MODERN SLAVERY AND

TRANSPARENCY IN SUPPLY CHAINS STATEMENT

FOR THE YEAR ENDED 31 MARCH 2021

VTech Holdings Limited (the ultimate parent company in the VTech Group),
VTech Electronics Europe Plc. (UK), VTech Communications Limited (UK)
and Leap Frog Toys (UK) Limited (the UK subsidiaries in the VTech Group),
and VTech Electronics (Australia) Pty Limited and VTech Telecommunications
(Australia) Pty Limited (the Australia subsidiaries in the VTech Group)
(together referred as we, us, our, VTech), make this statement to set out the
steps we have taken to address the risks of modern slavery and human
trafficking in our business operations and supply chains during the financial
year ended 31 March 2021 (FY2021).

This statement is made in accordance with the UK Modern Slavery Act 2015
and the California Transparency in Supply Chains Act of 2010, and with
reference to the Australia Modern Slavery Act 2018. Consultation within
VTech’s subsidiaries has been made for the preparation of this statement
before approval and publication.

Our Organisation Structure and Operations

VTech is the global leader in electronic learning products from infancy through
toddler and preschool ages, and the largest manufacturer of residential
phones in the US. We also provide highly sought-after contract manufacturing
services.

VTech’s electronic learning products range from a simple standalone toy to a

sophisticated learning platform to inspire kids to learn with fun. Our
telecommunication products offer a wide range of telephony, baby care and
communication products for residential and commercial use. As for our
contract manufacturing services, we provide reliable and high-quality services
to our customers in the major product categories of professional audio,
hearables, internet of things and medical devices around the world.

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VTech currently has operations in 15 countries and in the regions of North
America, Europe, and Asia Pacific. VTech’s headquarters is in the Hong Kong
Special Administrative Region and we have manufacturing facilities in China,
Malaysia and Mexico.

In FY2021, VTech had approximately 25,000 employees, including around

1,600 research and development (R&D) professionals in the United States,
Canada, Germany, Hong Kong, Taiwan and mainland China to design and
develop innovative and high quality products for VTech’s customers.

Our Supply Chains

VTech’s major suppliers are manufacturers of printed circuit board, integrated

circuit, metal, plastic parts and other electronic components, of which over
82% are located in China. We have policies and risk management
programmes in place to identify, assess, prevent and mitigate the risks of
modern slavery and human trafficking in our supply chains. These include but
not limited to the compliance of the conflict minerals laws and regulations.

Our Approach to addressing Modern Slavery Risks

VTech has established a Risk Management and Sustainability Committee

(Committee) which reports to the Board of Directors of VTech Holdings
Limited (Board) and the Group’s Audit Committee. The Committee is
delegated with the authority from the Board to review and monitor the risk
management and internal control systems of VTech Group, which include
assessing the effectiveness of the policies and risk management programmes
in addressing the risks of modern slavery and human trafficking along our
supply chains.

We strongly oppose and have no tolerance for child labour, modern slavery or
human trafficking in our supply chains or in any part of our business. We are
also committed to respecting the labour and human rights of all our
employees and fulfilling our statutory obligations. In this respect, we have

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developed and implemented policies, procedures, supplier accountability and
governance measures to prevent child labor, modern slavery and human
trafficking in our business operations and supply chains as detailed below.

Our Internal and External Policies and Governance

The following internal policies were in place to cover all entities within the
VTech Group in FY2021.

Ten principles of the UN Global Compact

We adhere to and implement policies that are consistent with the 10 UN
Global Compact principles, in relation to the protection of human rights and
the elimination of forced labour and child labour.

Code of Conduct for Employees

Our Code of Conduct for our employees (Employee Code) sets out the
guiding principles for maintaining our high standards of integrity, honesty and
behaviour, that all employees are expected to meet. We also provide regular
training for our employees on the Employee Code.

Employees are required to confirm in writing upon joining VTech and declare
annually that they have understood the Employee Code and how it applies to
their role and position in VTech. Employees are also required to strictly follow
the Employee Code, which ensures that the Group operates in accordance
with the highest standards of business behaviour and ethics in our
engagement with customers, business partners, shareholders, employees
and the business community.

Freely Chosen Employment

We do not use forced or prison labour. We ensure that the terms of
employment are voluntary. Our employees work at VTech of their own free will
and are free to leave the company upon reasonable notice under the relevant
company regulations. We do not require employees to lodge deposits or hand
over passports or work permits as a condition of employment, unless required
by applicable law.

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No Child Labour
We comply with all appropriate local and international regulations in relation to
the restrictions on the employment of child labour.

Freedom of Association
We ensure our employees have the freedom to join any organisations or
professional bodies of their own choices.

Anti-slavery
Modern slavery and human trafficking is not tolerated in VTech. We are
devoted to combating modern slavery and human trafficking, and committed
to respecting and treating our employees with dignity. We do not tolerate any
forced labour and we do not accept any physical and financial punishment for
employee wrongdoing.

Benefits and Wages

We ensure that the remuneration and benefits for our employees comply with
or exceed the minimum legal requirements of the country where employees
are employed. We do not make any deductions from wages as a disciplinary
measure. Since the regulations of law enforcement for some of the sites that
we operate are not fully established, collective bargaining in these sites could
not be comprehensively attained. However, we strive to engage with our
employees and understand their needs through different communication
channels, and we conduct regular communication meetings to create direct
dialogue with our employees.

