SUSTAINABLE VALUE · Compact yarn, Rayon/ Cotton Yarn, High Twist Yarn, Slub Yarn, and Rayon Silk...

SUSTAINABILITY

P.T. INDO LIBERTY TEXTILES

REPORT 2016-17

SUSTAINABLEVALUE

CONTENTSThe ContextCEO’s MessagePerformance Snap Shots

010203

6971737879

2124

2528313234373947495054

06

101113

151718

CSO’s Epilogue Assurance GRI Index Contribution to UNSDG Definitions & Acronyms

Strategic Stakeholder Engagementand Future Proofing

Balancing Economic ValuesAligning manufacturing processes with our sustainability goals Energy & CarbonWater & EffluentsBiodiversityMaterials & WasteHealth & SafetyChemical ManagementSocial & LabourSustainability SourcingResponsible to Customer Product Stewardship Stakeholder Engagement

Operations and Products

ABG Sustainability Framework Ten “Missions” of Resource StewardshipMaterial Issues

Our Values Steer Our ConductThe BoardSteering Sustainability

010204

72 80

192224

05

1416

Footprint

Governance & Management

Responsible Stewardship

Strategic Focus

P.T. INDO LIBERTY TEXTILES SUSTAINABILITY REPORT 2017 | 1

The ContextDear Reader,

It brings me great pleasure to introduce to you our third sustainability report for PT Indo Liberty Textiles (ILT).

The Overseas Spinning business has exceeded expectations, despite sluggish market conditions and steep cost increases in Indonesia. Viscose yarn margins have been under constant pressure throughout the year. We have been particularly hit by the ever decreasing Open End prices. However, the team at ILT have looked at diversifying their Open end product portfolio, in order to mitigate this trend. The most critical focus area for the Overseas Spinning business is VAP portfolio enhancement and the team has been working to enhance the product mix. The Value Creation team has made inroads into the textiles value chain, and is delivering value to the business. The teams have looked at diversifying its portfolio of products, and has stepped into the global technical textiles space. The team has also benefitted from the implementation of the supply chain solution, with better transparency being brought in the system. The efforts put in by my colleagues have been recognized both within the Aditya Birla Group and outside as well. The Indonesian units received a commendation awarded by NCSR, Indonesia, for the sustainability reports.

We continue to move ahead in our sustainability roadmap, having already reached a level of maturity in stakeholder engagement and responsible stewardship. We are embarking on a journey of future proofing our business, which would look at the long term strategy for the business.

The report will provide you with accounts of actions taken by us along with results achieved; I also encourage you to give us your feedback on the report, and share your kind views. Enjoy reading!

Thomas Varghese,Business Head


CEO’s Message It is my pleasure to introduce our third Sustainability report following GRI G4 Guidelines. The report covers the reporting period 01 April 2016 to 31 March 2017, disclosing performance on sustainability processes and material indicators. In line with Aditya Birla Group’s Sustainability Vision 2017, we continue to pursue- Responsible Stewardship, Stakeholder Engagement and Future Proofing. We are also presenting our performance on material aspects against targets taken for the year.

In a very competitive market and tough global economic scenario, our revenue generation has increased slightly. We have scaled up new product development and efforts in value added products. Emphasis is also given on material efficiency, energy and waste reduction to optimise the production cost. Our marketing team is constantly in touch with customers and in coordination with the product development team, we are able to tap new markets.

We are committed to contributing to UN Sustainable Development Goals and all our sustainability missions and programmes are tracked for contribution to the sustainability goals. We are committed to be climate steward; have assessed what should be our climate mitigation contribution to limit global temperature raise to 2oC and are exploring ways to meet such targets.

We enjoy very cordial relation with all our employees and the unions. Our continued investment in employee engagement including skill development, health and safety and celebrating many festivities as a family bounds us together in a journey towards a sustainable organisation. We have initiated deployment of social accountability standards and wish to our make workplaces “Happy Work Places”. Our efforts in our sustainability journey were recognised and all three Indonesian units received ‘Commendation for First Year Reports’ by National Center for Sustainability Reporting (NCSR), Indonesia, for the sustainability reports.

I look forward to your support as we continue on this journey.

Mr. Kapil AgarwalCEO, Overseas Spinning Business

NCSR Award for the first time SustainabilityReporting


Environment Social

Performance Snap Shots

WASTE INTENSITY (in MT waste/MT

raw materials)

% RECYCLED & RENEWABLE MATERIAL IN PACKAGING

GHG INTENSITY (in tCO2 eq/MT)

ENERGY INTENSITY (in

GJ/MT)LTI-FR, Female

Local Employment

(in %)

Employee Diversity by Age Group (<30:

30-50 :> 50)

Employee Diversity (Male:

Female)

% RECYCLED & RENEWABLE MATERIAL

IN PROCESS

WATER INTENSITY (in

m3/MT)

Average Training Hours

(in hrs)

2.25%

95.3

2.4711.87 0.59

95.6%

66:33:1

27:73

72.3

9.06

22.82

in 2016-17

in 2016-17

in 2016-17

in 2016-17 in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

2.46%

94.9

2.58

12.47 1.28

94.6%24:76

70:29:1

72.6

5.86

23.6

in 2015-16

in 2015-16

in 2015-16

in 2015-16in 2015-16

in 2015-16

in 2015-16

in 2015-16

in 2015-16

in 2015-16

in 2015-16

Legend

Achievements No major changes Needs Improvements


Economic Non-GRI

Performance Snap Shots

Community Social Investments (in USD)

PROPORTION OF PROCUREMENT

BUDGET FOR LOCAL PURCHASE

(in %)

ECONOMIC VALUE GENERATED (in

Mn USD)Supplier

Satisfaction Level (%)

Higg Index Environment

Module Score (%)

Community Satisfaction

Level (%)Employee

Satisfaction Level (%)

Higg Index Social and Labour

Module Score (%)

ENVIRONMENTAL PROTECTION

EXPENSES (in USD)

ECONOMIC VALUE DISTRIBUTED (in

Mn USD)WASH

Pledge (%)

24,297

92

122.3 95.57

76

93.296.17

72.65

27,154

116.988

in 2016-17

in 2016-17

in 2016-17 in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

in 2016-17

10,000

89

113.2 94

72

69

0

7370,911

106.7

88

in 2015-16

in 2015-16

in 2015-16in 2015-16

in 2015-16

in 2015-16

in 2015-16

in 2015-16in 2015-16

in 2015-16

in 2015-16

Legend

Achievements No major changes Needs Improvements


FOOTPRINTOur economic,social and environmental footprint is extended across the globe through our supply chain, manufacturing operations and products. Our customers process our products and add value before delivering to the end user.

