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Li & Fung ( Phils.) Inc.

The specialist in the sourcing of high-volume, time-sensitive consumer goods with:

The specialist in the sourcing of high-volume, time-sensitive consumer goods with:

Li & Fung Trading GroupLi & Fung Trading Group

• Over 100 years of history

• Over 8,000 employees world-wide

• Over 100 years of history

• Over 8,000 employees world-wide

Li & Fung Trading MissionLi & Fung Trading Mission

To be the premier global consumer products trading company delivering

the Right product

at the Right price

at the Right time

To be the premier global consumer products trading company delivering

the RRightight product

at the RRightight price

at the RRightight time

TYPICAL CODE OF CONDUCT

1. EMPLOYMENT PRACTICES

• Wages and Benefits• Working Hours• Child Labor• Prison Labor/ Forced Labor• Discrimination• Disciplinary Practices

2. ETHICAL STANDARDS

3. ENVIRONMENTAL REQUIREMENTS

4. HEALTH AND SAFETY

5. LEGAL REQUIREMENTS6. SUBCONTRACTORS AND SUPPLIERS TO

VENDORS COMPLIANCE

7. CORRECTIVE ACTION

C o o r d in a te d G lo b a l N e tw o r k7 0 O f f ic e s in 4 0 C o u n t r ie s

C o o r d in a te d G lo b a l N e tw o r k7 0 O f f ic e s in 4 0 C o u n t r ie s

E u r o p e / M e d i te r r a n e a n(1 1 L o c a t io n s )

E u r o p e / M e d i te r r a n e a n(1 1 L o c a t io n s )

Is ta n b u lIs ta n b u l

C a ir oC a ir o

O p o r t oO p o r t o

L a L a S e u DS e u D ’’ u r g e l lu r g e l l

T u n isT u n isD e n iz l iD e n iz l i

Iz m irIz m irF lo r e n c eF lo r e n c e

T u r i nT u r i n

M a n c h e s te r ,M a n c h e s te r ,A m s te r d a mA m s te r d a m

M a u r it iu sM a u r it iu s

M a d a g a s c a rM a d a g a s c a r

D u r b a nD u r b a n

A fr ic a(4 L o c a t io n s )

A fr ic a(4 L o c a t io n s )

In d ia n S u b c o n t in e n t(1 1 L o c a t io n s )

In d ia n S u b c o n t in e n t(1 1 L o c a t io n s )

S o u th e a s t A s ia(9 L o c a t io n s )

S o u th e a s t A s ia(9 L o c a t io n s )

H o n d u r a sH o n d u r a s

G u a te m a laG u a te m a la

A m e r ic a s(9 L o c a t io n s )

A m e r ic a s(9 L o c a t io n s )

G r e a te r C h in a & N o r th A s ia(2 1 L o c a t io n s )

G r e a te r C h in a & N o r th A s ia(2 1 L o c a t io n s )

SOCIAL COMPLIANCE/CLASSIFICATION OF CUSTOMER

Depending on the customer requirement towards social compliance as well as performing our due diligence towards Li & Fung, each customer will be classified as follows:

LEVEL 3 CUSTOMERCustomer that requires 3rd party auditing or that have their own

requirements.

LEVEL 2 CUSTOMER Customer that does not require any 3rd party auditing and is reliant

on Li & Fung to perform our due diligence

LEVEL 1 CUSTOMERCustomer that does not require any form of compliance. In this

case, we apply and treat them as LEVEL 2 Customer.

SUCCESSFUL VENDOR/SUPPLIER MUST MEET THE FOLLOWING COMPLIANCE REQUIREMENTS

1. SOCIAL COMPLIANCE

2. TECHNICAL COMPLIANCE

3.COUNTRY OF ORIGIN COMPLIANCE

4. C-TPAT COMPLIANCE (FOREXPORT TO US ONLY)

C-TPAT ( Customs Trade Partnership Against Terrorism) is a US Customs initiative to strengthen security of the overall supply chain.

SOCIAL COMPLIANCE ISSUES

• Wages and Benefits (minimum wage, overtime, night time pay, SSS, Medicare and Pag-ibig coverage.• Working Hours (excessive overtime, more than 60 hrs per week work schedule)• Child Labor (employing children below 14 years old• Prison Labor / Force Labor• Discrimination• Disciplinary Pratices / harassment

SOCIAL COMPLIANCE RATINGS

1. NI - No Issues2. CI - Continuous Improvement3. IA - Immediate Action4. ZT - Zero Tolerance (Blacklist)

TECHNICAL COMPLIANCE ISSUES

• Housekeeping and Maintenance of Equipments• Pre-Production Measures• Quality Assurance Measures• Product Integrity

Mandatory Requirements of passing Technical Compliance• Broken/Used Needle Policy (Garments)• Sharp Tool Control

TECHNICAL COMPLIANCE ISSUES

Rating scale of 0 to 100Minimun Passing Score is 40

COUNTRY OF ORIGIN ISSUESLi & Fung takes a very serious view towards Country of Origin (C/O)

Compliance and Trans-shipments Laws, it requires ALL vendors and factories with the Country of Origin Rules

COUNTRY OF ORIGIN ISSUESRating is similar to Social Compliance, but eventually be

classified either as NI(No Issues) or ZT (Zero tolerance)

C-TPAT COMPLIANCE ISSUES OR KEY AREAS OF EVALUATION

a. Physical Securityb. Access Controlc. Procedural Securityd. Information Technology Securitye. Personnel Securityf. Security Training and Awarenessg. Conveyance & Container Securityh. Business partners

C-TPAT COMPLIANCE ISSUES OR KEY AREAS OF EVALUATION:

Scoring System classified as:Grade A - 81% to 100%Grade B - 71% to 80%Grade C - 61% to 70%Unacceptable - Below 60%

Ceremonial turn over of relief goods.

The representatives together with General Bataoil.

RELIEF & MEDICAL MISSIONRELIEF & MEDICAL MISSIONRECIPIENT: NAVOTAS FIRE VICTIMSRECIPIENT: NAVOTAS FIRE VICTIMS

RELIEF & MEDICAL MISSIONRELIEF & MEDICAL MISSIONRECIPIENT: NAVOTAS FIRE VICTIMSRECIPIENT: NAVOTAS FIRE VICTIMS

The donations being turned over to the staff of The Army Reserve and Marine Command.

OUTREACH PROGRAM FOR OUTREACH PROGRAM FOR TYPHOON REMING VICTIMS IN TYPHOON REMING VICTIMS IN

BICOLBICOL

Mr. Eliseo C. MirandaVice President / Branch Manager

Li & Fung (Phils.) Inc.

&

FOBAP PRESIDENT