Overtime Policy
Overtime is voluntary and employees are compensated for overtime in
accordance with local laws.

Equal Opportunity and No Discrimination Policy

We ensure that our hiring, compensation, training, promotion, termination and
retirement policies and practices do not discriminate on the grounds of age,
sex, marital status, race, religion, disability or any other non-job related factors.

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Remuneration is determined with reference to performance, qualifications and
experience.

Harassment and Abuse

We do not tolerate any physical, sexual, psychological or verbal harassment
or abuse towards our employees.

Code of Conduct for Suppliers

In addition to the above internal policies, VTech has procurement policies in
place requiring our suppliers to comply with VTech’s Code of Conduct
agreement (Supplier Code), which includes our standards on corporate social
responsibility (CSR) and environmental protection. The principles enshrined in
the Supplier Code are in line with the standards on modern slavery with
reference to the UK and Australia Modern Slavery Acts and the California
Transparency in Supply Chains Act.

Verification

VTech strives to establish and maintain close working relationships with its
suppliers. Our employees visit the factories and facilities of the suppliers
before we decide to do business with them. VTech therefore does not rely
upon third parties to verify its product supply chains in order to evaluate and
address risks of modern slavery and human trafficking.

Due Diligence Processes in Supply Chains

VTech has a supply chain management system in place to monitor the quality
of our suppliers as well as their ethical performance. We also conduct supplier
survey on a regular basis to ensure that modern slavery and human trafficking
is not taking place in our business operations and supply chains. Prior to
doing business with VTech, our suppliers are required to confirm their
commitment to our standards on CSR and human rights protection, which will
also be reviewed by our procurement team.

Since VTech sources materials from different countries, we assess the

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modern slavery risks in our supply chains by country and each of our
suppliers is given a risk category rating based on the country in which they
operate and the nature of materials they supply to VTech. As modern slavery
risks evolve and emerge in response to changing social, economic and
political trends, we use our knowledge from our industry partnerships together
with our supply chain insights to stay abreast of the latest developments in the
relevant countries.

All VTech’s new suppliers need to go through a comprehensive supplier audit

to ensure that they meet VTech’s CSR standards, which are established
based on Electronic Industry Citizenship Coalition, International Labour
Organisation Conventions on Labour Standards, ISO 14001, and ISO 45001.
Our audits are conducted by VTech employees, who have been trained to
identify and report any non-compliance incidents. Following the audit process,
if there are any areas of non-compliance identified in the supplier’s factories,
we collaborate with the supplier to develop a corrective action plan. The
supplier is required to propose corrective actions with an implementation
schedule in order to eliminate the identified deficiencies. Our teams follow up
the corrective actions to ensure that the areas of non-compliance have been
improved and managed accordingly. We also provide training to suppliers on
continuous improvement processes to facilitate their implementation of any
corrective actions.

In FY2021, we audited 186 suppliers on their CSR performance including the

topics on modern slavery and human trafficking. We do not tolerate forced
labour, child labour, and human trafficking in our supply chains. If any issues
are identified and not resolved in accordance with our requested time frame
for any suppliers, we shall terminate the business relationship with them. In
FY2021, all audited suppliers passed the CSR audit.

Certification

While VTech does not require its suppliers to certify that materials
incorporated into their products comply with the modern slavery and human
trafficking laws of the countries where they are doing business, VTech's

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standard purchasing agreement includes requirements that our suppliers
need to comply with all applicable laws, including laws that govern modern
slavery, human trafficking, and other exploitative labor practices.

Internal Accountability

All VTech employees are required to comply with our written, company-wide
Employee Code, which promotes honest and ethical conduct, as well as legal
and regulatory compliance. VTech’s Employee Code requires all employees to
follow all applicable laws, including those prohibiting forced labour or human
trafficking.

Any issues or enquiries raised by our employees through different

communication channels will be handled and investigated by the company
with care and in a confidential manner. We also have Whistleblowing Policy in
place to ensure that all reported incidents are promptly reviewed by the Group
Chief Compliance Officer, who reports to the Group’s Audit Committee, to
determine the mode of investigation and subsequent corrective action. In
FY2021, no report about forced labour or human trafficking was received
under the Whistleblowing Policy.

Training

We have procedures in place to ensure that our policies are properly

implemented throughout the VTech Group. Apart from conducting employee
interviews and surveys, on-site visits and audits on a regular basis, we also
provide training on CSR including human rights protection for our employees
and suppliers.

As part of the CSR training, VTech’s employees who engage with suppliers
are expected to report any potentially unlawful or unethical conduct that
comes to their attention, including the presence of modern slavery or human
trafficking in VTech’s supply chains. In FY2021, we delivered over 54,000
hours of human rights training for our employees.

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VTech works closely with our upstream suppliers to further improve their
sustainability and CSR performance. We conduct annual supplier CSR
workshop for our key suppliers focusing on enhancing their knowledge of
supply chain CSR management and social responsibility practices, including
topics on elimination of forced labour and child labour, and human trafficking.
In FY2021, due to the COVID-19 pandemic, the supplier engagement
workshop was conducted virtually with guidance provided for our suppliers to
meet our Supplier Code and CSR requirements.

This statement has been approved by the Risk Management and

Sustainability Committee of VTech Holdings Limited for the year ended 31
March 2021.

Allan WONG Chi Yun

Chairman and Group Chief Executive Officer
VTech Holdings Limited

27 September 2021