Operations & Products 06


Operations & ProductsGlobal Value Chain

Associations:

USA

BRAZIL

SWITZERLAND

TURKEYEGYPT

PAKISTANSOUTH KOREA

TAIWANVIETNAM

BANGLADESH

INDONESIA

PT. Indo Liberty Textiles (ILT) was incorporated in April 1995 with a modest capacity of 21,120 spindles in a total area of 20 hectares in an industrial town of Karawang, about 70 kilometres east of the capital city Jakarta, in the West Java province of Indonesia. ILT is a closely held, non-listed company. Reporting to shareholders is done once in a year at the Annual General Meeting. However, key shareholders are represented on the Board of Directors and are kept informed about business developments via quarterly board meetings.

The annual turnover is US $122.3 million , the present capacity is 181,836 spindles including 4,440 open end rotors with annual sales volume 49,523 MT per annum in 2016-17. Our total market capitalization is 83.77 Mn USD with a debt to equity ratio of 68:32.

• Total Employee Strength: 1,411 (2016-17) (Contract workers-392, Permanent workers-1019)

• Net Sales: 122.3 Mn US$ (2016-17)• Quantity of Products Sold: 49,523 MT (2016-17 )

KARAWANG, INDONESIA.

INDONESIA

India – Indonesian Chamber of Commerce

Business Forum of India

BPJS ( Health Insurance )

Social Security Employment Agency (BPJS Ketenagakerjaan)

Association Textiles Indonesia

Association of textile employer

ECAII - ECONOMIC ASSOCIATION OF INDIA

AND INDONESIA


We manufacture spun yarn in different counts for different end users.

During the reporting period we have introduced the following products in our product range. These include:

Value Added Products-Modal / Micro Modal – 100% as well as blends-Bamboo – 100% as well as blends-High Content Linen Blends-Glitter-Wool touch-Triblend YarnsSpecial Fibres - Cool max- Recycled polyester (PET bottles) This is in addition to the product basket including, Compact yarn, Rayon/ Cotton Yarn, High Twist Yarn, Slub Yarn, and Rayon Silk Yarn.

In future, we are also focusing on other products such as recycled polyester, ABY glitter, High linen content yarns (including Coarse counts, slubs and 2-ply), CD polyester, BCI cotton blended yarns, Dyed yarns, Sewing threads and optical viscose and blends.

Products Portfolio:


Products Brands:

ABYTM Style

ABYTM Glitter


SUSTAINABILITYMISSIONABG Sustainability framework drives us beyond being a responsible steward, to practice future proofing of business through strategic stakeholder engagement. As a responsible steward we identified TEN material issues to focus on and constituted mission teams to drive pursuit of road map and targets.

ABG Sustainability Framework 10Ten “Missions” of Resource Stewardship 11Material Issues 13


ABG Sustainability Framework

Responsible StewardshipFocus on how we manage today and our goal is to build a framework of policies, technical and management standards aligned to international standards as defined by the IFC, OECD, UNGC, ISO and OHSAS. By introducing these standards into our systems we manage our operations in the most responsible manner.

Stakeholder EngagementTo understand the external changes that will inevitably impact our companies in the future and this step of the model is called “Stakeholder Engagement”. Our goal is to build strong relationships

with our stakeholders and key technical experts on climate change, water and waste management, developments in human rights legislation, safety standards, health impacts and the like. Future ProofingWe will embed sustainability trends into our strategic business plans to minimise the risks and find new opportunities that will be presented by the requirements of a sustainable planet and society by 2030 and 2050 and make our businesses sustainable.

RESPONSIBLE STEWARDSHIP

Create a framework to help us move to international

standards.

STAKEHOLDER ENGAGEMENT

Knowledge to think how fast things will

change & where disruptions will occur

FUTURE-PROOFING INCLUDING OUR SUPPLY CHAINA plan to create and share stakeholder value so we stay ahead of the Major Trend Curves - Roadmaps for Products, Energy, Water, Waste, Human Rights, H&S, Biodiversity, Suppliers, New business technologies, etc.

Legal Standards needed for a sustainable 2050

More demanding Legal Standards by 2030

International Standards Today

Bext Price TodayLegal Standards Today


Ten “Missions” of Resource Stewardship

Energy & Carbon Water & Effluent Waste Mgmt.Chemicals Mgmt.

Responsible Supply Chain

Compliance & Risk Management

Health & SafetySocial &

Labour

Stakeholder Engagement

Products Stewardship

-GHG Intensity -Water Consumption -Hazardous Waste-Compliance with REACH

-Recycled & Renewable input materials

-Compliance with applicable regulations along value chain

-Workplace hygiene -Diversity & Equal opportunity

-Dialogue with Internal & External Stakeholders

-Grievance mechanisms for: Impacts on society,

environment, labour, Human Rights

-Product Quality

-Customer Satisfaction-Packaging

-Customer Health & Safety-Safety

-Training & Retention-Occupational Health-Neighborhood Developement

-Energy Intensity -Water Risk -Non Hazardous Waste-Air Emissions -Waste Mgmt. -Waste Recycling-OEKOTEK

certification

-Procurement Practices

-Sustainability Risk Management

-Environmental, Labour, & Human Rights Assessment

-Delivering indirect economic benefits


Mission Champions:

1. ENERGY & CARBON 6. STAKEHOLDER ENGAGEMENT

2. WATER & EFFLUENTS 7. PRODUCT STEWARDSHIP (Higg Index, LCA etc.)

3. “WOW”-WEALTH OUT OF WASTE 8. SOCIAL & LABOUR

4. CHEMICAL MANAGEMENT 9. COMPLIANCE & RISK

5. SUPPLY CHAIN MANAGEMENT 10. SAFETY, HEALTH & ENVIRONMENT

Saji George, N.C, Ghosh N.C. Ghosh, Ram Chandak

Parminder Singh Umasankar Mahapatra, Saji George

Ram Chandak, Ravindra Kayarkar Lambok S., Sanjeev Gupta

Ketan Shah Lambok S., Saji George, Ram Chandak

Ravindar Kayarkar Midwar Kamal, K.C.Bhushan, N.C Ghosh, Parminder Singh


Material IssuesThrough many internal and external stakeholder engagements, the material issues were determined in 2014-15. The assessment included identification and prioritization of issues that can pose risks to business and stakeholder interests in the short and long term. This is further reviewed during 2016-17 and also in internal stakeholder meeting and strategic stakeholder engagement meetings.

Aspect Importance along the Value Chain:

-Supply chain; -Manufacturing; -Transport; -Customer

Policies, Standards & Code of ConductRegulations & Legal Compliance Grievance mechanisms (employee, Env, HR, society) Economic Performance Market Presence Indirect Economic Impact Renewable & non-renewable materials Responsible procurement Packaging Energy management Waste management and effluents Water stewardship GHG emissions and air pollution Compensation & benefits to employees Employee Recruitment & Retention Employee relations Employee health & safety Training and education Diversity and equal opportunity Collective bargaining Human rights assessment of operations Community Impact, Relations and Development Payments terms and negotiations with suppliers Supplier screening and Audits (Labour, HR, Community)Investments in developing local supplier network Customer health and safety Product and service labelling Marketing communications Customer satisfaction

0102030405060708091011121314151617181920212223242526272829

IMPO

RTA

NC

E TO

STA

KEHO

LDER

S

IMPORTANCE TO ILT

01

03

05

06

09

19

21

22

250708

10

14

11

15

12

16

18

20

2324

27

28

02

04 13

1729

26


GOVERNANCE& MANAGEMENTABG Values steer our conduct in dealings with all our external stakeholders along the value chain. Our Board supervises adherence to ABG values at all times and guides the business to deliver sustainable value. Sustainability practice in the business is guided by the APEX committee and executed by TEN Mission teams covering all material issues that our business is challenged with.

Our Values Steer Our Conduct 15The Board 17Steering Sustainability 18


Our Values Steer our Conduct

INTEGRITY

COMMITMENT

SEAMLESSNESS

PASSION

SPEED

Acting and taking decisions in a manner that is fair and honest. Following the highest standards of professionalism and being recognised for doing so. Integrity for us means not only financial and intellectual integrity, but encompasses all other forms as are generally understood.

On the foundation of Integrity, doing all that is needed to deliver value to all stakeholders. In the process, being accountable for our own actions and decisions, those of our team and those in the part of the organisation for which we are responsible.

Thinking and working together across functional groups, hierarchies, businesses and geographies. Leveraging diverse competencies and perspectives to garner the benefits of synergy while promoting organisational unity through sharing and collaborative efforts.

An energetic, intuitive zeal that arises from emotional engagement with the organisation that makes work joyful and inspires each one to give his or her best. A voluntary, spontaneous and relentless pursuit of goals and objectives with the highest level of energy and enthusiasm.

Responding to internal and external customers with a sense of urgency. Continuously striving to finish before deadlines and choosing the best rhythm to optimise organisational efficiencies.

Code of Conduct:

We are in the process of strengthening deployment of the Code, we are focused on Values integration, Integrity, Safety and better deployment of our “prevention of sexual harassment policy”. If any employee come across a violation of Code of Conduct, he or she can report directly to the respective committees for an independent investigation, this is closely followed by the Corporate Cell.

We voluntarily follow the Code of Conduct outlined by the Aditya Birla Group. The Code of Conduct, which incorporates the Business Principles, is our central guidance document for norms of behaviour. Under our Governance system we consider employees, suppliers, community, and our creditors as our stakeholders, and their legal rights are protected and treated with care.

Our Commitments- UN Global CompactTen principles to usher in sustainable global economy

- UN Sustainable Development GoalsNew sustainable development agenda 2030

- Science Based TargetsDriving ambitious corporate climate action

- Wash PledgeThe wash at the workplace pledge

- Higg IndexSelf-assessment empowering brands, retailers and facilities of all sizes, at every stage in their sustainability journey


RISK EVENT

Gratification from Vendor / Supplier

Mark up the Budget

Misuse of Corporate Assets

RISK DRIVER

High value offered

Authority, lack of monitoring, high value

Access, high value asset,

RMM*

Code of Conduct, Values, SOP

Financial Control / Audit, Code of Conduct, Values

Asset Management, Asset Control / Audit, Code of Conduct, Values

IM*

Business Value Standards Committee is assigned responsibilities to investigate complaints of value violation at workplace, if any, and to take appropriate action against the employee found guilty of such offence.

RMM* - Risk Management MitigationIM* - Impact Mitigation

While negotiating for high value items, the head of stores negotiates with third parties. This is then reviewed by a common procurement head for the Overseas Spinning Business. The CFO then reviews and gives the final approval for the same.

In case of low value items, the deliberations are conducted both by the stores in charge and the technical head as required. Further, we request for three supplier quotations. The final purchase order has to be approved by the appropriate authority before finalisation.

In order to bring in greater transparency in the procurement process, prices for common items to the OS business such as packing materials, machinery spares are negotiated for collectively with suppliers.

