California Transparency in Supply Chains Act

As of January 1, 2012, California’s Civil Code section 1714.43 (California Transparency in Supply Chains Act of 2010) requires certain manufacturers and retailers to provide website information concerning their efforts to address the issues of forced labor, slavery, and human trafficking within the supply chain. The purpose is to allow consumers to make better and more informed decisions about the products they buy and the companies they support. To this end, the law requires QSC to inform the public as to how it has addressed the following issues:

1. Verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.

2. Audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.

3. Certification by direct suppliers that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

4. Internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

5. Training of company employees and management who have direct responsibility for supply chain management on issues of human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

QSC has implemented a Supplier Code that not only addresses issues of forced labor, slavery and human trafficking, but also addresses a number of other important employment practices, including:

1. The ILO Convention No. 138 on the Minimum Working Age
2. The ILO Convention No. 111 on Discrimination
3. Workplace Environment
4. Safety and Health
5. Respect of Privacy
6. Anti-Bribery
7. Environmental Sustainability

QSC’s largest suppliers have signed this code. All new suppliers will be requested to sign the code.

CA Transparency in Supply Chains Act Statements

(1) Verification of product supply chains to evaluate and address risks of human trafficking and slavery.

QSC regularly evaluates our supply base using QSC personnel. We do not employee third party evaluators.

(2) Audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.

QSC audits our largest and our most critical suppliers at least annually. These audits are conducted by QSC personnel and not conducted by a third party, and are not unannounced. We are currently in the process of adding audit questions regarding human trafficking and slavery to our existing audit material.

(3) Certification by direct suppliers that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

QSC’s largest suppliers have signed, and all new QSC suppliers will sign, the QSC Supplier Code which includes language that meets the California Transparency in Supply Chain Act of 2010.

(4) Internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

QSC is currently developing our internal accountability standards and procedures for employees and contractors regarding slavery and trafficking. The standards will include corrective action up to and including termination for violation of the standards.

(5) Training of company employees and management who have direct responsibility for supply chain management on issues of human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

Executive management responsible for the QSC Supply Chain, as well as QSC Supply Chain staff, have been trained on the California Transparency in Supply Chain Act and the QSC Supplier Code.