08-06-15

To our stakeholders:

I am pleased to confirm that Red Solutions FZ-LLC reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti- Corruption.

In this annual Communication On Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely Yours

Simon Precious
Chief Executive Officer- Red Solutions FZ-LLC

Red Solutions shareholders and management are committed to upholding human rights as referenced in the “Universal Declaration of Human Rights’ and affirms its belief that every single human is entitled to enjoy his or her human rights without discrimination as to race, colour, sex, language, religion, political or other opinion, national or social origin, property birth or status.

Red Solutions assessment and setting of its policy and goals was undertaken after completing the ‘Human Rights Compliance Assessment' (HRCA) as issued by the Danish Institute for Human Rights.

Red Solutions issued a written company policy alongside its ‘Core Values’ and ‘Health & Safety policy’ referencing its commitment to Human rights and the practical enforcement of them within the workforce and ensuring that all other stakeholders were cognisant of Red Solutions stance and desire for demonstrable adherence of the same by said stakeholders.

Red Solutions is a specialised security systems integrator deploying integrated security solutions within the Middle East, Levant region and Africa. Many of the projects are undertaken in areas that are susceptible to poverty, crime, bribery and corruption, disease and political and religious intolerance.

An assessment of Human Rights related risks and impact of Red Solutions operations in our areas of operation was undertaken at a preliminary stage using the HRCA Quick Check and referencing the Global Compact self assessment tool.

Specific goals in the areas of Human Rights for the upcoming year being:
• Ensuring our supply chain and sub-contractors take all the necessary measures to not participate in, or benefit from any form of
forced labour.
• Ensuring the company’s employment contracts adhere to Human Rights (Principles 1- 2) and where possible seek clarity with
respective local authorities regulations which conflict with said principles.
• Increased internal and external workshops for staff and external stakeholders to understand the definition of ‘Human Rights’,
address Human Rights risks and respond to Human Rights violations through implementation of Human Rights policies.
• Undertaking more detailed due-diligence of our customers in relation to their adherence to the principles of Human Rights.

Red Solutions has addressed and is continuing to address through a process of ‘Assess-Define-Implement-Measure’ its HR policies and procedures.
The company has allocated responsibility for the protection of Human Rights within the company to the HR Manager and the CEO who has overall responsibility to ensure that the company is adhering to ‘Human Rights principles 1-2 of the Global Compact’
The company has issued “Requests for Conformance’ through its supply chain confirming recognition and adherence to Human Rights
The company has delivered internal workshops defining the principles of Human Rights and how they are being recognised, addressed and adhered to by the company

The company monthly management reporting system includes Human Resource statistics. These statistics include reports pertaining to the HRCA assessment tool that are:
• Obtained from the quarterly employee performance reviews
• Obtained by employees access to a confidential HR email address
Whilst the management is reasonably satisfied as to the reasonable level of conformance with suggested HRCA indicators, the company will continue to monitor and improve those areas in which conformance is either not being achieved or no data or visibility is prevalent to determine conformance.
Monitoring and evaluation of external stakeholders such as suppliers and sub contractors has proven to be challenging. The company is seeking guidance through networking groups, consultants and public access material for suggestions and methods to monitor external stakeholder performance.
That said, the company’s Supply Chain, Project Management and Human Resource departments have actively sought to monitor external stakeholders against checklists based on the HRCA assessment indicators, and the information and testimonies supplied by suppliers and sub-contractors as per of their ‘Approved Vendor’ status.

