VTech Communications Ltd. is committed to conducting business in a manner that respects, preserves, and improves the environment. In recent years, there are increasing concerns for environmental conservation globally. One of the major events is that The European Union has issued a directive to address this growing concern.

The Directive 2002/95/EC on the Restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS) was issued on February 2003. The RoHS directive restricts the use of the following substances on products sold into European markets from July 1, 2006:

• Lead
• Mercury
• Cadmium
• Hexavalent Chromium
• Polybrominated Biphenyls (PBB)
• Polybrominated Diphenyl Ethers (PBDE)

VTech's goal is to comply to the EU RoHS directive for all products manufactured by Q1 2006. VTech has outlined the following initiatives to achieve VTech goal:

• Adopt appropriate modification to current manufacturing processes to reduce or eliminate the use of those restricted hazardous substances.
• Take necessary measures to substantially decrease the use of parts which do not meet RoHS directive, except for critical components provided by customers/suppliers beyond our control.
• Utilize substitute components which meet the RoHS directive, whenever possible.
• Assist our customers in their transition to RoHS compliant products.