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Sustainability Report

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Page 1: 54th Edition's recent work

Sustain

LivesSustainability Report 2014

Page 2: 54th Edition's recent work

Table of ContentsCHAIRMAN AND CEO MESSAGE ABOUT THIS REPORTSUSTAINABILITY AT AGI AND AFMABOUT USOUR STAKEHOLDERSCERTIFICATIONS AND ACCREDITATIONSAAWARDS AND RECOGNITIONOUR PEOPLEOCCUPATIONAL HEALTH AND SAFETY ENVIRONMENTAL MANAGEMENTSOCIETAL CONTRIBUTIONS

2014 SUSTAINABILITY REPORT

010304050607080809162231

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Chairman and CEO Message We are thrilled to present our sustainability report for 2014. Though we work hard to deliver the best denim to our customers, we continuously strive towards enhancing our social responsibility initiatives. We aim to be the world's most responsible denim producer, realizing that as the world's population is increasing, demand for resources will likely increase, and we will need to think of more sustainable ways of doing business. The last year has been an exciting year for us. In the area of environmental conservation, we have made great strides in water reuse, energy efficiency and solid waste management.

OOur target is to achieve a 15-20 % reduction in water consumption, a 8-10 % reduction in waste volume, and 5-8% reductions in energy and carbon emissions by 2020. Though we've always conformed to and often surpassed our health and safety regulations, this year in particular, we've focussed on re management in response to a recent spate of factory res in Pakistan. We have intensied our re training programs and procedures. One signicant change is to increase our re safety exits to 53, compared to 31 in 2009.

OOur communities remain vital to our success, and like every year, we have made contributions in the areas of healthcare, education and disaster relief, among other initiatives. The work we do for our communities is in line with our vision which is to lift underprivileged individuals out of poverty, and pave the way for socio-economic stability.

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Javed AhmedCEO Artistic Garment Industries and Artistic Fabric Mills

Iqbal AhmedChairmanArtistic Garment Industries and Artistic Fabric Mills

(continued)Chairman and CEO Message

Sustainable ways of operating have a number of benets to our stakeholders. For our customers, it translates to having thebest quality products that are environmentally friendly. We continuously introduce products, and engineer our processes, keeping mindful of nature's scare resources. For example, in addition to installing a number of energy saving gadgets within our facilities, our plants are more efficient than ever. Our Effluent Treatment Plant is one of many energy saving plants within the factory. The water recycling capacity of this plant has now increased 91 percent compared to 2011.

OOur people, however, remain our real beneciaries. They have the opportunity to work for a Company that is not only socially responsible, but also one which has a strong ethical framework, which ensures all employees are treated with dignity and respect. A non-discriminatory hiring policy, robust training programs, as well as competitive benets and incentives, make Artistic Garment Industries and Artistic Fabric Mills great places to work.

We welcome your feedback on this CSR report, as we continue our journey towards the path of corporate social awareness.

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

03

About this ReportWorking towards a sustainable future

In line with sustainable development initiatives worldwide, we have developed a sustainability report which highlights our corporate social responsibility initiatives from January 2012-July 2014.

TThis report details our sustainability initiatives in the areas of social, environmental and human resources, and includes all our units at Artistic Garment Industries (AGI) and Artistic Fabric Mills (AFM), including spinning, weaving, dyeing, stitching and nishing departments. Our goal is to be transparent in our business activities, and highlight our progress, as well as the challenges we encounter.

This report covers all aspects of our sustainable initiatives so that our stakeholders understand why we report, determining our current performance, achieved goals, along with our future outlook. We welcome feedback on our CSR report. IIf you would like to share your thoughts, please e-mail us at: [email protected]

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Sustainability at AGI and AFM Mission Our sustainability mission is to be the world's most responsible denim producer: whether it be safeguarding our planet, serving our communities, improving our HR systems, or complying with the most stringent health and safety regulations, we strive to enhance our sustainability efforts every day.

Vision

OOur vision is be the most sought-after denim producer in the world. By staying true to our mission, we want to be in a world where communities thrive, food security increases, and where people's basic energy and sanitation needs are met in a sustainable and efficient manner.

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2014 SUSTAINABILITY REPORT 05

About usAGI and AFM comprise a state-of-the-art fabric mill, composed of spinning, weaving and dyeing operations, as well as a fashion garment facility in Pakistan. AGI produces 2 million pieces of apparel per month, whereas AFM produces 3.5 million meters of fabric per month. Over the years, both AGI and AFM have played a crucial role in taking the denim culture to the next level. Denim continues to dominate the shelves of some of the world's leading brands.