Red Solutions shareholders and management are committed to uphold the core conventions derived from the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights of Work.
The company employment contracts were reviewed to ensure that they upheld the freedom of association and collective bargaining.
The company employment contracts do not prohibit employees from establishing and joining organisations of their own choice but do not condone such actions if they are outside the laws of the country in which the respective employment contract is applicable.
Likewise it was determined that the company’s existing recruitment procedure allows for the provision for meaningful bargaining with respect to their terms and conditions of employment.
It was deemed that the local labour laws under which the company adheres to from a regulatory and lawful perspective prohibits the use of child labour.
Upon review of the company’s recruitment and Human Resource policy it was deemed that Red Solutions operates a non-discriminatory policy in relation to sex, gender, creed or religion.
The company goals for the forthcoming year are:
• To continue to disseminate the company’s stance on Labour rights throughout the organisation and educate employees as to
the positive benefits that they will enjoy in relation to the terms and conditions of their employment contracts, freedom of
association and collective bargaining and employment discrimination.
• Implement policies to ensure that business partners and suppliers reference the Global Compact Labour principles.
• Increase awareness throughout the operational teams in conjunction with Human Resources as to labour related risks in new
countries of operation in Africa, with a view to establishing a formal risk assessment profile for each opportunity or country
within the next 12 months.

The company implemented a company wide ‘Town Hall’ to present the United Nations Global Compact, its purpose and objectives and as to why Red Solutions had registered as a participant and supporter of the Global Compact.
Through a series of further Town Hall meetings the pillars and principles of the Global Compact were presented in the format of an open discussion workshop as to contextualise the principles in relation to the company’s current policies and practices and discuss openly as to the benefits and disadvantages if applicable of conformance with the guidelines of the respective principles.
As a result the following policies were reviewed and were appropriate realigned:
• Human Resource policies and procedures
• Company Employment contract
• Employee handbook
• Office Health & Safety policies and procedures relating to fire, evacuation and emergencies
• On site Health & Safety policies relating to working conditions and provision of appropriate Personal Protection Equipment
Guidelines were issued to all employees as to mechanisms and procedures for registering grievances.

As part of the monthly management report, under ‘Human Resources’ statistical data is collected and presented. Captured statistics includes:
• Percentage profile of employees per gender, nationality and age group (21-28, 29-35, 36-50, 51+)
• Average retention rate of employees in terms of days
• Number of interviews per month and percentage ratio of positions offered- demographic profile of candidates
• Details of disciplinary actions
A formalised procedure for registering employee grievances is part of the company’s HR policy and procedures. Should an individual employee raise a grievance that he or she deems relevant to the Global Compact Labour principles then he or she will request a meeting with the head of HR and can request the attendance of an Executive Board member (such as the CEO).

Red Solutions shareholders and management on a broader scale understand the relevance of environmental protection for the company and its stakeholders and are committed to further understand what are the risks and opportunities.
Global Compact Principle 7 states, “Businesses should support a precautionary approach to environmental challenges.” The key element of this precautionary approach being that the idea of prevention is better than a cure and that it is more cost effective to take early action to ensure that irreversible environmental damage does not occur as a result of the company’s operations.
To this end the company has undertaken a study of the aspects of its operations and ‘deliverables’ to assess the environmental footprint and impact of the company.

Whilst it is fair to say that many environmental impacts are relatively obvious, the wider footprint and impact of the company on the environment is not and the company sought guidance and continues to seek guidance on its environmental impact.

A written company policy on environmental issues, including prevention and management of environmental risks was formulated based on the template for an environmental management system manual according to ISO 14001:2004 whereby

“Red Solutions will establish, implement and maintain procedure(s)
a) To identify the environmental aspects of its activities, products and services within the defined scope of the environmental management system that it can control and those that it can influence taking into account planned or new developments, or new or modified activities, products and services, and

b) To determine those aspects that have or can have significant impact(s) on the environment (i.e. significant environmental aspects).

Red Solutions intends to implement policy requiring business partners and suppliers to adhere to the environmental principles, however we do recognise that in order to fully understand and appreciate all stakeholders participation we need to understand ‘Environmental Principles’ more deeply and this will form one of our goals for the next year.

