& Regulatory Compliance System

1. Hazardours Substances Free & Regulatory Compliance System HENZ — Principle and Operation

2. SVHC in Articles: The Challenges Practicalities and Enforcement • 1990’s conflicting pressures for change: • Industry concerns over burden of chemicals legislation but • Pressures from consumer groups • Pressures from green NGO’s • Pressures to replace substance of concern Need to know what chemicals are in products and what risk is there to the user and the environment • The original plans for REACH in 1990 emphasised the need to identify risk and ensure risk management RISK = HAZARD x EXPOSURE

3. The Challenges – identification of SVHC Courtesy of Volkswagen

4. The Challenges – For Industry • Information from suppliers • Increasingly difficult the longer the supply chain • Managing Communication • Obtaining and verifying data • Can suppliers be trusted? • Do they know the materials used, or have they been analysed? • Is there a chain of custody to demonstrate regulatory compliance? • COST

5. The Challenges – Consumer Reactions • Many consumers already asking about the presence of Candidate List Substances in the products they buy with a view to making a choice of “to buy or not to buy” • Citing “Public right to know” under Article 33 of REACH • Competitors reporting each other • Consumers • Looking for compliant, caring retailers and suppliers • Impact on Business Reputation and Shareholder Value • Public Pressure • More Public scrutiny • INFLATIONARY PRICING PRESSURES

6. Eurofins – CIRS The Practical, Cost Effective Supply Chain Solution to Ensure Chemical Compliance • Collection, Storage and Management of Compositional Information throughout Supply Chain • Unique, extensive and verified databases • >10,000 Materials linked to • >180,000 Substances • >15,000 Substances of Concern • >250 Chemical Regulations • Verification of Bill of Materials/ Bill of Substances • Calculation of Bill of Substance from Bill of Materials • Analysis of Materials/ Components and Articles against Global Chemical Regulations • Web based, secure and easy access to information to provide smooth communication through the Supply Chain • Internationally Supported and Managed by Eurofins - CIRS

7. HSF Requirement Start HSF Guide Developing HSF & CRC Requirement BOM+BOS Training staff and vendors Assessment Report Information collection and management in supply chain + Processing Report Regulatory compliance assessment + Self- Declaration +PSDS Implement of regulatory compliance measures + Proof Preparation of regulatory compliance documents Communication in supply chain Over Managed by manufacturer Supported by Eurofins-CIRS Operated by Suppliers（DIY）/Eurofins-CIRS（DIFM） The key of Hazardous Substance Free and Chemical Compliance is product composition data collection, regulatory compliance assessment, documentary evidence preparation and supply chain communication. This requires processes for smooth communication flowing throughout the supply chain with support on understanding regulations, materials and chemical substances. HENZ Solution Outline

8. Legend: Start HENZ Procedure Vendor Action DU Action Vendor enter material data of products in HENZ system Lab Action HENZ Action HENZ system generate substance data of products HENZ system assess regulatory compliance of products Find material of very high concern? YES Existing test data / evidence? YES NO NO Test SVHC for material of very high concern Meet regulatory compliance? NO YES Implement of regulatory compliance measures (follow regulatory requirement) Submit data to DU Supplementary data Is the data Complete ? NO Reject the data Test for data verification The key of Hazardous Substance Free and Chemical Compliance is product composition data collection, regulatory compliance assessment, documentary evidence preparation and supply chain communication. YES Accept data for prove regulatory compliance OVER Test for quality assurance

9. Introduction to HENZ System • Build and maintain the supply chain management; • Collect and manage the product composition data; • Analyze the hazardous substance free and regulatory compliance situation; • Provide abundant proof of regulatory compliance. HENZ system enables users to: HENZ is based on the B/S (Browser/Server) model. It is used to manage the product composition information, generate the regulatory compliance assessment and preparing regulatory compliance documents. The system is able to help users implement regulatory compliance with minimum costs.

10. HENZ Functions

11. Supplier Chinese/English Basic/Plus/Extra permission …… Interface for administration Administrator Down stream user Interface for user HENZ Structure 250 regulations 15,000 Hazardous S. 180,000 Substances 10,000 Basic materials …… Basic data Product data Logic system User info Attach -ment Auxiliary data Materials data Parts data Products data Structure info …… if (!empty($reguSubs)) $conclusion= " Found REACH Restricted substances,……"; …… Material type Region code …… Documents Pictures …… Basic information Login record …… HENZ consists of a large database, a logical system and a user interface.

12. HENZ Data Product Product P1 Part P2 Material M1 Substance S S S1 S S2 S S3 M2 S S4 M3 S S5 S S6 S S7 Pn S S8 M4 S S9 S S10 Mn S S11 S S12 HENZ manages both data at product, at material and substance level. All traced back through the structure of the Article. S S13 S Sn

13. HENZ Materials Classification HENZ material classification is set according to the basic requirements governed by the rules of industry and regulations; combined with the actual operation. This includes classification of basic materials such as metals, non-metallic inorganic materials, organic polymers, functional and consumable materials. Classification helps users quickly find the materials they are using in an Article, and identify in the substance list.

14. HENZ Products Category To assist in the assessment of products against the Chemical Reglations, HENZ employs set Product categories Since updated regulations may involve the applicable product category adjustment, so the product classification of HENZ will be updated.