Our passion for denim remains integral in helping us produce quality denim which is in line with the most stringent quality paparameters. Our primary interest, however, is in denim jeans. We manufacture all types of denim jeans including straight leg, boot cut, and skinny, among other cuts. We also produce denim jackets. Our product portfolio targets all age brackets (men, women, girls, boys and toddlers) and both genders.

Research and Development (R&D) activities remain fundamental at AGI and AFM. Our R&D department comprises of iinternational fabric designers and product technologists, who work collaboratively to stay updated on the latest denim trends. Our in-house labs consist of highly-skilled technicians and quality control experts who work in coordination with the R&D de-partment to provide high-quality and innovative products to our buyers.

We also continuously assess market needs and keep abreast of industry trends by participating in many denim trade shows world-wide. Such opportunities allow us to network with some of the world's leading denim suppliers.

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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2014 SUSTAINABILITY REPORT

Our Stakeholders

06

Stakeholders play a very critical role in helping our business progress. Customers, suppliers, partners and non-prot organizations all help propel our business to greater heights.

We work with many of the world's leading brands in North America, Asia, Europe, South America, as well as the Aus-tralian continent. AGI's portfolio of customers comprise of Aeropostale, Gap Inc., Charlotte Russe, American Eagle, H&M, Zara, Lindex, VF, Conbipel, Mango, Esprit, House, Bershka, Rhodi, Seppala, Rie, Visage and Pull & Bear.

Our annual production continues to rise. From January-October this year, our production reached 15,006,767 pieces of garments, increasing from 13,691,215 pieces in the same period last year (2013).

We are partners with the Sustainable Apparel Coalition, a trade organization which comprises of brands, retailers, manufacturers, governmental, as well as non-governmental organizations. The coalition's aim is to reduce social and environmental impacts of apparel and footwear products. By way of multi-stakeholder engagement, the coalition aims to lead the industry towards a shared vision of sustainability.

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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We comply with a number of certications and accreditations to ensure we meet the latest safety parameters. AGI is also certied by the Worldwide Accredited Production (WRAP). Headquartered in Virginia, U.S, WRAP is not-for-prot organiza-tion, encompassing a team of social compliance experts, who remain committed to promoting ethical, humane, and lawful conditions pertaining to manufacturing facilities world-wide.

We participated in the Higg Index, and apparel and footwear industry self-assessment standard for assessing environmen-tal and social sustainability. Our participation in the Higg 2.0 Index revealed an average score of 89. Developed by the Sustainable Apparel Coalition, the score-based web tool also allows us to compare our sustainability assessments with others in the industry, encouraging us to focus on specic goals, and work towards a more sustainable future.

We also abide by the Manual of Labor Laws, ILO Convention 155, 164, SA-8000 principle number 3, and WRAP principle number 8. We believe compliance results in process improvement, minimal accidents and in turn lower costs for the company.

2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Awards and Recognition In 2012, AGI received a Gold Supplier Recognition from H&M at an awards ceremony in Bangladesh. The Gold Supplier Recognition constitutes recognition for valuable contribution to H&M's business.

Even though recipients were from a pool of global suppliers, AGI was the only supplier in Pakistan to receive this award. Accreditations like these motivate us to continuously strive towards being the most reputable denim supplier in the world.

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Our efforts to become a more sustainable organization are not possible without responsible behaviour towards our employees. Our people remain our core strength. Our human resource policies are in line with our corporate objectives. We provide compensation and benets in line with industry standards so all employees remain motivated.

Our hiring process is unbiased; we ensure all applications regardless of eeconomic status, ethnicity, disability, religion or gender are considered for employment. Moreover, we remain true to our employees by providing a conductive learning environment where every employee has a chance to enhance his or her potential. Regular training and safety programs ensure our employees develop the skills to perform optimally.

092014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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We have an open hiring policy. We don't discriminate on the basis of creed, colour, disability, or sexual orientation. These values of integrity and fairness are inherent within our company's genetic makeup, and and reinforced within the company's culture.

2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Compensation and Leaves

We provide compensation that is fair and consistent with the current labour laws of Pakistan. In addition, all our emplemployees are entitled to leaves. Employees who have served for 12 months, are entitled to 14 days annual leave. Casual leave accounts for 1.16 days per month, and sick leave accounts for 14 days during one calendar year. All employees handling payroll receive training so they remain well versed about all areas pertaining to compensation such as wage policies, benets and additional padditional payments.

Benets and Incentives

We offer a number of nancial benets to our employees so they feel motivated and appreciated. These benets include monetary rewards such as bonuses, production incentives, attendance allowances, gratuities and pensions. We also provide regular pay increments to emplemployees whose performance meets and exceeds industry expectations. All workers and supervisors also receive premium overtime rates in line with the labour laws in the country. Our employees are covered under the group insurance scheme according to the law.

