ANNUAL REPORT 2014

2014

CONTENT

PRODUCT ROADMAP 2

• products 2• product packaging 2• product manuals 2• hard goods collection 2

SUPPLY CHAIN ROADMAP 5

• QES-supplier management 5• quality 4• environment 4• social 4• ISO9001 & ISO14001 Xindao Shanghai 4• OHSAS 18001:2008 Printmasters 5

COMPANY ROADMAP 8

educate and inspire 8trade fairs 8marketing 9green office 9

headoffice rijswijk 10food & drinks printers & printing cars furniture

shanghai office 10saving energy now resource saving waste sorting

community projects 12

COMMUNICATION ROADMAP 13

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PRODUCT ROADMAP

PRODUCTS

619 new XD Eco SKU have been added in the new catalogueThis makes 39.7% of the total catalogue XD Eco

• 391 SKU are XD Apparel brand (63%)• 84 SKU are XD Design brand (14%)• 144 SKU are Open items (23%)

The major concepts are RPET and PVC-free

PRODUCT PACKAGING

• In our ‘Winter 2014 Catalogue’ all the new XD Design items have been put in an FSC compliant paper box and all carry the FSC logo.

• 12 SKU’s out of 43 new ‘Main Catalogue 2015’ XD Design SKU’s wiil be packed in corn starch bags to reduce the amount of paper used.

PRODUCT MANUALS

Manuals for XD Design items are being printed on the inside of the paper packaging to reduce paper use. (Only if packaging allows)

HARD GOODS COLLECTION

We continued product development with sustainable materials in the collection

• 6 SKU’s are using RPET• 3 SKU’s are using resound• We have introduced items with Bamboo and Cork

We had a development with UPM Formi which unfortunately had to be cancelled at the last minute because the material was not yet meeting our requirements.

In all developments we tried to avoid using glue as much as possible. In 2 items (Dia travel mug and Kliq pen) we even managed to avoid it all together.

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TARGETS VERSUS REALISED

Materials We will invest continuously in the use of sustainable materials to remain at the forefront, using recycled, biodegradable or other environmental friendly materials ( i.e. bamboo). Designed to be easily dismantled for recycling and/or re-us (second life).

Target for XD Design 2014 10% reductionRealized for XD Design 2014 27% reduction

Target for total Collection 2014 5% reductionRealized for total Collection 2014 40% reduction

PackagingLess is more, especially in packaging. We will reduce sizes, skip inner cartons and polybags. And whilst we switch to environmentally friendly packaging materials whilst recycling will be promoted.

Target for XD Design 2014: 10% reductionRealized for XD Design 2014: 21% reduction

Target for total Collection 2014: 5% reductionRealized for total Collection 2014 29% reduction

Toxic substancesThe target for 2014 was to identify all items containing toxic substances. Not all the items have been identified yet. However we can guarantee that 29% of the total collection is non-toxic. The rest will be identified in 2015.

PVC-freePercentage of all hard goods 53%Percentage of total collection including textile 65%

We are glad and proud to see that we are ahead of schedule.

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PRODUCT ROADMAP

INTRODUCING XD APPAREL you only have one opportunity to make a perfect first impression

When we launched our XDVision2020 at the beginning of 2014, we also promised the introduction of a unique new product range!

In August 2014 we launched a new flagship for our company; XD Apparel. At the start of this development we had a unique opportunity; we could start from scratch with a complete clean sheet.No history and not influenced by the past!

We would use only new and innovating sustainable materials. We wanted the best materials on the market, environmentally friendly and with the lowest carbon footprint. That we would use only the best manufacturers was obvious. Putting these goals down on paper is often very difficult and far away from reality! You can only deliver all the promises when your whole process is strictly monitored by a well respected and reliable institute!

The XD Apparel range is produced according to the highest standards of bluesign®. Bluesign® is widely considered to be the best-practice approach in performance apparel. The highly specialized audit company ensures that every stage of the manufacturing process complies with its strict environmental and performance standards. There is no room for compromise. The certification process requires that all component and ingredient suppliers, including dyes, convert their internal process to bluesign® standards. The effort is definitely worth it for everyone involved; suppliers, customers and above all the environment. More valuable information concerning bluesign® can be found on www.bluesign.com

Innovating sustainable materials •Productionaccordingtobluesign®standards •Useofinnovatingsustainablematerials •XDAppareljacketsaremadefromrPET •XDAppareljacketsarecompletelyfreeofdown

The jackets are free of down because of the use of Aria from Thermore®. The same comfort as down, without the downside of it. Aria from Thermore® is made from 98% air, 1% virgin PET and 1% recycled PET.