Discipline is ensured through strengthening of the administrative security and installation of CCTV cameras at strategic locations.

A total number of 353 employees have received anti-corruption training in the reporting period. During the reporting period no cases of corruption were reported.

Charitable Donations and Sponsorships

In order to ensure that donations or sponsorships to schools, communities or village government organisations are not misused, we ensure that we do not transfer cash but provide materials or items that are required.

Representatives from the company and the beneficiaries attend the hand-over event. We also take photographs for documentation and communication purposes.

Our Group Values document and Code of Conduct highlights how employees must conduct themselves both within the organisation and with external stakeholders All employees shall ensure that their personal conduct in a public place and with public is dignified and reflective of Group Values.

Every individual is evaluated not only against business performance but also against the values espoused in the Code, this is also highlighted in the KRA.

All employees are encouraged to bring to attention of management i.e. their seniors/ other senior representatives of the Group when they come across a violation of Code of Conduct.

Anti-Corruption:The organization’s risk assessment procedures for corruption, include the criteria used in the risk assessment (such as location, activity, sector is provided below)


Our sustainability governance organisation is :The BoardThe Board of Directors of Indo Phil Textile Mills Inc. for 2016-17:

Mr. K.M. Birla

Mrs. Rajshree Birla

Mrs. Neerja Birla

Mr. S.S. Mhansaria

Mr. C.H. Mahtani

Mr. Vikash. C. Mahtani

Mr. Askaran Agarwala

LEGENDNATIONALITY : INDIAN NATIONALITY : INDONESIANGENDER: MALE GENDER: FEMALEAGE: >50 AGE: <50

Non – executive

Non – executive

Non – executive

Non – executive

Independent

Non – executive

Non – executive

The board provides the oversight to environmental, social and economic performance of the organisation, oversees upholding of a broad set of governance principles, and delegates management authority to the Chief Executive within defined limits.

The board reviews key risks including that arising from imperatives of sustainable development and how they are managed. The management exercises appropriate internal controls and periodically reports to the board.

Business HeadDT, AF & OS(Chairs Apex Council)

CEO - Acrylic Fibre(Chairs theCommittee)

Sustainability Committee

-HR, EHS, Eng., Mfg., Finance- Sustainabilty Champion (Secretary)





CEO - Textiles(Chairs theCommittee)

CEO - Overseas Spinning(Chairs theCommittee)

Sustainability Advisory Council

10 Workgroups

Apex Sustainability Council- CEOs, CPOs, CFOs- Sustainability Champions- CSO & VP-BE Secretary

Meeting: Once/QuarterGREENTEAM

Supply ChainSustainability

Compliance & Risk

Energy & Carbon

Water & Effluents

ChemicalManagement

Social & Labouur

Waste Management

Health & Safety

StakeholdersEngagement

Product Stewardship

TEN WORKGROUPTEAMS


Steering Sustainability

ILT Sustainability Committee:

For sustainability initiatives, ILT coordinates with all other eight textile businesses of the ABG. The eight businesses are further divided into three sub groups and five units involved in spinning viz., IPT, PTE, ILT, PTS and ITS are in the sub group Overseas Spinning. Our sustainability governance organisation structure Is depicted below:

Mr. Sanjeev Gupta Mr. S.M. George

Mr. Parminder Singh Mr. Ravindra Kayarkar

Mr. Ram Chandak Mr. Fahri Haryudi

Mr. N.C.Ghosh Mr. Lambok Sidabutar

Chairperson, Technical Member, Engineering

Member, Engineering Member, Store & Purchases

Member, Finance & Commercial

Manager, HR

Member, HR & Production Member, Personnel

This institutional mechanism is the main enabler for driving sustainability practice and performance within the group. Besides, we have deployed comprehensive set of enablers that drive sustainability.

Sustainability Advisory CommitteeThis committee consists of 6 members, which focuses on the enhancement of the sustainability vision. There was one meeting conducted in this reporting period where the previous year reports were reviewed and feedbacks were discussed. Also, discussed about the future plans and targets for the improvisation and development of the units.

Dr. Ancha Srinivasan

Mr. Dicky Hindarto

Asian Development BankPrincipal climate change specialist

Head of Advisory Board of the Green Partner FoundationMember of the Expert Board of Indonesia Renewable Energy Society.Indonesia Vice Regional Manager of the Climate Reality Project.Member of the Advisory Board of the Indonesia Energy Efficiency Society

Mr. Joseph Scaria

Dr. Satish Wate

Dr. Ram Babu

Dr. Shirish Sangle

Asia Pacific, Habitat for Humanity International

National Environmental Research Institute

Ex-M.D- PWC

NITIE (National Institute of Industrial Engineering)

Director- Development,

Ex- Director – NEERI

Managing Director - RSM GC Advisory

Professor of Sustainable Business

Overseas Spinning Sustainability Commitee:

Mr. Yashpal Singh

Mr. KapilAgrawal

Mr. S LSipani

Mr. Kapil KAgrawal

Mr. C PBansal

Unit HeadITS

Chairman & CEO, OS Indonesia

Unit Head, IPT

CMO CFO


Sustainability Information ManagementSystem - powered by IT Platform

Policies & Management Framework:

Our IT platforms were further enriched through the deployment of the following projects:

A supply chain project was also initiated for AB Yarn in the reporting period. This module concentrates on demand planning, production planning and scheduling, forecasting, pricing, profit maximisation, increase in OTIF and inventory management. Projects of demand planning was undertaken in the reporting period and is due for completion in the next year. A Management information report is prepared from this system and is reviewed by top management.