Some of our other benets include:

Employee Old Age Benet We provide all employees old-age benets which ensure support after retirement. All employees are covered under EOBI scheme, and are entitled to old age benets as per, "Employees Old Age Benets Act. 1976."

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Employees who have served for 12 months, are entitled to 14 days annual leave.

Sindh Employee Social SecurityWorkers who earn over Rs.10,000 per month are registered members of the Sindh Employee Social SSecurity Institution (SESSI). All workers registered under the scheme are entitled to social security benets for themselves and their dependants in the event of sickness, on-the-job injury or death. Employees are also eligible for other benets stipulated under the "The Employees Social Security Ordinance 1965."

Medical FacilitiesWWe provide medical facilities to all our employees. We have a nurse on the facility who handles illnesses or injuries that may occur during working hours.

Loan OfferingsManagement dedicates a set sum for offering advance payments as well as loans to employees. All employeesare eligible to apply for these interest-free loans.

EEducational IncentivesWorkers who are registered under the SESSI are also entitled for educational support for their dependants.

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Non-Financial IncentivesThough nancial incentives can be great tools to enhance worker motivation, at times, non-nancial incentives can play a signicant role in helping employees work harder. Our non-nancial incentives fall under four categories: recognition, reward, oppoopportunity, and exibility.

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Training and DevelopmentTraining and development forms an integral part of our company's framework. We ensure our employees participate in seminars and workshops so they can hone their skills, thus becoming experts in their respective eldelds. We also conduct a number of work-skill assessments which allow employees to identify their capabilities, enabling them to develop personal development plans to improve their areas of weakness.

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Recognition

Reward

Opportunity

Flexibility

Award presentation in front of peersDinner with the CEOEnhanced decision makingNew office or upgraded work space

VouchersPrizesGift cardsPaid parking or transit pass

Chance to lead teams and tasksPaid trainingPromotionMentorship program

Paid personal daysFlexible schedulingTelecommuting optionsAbility to stop working on least favorite task

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We hire all types of employees, irrespective of creed, colour, disability or sexual orientation at AGI. These values of integrity and fairness are inherent within AGI's genetic makeup, and reinforced within the company's culture. IIn line with our efforts to promote women empowerment, we hire a number of women. Our current male to female ration currently stands at 7:3.We believe a steady source of income provides women with the condence and skills to not only work towards a better life for themselves and their children, but also helps them feel like productive individuals, thereby gaining gaining respect from their family members.

Diversity and Inclusion

We also hire a number of disabled individuals. We believe disability should not be a factor in the hiring process, so long as a disability doesn't affect performance.

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Our male to female ratio currently stands at 7:3.

Employee Engagement Activities Since our employees are the backbone of our business success, we constantly engage with them so they remain motivated, and think of our Company as an extension of their familtheir family.

Sports FacilityWe believe adequate amounts of exercise plays a huge role in maintaining general health and wellness. For this reason, we have four cricket teams within our unit. The teams not only play among themselves, but also with teams from other organizations.

SubsidiSubsidized CanteenWe have a canteen within our factory which offers clean and subsidized meals to all workers. During the holy month of Ramadan, we also offer iftar meals to all staff members.

Transport FacilitiesSStaff members at Artistic are provided a free pick and drop service, so they save on transportation costs. Managers, on the other hand, are given cars depending on their designation within the company.

Ramadan PackageDDuring the holy month of Ramadan, we distribute gift packages to our employees, consisting of food and clothes.

Meat PackageEvery Thursday, animals are sacriced and meat is distributed to workers on a rotational basis.

Eid Milan PartyWWe organize Eid parties on both Eid-ul Fitr and Eid-ul-Adha. Such parties serve as avenues for employees to engage socially, thereby enhancing work-life balance.

Hajj FundEEvery year, AGI sends one employee to perform pilgrimage (Hajj). The winner is selected through a lucky draw. The company is responsible for all expenses incurred by the winner during Hajj.

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Harassment or Abuse

Our staff's mental and physical well being is of prime importance to us. We have measures in place to ensure all our employees are happy and not victim to any form of sexual, verbal or mental abuse.

The HR manager, the administration department, and other emplother employees responsible for supervising personnel are trained about the Company's policies pertaining to harassment and abuse. They are also required to sign a document which ensures they understand Artistic's anti-harassment and abuse policies.

If employees believe they are victim to any form of abuse, they can present their grievances to a worker's rrepresentative or management by writing their complaints on paper and dropping them in complaint boxes. These complaints are addressed during workers council meetings, after which immediate and stringent action is taken to resolve these issues, thereby minimizing future incidents.

Harassment or Abuse

We also have a grievance procedure in place which includes dissatisfaction with aspects of employee working conditions. Employees who are eligible may ppresent a grievance to the employer. The supervisor-in charge has ten working days to respond to the requested grievance. If he or she does not respond within ten days, the employee is eligible to write an appeal to the Manager Administration, clearly specifying the grievance and the relief requested.