15. Establish the relationship between supply chain Down stream useruser Start Supplier Launch invitation to establish a partnership Over Assessing the the invitation Accept？ reject no yes HENZ Supply Chain Management Communication in the supply chain is a primary function of the HENZ system. Supply chain management. Through supply chain management, our clients control their supply chain ensuring that only recognized vendors are in their supply chain. This function allows for easy search for information on suppliers and downstream users and provides a check on their response to information etc.

16. Start Material generation Product generation Input from basic material? Input from BOM? Determine the basic material Determine the BOM Confirm to enter Enter data of material Enter data of product confirm to enter Modify the material Enter data of substance Assemble parts and materials Modify the product Save material-substance Save product data Over HENZ Data Enter Data input consists of either manual input of the Bill of Materials or import from vendors and clients systems.

17. Start HENZ Data Management Data submit[1] Data updata[2] Data modify[3] Data detail[5] Documents generate [7] Determine query mode (product or material) List of product or material Determine query object Data operate Data delete[4] Object detail Data copy6] [1] Data submit refers to the operating that submit data to downstream user through HENZ; [2] Data update refers to the operating that modify the structure of the product; [3] Data modify refers to the operating that edit the data of the product like name, model, categoryand so on; [4] Data delete refers to the operating that delete the data of the product from database; [5] Data detail refers to the operating that list the information of the product in detail; [6] Data copy refers to the operating that copy the data of the product to generate a same product or material; [7] Documents generate refers to the operating that output compliance documents automatically. Over

18. P1 M1 P2 S1 S2 M1 BOM S3 S1 S2 S3 S Database of basic materials S S S S S HENZ Material-Substances Data Users can select the corresponding material from the material database of HENZ system to acquire the material composition data.

19. HENZ Assessment Schmatic Start BOM BOS One by one control Regulatory database, update with regulations Synchronously by CIRS Assessment Report Material database stored 50,000 basic material data, including the material name, standard number and the list of substances …… HENZ system realizes the regulatory compliance assessment function through contrasting the product composition to the hazardous substances regulated by chemical regulations and further making clear the obligations related with chemical compliance. Over

20. Start Display Relevant Regulations with Explanation Display Assessment Result Save Assessment Report Print Evaluation Report？ Yes Assessment Report No HENZ Assessment Procedure Confirm the Product to Be Assessed Confirm the Country or Area of Product Launch Start Assessment Process Assessment Process [1] Over Results of Chemical Regulatory assessments are saved in system database for automatic uploads into our clients own regulatory compliance systems, or for direct access through the web portal. Maintained data is available for automatic reassessment as and when regulations change.

21. Start Result of assessment[E] HENZ Data Processing Determine the product to process Display of the result List the result of assessment Process the result of assessment Print report ? Save the report Print the report print save Over The assessment will list the substances which regulated by regulations in the materials of product, HENZ provides the function to process the substances to meet the requirements of the regulations.

22. Start HENZ Information Transfer Search product or material Determine the DU to transfer information Enter the DU’s code Submit Accept the info？ Return to supplier No Yes Save the information The supply chain communication function enables the upstream users to submit the product, material and substance data and relevant documents to the downstream users. Data submit can be completed by selecting the products/materials and the objects. Over

23. Down stream user Supplier Enter product-materials data Receive product-material-substances data and compliance documents Set rules of data integrity BOS+ Assessment Report BOM HENZ Verify Meet rules? Return to supplier for supplement of data Submit to down stream user HENZ Data Verification HENZ includes the data verification function, which helps downstream users analyze and verify the data submitted by the upstream users and make decisions to accept or reject the data based on the verification results.

24. Start Generated by HENZ from BOM which is entered by vendor BOS Checking of data integrity Meet the requirements of data integrity? No Reject for data supplement Requirement of data integrity set by downstream user Yes Submitting data to downstream user Over HENZ Quality Assurance Verifying of data accuracy The quality control of HENZ system can be realized by data integrity and data consistency. Data integrity demands the completeness of the essential data, which can be verified by the system automatically according to the integrity conditions set by the users. Dada consistency refers to how the product composition data match the real products, which need to be confirmed by necessary tests.

25. HENZ Safety Strategy Internet Application Server Backup Server IDS IDS The Security of HENZ includes the following levels: Operating system platform security. The operating system platform of HENZ is based on digital certificates-firewall model; Application system security. Measures are taken including… Application data security. Users can ensure the application data security via pluralized data backup, user register, logging in, recording, etc..

26. Start HENZ Data Verification Enter product data Save the bill Billing the cost of the product [1] Generate the invoice regularly Submit the invoice Charging operation Save charge record Over

27. Organization Helpline Manager - Helpline design, operate, monitoring and Improve Consultants - Online customer service Vendors Downstream User Trainers - Training lectures Engineers -Technical Support on BOM COO - Project Monitoring and liaison with Kingfisher Quality Manager - Record, Review,Feedback, Assess and report Regulations support - Interpretation of regulations Data support - Data of materials and substances IT Support - Maintenance and Development Technical & Regulatory HELPLINE Technical and regulatory support is always needed in the process of hazardous substance free and regulatory compliance. Helpline will provide the supporting services for you.

28. HELPLINE Facilities

29. Example — Login

30. Example — Homepage

31. Example— Materials management

32. Example — Material in detail

33. Example — Products Management

34. Example — Product in detail

35. Example — Assessment

36. Example — Assessment Report

37. Example — Assessment Report - Result

38. Example — Assessment Report – Conclusion & Suggestion

39. Example — Bill Information

40. Example — Statistic-1

41. Example — Statistic-2

42. ThanksHENZ will provide the best service for your chemicals policy!