Energy & Carbon

Safety

Health

Bio-Diversity

Water Stewardship

Quality

Human Rights


Supply Chain

Procurement

Transportation

Product Stewardship

Security

Supplier Code of Conduct

Anti Corruption

ISO 14001, Oeko-Tex, Higg Index

OHSAS 18001

OHSAS 18001, Wash Pledge

ISO 14001


ISO 9001, Oeko-Tex

UNGC

SA 8000, AA 1000

ISO 9001, 14001, OHSAS 18001

ISO 9001, 14001, OHSAS 18001

ISO 9001, 14001, OHSAS 18001

ISO 9001, ISO 14001, Oeko-Tex,

ABG Group - Information Security

ISO 9001, ISO 14001, OHSAS 18001

Code Of Conduct


Higg Index

Policy

Environmental Policya.

b.

c.

d.

e.

f.

g.

h.

i.

j.

k.

l.

m.

n.

o.

p.


RESPONSIBLE STEWARDSHIPFocus on how we manage today. Our goal is to build a framework of policies, technical and management standards aligned to international standards as defined by the IFC, OECD, UNGC, ISO and OHSAS. By introducing these standards into our systems we manage our operations in the most responsible manner.

Balancing Economic ValuesAligning manufacturing processes with our sustainability goals Energy & CarbonWater & EffluentsMaterials & WasteHealth & SafetyChemical ManagementSocial & LabourSustainable SourcingResponsibility to Customer

2124

2528323437394749


Balancing Economic Values

Strong and sound financial management and risk mitigation are crucial for the sustainable performance of an organisation both in short as well as in long term. Accordingly, we have adopted some of the best practices in the industry. One such practice is sustainability risk identification, mitigation and continuous monitoring.

The global textile industry is facing challenge from contracting demand and dumping of surplus production from China. The revenue generation was marginally up in all three Indonesian companies in adverse global markets. We have taken many actions such as reducing overhead costs, reducing packaging expenses, and investing in process improvements to improve process efficiency as well as our bottom line.

Guided by our business strategy and periodic updating of risk matrix, we identify areas and projects for improvement, assess feasibility and prioritize the projects. After careful consideration, as per priority, projects are taken up and implemented. While selecting such projects, sustainability aspects are duly and diligently considered. We give utmost importance to total compliance and take steps proactively even if administration of a certain regulation is weak in a geography.

We benchmark ourselves with the best in industry to understand the gaps and bridge and exceed in performance. The annual budget is prepared after many iterations of consultations with internal and external experts to arrive at challenging as well as achievable results.

With all these actions and more to come, our aim is to make company stronger financially. We are well on our path to delivering benefits to our stakeholders including communities, customers, suppliers and employees.

Mr. C.P. BansalCFO, Overseas Spinning Business


Direct Economic Value Generated and Distributed (in Mn USD)

Indirect Economic Impacts

Local Employment

Environmental Expenditures

2014 2015-16 2016-17

Economic Value Generated

(in Mn USD)

Economic Value Retained(in Mn USD)

Economic Value Distributed

(in Mn USD)

Economic Value Distributed(in Mn USD)

Value (in USD)

9.99

6.51

5.17

123.2113.2

122.3

15,24130,377

27,154

106.7 116.9113.2

2014 2015-16 2016-17

The company has made efforts to localise most of its procurement so as to increase the indirect positive impact in the local economy.

We always prefer sourcing of materials and equipment locally, provided that desired technical specifications are met. Local purchase accounted for 92% of our total purchases in the reporting period.

We are now in the process of deepening our pool of leadership talent by strategically giving more opportunities to local employees and developing their skills in managing the business. We currently employ 39% of the employees from Karawang as part of our workforce.

We have completed our audits, including environmental audits, and renewed our ISO 14001 and the ISO 50001 certification. The previous year’s values are also changed to remove the landscaping cost for correction in the items allowed in the Environmental Expenditure.

Percentage of the procurement budget used for significant locations of operation spent on suppliers local to that operation

2014-15 2015-16 2016-17

91.57%89% 92%

2014

2015-16

2016-17

Operating costs - 107,191,142 Employee wages and benefits - 7,603,223Payments to providers of capital - 1,786,804Payments to government - 31,200



Noted violations, fines (2016-17) : 0Target for 2017 : 0

0Number of Whistles blown (2016-17): 0Target for 2017 : 0

0

Compliance Registers are maintained by the respective departments. All upcoming regulations are reviewed annually and the compliance registers are updated, monitored and tracked.

During the reporting period, we did not pay any fines or face any non-monetary sanctions and/or cases brought through dispute resolution mechanisms for non-compliance with environmental and social laws and regulations. We also did not pay fines for non-compliance with laws and regulations concerning the provision and use of products and services, environmental, social or non-compliance

Guided by our business strategy and periodic updating of risk matrix, we identify areas and projects for improvement, assess feasibility and prioritize the projects. While selecting such projects, sustainability aspects are duly and diligently considered.

Highlights of risk management plan:Legal Compliance1. First Aider Licensed Training for 10 persons was given2. Waste Water discharge permit is renewed

Wash pledgeAll hygienic practices are in place as per guidelines.

ENHESAThe ENHESA score is reviewed regularly and also audited within theGroup companies


Policies,Code of Conduct


Mission

IMS,ENHESA


Dear stakeholders,

I am happy to present the sustainability report for the year 2016-17. After initiating the sustainability journey in 2013 and our first report in 2014-15, we have determined targets for the material indicators to be achieved by 2017. In this report we have reported our performance against the targets.

Our operations have been fully compliant with all regulatory compliances and voluntary guidelines. The Enablon- Sustainability Information Management is fully implemented now and is used for regular management reviews and intervention where required. We have also normalised our production measure and this should help us streamline the monitoring, measuring, performance management and reporting the impact of various resource conservation initiatives. Further, in line with the Group’s commitment, we are also in the process of setting science based targets for our climate stewardship initiatives.

We have modified our production lines for the production of value added products. We have renewed Integrated Management System certification and included ISO 50001 certification. Many energy saving initiatives were taken. Our sustainability initiatives helps us operate with efficient energy and GHG intensities within our sector among comparable size operations. We have also taken many initiatives in increasing material resource efficiency, reducing waste to landfill and fresh water consumption. We have also Various employee engagement initiatives and continuous dialogue between the employee and management, which helps us implement our annual production plans.