Forced or Child LabourWWe do not believe in child labour, and do our very best to protect every child from economic exploitation. We do not hire any person who has not reached the legal age-limit for working. In addition, we have systems in place which ensure we do not have under-age individuals working for us.

HHowever, if we identify a minor in our factory, we have a remediation process in place. We immediately terminate the child's employment, and admit him or her to a school, taking care of his or her expenses. We feel strongly against child labour, and display posters at the factory highlighting our disapproval.

Freedom of AssociationWWe do not prohibit any workers from joining trade unions or to bargain collectively. Neither do we accept any disciplinary actions from suppliers against workers who organize or join associations in a peaceful and lawful manner. We are rm believers that an open policy must be in plabe in place to permit representatives from trade unions or business associations to raise issues with those heading mills, factories, manufacturing premises or suppliers.

Freedom of ChoiceWe do not force people to work for us. We give workers the right to leave employment after they give signicant notice, and after they work for the required notice period.

2014 SUSTAINABILITY REPORT

If employees believe they are victim to any form of abuse, they can present their grievances to a worker's representative or managememanagement by writing their complaints on paper and dropping them in complaint boxes.

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Page 17: 54th Edition's recent work

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

The health, safety and security of our employees is of paramount importance to us. We have various measures in place to ensure these areas are not compromised. In addition to our safety programs, we ensure our staff is trained in all areas relating to worker’s health, safety and security, guaranteeing optimum protection for our workforce.

2014 SUSTAINABILITY REPORT

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

2014 SUSTAINABILITY REPORT

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

The safety of our staff is of utmost importance to us. Our up-to-date re management program, timely rst aid care, unsurpassed security measures, as well as relevant safety training keeps our emplemployees free from harm.

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Fire Management

We have a comprehensive re management program in place to prevent and deal with any re-related emergencies that may occur at our facilities.OOur re exits are clearly labelled in both English and Urdu, evacuation plans are developed for every building and all factory doors are kept unlocked during working hours, allowing employees to vacate during a crisis. At AGI, we conduct monthly re drills, in which all staff members participate. Such re drills help employees keep up keep up to date with routine re safety mechanisms so they become familiar with routine procedures in case of res.

We also have a risk assessment policy for all the equipment we install. And our re hydrant line includes the entire facility.

In response to the spate of recent factory res, we have increased our re exits to 53, compared to 31 in 2009. We have also expanded and intensied our re safety training, which is now conducted monthly as opposed to quarterly.In addition, our unannounIn addition, our unannounced and announced re drills have increased in frequency. Emergency lights have also been added to all escape routes which can lead employees out of the building should there be power failures in hazardous situations like res.

Emergency PlansAGI has an active emergency preparedness plan to tackle emergencies. Our evacuation plans our placed on a number of walls. In case of a crisis, the plans help ensure employees evacuate the building in a timely manner.

EmeEmergency Assembly Points We have designated several emergency assembly points within our facility. During emergencies, such points allow staff members to gather together in areas which are deemed safe and secure.

First Aid

In addition to having a nurse at every facility, as well as an ambulanan ambulance on site, we have rst aid boxes placed around our facilities so minor accidents and injuries can be treated without delay. We also have several eye wash points located near areas where strong acid or caustic sodas are used.

Fire Related Emergencies

Protective EquipmentWhen workers are handling dangerous chemicals, we ensure they wear protective masks, gloves and coats so they don't fall victim to any illnesses or workplace injuries. We have also developed and implemented a machinery and equipment safety policy.

2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Close Circuit Television Cameras In order to further enhance the safety of our employees, our units are equipped with security cameras. In addition, we have a control room where real-time videos are monitored by a manager. CCTV images allow us to monitor any illegal activities within and outside our ppremises. We ensure our equipment is updated and maintained on a quarterly basis, and relevant records are maintained.

Adequate LightingAll access points and ground oor windows have a minimum 10 foot candles, which are lit 24 hours a day. Security guards patrolling the premises at night ensure missing and non-funmissing and non-functional lights, as well as dark areas are brought to the attention of security managers and electric engineers. In addition, we ensure all parking areas are well-illuminated as per minimum requirements for lighting standards.

Employee Access ControlWWe require company employees to scan their company identication cards, and show them to security personnel when they enter the building. To further protect the safety and security of our employees, we ensure all employees wear their identication cards when at work. In addition, the security manager does not allow employees who were laid off or resigned to enter the premises.

BBomb HazardWe follow a procedural check list and train our staff to remain vigilant of any external threats. In case we suspect a bomb, we call a bomb disposal squad. And if necessary, inform the police.