Specific goals in the area of the environment for the upcoming year include:
• Further understanding and education as to how the operations of the company and its partners, clients and suppliers impact the
principles of prevention of environmental degradation.
• Understanding which products we can utilise within our product offering which are more energy efficient
• Potential service for customers to remove end of life products and equipment to ensure environmentally sound disposal
practices
• Set measurable outcomes regarding monitoring and evaluation of environmental performance

Examples of efforts to date regarding implementation of environmental policies, reduce environmental risks and response to environmental incidents:
• ‘Town Hall’ workshop was conducted for all employees to explain the context of Global Compact Environmental Principles
• Red Solutions Environmental Policy and the company’s drive towards its implementation and adherence was presented
• An open forum discussion workshop was initiated to discuss and share ideas regarding recognising and mitigating
environmental impact within the company and wider stakeholders operations.
NB It was recognised during the above workshop that there are unknown or unfamiliar environmental consequences that the company isn’t aware of due to visibility and lack of experience or education. As a result the first priority to introduce an external consultancy resource was determined.

Post workshop the following initiatives were introduced:
• Implementation of a secure documentation (recycling) disposal system
• Initiatives to reduce electricity and water consumption
• Appointing environmental champions within respective departments to monitor environmental impact and mitigation within
operations

Progress regarding implementation has been slower than we would have preferred due to efforts to fully understand how environmental risk and mitigation affects the company. Therefore actual results regarding monitoring and measurement of outcomes is minimal.
A priority goal for the forthcoming reporting period is to set measurable outcomes regarding monitoring and evaluation of environmental performance.

It is fair to say that in the geographical regions, industry and sector’s in which the company operates, irregular means such as corruption and bribery are used to secure contracts on varying degrees of scale depending on the value of the respective contracts.
That said the company is bidding and tendering for work where anti corruption measures are being implemented to ensure a fair and transparent evaluation process occurs.
As a policy Red Solutions only partakes in bidding for projects where there is a demonstrable and transparent tender evaluation process that contain at a minimum a technical and commercial evaluation matrix.

Red Solutions has issued an Anti- Bribery and Anti-Corruption Policy. The opening paragraph of the Policy Statement being:

It is the policy of Red Solutions FZ-LLC, and its subsidiaries to conduct its business in an honest and ethical manner. The Company adheres to best practices with respect to anti-corruption behaviour, and therefore has a ZERO tolerance policy for bribery and corruption by employees, officers, directors, agents, consultants and contractors of the company.

The statement recognises and is a statement of support for the UN Convention Against Corruption.

The goals for the forthcoming reporting year are as a minimum:
• Implementation of protocol to guide staff in situations where they are confronted with extortion or bribery through policy and a
process of workshops
• Issue a policy and work with partners, suppliers and stakeholders to adhere to the anti-corruption principles. Increasing
awareness of employees about company’s policies regarding anti-corruption

The shareholders and management of Red Solutions voluntarily applied to TRACE International, the leading Anti-Bribery Compliance organisation to be vetted and awarded TRACE certification. www.traceinternational.org
TRACE certification demonstrates a company’s high commitment to transparency and integrity with an internationally accepted compliance credential. TRACE certified companies are “pre-vetted” partners for multinational companies seeking to do business with suppliers, agents and consultants who share their commitment to commercial transparency.
Red Solutions received its TRACE certification (ID number- TC 4142-2287) on September 15th 2014 and is valid until 14th September 2015 upon which the company will be re-evaluated to receive on going certification.

Responsibility for anti corruption within the company have been allocated to
• CEO- overall responsibility to ensure practices are in accordance with policy
• Finance Manager
• Head of Supply Chain
• HR Manager- training and awareness of employees

The main measurement has been against the findings of TRACE International regarding their due diligence process of Red Solutions and its Directors/Shareholders.
The intention for the forthcoming reporting year is to formalise internal audits in relation to the audit requirements of TRACE International to ensure full awareness and compliance throughout the entire company.

At the time of reporting it was not yet decided as to whether we would outsource this process to an external consultant.

It is the intention of Red Solutions to continue indefinitely with participation in the TRACE International certification process.