Our unique XD Apparel collection and all its innovating features can be found on www.xd-apparel.com

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SUPPLY CHAIN ROADMAP

QES-SUPPLIER MANAGEMENT

We started the three-part factory audit: Quality, Environment and Social, for our suppliers in 2014.

We follow high level international audit standards when we do factory audits:

• ISO9001 for Quality• ISO14001 for Environment and • BSCI for Social compliance

We select the factory for audit according to the priority of • New Supplier• Big Purchasing Amount• Factory Location combination • Key product/customer

We audited 70 suppliers in 2014; 15 of them did not qualify. We have set up the CAP (Corrective Action Plan) with the suppliers, and will evaluate it in the first quarter of 2015.

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The top 3 reasons suppliers failed the QES audit

QUALITY• Quality Control System was not established; the quality of the

product depends on the staff’s experience. • An inspection record was not kept. • Finished products (including re-work) did not have full traceability

from raw materials source to the customer.

ENVIRONMENT• The construction units did not comply with the processes

according to government requirement. This means they did not have the relevant certificates, such as Environmental Impact Report, Pollution monitor and permit certificate, etc.

• Hazardous waste container was stored in the open air, without any protective measures.

• They did not take any precautions against pollution/emissions.

SOCIAL• Working hours, wages and compensation. • Health & Safety; there was a serious risk of fire.• The Supplier management did not have a responsible person to

perform Social Compliance activities.

ISO9001 AND ISO14001 Xindao ShanghaiWe passed the ISO9001 quality management system and ISO14001 Environmental management system audit by third party TUV without any anomalies in June 2014.

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SUPPLY CHAIN ROADMAP

PRINTMASTERS

OHSAS 18001:2008 Printmasters

Printmasters is the Xindao printing company for promotional products. It is a state of the art factory with new machines for all possible decorating techniques.

Printmasters obtained the OHSAS 18001:2008 - Occupational Health and Safety Management System Certification certificate in January 2015; as a result of an immense effort in 2014.

In combination with the ISO 9001:2008 – Quality Management System Certification certificate and the ISO 14001:2005 – Environmental Management System Certification certificate, Printmasters now guarantees the highest possible standards in our Industry.

Quality, environment and health and safety are now integrated in one system.

We will investigate the use of waterbased inks for screen printing production further in 2015. This will reduce the exposure for the external environment and create better working circumstances for our employees.

We are investigating a total solution for waste water, so that cleaned water (from our treatment plant) no longer drains into the ground water.

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EDUCATE AND INSPIRE

We sponsored a student community project in 10 student houses in Leiden, the Netherlands (201 students).

The project generated a saving of 33% on the total annual consumption of electricity and gas.

This saved a total of 33,979 Euros, that is an average of nearly 165 Euros per person per year.

The most motivating product in this challenge was the XD Design product SAAVI Shower Coach. A report about this project is available (in Dutch)!

For the 2015 Challenge, based on the success of the 2014 edition, Xindao sponsored 200 SAAVI Shower Coaches.

This year’s competition will be held in two cities; Leiden and Delft

TRADE FAIRS

• We use stands at our Trade Fairs that are recyclable. The stand used for the PSI is being used for the 6th year running!

• We use energy saving LED spotlights

8Saavi shower coach

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245,308 kg6,050 kg

56,280 kg-------------

307,638 kg

228,564 kg-- kg

35,305 kg14,250 kg

-------------278,119 kg

29,519

2,406 kg710 kg

-------------3,116 kg

3,856 kg1,440 kg

-------------5,296 kg

700 kg70 kg

-------------770 kg

2,950

26,559 kg

We print all our catalogues on FSC paper

An important feature in 2014 is the introduction of our Digital Eco+ magazine (reduction of paper above)