2014 SUSTAINABILITY REPORT

Security Measures

Alarm System We have installed several alarm systems within our factories. Manually operated, these systems can be turned on by employees, in emergency situations. We inspect alarms on a periodic basis, and maintain rrecords of all inspection activities.

Unauthorized Personnel Security staff and section managers are authorized to question unauthorized people should they nd them on site. If people are unable to identify themselves, the chief security officer conducts a detailed investigation, and depending on the sedepending on the severity of the situation, we may involve law enforcement authorities. We record all incidents in an Incident Record Register and take relevant corrective action.

AGI units are equipped with security cameras. In addition, we have a control room where real-time videos are monitored by a managemanager. CCTV images allow us to monitor any illegal activities within and outside our premises.

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Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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Occupational Health and Safety Training We believe in training all our staff with regards to occupational health, safety and security, particularly re safety. AGI and AFM staff members conduct internal training; we also have a series of external training programs conducted by professionals such as civil dedefense officers.

For instance, security personnel in our building are instructed to follow an action plan in case of emergency situations, allowing re brigades and police officers to reach the facility in a timely manner. In addition, we provide training to relevant employees with regards to communicating an emergency, eevacuating the building, contacting other agencies, as well as shutting down certain facilities.

The chief security officer and manager HR and systems maintains all training records for health and safety requirements. They also train all individuals responsible for supervising workers on machinery, equipment and re safety policies. Management maintains records of all aall accidents, and appropriate action is taken to prevent future incidents. After an emergency situation, management and appropriate department heads meet to identify losses incurred during the incident, and analyze their impact on the environment as well as on human health.

We provide training to relevant employees with regards to communicating an emergency

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

2014 SUSTAINABILITY REPORT

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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167

2010 2011 2012 2013 2014

107

3020

Total Injuries

Clipper Injuries

Needle Prick

Scissor Injuries

Burn Injuries

Needle Prick40

Quantity

35

30

25

20

15

10

5

0

1 2 3 4 5

2010 2011 2012 2013 2014

Clipper Inuries

Quantity

30

25

20

15

10

5

0

1 2 3 4 5

2010 2011 2012 2013 2014

decrease in injury rate in 2014 compared to 2010

Scissor Injuries

Quantity

2

3

4

5

6

7

8

9

1

0

1 2 3 4 5

2010 2011 2012 2013 2014

Burn Injuries

Quantity

2

3

4

5

6

7

1

0

1 2 3 4 5

2010 2011 2012 2013 2014

21

INJURY DATA

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Page 24: 54th Edition's recent work

2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

We remain committed to manage our direct and indirect impact on the environment. We embrace sustainable practices and realize that it is our duty to help lower water, energy and waste consumption within ourfactories.

Our goal remains to enhance environmental sustainability into everyfunfunction and process at Artistic Garments. To reach our goal, our research and development teams continue to work diligently to study more energyefficient ways of increasing production, by way of keeping up-to-date with the latest technologies and processes.

Our wider goal remains to instill a culture of environmental conservation within our premise, so that every member at AGI and AFM, from a machine operator to senior management personnel, plays his or her role in ppromoting environmentalism.

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In the area of environmental conservation, we have made great strides in the spheres of water reuse, energy efficiency and solid waste management.

OOur target is to achieve a 15-20% reduction in water consumption, a 8-10% reduction in waste volume, and 5-8 % reductions in energy and carbon emissions by 2020.

2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Page 26: 54th Edition's recent work

Water Recycling Realizing that water remains a scare commodity, we work hard to ensure we play our part in reducing water intake. Our indirect water footprint has decreased through the years.

Effluent Treatment Plant

AGI has also installed an advanced Effluent Treatment Plant (ETP). With a capacity of 300,000 imperial gallons, the plant is used for processing wastewater and meets the British Standard Guidelines, a European standard paparameter for water testing. Approximately, half of the treated effluent is reused in washing by passing it through an ultra ltration plant. The rest is drained out into an industrial sewer after treatment.

Our plan is to steadily increase water reuse within our premises. Installed in 2007, our ETP now has a water rrecycling capacity of 7,726,846 gallons, increasing from 4,047,883 gallons in 2011. We remain adamant to expand such plants within our factories to increase water reuse.

Reverse Osmosis Plant In 2009, we installed a Reverse Osmosis Plant (ROP). A popular water purication system used worldwide, the plant has a capacity of 60,000 IGPD, which is used to convert well water into portable water.

TThe Reverse Osmosis process involves forcing water through specialized membranes and exerting pressure which removes contaminants, solid substances, large molecules, and minerals from water. The plant is environmentally friendly as it does not produce any harmful chemicals and requires minimal amount of power.

