July 1, 2013

To our stakeholders:

I am pleased to confirm that Bazz Houston 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,

Javier Castro

President/CEO

Bazz Houston fully supports and respects the protection of human rights worldwide and is working to ensure that both it and the companies with whom it conducts business are also fully supporting this principle.

Bazz Houston does not and will not conduct business in any countries where Human rights are being abused.

Bazz Houston is committed to ensuring that all of its employees are treated equally and with dignity.

Bazz Houston has a range of Human resources policies which reflects its policies regarding human rights, equal opportunities policy and mediation strategies to resolve any staff issues. All employees are made aware of their individual and collective rights through a highly detailed employee manual which is updated on a regular basis.

Bazz Houston policies include:

Zero tolerance of any kind of discrimination either in hiring or in advancement within the company. Bazz Houston’s small workforce is a microcosm of today’s world with employees from North & South America; Asia and Europe.

Women and minorities are well represented at the managerial level with 4 out of 9 Departments being headed up by women.

Regular training sessions are held to explain the implications of this policy and ALL employees and managers are required to attend.

All employees are also offered the opportunity to improve and enhance their individual skills. Classes are held both on and off site. We also offer cross training.

Bazz Houston is also active in providing opportunities for young people by participating in Apprentice Programs and is currently training 2 such young people.

All employees receive health care benefits for themselves and their families, 401Ks, Vacation pay, Illness pay, etc.

The company also implements safety training programs and this is monitored on a regular basis by the MOD (the standard by which rates are set for Worker’s Compensation Insurance); our current rate is 61.

Monthly employee meetings are held in which everyone is encouraged to participate. This embraces all concerns from criticisms to requests for changes to positive suggestions for improving manufacturing processes, facility improvements etc. The company has an “OPEN DOOR” policy in which each employee is made to feel comfortable in addressing any issue.

There is zero tolerance of any kind of discrimination and this applies also to all of the company’s dealing with outside vendors.

Bazz Houston’s strict code of conduct for employees and vendors applies equally to the USA & Mexico.

Employee turnover is minimal and several employees have been with the company for more than 25 years.

Every employee has a job performance review twice a year.

A high percentage of employees have been promoted from within the company.

During the past 3 years Bazz Houston employees have completed educational courses in Blue Print Reading, Lean Manufacturing, AS Quality Systems, English & Spanish courses.

In the past year, Bazz Houston has not been subject to any investigations, legal cases or incidents concerning Human Right violations.

Bazz Houston supports freedom of association and collective bargaining rights.

Bazz Houston supports the ILO Core conventions and will not do business with any organization which uses forced or child labor. The company strictly adheres to all rules and regulations pertaining to this issue in both the USA and Mexico.

Bazz Houston upholds a strict policy on non discrimination in its hiring and working practices.

All employees are issued with an employee handbook and new hires read and sign this prior to employment.

All qualified candidates are considered equally at the recruitment stage and individuals are hired solely on their ability to do the job.

Advancement within the company is also based solely on merit with 4 out of 9 department heads currently filled by women and minorities.

All employees receive job evaluation reports twice a year.

All employees are encouraged to communicate any issues or problems immediately to their superiors or higher within the company. All problems are dealt with in a timely fashion.

Monthly company meetings are held which are attended by every member of the company.

Bazz Houston enjoys a high employee retention rate. Many employees have worked for the company in excess of 25 years.

Almost one half of management positions are filled by women and minorities, and, whenever possible these positions are filled from within the company.

Bazz Houston has not been involved in any investigations or other relevant events related to the contravention of the Global Compact Labor principles.

Bazz Houston is committed to being a good corporate entity in terms of the environment and is continuing to evaluate all possible means to lower its carbon footprint and to protect the local environments in which it is based.

Over the past several years Bazz Houston has done the following:

1. New Lighting throughout the facility.
2. New Compressors
3. The gradual switch from high consumption to lower consumption vehicles.
4. New Copy machines which automatically print on both sides of the paper.
5. The gradual switch over from Paper to Non Paper throughout the company.
6. The introduction of Lean manufacturing.
7. Constant review of manufacturing processes to implement new, lower energy intensity processes whenever possible.

Bazz Houston has reduced its electrical and fuel consumption by over 20%

Bazz Houston has enabled several of its customers to modify component parts to use 30% less raw materials, while achieving the same quality and strength.

Reduced toner and paper consumption by over 50%

Bazz Houston has not had any environmental accidents within the last year and has not been subject to any statutory notices or prosecutions

Bazz Houston fully supports the UN Convention against corruption, bribery and extortion and does not work with any organizations which are corrupt.

Company policy is extremely strict and clear in this respect and any attempt to bribe a company employee would be dealt with immediately.

Bazz Houston employees also understand that bribery or corruption is strictly against company policy.

Bazz Houston has not been involved in any legal cases, rulings or other events related to corruption and bribery.