Conflict Minerals compliance, our VP Engineering, Yaron Dolev, has been designated to oversee the due diligence process. Additionally, relevant employees have received training on the company’s policy and procedures relating to Conflict Minerals to ensure they are aware of and understand their roles.

 

2.2. Identify and Assess Risk in the Supply Chain

 

Nayax identified and mapped its supply chain for minerals used in its products. The company assessed the risk of sourcing from conflict-affected and high-risk areas by evaluating the countries of origin and the nature of mining operations, and communicated with its suppliers to gather information regarding their sourcing practices and the origins of the minerals used in their products. Nayax's risk-based strategy prioritized suppliers who, as of December 31, 2024, collectively accounted for at least 80% of its expenditures on the manufacturing costs of its finished products shipped in 2024. Through this strategy, Nayax identified a total of 47 relevant suppliers. The company gathered all pertinent data from these suppliers, who were asked to submit a CMRT of version 6.4 or higher, as published by the RMI, to facilitate the monitoring of Nayax's due diligence process. Nayax also communicated with its relevant suppliers through letters that outlined the requirements of the Rule and directed them to online training materials and instructions.

 

2.3. Manage Risks

 

Nayax created a plan to address identified risks, which included strategies for engaging with suppliers and mitigating potential issues related to Conflict Minerals.

 

Nayax reviewed the responses received and for any identified risks, followed up with the relevant suppliers on any responses that were inconsistent, incomplete, or inaccurate, including requiring additional documentation and information on smelters or refiners (“SORs”).

 

2.4. Carry Out Independent Third-Party Audit of Supply Chain Due Diligence

 

We depend on industry-wide initiatives, such as the RMI, to carry out risk assessments at the upstream level. Given that we do not have direct sourcing relationships with SORs of Conflict Minerals, we did not conduct direct audits of these entities within our supply chain.

 

2.5. Report on Supply Chain Due Diligence

 

Nayax's efforts regarding due diligence for conflict minerals in the supply chain are detailed in this report. This Conflict Minerals Report is accessible on our website and has been submitted to the SEC.

 

2.6. Establish a Grievance Mechanism

 

Nayax has established a mechanism to report concerns about Conflict Minerals in its supply chain or submit a grievance, through its dedicated inbox at conflictminerals@nayax.com. Nayax ensures all reports are promptly investigated and addressed, maintaining transparency and accountability in enforcing its Conflict Minerals Policy.

 

3. Results of the Assessment

 

Out of the 47 In-Scope Suppliers, 46 suppliers (98%) successfully completed and returned a CMRT to us. Based on the CMRTs provided by our suppliers, we believe that, to the extent reasonably determinable, the facilities that were used to process the Conflict Minerals contained in the Covered Products included the SORs listed in Annex I below. Annex II to this Report includes (to the extent information was available) the countries from which the supplier-reported SORs may have sourced Necessary Conflict Minerals.

 

As a result of our due diligence efforts, we found that a portion of the Necessary Conflict Minerals used in our products may have originated from the Covered Countries. However, we are committed to working with our suppliers to ensure that these minerals are sourced responsibly and do not contribute to human rights abuses.

 

4. Future Risk Mitigation Efforts

 

Nayax is dedicated to promoting responsible sourcing practices, and we will continue to engage with our suppliers, conduct due diligence, send educational materials, and take appropriate measures to mitigate the risks associated with Conflict Minerals in our products.

 

Looking ahead, Nayax will continue to refine our due diligence processes and enhance our engagement with suppliers to ensure compliance with Conflict Minerals regulations. We will also explore opportunities to support initiatives aimed at improving transparency and accountability in the sourcing of Conflict Minerals.

 

This Report is available on our website and will be updated annually to reflect our ongoing efforts in this area.

Annex 1

 

Names and Locations of Smelters or Refiners

 

 

Annex 2

 

Country of Origin (COO)*

 

 

*As not all of the SORs reported by our suppliers or manufacturers in the supply chain inquiry provided information on the Location of Mine in their CMRTs, and the Company was not able to establish from the SORs complete sourcing information on their Conflict Minerals, it has indicated in the COO the closest indication provided as to the source of Conflict Minerals, i.e. the Smelter Country as reported in the suppliers’ CMRT.

 

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