AAdditionally, the ROP removes dissolved chemicals and other contaminants in water which can corrode pipes. The system, therefore, does not only lengthen the lifespan of plumbing systems and boilers, but also produces clean water which can be used for drinking and to cool gas engines, as well as in the boiler house for steam production.

Our ETP now has a water recycling capacity of 7,726,846 gallons, increasing from 4,047,883 gallons in 2011Our ETP meets British

Standard Guidelines, a European standard parameter for water testing

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Chairman and CEO Message e 1About this Report 03Sustainability at Artistic 04About Us 05Our Stakeholders 06

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

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ARTISTIC SUSTAINABLE STITCHING 2014

Condensate Recovery We have also installed a Condensate Recovery System to collect and condensate steam. Condensate results in the temperature of steam to decrease from 160 to 120 degrees celcius generating condensate from steam. TThe recovery process reduces water consumption and re-lated expenses associated with it such as water and cool-ing costs, as well as effluent charges.

In addition, the system reduces gas consumption and minimizes chemical consumption in the boiler in turn lowering green house gas emissions. The water requirement is partially fullled by the condensate return water. Water Flow Meters

In order to conserve water throughout our plant, we have installed several ow meters. These devices help measure and control the amount of water which ows through our wastewater applications, ultimately leading to water conservation. Our water ow meters have incincreased to fteen.

Energy Efficiency

We realize the dire state of energy in Pakistan, and are concerned about the short and long-term effects of the energy crisis. For this reason, we continue to reduce the amount of energy used in our supply chain, and incincrease efficiency of energy use in all our operations, thereby reducing GHG emissions and eliminating global warming. We are also working to increase energy con-sumption from renewable sources.

Energy AuditWe involved the Programme for Industrial Sustainable Development to investigate the energy efficiency of our processes. The team had identied areas for improvement and ways to reduce energy consumption.

The audit resulted in substantial energy savings, and improved maintenance procedures for our equipment. We also involve third party rms such as SGS and NEC tto perform audits. In addition, we have internal training programs whereby professionals including engineers conduct training for their teams.

Other Water Conservation Measures

Multimedia TechnologyWWe have installed a multimedia, a waste water treatment technology, which helps conserve water within the plant. This technology decolours and cleans water by lowering the total suspended content in it. The clean water derived from the process is then used in the plant, resulting in tremendous cost savings and enhanced water efficiency. We plan on installing another multimedia so we can rrecycle all the water within the plant.

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Chairman and CEO Message 1About this Report 03Sustainability at Artistic 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

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2014 SUSTAINABILITY REPORT

Chairman and CEO Message 01About this Report 03Sustainability at AGI & AFM 04About Us 05Our Stakeholders 06

Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Cleaner FuelWe use natural gas as opposed to diesel for production processes including power generation and gas red boilers. This step has signicantly reduced our carbon footprint and other emissions.

Electrical Distribution SystemsAAGI's electrical system is dependent on self-generated power generation units. We have three gas-red generators and a well-maintained electrical distribution system which reduces energy.

Waste Heat Recovery BoilersWe recover much of the energy lost in waste gases through waste heat recovery boilers, thereby saving a a considerable amount of natural gas. We have systems in place to monitor natural gas consumption, in addition to pressure setting which optimizes waste heat recovery.

Project Energy Efficient Eco Opti DryerOur project energy efficient eco opti dryer is composed of a state-of-the-art delta controller and an advanced humidihumidity controller. We have an optimized PID controlling for steam injection. The dryer has an extremely efficient temperature control mechanism making it a higher yield energy efficient dryer.

Other Power Saving Gadgets

We have taken a number of steps to ensure our plant remains the most efficient one in Pakistan. By adopting energy efficient practices, and installing a number of gadgets within our plant, we ensure all our practices conserve energy and water savings.

WWe also have a preventative maintenance program, aimed at preventing breakdowns. The system ensures all panels, trenches, cables and motors are well-maintained. The long-term benets of preventative maintenance includes improved system reliability, decreased replacement costs and system downtime, as well as a more efficient inventory management system.

Power Factor PanelsWe have installed a number of power factor panels in our facilities. These increase distribution capacity of electrical systems by increasing the current ow and lowering voltage thus decreasing utility bills, resulting in a much more energy efficient system.

VVariable Frequency DriversWe have placed variable frequency drivers at the reverse osmosis pump, effluent treatment plant, as well dryers and boiler motors. The variable frequency meters control the rotational speed of electric motors by monitoring the speed of the electric power, ultimately leading to reduced electricity consumption.

EEconomizersWe have installed a number of economizers at gas red boilers. These are heat exchanging devices which capture waste and lost heat from the boiler's hot stack gas. Economizers transfer waste heat to the boiler's feed water, reducing overall fuel requirement for the boiler.

