REPORT ON THE FIGHT AGAINST FORCED LABOUR AND CHILD LABOUR IN SUPPLY CHAINS

Financial Year Ending December 31, 2024

1. SCOPE

This report had been prepared for Manac Inc. (“Manac”) in accordance with section 11 of the Fight Against Forced Labour and Child Labour in Supply Chains Act (the “Act”).

Manac hereby reports to the Minister of Public Safety and Emergency Preparedness on the various measures taken during its financial year that ended December 31, 2024, to prevent and mitigate the risks related to the use of forced labour or child labour at any stage of its production and supply chain.

2. STEPS TO PREVENT AND REDUCE RISKS OF FORCED LABOUR AND CHILD LABOUR

Mission. Manac’s mission is to offer quality, state-of-the-art products produced under conditions that respect ethics, people and the environment. Manac’s core values are teamwork, respect, integrity, innovation and perseverance. Manac is committed to respecting human rights in all stages of its supply and production chains. Manac offers a fair and equitable workplace for all its employees.

During its financial year, Manac undertook the following measures to prevent and reduce the risks of forced labour and child labour in its supply chain, which are described in greater detail in section 4 of this report:

Information gathering within its supply and transportation departments and assessment of its process to identify potential risks of forced labour or child labour;
Participation in information sessions on the subject;
Collaboration with a forwarding agent who coordinates and manages the choice of suppliers for goods imported by Manac;
Implementation of a Policy against forced labour and child labour (the “Policy”);
Drafting of contractual provisions in new contracts, to ensure Manac suppliers’ compliance with the Act;
Drafting of an updated version of Manac’s Code of Ethics to include commitments related to the fight against forced labour and child labour; and
Communication to Manac’s management team of the requirements of the Act and of the ongoing initiatives to prevent and reduce the risks of non-compliance.

3. STRUCTURE, ACTIVITIES AND SUPPLY CHAIN

3.1. Structure

Manac is a corporation incorporated under the Business Corporations Act (Quebec) and a subsidiary of the holding company 9327-2615 Quebec Inc. Its head office is located in Saint-Georges (Quebec). Manac owns the following subsidiaries: Peerless Limited (Penticton, British Columbia), Manac Trailers USA, Inc. (Oran, Missouri) and ABS Remorques Inc. (Val-des-Sources, Quebec).

Manac's organizational structure consists of several departments, including operations, human resources, finance, sales, marketing, engineering and innovation, legal affairs, parts and service, production, maintenance, etc., all of which contribute to the compliance of Manac's activities.

Across its manufacturing plants, administrative centers, and parts and service centers, Manac employs more than 1,100 people (including employees of its subsidiaries).

3.2. Activities

Production. Manac operates two (2) semi-trailer manufacturing plants in Canada, located in Saint-Georges (QC) and Laurier-Station (QC), two (2) other plants through its subsidiaries Peerless Limited and ABS Remorques Inc., located respectively in Penticton (BC) and Val-des-Sources (QC), and a manufacturing plant in Oran (MO), USA, through its subsidiary Manac Trailers USA, Inc.

Manac develops and manufactures several types of commercial semi-trailers, including vans, refrigerated vans, flatbeds, log trailers, chip vans, lowbeds, tippers, drop decks and more. In 2024, Manac and its subsidiaries produced over 5,700 semi-trailers.

Sales. Manac sells its semi-trailers in North America, directly through its sales department, but also indirectly through dealers. Manac also operates several parts and service centres in Canada (Boucherville, Dorval and Lévis (QC), Etobicoke (ON) and Moncton (NB)), through which it offers semi-trailer maintenance, repair and modification services, in addition to selling numerous replacement parts and components.

Importation. Manac directly and indirectly imports in Canada materials, components, raw materials, processed raw materials, parts, tools and equipment it uses in the manufacture of its products.

3.3. Supply Chain

Manac’s supply chain consists mainly of suppliers of the following products:

CATEGORY	PRODUCTS PURCHASED
Raw Materials	Aluminum, steel, wood, etc.
Processed Raw Materials	Tires, electrical wires, zinc for semi-trailers, aluminum extrusions, etc.
Parts Used in the Manufacture of Semi-Trailers	Suspensions, wheels, composite panels, etc.
Tools and Equipment	Welding robots, overhead cranes, drills, screwdrivers, welders, lasers and other hardware, etc.
Service Suppliers and Subcontractors	Professional services firms, technology companies and companies specializing in tire assembly and raw materials processing (urethane, galvanizing), etc.
Technological Equipment to Support Production	Servers, computers, laptops, storage, software, cell phones, electronic tablets, printers, etc.

The vast majority of Manac’s suppliers are located in Canada and the United States. For certain goods, Manac may also supply from Europe, Mexico, India (Synflex fittings and tubing), China (door locks, steel rims, glycerine pressure gauges), Taiwan (composite panels and doors) and Brazil (wood), either directly or indirectly through suppliers, agent or intermediaries.

When sourcing from abroad, Manac makes sure to obtain a certificate of origin for the goods purchased. In addition, Manac retains the services of a forwarding agent for purchases made in certain countries, such as China or India. This agent visits suppliers and provides inspection reports to support Manac in the responsible and managed selection of its foreign suppliers.

4. POLICIES AND DUE DILIGENCE PROCESSES

The following elements outline the due diligence policies and processes that Manac has put in place during the financial year that ended December 31, 2024, in order to prevent and mitigate risks related to the use of forced labour and child labour in its supply chain.

Policy. Manac has implemented a policy against forced labour and child labour in its supply chain (the “Policy”) effective January 1st, 2024. This policy applies to Manac employees, managers, subcontractors, consultants, representatives, partners, and suppliers.