Mr. Sanjeev Gupta,Senior Vice President,P.T. Indo Liberty Textiles

Aligning manufacturing processes with our sustainability goals


Energy Conservation & Renewable Energy

Energy & Carbon

Energy Intensity (GJ/MT) 2016-17 : 11.87Target for 2017(GJ/MT) : 11.85

11.87

GHG Intensity (tCO2/MT) 2016-17 : 2.47Target for 2017 (tCO2/MT) : 2.46

2.47

Energy amounts to approximately 14% of the product cost. It is the second highest cost component after raw materials viz 65% - 70% of the product cost. We consume energy in excess of the minimum 6,000 TOE/annum as stipulated by the Government Regulation ESDM, no. 40.2009. Hence it is mandatory to conserve energy continuously and report to the government.

Our energy and carbon policy and processes drive us to explore and implement energy efficiency measures, low carbon solutions andrenewable energy in our operations.

We aim to optimise energy consumption through the application ofenergy efficient technologies; up gradation of plant & machinery andreal time monitoring and control of process parameters.

In the reporting period, we have been able to improve energy intensity by 4.8%.

Energy & CarbonISO 14000, Oekotek,

Higg Index

Energy & Carbon Policy

Energy & Carbon Mission


Our GHG emissions are largely from the purchased electricity from PLN which is generated in coal fired generation plants. To reduce our GHG emissions, we have undertaken the following projects:We have replaced our existing lighting fixtures with LED lighting, through effective planning of forklifts, we have optimized our operations and reduced our diesel consumption.

We plan to install 15.6 kW solar plant in the next reporting period.

We have saved 84.24 GJ of energy during the reporting period.

Savings due to energy efficiency projects (GJ)

12.47 458.2111.87

84.24

Energy Intensity (in GJ/MT)

591,544886

595,729590,658

595,729 1,770

Energy consumption- non renewable (in GJ)

Energy Consumption diesel(in GJ)

Energy consumption- Electricity (in GJ)

Carbon

Science Based Targets

Legend:

Legend:

217

495 2.58

440.25 2.47

162

123,398 122,348

We understand the impact of climate change and have developed an environment awareness creation module addressed to all employees. This module is translated into Bahasa for easier understanding.

Our target for GHG emission intensity reduction was 1.5 % year on year. We have reduced the GHG emission intensity by 4.6% through our energy saving measures.

As a responsible corporate, ILT is in the process of conducting internal studies to set up Science Based Targets (SBT) for its GHG emission reduction target.In 2016-17, we have conducted background studies, like selection of a base year, deciding tenures for the short and long term targets, as well as activity data such as normalised production, GHG emissions and gross profits in the base year.

After completing these studies, we will establish and communicate the new targets for GHG emissions reduction, in line with the SBT, in the next report.

Total Scope 1 Emissions (in tCO2/annum)


GHG Intensity


2015-16

2015-16

2016-17

2016-17


Emissions

NOx

SOx

PM

3.28

0.65

61.15

3.15

1.30

72.22

We understand the need to improve the air quality conditions in the work place and in the surrounding region. We improved the in-plant air quality by following a Standard Operating Procedure (SOP) whilst undertaking civil works so as to reduce the particulate matter in the environment. All the emissions are within the allowable limits from the Government agencies.

We continue to use R134A in all our chillers and R410A in our split air conditioning systems which are non- ODS refrigerants.

We are also planning to install a VRV based centrifugal HVAC system in our premises in the coming years.

P.T. INDO LIBERTY SUSTAINABILITY REPORT 2016 | 27

Emissions We understand the need to improve the air quality conditions in the work place and in the surrounding region. We improved the in-plant air quality by following a Standard Operating Procedure (SOP) whilst undertaking civil works so as to reduce the particulate matter in the environment. Effective implementation of this SOP has brought down the total suspended particulate matter from 101.64 mg/m3 in 2014 to 61.15 mg/m3 in the reporting period.

We revised the maintenance schedule of our rotary air filters, re-placed our filter media at more frequent intervals and this has helped to maintain a pressure of 250 Pa, thus improving efficiency and reducing particulate matter in the reporting period.

We continue to use R134A in all our chillers and R410A in our split air conditioning systems which are non- ODS refrigerants.

We are also planning to install a VRV based centrifugal HVAC system in our premises in the coming years. Air Emissions:

NOx µG/Nm3

SOx µG/Nm3

PM µG/Nm3

3.12 2014

0.73 2014

101.64 2014

3.28 FY15-16

0.65 FY15-16

61.15 FY15-16

Rotary air filters

Centrifugal Chiller using R134A Refrigerants (Environment Friendly)

Air Emissions:

mg/lt

mg/lt

mg/lt

2015-16

2015-16

2015-16

2016-17

2016-17

2016-17Allowable Limit: 250

Allowable Limit: 900

Allowable Limit: 400


Water & Effluents

Water Intensity(m3/MT) (2016-17) : 9.06Target for 2017 : 6.5

9.06Effluent water discharged (m3)(2016-17): 13,520m3

Target for 2017 : 30,000 m3

13,520 m3

Regulations in Indonesia require adherence to discharge water quality standards and responsible use of water resources. Discharged water quality and quantity is monitored on a monthly basis which is done by the government agency.

We have a Saskatchewan Irrigation Projects Association (SIPA) agreement with Perum Jasa Tirta-I, the water supplying authority for water intake and its consumption. We withdraw upto 40,000 m3/month from the Citarum Lake.

Water in huge volumes are not required in spinning units similar to ours. We were consuming approximately 1,344 m3 of municipal water per day in 2015 -16.

In the reporting period, we have put up a rainwater harvesting system with a capacity of 10,000 m3. lt collects rainwater from October 2016 to February 2017 (typical rainy season). We have received roughly 6 hours of rainfall per day in 2016-17. We pump 30 m3 of rainwater per day during the season towards the main water line. In 2016-17 we reduced the same to 12 m3/day. This was achieved by changing all underground pipelines to above ground, arresting all leakages etc. This has resulted in the reduction in water (use) intensity. Most of the water is used for sanitation, landscaping and hygiene purposes as spinning process is less water intensive.