TThis lowered fuel requirement not only results in cost savings but lowers emissions due to enhanced boiler efficiency. The recovered heat energy is used to heat fresh water for 70-80 celsius, which is then reused.

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This move will result in immense energy savings as diesel units are much more expensive compared to electricity derived from KESC and gas units. In addition, we make maximum use of natural light which leads to reduced electricity consumption, leading to increased energysavings within the plant.

Solid Waste Management

WWe sell the majority of solid waste we produce, segregating it into reusable and non reusable items. We follow EPA guidelines with regards to waste recycling. Medical waste, tube lights, drinking water bottles, energy savers, used oil and batteries are disposed and incinerated by an external laboratory. The management keeps track of solid waste generation at the departmental level. In addition, we also hahave a proper storage facility within the factory for solid waste.

Compressed Air SystemWe take part in routine maintenance services which control compressed air leakages. This measure saves energy and lowers green house gas emissions.

Steam Meters Steam ow meters are installed at appropriate loclocations to monitor and log steam ow.

Combustion Analyzer The combustion analyzer measures oxygen and carbon dioxide levels as well as temperature readings.

Fluke Power Analyzer The power analyzer measures voltage and current. IIt also measures total harmonics distortion caused by electronics load.

Thermal Imaging CameraThe thermal imaging camera allows us to inspect performance of steam traps, heat exchangers, copper wires, electric panels, as well as electric motors, thus leading to efficient operations.

IInverters on Single Driver MotorsWe have installed inverters on single drive motors which have resulted in power savings of up to 30 percent. This has increased motor life, reduced maintenance costs, and lowered green house gas emissions.

Energy Saving LightsAAt stitching units, we've replaced existing lights with energy saving lights.

This initiative has resulted in a lower turnover of lights per year, as eco friendly lights have a longer life, amounting to appapproximately, 20,000 to 40,000 hours, thereby reducing power, and conserving energy. We rely on natural gas for power production within the plant. In case of a power shortage, we use a diesel generator which we plan on replacing with a gas generator.

2014 SUSTAINABILITY REPORT

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Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16Environmental Management 22Societal Contributions 31

Our energy saving lights have resulted in power savings from 45 to 80 kw/hour

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Water Sources

Other incoming water 349074 m336.3 %

Recycle water35138 m33.6 percent

01 02 03

Ground water575629 m360 percent

Water Savings through Liquor Ratio

Saved total water consumption Total number of garments processed Cost savings

Water Savings through Green Chemistry

Saved total water consumption Total number of garments processed Cost savings

Water Savings through Recycling

Saved total water consumption Water recycled instead of drain Cost savings

1.6% 3069072- 1047453 Rs.

0.5% 1264736- 2996532 Rs.

3.6 %

- 1361646 Rs.

WATER RECYCLING DATA

Our reliance on recycled water is 35138 m3.

282014 SUSTAINABILITY REPORT

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ENERGY EFFICIENCY DATA

ENERGY CONSUMPTION BOILER

W.H.R STEAM (WATER HEAT RECOVERY)

721% increase W.HR STEAM from Jan 2013 to May 2014

600

800

1000

400

200118

118

969969

01 2 3 4 5 6 7 8 9 1011121314151617

Jan,13

Feb,13

Mar,13

Apr,13

May,13

Jun,13

July,13

Aug,13

Sep,13

Oct,13

Nov,13

Dec,13

Jan, 14

Feb, 14

Mar, 14

Apr, 14

May 14

01 2 3 4 5 6 7 8 9 1011121314151617

Jan,13

Feb,13

Mar,13

Apr,13

May,13

Jun,13

July,13

Aug,13

Sep,13

Oct,13

Nov,13

Dec,13

Jan, 14

Feb, 14

Mar, 14

Apr, 14

May 14

ENERGY CONSUMPTION BOILER

688% increase COST SAVINGS from Jan 2013 to May 2014

12512311251231

158833 158833

COST SAVINGS

200000

400000

600000

800000

1000000

1200000

1400000

WASTE RECYCLING DATA

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• Replace high bay lights (85 to 400 watts) in the washing department.

2014 SUSTAINABILITY REPORT 30

ENVIRONMENTAL INITIATIVES FOR 2013-2014

• Installed O2 trim micro modulation system at 10 TPH boiler to curtail gas consumption of boiler.

• Recycle 100% of ETP water to curtail water consumption of plant.

• Install distributed control system (DCS) for online monitoring of the plant.

• Conduct monthly testing of water, waste water, air emissions and noise.

• Yearly analysis of solid waste.

• Recycle fabric cut-pieces.

• Install humidity control system to curtail steam consumption at drying machinery.

• Install T5 light to reduce energy consumption at production oor.

