At Varni Labs FZE, our core mission is to revolutionise the financial services ecosystem through innovative stablecoin and blockchain-enabled solutions, while maintaining the highest standards of regulatory compliance and ethical conduct. Alongside this mission, we continue to place strong emphasis on Environmental, Social, and Governance (ESG) principles, recognising that responsible and sustainable business practices are fundamental to long-term value creation, stakeholder trust, and regulatory alignment.

As a Virtual Asset Service Provider (VASP) operating under the regulatory oversight of the Virtual Assets Regulatory Authority (VARA) in Dubai, we acknowledge that our responsibilities extend beyond financial and technological performance. They include meaningful contributions towards environmental stewardship, social responsibility, and the maintenance of a robust governance framework. This bi-annual ESG report provides an update on our ongoing initiatives, sustained practices, and incremental enhancements implemented during the current reporting period, while maintaining continuity with our previously disclosed ESG commitments. This report is prepared to satisfy the Mandatory ESG Disclosure Requirements set out in Rule V.E of the VARA Company Rulebook, and forms part of our continued practice of raising awareness of ESG-related activities and opportunities through our website and social media channels.

Environmental sustainability remains a core tenet of Varni Labs FZE’s operational philosophy. As a technology-driven organisation, we are conscious of the environmental impact associated with digital infrastructure, energy consumption, and resource utilisation. During the current reporting period, we have continued to focus on reducing our environmental footprint while ensuring that system resilience, security, and performance are not compromised.

Our environmental approach is embedded within our broader risk management and operational decision-making processes. We recognise that environmental considerations, including energy efficiency and responsible resource management, are increasingly relevant to the sustainable growth of Virtual Asset Service Providers, and we continue to monitor emerging best practices in this area.

Varni Labs FZE continues to integrate sustainability into its day-to-day operations through environmentally responsible office practices. The use of compostable and biodegradable materials remains embedded across our operational activities, replacing traditional plastic-based alternatives wherever practicable. Efforts to minimise single-use plastics continue to be reinforced through internal awareness initiatives and the promotion of reusable materials.

In addition, we continue to emphasise waste reduction and responsible disposal practices across all physical office locations. These measures form part of our broader commitment to responsible consumption and operational efficiency, supporting a culture of environmental awareness across the organisation.

Our core technology infrastructure continues to be hosted on the Google Cloud Platform (GCP), which operates on renewable energy and maintains a carbon-neutral commitment. By leveraging cloud-based infrastructure aligned with renewable energy sourcing, Varni Labs FZE significantly reduces indirect emissions associated with data processing and hosting activities.

During the current reporting period, we have continued to monitor system usage and processing requirements to optimise workflows and reduce unnecessary compute consumption. While our operations do not involve energy-intensive activities such as crypto mining or on-premises data centres, we remain mindful of the broader environmental impact of digital services and continue to assess opportunities to enhance energy efficiency as part of our operational planning.

As part of our ongoing efforts to promote a healthy and sustainable working environment, air purification systems remain installed across office premises to improve indoor air quality. These measures contribute to employee well-being by reducing indoor pollutants and supporting a comfortable and productive workplace environment.

Varni Labs FZE remains firmly committed to fostering a workplace culture that promotes inclusivity, fairness, professional growth, and employee well-being. Our social responsibility framework extends beyond internal workforce considerations to include customer protection, responsible service delivery, and adherence to applicable regulatory expectations.

Diversity, equity, and inclusion continue to form an integral part of our organisational values. During the reporting period, we have maintained our focus on providing equal employment opportunities and supporting diverse representation across teams. Our recruitment and talent development practices aim to encourage broader participation, including improved gender diversity within the fintech and virtual assets ecosystem.

We continue to promote an inclusive workplace culture where all employees are treated with respect and are provided with equal opportunities for professional advancement, irrespective of gender, background, or personal characteristics. Up-to-date information on our diversity and inclusion initiatives is maintained in a prominent, publicly accessible section of the Company’s website.

Maintaining a safe and respectful working environment remains a priority for Varni Labs FZE. Our Prevention of Sexual Harassment (POSH) policy continues to be enforced across the organisation, supported by internal awareness initiatives and clear reporting mechanisms. These measures are designed to ensure that employees are able to perform their roles in an environment free from harassment, discrimination, or inappropriate conduct.