MARKETING

B2B

Main 2013 Eco+ magazine 2013Winter 2013

Total B2B

Main 2014 Eco+ 2014 digitaalWinter catalogus 2014XD Apparel magazine

Total weight 2014

Weight reduction

Retail departmentXD Design Main retail 2013 XD Design Winter 2013

XD Design Main Retail 2014 XD Design Winter 2014

Retail general Retail 2014 Winter general Retail 2014

Extra Weight

Total weight reduction 2014

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GREEN OFFICE, HEAD OFFICE RIJSWIJK

FOOD AND DRINKS We use rainforest Alliance coffee and Fair Trade tea

PRINTERS & PRINTING

Printers

• 5 new ECO printers installed • 50% energy saving • 50% paper saving (double-sided printing)

Paper

• We only use FSC paper• The standard colour for printing is black• Double-sided is the standard

CARS

All the cars in the company will be replaced by Hybrid cars; the first were operational in 2014.

FURNITURE

In 2014 we ordered new furniture for our new energy friendly office:

• All the wooden furniture is made of sustainable bamboo• Carpeting in the new office is cradle to cradle• No more paper hand towels, we will use Dyson hand dryers• Light sensors will be installed

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GREEN OFFICE, SHANGHAI OFFICE

SAVING ENERGY

Air-conditionWe don’t use air-conditioning at temperatures below 25ºCWe don’t use the heater at temperatues above 22ºCThe systems must be turned off when the last person leaves the office.

ComputerWe always turn off our computer screens when we leave the office for periods of up to one hour. If we leave for more than one hour, we shut the computer down completely.

Light We always turn off unnecessary lighting during office hours. When we leave the office we always turn off the lights completely.

RESOURCE SAVING

Paper• We prefer double-sided printing• One-sided printed paper is collected for reuse• Waste paper is collected for recycling

Water faucet• Save water by using the water faucets for short periods.• Always turn the faucet off properly.• Always report a leaking faucet to HR Department immediately

WASTE SORTING

There are three kinds of waste every day• Unrecyclable Waste• Recyclable Waste• Harmful Waste

We have work instruction for sorting this waste into the dedicated bins, which are clearly marked.

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COMPANY ROADMAP

COMMUNITY PROJECTS

‘Schoon Afrikaans Water’

Annual sale of ‘used samples’ by Marketing realized a turnover of 375 euro per year in this project in 2013 adn 2014; 750 euro in total. This sum was, as usual, doubled by Xindao.

The total profit of 1.500 Euros enables ‘Schoon Afrikaans Water’ (Clean African Water) to install water wells in small African villages. Clean, drinkable water is common practice for us; in Africa it is still unique. A personal gift Invita at Buchkirchen (Austria) provides people with psychosocial disorders individual employment opportunities. The ability-oriented activity offers participation and involvement in the labor process and creates an organized daily structure. At Christmas all customers and employees were surprised by HSW Promotional Products GmbH (a Xindao customer) when they were each given a sealable thermo mug. That alone would be a useful gift, but HSW and Xindao made it really special and personal because the first names were engraved in each cup.

Supporting our customers The Xindao team Austria has joined one of its customers in a run to collect money for a good cause. Not a direct Xindao project, but the involvement of the team in this project was heartwarming.

Supporting a children’s hospital At Printmasters we are helping a local children’s hospital by donating items they can use or that will put a smile on their faces. We donate items like mugs or umbrellas printed with their names. .

Exercise is good for you! Exercise is important, not only for the employees at Printmasters. We want to encourage our community to exercise as well and we have initiated several sporting courses.

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Green message

Through our packaging, product labeling and our manuals we help our customers to bring our green message across to the consumer. These means of communication give us the unique opportunity to communicate directly to the end-consumer and to try to educate and inspire them to also consider the environment. Creating awareness and trying to influence environmentally friendly behavior is just one thing in which we can try and make a difference.

A good example is the QR label in all XD Apparel jackets.On the label is a QR code that leads customers to a product movie about the unique production process for these sustainable jackets.

You can watch the movie via the QR code or on www.xd-apparel.com

Annual report 2014

This is the annual report 2014 (only digital of course) in which we communicate the progress made along the road to 2020. Our upcoming digital Eco+zine will further inform our customers and end-consumers about green initiatives worldwide and about the importance of our goal; Reinventing ourselves to become the most sustainable and socially responsible company in the industry.

This is our road to 2020,

and we are convinced it is the right one.

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2014