• Install PF panal at production oor resulting in reduction of 150 kw of electrical energy.

• Curtail gas consumption of CPP (Captive Power Plant).

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Giving back to our communities remains a key aspect of our social responsibility initiatives. We remain accountable for the well being of members in our communities, and do all we can to secure a better future for them. We contribute towards healthcare, education, human rights, disaster relief, among other initiatives.

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Our communities remain vital to our success, and like every year, we have made contributions in the areas of healthcare, education and disaster relief, among other initiinitiatives. The work we do for our communities is in line with our vision to lift underprivileged individuals out of poverty, and pave the way for socio-economic stability.

322014 SUSTAINABILITY REPORT

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Pediatric Care

Eye Care Treatments

Cancer and Kidney Ailments

Societal Contributions 31

2014 SUSTAINABILITY REPORT

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ARTISTIC SUSTAINABLE STITCHING 2014 34

SIUT is one of the most reputed medical institutions in the South Asian region, providing specialized medical care to patients suffering from kidney, liver, and related cancers, as well as ethical transplant procedures at no cost. We have also been active contributors to the Fatima Kidney Care Foundation.

Patient Aid WWe've also played our part in helping organizations working towards patient welfare. The Edhi Welfare Trust is one such foundation, which has worked relentlessly to help people without discrimination on color, creed, or class.

FFor the last three years, we've also donated funds to MALC, a non-prot, sectarian organization working to eliminate leprosy, TB, and blindness. The non-prot has a network of 157 control centers, and is working in collaboration with provincial governments, providing free services to patients.

AAnother such organization is Patient Aid Foundation (PAF), who we've been donating to for the last twelve years. Started 22 years ago, the PAF was founded by a group of concerned citizens, who recognized the rich history of Jinnah Hospital in Karachi. Though Jinnah Hospital provides free medical treatment to thousands of patients, the crumbling structure of the building rremained a concern. The PAF was born as a result of this concern. Since then, PAF has launched an independent drive to raise funds, reconstruct buildings, as well as reinstate medical equipment. We've also donated to the Hawa Ilm Ul Shifa Trust, which provides health and education services to underprivileged members of our society.

OOur other contributions in the area of healthcare include donating funds to Indus Hospital, which provides free healthcare to patients; Fatimid Foundation, which provides blood banking and haematological services to millions of patients whose lives depend on blood transfusions; as well as the Burns Centre.

Recently, we donated a clinic to SINA. SINA provides primary healthcare to underprivileged communities at their doorstep. Located in the Korangi area of Karachi, the clinic will be accessible for primary health care to all our workers. We expect the clinic to be active in the next ve months, and anticipate it benetting 35,000 people yearly at almost no cost.

WWe have also made signicant donations to Patel Hospital and the Kashif Iqbal Thelesimia Centre. We remain active contributors to SINA, Poor Patient Aid Society, and Markaz E Umeed, a voluntary organization for the welfare of mentally retarded children in the vicinity of Karimabad, among other associations.

DisasDisaster Relief

Following the oods which had devastated parts of Pakistan, we had donated funds to the TCF Relief Fund, Imran Khan Flood Relief Fund, Motor Sports Club, among other relief funds.

Education

We consider education as a superpower to solve pproblems in third world nations such as Pakistan. Realizing the importance of quality education on the well being of a country, and its colossal effects on eliminating poverty, we contribute to the following organizations.

In the area of education, we've been partnering with The Citizens Foundation (TCF) for the last ten years. TTCF is a non-prot organization started by a group of individuals concerned about the state of education in the country. As of 2014, TCF has established 1000 purpose-built schools across Pakistan, enrolling 145,000 students. Moreover, TCF encourages female enrollment, and tries to maintain 50 percent females in all its campuses, thus contributing to gradual female empempowerment. In addition, TCF has a teacher training centre in Karachi and Mansehra. TCF expansion and success has also resulted in 11,500 jobs across the country.

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Certications and Accreditations 07Awards and Recognition 08Our People 09Occupational Health and Safety 16 Environmental Management 22Societal Contributions 31

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ARTISTIC SUSTAINABLE STITCHING 2014 34

Human Rights

We consider human rights to be a critical component of a free and democratic society. For this reason, we work hard to eliminate social injustice and do all we can to play our part in this area.

In the area of human rights, we have contributed to the the Ansar Burney Trust. This trust constitutes a network of human rights organizations working to deliver justice, better treatment of humans, and for the freedom of civil liberties. The trust works towards raising awareness, providing free legal advice, as well as offering humanitarian assistance. In addition, for the past year, we have also been contributing to Panah, a non-pa non-prot which provides shelter to women who are victim of domestic abuse and societal injustice, among other organizations.

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2014 SUSTAINABILITY REPORT

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