Introduction

This report is made pursuant to the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”) and describes the steps taken during the financial year ended February 28, 2026 by Kerr Controls Limited and Kerr Investments Limited (collectively referred to in this report as “Kerr”) to prevent and reduce the risk that forced labour or child labour is used in Kerr’s activities and supply chains. Kerr recognizes the importance of ethical business conduct and responsible sourcing practices. As a regional distributor operating within the HVAC/R industry, Kerr also recognizes that modern supply chains can involve multiple tiers of manufacturing, sourcing, logistics, and transportation activities that may extend across numerous jurisdictions. Kerr is committed to continuing to improve its understanding of supply chain risks and to implementing reasonable and proportionate measures appropriate to the size and nature of its operations.

1. Structure, activities and supply chains

Kerr Controls Limited is a privately owned Canadian distributor of heating, ventilation, air conditioning and refrigeration (“HVAC/R”) equipment, parts, and related products. Founded in Truro, Nova Scotia in 1949, the company operates a network of branch locations and distribution facilities throughout Atlantic Canada.

Kerr Controls Limited is a wholly owned subsidiary of Kerr Investments Limited. Kerr Investments Limited also controls Kerr Smart Energy Limited, which operates in Ontario. Kerr Smart Energy Limited is not currently an “entity” under the Act.

Kerr’s business activities primarily involve distribution, warehousing and logistics operations, sales and technical support, inventory management, and customer training and support activities.

Kerr operates regionally within Atlantic Canada and Ontario and does not own or operate manufacturing facilities outside Canada.

Kerr sources products from a range of established domestic and international manufacturers and suppliers. As a regional distributor, Kerr has limited direct visibility into upstream manufacturing operations and raw material sourcing activities occurring within global supply chains managed by large multinational manufacturers.

Kerr does not maintain the operational scale or internal resources necessary to independently audit international manufacturing facilities or complex multi-tier supply chains. Accordingly, Kerr relies in part on the established compliance programs, supplier standards, and ethical sourcing practices maintained by its key manufacturing and supply partners.

2. Policies and Due Diligence Processes

Kerr is committed to conducting business ethically and responsibly and to maintaining business relationships with reputable suppliers and manufacturers.

During the reporting period, Kerr maintained internal policies and business practices intended to support lawful and ethical business conduct, including employee conduct expectations, financial and operational controls, procurement oversight processes, and internal reporting and management review practices.

Kerr also maintains a whistleblower reporting process intended to encourage employees and business partners to report concerns relating to unethical conduct or potential legal non-compliance.

As part of its procurement and supplier management activities, Kerr considers factors such as supplier reputation, industry standing, long-term business relationships, product quality, and commercial reliability when selecting and maintaining supplier relationships.

Kerr participates in industry buying groups and maintains ongoing relationships with major manufacturers and suppliers operating within the HVAC/R industry. Through these relationships, Kerr seeks to remain informed regarding evolving industry standards, supplier practices, and compliance expectations.

Given the size and structure of the organization, Kerr’s due diligence activities are designed to be proportionate to its operational role as a regional distributor and to the resources reasonably available to the company.

3. Risk Identification and Management

Kerr recognizes that risks relating to forced labour and child labour may exist within global supply chains associated with the manufacturing, transportation, and distribution of HVAC/R products and components.

Potential areas of risk may include overseas manufacturing operations, raw material sourcing activities, electronics and component manufacturing, third-party logistics and transportation services, and subcontracted labour arrangements used by suppliers or service providers.

Kerr primarily sources products from established international manufacturers and suppliers with significant global operations and existing corporate compliance frameworks. Kerr relies in part on these manufacturers’ established compliance programs, supplier standards, and governance processes relating to labour and ethical sourcing practices.

During the reporting period, Kerr did not identify any known instances of forced labour or child labour within its direct operations or within the portions of its supply chain visible to the company through its normal procurement and supplier management activities.

Kerr acknowledges that supply chain risk management is an evolving process and intends to continue monitoring developments in regulatory expectations and industry practices.

4. Measures Taken To Prevent and Reduce Risk

During the reporting period, Kerr maintained and continued developing measures intended to support responsible sourcing and ethical business conduct, including maintaining relationships with established suppliers and manufacturers, participating in industry and supplier discussions through buying groups and commercial partnerships, monitoring supplier relationships through normal procurement activities, maintaining internal procurement oversight and approval processes, and reviewing publicly available supplier and industry information where appropriate.

Kerr also continued evaluating practical and proportionate opportunities to strengthen its understanding of supply chain risks and supplier expectations.

5. Remediation Measures

During the reporting period, Kerr did not identify any known instances of forced labour or child labour within its direct operations or supply chains requiring remediation.

Accordingly, no remediation measures were implemented during the reporting period.

6. Measures to Remediate Loss of Income

Kerr did not identify any circumstances during the reporting period requiring measures to remediate the loss of income to vulnerable families resulting from efforts to eliminate forced labour or child labour from its activities or supply chains.

7. Training

Kerr recognizes the importance of employee awareness regarding ethical business conduct and responsible procurement practices.

Employees involved in procurement, supply chain management, operations, and vendor relationships are expected to conduct business in accordance with company policies and applicable legal requirements.

During the reporting period, Kerr continued evaluating practical and proportionate opportunities to enhance employee awareness regarding forced labour and child labour risks within global supply chains.

8. Assessing Effectiveness

Kerr continues to evaluate the effectiveness of its business practices and procurement oversight activities in supporting responsible sourcing and ethical business conduct.

As part of its ongoing efforts, Kerr may continue to review supplier relationships, monitor developments in industry practices and regulatory expectations, participate in supplier and buying-group discussions, and evaluate opportunities for practical improvements to procurement and supplier management processes.

Kerr recognizes that responsible supply chain management is an ongoing process requiring continued review and improvement over time.

Approval and Attestation

In accordance with the requirements of the Fighting Against Forced Labour and Child Labour in Supply Chains Act, and in particular section 11 thereof, I attest that I have reviewed the information contained in this report for the entities listed above.

Based on my knowledge, and having exercised reasonable diligence, I attest that the information in this report is true, accurate and complete in all material respects for the purposes of the Act, for the reporting year ended February 28, 2026.

Trevor Pitcher

Vice President, Finance May 28, 2026