Forced Labor Committee. A working group (the Forced Labor Committee) has been formed, comprising members from Manac's purchasing, transportation, and legal departments. This committee meets quarterly to review existing processes, assess supply chain actors who may be at risk of using forced labor or child labor, and establish a plan to mitigate this risk, if necessary. This working group is also tasked with improving existing supply chain processes and practices.

During the 2024 fiscal year, the committee worked on an inventory of its overseas suppliers, which identifies the products purchased, their origin, the compliance verifications performed before selecting these suppliers, the date of the last assessment, the level of risk these suppliers represent in terms of forced labor and child labor, and the corrective measures to be taken, if any.

Code of Ethics. Manac introduced a Code of Ethics several years ago, to which all its employees are subject. This Code is currently being updated to include a section on awareness and commitment to fighting the use of forced labour and child labour. This Code is periodically distributed to all employees, and new employees undergo training on the Code, including an overview of Manac’s obligations and commitments regarding forced labour and child labour.

Contractual Relations. Manac proposes to add certain contractual provisions to new contracts signed with suppliers, as well as to renewal contracts signed with current suppliers. These proposed provisions include a commitment by the suppliers to comply with the laws on forced labor and child labor, and Manac’s right to conduct certain verification, such as audits or visits to suppliers’ facilities. In the event that Manac is informed that one of its suppliers is in breach of laws on the subject, the proposed provisions would allow Manac to require the supplier to provide a remediation plan. To the extent that appropriate remedial action is not taken, these proposed provisions would allow Manac to terminate its relationship with the supplier.

Choice of Overseas Suppliers. For many years, Manac has retained the services of a forwarding agent for purchases made in certain countries, such as China and India. The forwarding agent conducts supplier visits and audits and provides inspection reports to assist Manac in the selection of its suppliers in various aspects and provides greater visibility of the compliance of supplier activities with applicable laws.

Whistleblowing Mechanism. Manac has also implemented a whistleblowing mechanism enabling anyone to anonymously report any concerns, suspected breaches or any form of violation of the Act or the Policy by Manac or any actor in its supply chain. Any such whistleblowing will be analyzed by the Audit Committee of Manac’s Board of Directors, which may investigate the alleged facts and suggest appropriate corrective measures. The whistleblowing mechanism is detailed in the Policy.

5. RISKS IDENTIFIED IN THE SUPPLY CHAIN

Manac is in the process of identifying the risks of forced labour and child labour by carrying out an inventory of the actors in its supply chain. To date, Manac has not identified any situation involving the use of forced labour or child labour.

External Risks

The main risks identified are related to Manac’s suppliers based in Asia and to the supply chains of its American and Canadian suppliers who supply or could supply from Asia. It is common knowledge that this region is at greater risk of forced labour and child labour. Manac keeps a watchful eye on the most at-risk zones in the Asian countries it supplies from, namely by using the services of its forwarding agent, and by ensuring that it maintains a rigorous selection process for its suppliers.

Manac outsources certain professional services to engineers in Romania because of their particular expertise. On-site visits are carried out and contracts are signed with a Canadian firm to ensure that these workers benefit from acceptable working conditions that comply with applicable laws.

Internal Risks

In recent years, Manac has also employed many foreign workers in its manufacturing facilities and parts and service centres. Theses workers come from countries such as Madagascar, Nicaragua and Costa Rica. Procedures have been put in place to give them the best welcome possible at Manac, and to provide them with the support they need to integrate successfully on Canadian soil. These workers benefit from working conditions identical to those of other Manac employees.

6. REMEDIATION MEASURES

Since Manac has not yet identified any situation involving the use of forced labour or child labour in its supply chain, no measures have been taken to remedy the situation to date, and no measures have been taken to remedy the loss of income for the most vulnerable families that might have resulted from measures to eliminate the use of forced labour or child labour.

In the event that Manac identifies risks of forced or child labour, corrective measures will be developed, where appropriate, to remedy the shortcomings identified in Manac’s supply chain.

7. TRAINING

All Manac employees must comply with the Code of Ethics, which contains provisions for respecting human rights. Following their hiring, all new employees must undergo training on this Code. This training addresses human rights issues and raises awareness among all employees.

Manac is developing a specific training program to warn and raise awareness of the use of forced and child labour in its supply chain. This 30-minute training program will be mandatory for employees in the supply and purchasing department, as well as those in the transport department. It is intended that a register of employees who received this training will be kept up to date, and Manac will ensure that the employees concerned receive this training periodically. This training will address the risks of forced labour and child labour in Manac’s supply chains, and the elements to be monitored in order to prevent any recourse to these types of labour.

Senior management were also trained on the requirements of the Act and the commitments foreseen in the Policy, so that they become agents of change in the fight to eliminate forced labour and child labour.

8. ASSESSING EFFECTIVENESS

To date, no formal assessment has been prepared.

This report was written in French. In the event of any discrepancy between the French and English versions, the French version shall prevail.

APPROVAL AND ATTESTATION

This report was approved pursuant to subparagraph 11(4)a) of the Act to fight forced labour and child labour in supply chains (the “Act”) by the board of directors of Manac Inc.

In accordance with the requirements of the Act, and in particular article 11 thereof, I attest that I have reviewed the information contained in this report for the entity Manac Inc. Based on my knowledge, and having exercised reasonable diligence, I attest that the information contained in this report is true, accurate and complete in all material respects, for the purposes of the Act, for the reporting year listed above.

I make the above attestation in my capacity as a director of the board of directors of Manac Inc. for and on behalf of the board of directors of Manac Inc.

I have the authority to bind Manac Inc.

Signed in Saint-Georges, May 1st, 2025.

(s) Charles Dutil
____________________________________

Charles Dutil
Director
MANAC INC.