Water & Effluents

Water & Effluents Mission

WaterStewardship & Environment

Policies

ISO 14001, Oeko-tex,Higg Index

Wash Pledge


ILT recycles and reuses more than 6% of its intake water. During the filtration process, the inlet water enters a sand filter, and in a subsequent cycle to the carbon filter followed by the softening process. This back wash water is channeled back to the raw storage tank where it is treated and reused within the facility. This has resulted in water savings of 82.5m3/day. In the reporting period we have installed a rainwater harvesting system, which has contributed to reducing stress due to water consumption from Chitaru lake.

SourceRiver Chitaru (m3) - 450,600Rainwater harvesting (m3) - 720Total 451,390

Recycle & Reused

Quantity of Water Withdrawn in consecutive years (in m3) -

Total volume of water reused & Recycled (in m3) -

% of volume of water reused & recycled -

503,000

-

-

490,510 451,390

29,430 27,791

6% 6.16%

2014 2015-16 2016-17

As an environmental steward, ILT is committed to treating all the waste water and maintaining the same within prescribed limits of the Ministry of Environment, Indonesia. Discharge water amounts to 3% of the total intake water. This water is largely from the air-washer unit and the blow down from the cooling tower.

Waste Water


Citarum Lake Citarum Lake Citarum Lake

20142015-162016-17

COD mg/l

BOD mg/l

TSS mg/l

101.93 93.38 48.27

41.9 m3/day40.8 m3/day37.6 m3/day

54.71

28

43.17 22.85

34.17 33.08

2014 2015-16 2016-17

Destination of Water Discharged Quantity

Waste Water Quality:


BiodiversityWe have conducted IBAT point-based intersection report identifies the Legally Protected Areas, Internationally Recognized Areas and Priority Sites for Biodiversity that are located within 1 km, 10 km and 50 km of the location. We also provide an indication of the potential biodiversity-related features close to the location.

The following are the threatened species that are potentially found close to the area of interest:

Taxonomic group: Birds Near Threatened species- 21Vulnerable species-6Endangered species- 01Critically Endangered species- 03

Taxonomic group: ReptilesVulnerable species-2DD species- 03

Taxonomic group: Amphibians

Near Threatened species- 1Vulnerable species-3

Taxonomic group: InvertebratesEndangered species- 01

Taxonomic group: MammalsNear Threatened species- 5Vulnerable species-7Endangered species- 06DD species- 08

Features Priority Sites for Biodiversity(Key Biodiversity Area)

Within 1 Km

Within 10 Km

Within 50 Km

no features

no features

no features

no features

2500 Ha

548 Ha

23630 Ha

Gunung SanggabuanaTriggers: endemic

Muara Gembong-Tanjung Sedari. Triggers: VU, migratory birds/congregations

Telaga Warna-CibulaoTriggers: CR/EN, migratory birds/congregations

21

3

3

2

1

8

4

4

6

1

7

65

31

IUCN Red List Categories: EX – ExtinctEW - Extinct in the WildCR - Critically EndangeredEN – EndangeredVU – VulnerableNT - Near ThreatenedLC - Least ConcernDD - Data Deficient


Waste Management

Waste intensity as % of of total raw materials (2016-17): 2.25%Target for 2017 : 1.92%

2.25%Quantity of Hazardous Waste Generated (MT) (2016-17): 2.3MTTarget for 2017 : 0

2.30MTRecycled / Renewable Waste in Packaging (2016-17): 229.7MTTarget for 2017 : 3.1MT

229.7MT

As we move towards a highly differentiated market with speciality yarns, our primary raw materials continue to be polyester staple fibre and viscose staple fibre, combining these with speciality fibres such as linen, modal, excel, coolmax, comber noil and bamboo.

Renewable raw materials including cellulosic, fibre constitutes approximately 72% of our total material consumption.

Materials & Waste Materials

Our material management policy ensures conservation, use of renewable, recovered and recycled material with speciality fibres. We aim to gradually lower our environmental footprint. There is also a focus on increasing the Value Added Products year on year.

We strive hard and put our best efforts to improve our material use efficiency.

Environment &Product

Stewardship Policies

ISO 14000, Oekotex,

Higg Index

Waste Management

Mission


Waste reduction targets are set annually at our budget conference, held in the middle of the coming year. Similarly supply chain engagement and intervention have resulted in improving efficiencies, reduction in lead times and improvement in OTIF (On Time In Full).

Process Material:

Packaging Material:165

13,49114,267

326

2,659

34,688

451

2,899

35,77937,298

161

13,140

Non renewable Materials (in MT)

Non renewable Materials (in MT)

Renewable Materials (in MT)

Recycled Materials (in MT)

Renewable Materials (in MT)

Waste such as roving flat strips, filter, are collected and stored in the waste go-down. In order to overcome the challenges of waste organisation, a bale press machine was installed, which has resulted in better waste storage and disposal, resulting in lesser number of trips to dispose of the same.

Non-Hazardous waste is handed over to authorised waste handlers. We ensure that the certificate and evidence for treatment and disposal is provided. This also enables us to track, monitor and manage the waste.

Solid Waste Management The main wastes produced by our facility in the spinning process includes fibre, scrap, paper, plastic and cartons.

We look at waste as a responsibility and an opportunity. We work in complete adherence to our waste management policy and provide a structured approach to waste collection, handling, storage and disposal of different types of waste generated in ILT.

There were no significant spills during the reporting period.

1004

229244

2.32.97

964

Non Hazardous Waste generated (Reused) (MT)

Non Hazardous Waste generated (Recycled) (MT)

Hazardous Waste (MT)

Legend:Legend:

2015-162015-16

2014-152014-15

2016-172016-17

We do not transport, import, export or treat any hazardous waste, which can be classified under terms of Basel Convention, and no waste is being shipped internationally.


