APPENDIX 2

FREQUENTLY ASKED QUESTIONS

1. Am I required to submit an ILS Audit Report for every Facility producing Disney-branded

products? What about those Facilities being used by more than one Licensee or Vendor?

• A qualified ILS Audit Report is required only for Facilities located in Permitted Sourcing Countries designated as “Permitted with ILS Audits.” A qualified ILS Audit Report is not required for Facilities located in Permitted Sourcing Countries designated as “Permitted without ILS Audits.” In all cases, Licensees/Vendors must declare each Facility by submitting a Facility and Merchandise Authorization (“FAMA”) application.

• Only one qualified ILS Audit Report is required for each Facility. If Disney already has a qualified ILS Audit Report on file that meets the Minimum Compliance Standard, it is not necessary to submit another report.

• A qualified ILS Audit Report submitted for a Facility will impact the audit status as reflected in the “Action Required” section of the monthly Licensee/Vendor Status Report of every Licensee and Vendor working with that Facility.

2. What is a qualified ILS Audit Report?

• An ILS Audit is a labor standards inspection and/or audit of a Facility used to assess whether the Facility complies with the MCS, the Code, and pertinent Laws. (See the Requirements for a Qualified ILS Audit and ILS Audit Report section of the ILS Program Manual for detailed information on qualified ILS Audits and ILS Audit Reports.)

• Disney will not accept Facility certifications, seals of compliance, self assessments, partial reports, preliminary reports (including Disney Corrective Action Plan Acknowledgement Reports), or ratings in lieu of a full ILS Audit Report.

• Submission of a follow up ILS Audit Report must be accompanied by previous ILS Audits Reports conducted within the same audit cycle.

3. Which audit programs are accepted by Disney?

Disney will accept (a) ILS Audits conducted in accordance with the standards of a multi stakeholder or industry initiative program recognized by Disney and performed by an authorized Social Compliance MonitoringOrganization as designated by the respective program, (b) ILS Audits conducted in accordance with Disney’s ILS Audit standards and performed by a Social Compliance Monitoring Organization that is approved by Disney, and (c) ILS Audits conducted in accordance with the standards ofa well established brand, retailer, Licensee, or Vendor program recognized by Disney and performed by one of the qualified Social Compliance Monitoring Organizations approved by Disney or by the internal or dedicated audit function of the recognized brand, retailer, Licensee, or Vendor program where approved by Disney.

4. How much time should I plan for contacting an audit firm, scheduling an ILS Audit,

submitting an ILS Audit Report to Disney, and Disney evaluating the ILS Audit Report?

Contact the audit firm in advance to receive guidance on the time required to schedule an ILS Audit. Once a complete and accurate ILS Audit Report is provided to Disney, the report will be processed as quickly as possible. Licensees/Vendors should anticipate that this evaluation may take up to 28 days or more.