We recognise that employee well-being and continuous skill development are critical to organisational resilience and long-term success. Varni Labs FZE continues to provide access to learning and development resources, including online courses and skills enhancement programmes. These initiatives support employees in developing relevant expertise while contributing to the Company’s operational and compliance capabilities.

Customer protection remains central to our social responsibility commitments. Throughout the reporting period, we have continued to maintain and enhance our Know Your Customer (KYC), Anti-Money Laundering (AML), and counter-fraud controls in line with UAE regulatory requirements. Regular employee training and internal reviews support our zero-tolerance approach to fraud, misconduct, and data breaches, reinforcing trust and confidence among customers and stakeholders.

Strong governance and ethical leadership underpin all aspects of Varni Labs FZE’s operations. Our governance framework is designed to promote transparency, accountability, and regulatory compliance, while supporting responsible decision-making at all levels of the organisation. ESG considerations are integrated into our governance and risk management processes to ensure alignment with both regulatory expectations and long-term business sustainability.

Data security remains a critical governance priority given the nature of our business and the regulatory environment in which we operate. Varni Labs FZE continues to maintain a comprehensive cybersecurity framework, supported by periodic third-party security assessments and penetration testing. These measures are designed to identify vulnerabilities, strengthen system resilience, and safeguard sensitive customer and business information.

In parallel, our continued transition towards digital-first processes reduces reliance on physical documentation, supporting both environmental objectives and enhanced data protection through encrypted storage and controlled access mechanisms.

Varni Labs FZE maintains an active and evolving risk management framework aligned with applicable UAE Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations. Policies and procedures are reviewed periodically to reflect regulatory developments and emerging risks. Mandatory compliance training is conducted to ensure that employees remain aware of their regulatory obligations and the importance of maintaining strong compliance standards.

Ethical conduct and transparency remain fundamental to our governance culture. Varni Labs FZE enforces a comprehensive Anti-Bribery and Corruption Policy, reflecting a strict zero-tolerance approach to bribery, corruption, and unethical behaviour. Clear guidelines govern gifts, hospitality, conflicts of interest, and third-party engagements, ensuring that business activities are conducted fairly and transparently.

Confidential reporting mechanisms remain available to employees and stakeholders, supported by non-retaliation protections. Regular policy communication and training reinforce ethical expectations and ensure continued alignment with applicable local and international anti-corruption standards.

Sustainability and diversity and inclusion considerations are factored into Varni Labs FZE’s business strategy and VA Activity processes through ongoing oversight by senior management, who review material ESG-related risks and opportunities as part of broader strategic and operational decision-making. Where the Company’s activities involve engagement with counterparties, service providers, or reserve-asset arrangements, relevant due diligence processes have regard to reputational, regulatory, and sustainability-related factors alongside standard commercial and compliance criteria.

With respect to talent, the Company’s recruitment and workforce development practices, as described under Diversity, Equity, and Inclusion above, form the primary methodology by which talent-related ESG considerations are identified and factored into hiring and development decisions, with an emphasis on broadening representation within the fintech and virtual assets ecosystem.

As an early-stage Virtual Asset Service Provider, Varni Labs FZE currently manages sustainability and diversity and inclusion risks and opportunities primarily through the qualitative governance policies and practices described throughout this report. The Company recognises that Rule V.E.2(a) of the VARA Company Rulebook envisages disclosure of metrics and targets, and is in the process of developing a proportionate metrics and target-setting framework, covering areas such as workforce diversity, training completion, and technology resource efficiency, for progressive introduction in future reporting cycles.

During the current reporting period, Varni Labs FZE has continued to strengthen its commitment to environmental sustainability, social responsibility, and robust governance practices. While maintaining continuity with previously established ESG initiatives, we have focused on consistency, monitoring, and incremental enhancement across all ESG pillars.

Looking ahead, Varni Labs FZE remains committed to further maturing its ESG framework in line with regulatory expectations, industry best practices, and stakeholder interests, including the phased introduction of quantifiable ESG metrics and targets as outlined above. We will continue to embed responsible growth, ethical leadership, and sustainable operations at the core of our business strategy.