Corrective action plans in FY10 resolved all noncompliance issues uncovered in FY09 audits. We audited all medium- and high-risk first-tier electronics manufacturing suppliers in FY10.

The following chart summarizes the findings from our FY10 supplier audits, which reviewed supplier performance across all four pillars of value chain sustainability. Cisco undertook 1366 unique areas of investigation in our audits. Those audits revealed that the suppliers reviewed, on average, were fully compliant to 94 percent of those 1366 areas of investigation. Cisco and our suppliers ensured that each major and minor finding identified was fully addressed within the fiscal year.

Bar chart showing FY10 Supplier Audits - Summary of findings showing the following data: General Code and Legal Compliance - 46 total audit elements, 1 identified as major findings, 1 indentified as minor findings; Labor - 341 total audit elements, 21 identified as major findings, 13 identified as minor findings; Ethics - 88 total audit elements, 5 identified as major findings, 2 identified as minor findings; Health and Safety - 285 total audit elements, 27 identified as major findings, 24 identified as minor findings; Environment - 158 total audit elements, 6 identified as major findings, 23 identified as minor findings; L and E Management System - 224 total audit elements, 5 identified as major findings, 10 identified as minor findings; EHS Management System - 224 total audit elements, 9 identified as major findings, 9 identified as minor findings

Audit findings revealed three areas on which Cisco needs to direct focus: labor, health and safety, and environment. The following table provides a snapshot of common significant issues in these categories and how Cisco and our suppliers collaboratively respond:

Significant Issue	Typical Response
*Labor*
Juvenile labor management	Root cause analysis of issues; management system and worker testing ensured
Excessive overtime and consecutive days worked	Implement tracking system; retrain managers on issue; work with Cisco to address root causes
Improper deductions from pay	Stop practice; retrain management on issue
*Health & Safety*
Improper or missing permits	Immediately obtain proper permits; strengthen management system; and ensure adequate supplier oversight
Inadequate emergency preparedness equipment	Replace inadequate equipment; establish periodic equipment testing program
Air quality issues	Test air, identify sources and remediate
Sanitation concerns in cafeteria	Clean up problem; retrain workers on correct practices; implement oversight program
*Environment*
Improper management of chemicals and hazardous materials	Address all existing issues; reevaluate management system and oversight; retrain workers and management
Inadequate pollution management	Develop procedures to meet legal requirements; implement program and ensure adequate management oversight