Health & Safety

Injury Rate (2016-17): 0.59Target for 2017: 0

0.59WASH Pledge Score(2016-17) : 88%Target for 2017 : 95%

88%Higg Index score %(Env Module)(2016-17): 76%Target for 2017 : 90%

76%

By its ratification of ILO Convention No. 187, the Government of Indonesia reinforces its commitment to achieve sustained and continuous improvement of occupational safety and health to prevent occupational injuries, diseases and deaths, and take active steps in consultation with the social partners.

Ensuring health and safety of employees is the first and foremost responsibility as they are the most important resource, and every process depends on them. Any incidents of accidents, injuries or lost days due to occupational hazards damage our employee well-being, cause business disruptions and damage our reputation.

In order to ensure adherence to continual improvement and total employee involvement in addressing the challenge of safety and occupational health we have implemented management systems as per OHSAS 18001 standards.

We continue to conduct OHS aspect – impact analysis on a yearly basis. The same is certified by external third parties. Risk assessments are conducted once in 6 months by an external agency. Basic Condition Evaluation (BCE) is being audited internally on a quarterly basis for continual improvement on health & safety parameters.

Health & Safety

Health & SafetyPolicies

OSHAS 18001, Oeko-Tex,

Higg Index, Wash Pledge

Health & Safety

Mission


Our commitment to WASH pledge and periodic internal audits to check adherence to the pledge, are the main levers for maintain health and hygiene in the work place. Our performance is tracked at a unit level and also at a business level which is tracked during our Apex council meetings. Our score was 1.8 / 2 in 2015 which has decreased to 1.76 in 2016-17.

Our commitment to health extends to customer and ultimate user of our products. This is achieved through undertaking Oekotex certification of our fibre and yarn. Periodic evaluation of Higg Index score ensures that our commitment is adhered to in our operations.

Safety Council at ILT is registered with the Manpower Department, Indonesia, and members are from different functions. The safety council meeting is held each quarter. Inclusion of more workers in safety committees and improved awareness and training to our workers employed by contractors are also some factors that contributed to improvement of our safety performance.

Our Health & Safety Council comprises of of 53 members with 100% representation by workers.

In addition to the following training programmes such as First Aid, fire-fighting, emergency evacuation, mock drills, we have conducted awareness training programmes in the reporting period on working at height training, preventive loss of hearing tests, portable hand and power tools, electrical safety, occupational stress management, safety training for operation of the forklift, management of gas cylinder, personal protective equipment inspection and testing


Injury rates by gender

Lost day rate by gender:

Absentee rate:

Health & Safety CommitteeMr. Sanjeev Gupta Mr. S.M. George

Mr. Lambok SidabutarMr. P.S. Mangat

Mr. Midwar KamalMr. Syawal Riyanto

Ms. Pepi Putri KartikaMs. Anita Octaviani

Mr. Ade Suhendi

Mr. Sarwan

Mr. Diana

Mr. Amirudin

Mr. Agus Suprianto

Mr. Ina Mega

Mr. Hendro Setiyono

Mr. Sujadi

Advisor, Management Advisor, Management

Chairman, ManagementAdvisor, Management

Safety OfficerVice Chairman, Employee

Member, TrainerVice Secretary

Member, Worker

Member, Management

Member, Management

Member, Superviser

Member, Labor Union

Member, Leader

Member, Superviser

Member, Security

TECHNICAL ENGINEERING

PERSONNELENGINEERING

STAFF UTILITY ENGINEERINGENGINEERING

HRDSTAFF WCM

MAINTENANCE

GODOWN

ENGINEERING

PRODUCTION

MAINTENANCE

SQC

PRODUCTION

PERSONNEL

In 2016-17, we provided a total of 7244 hours of training on occupational health & safety, for a total of 1411 employees.

Types of Injury & Injury Rate:

in 2016-17in 2015-16

Female

Female

Male

Male

Injury rates by gender

1.16

3.47

1.48

4.45

1.101.88

0.40

2.78

1.22

2.04

Legend:

Legend:

2016-17

2016-17

2015-16

2015-16


Chemical Management

COD (mg/l)

93.3848.27

COD (mg/l) of Effluent (2016-17) : 48.27Target for 2017 : <90

48.27Compliance with IFC & regulatory standards of Effluent (2016-17) : 100%Target for 2017 : 100%

100%

Chemicals management is an important aspect for safe operations, maintaining quality of effluent and most importantly customer health and safety. At ILT, we manage chemicals through our Integrated Management System following ISO standards and REACH requirements.During the reporting period there were no significant spills in our operations.

We avoid known/identified toxic, harmful and bio- accumulative chemicals and substances. We comply with REACH requirements fully.

Our diligent chemical use is monitored by COD in our effluents.

Chemical Management

Chemicals Management

Mission

Environment, Health,Safety and Product Stewardship

Policies

SA 8000, Oeko-tex

Legend: 2016-172015-16


Caring & Sharing Our employees are critical to our business and its sustainability, more so in a challenging business environment wherein continuous innovation is critical. We are committed to creating a fair, healthy, safe and a rewarding work environment that balances work and life.

We provide equal treatment to all workers in employment, training, promotion and remuneration on the basis of their capability to perform the jobs regardless of race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliations or age. We create an enabling environment for diverse groups, made our premises disabled friendly and also improved the environment during the reporting period.

Company does not tolerate child labour, forced labour at work place or in the supply chain. We provide wages and benefits more than that is stipulated by the regulations. Company promotes structured employee recognition, reward, promotion system and the team rewards and individual rewards.

We have arranged health awareness programs for employees to increase their awareness on basic health. In addition we are arranging training on emergency evacuation, fire mock drills once every year by an external party. We also strengthened the recruitment process by enforcing all new recruits to undergo basic health screening and to cover health risks assessment. We have included occupational health and safety in our agreements with the worker unions.

We conform to the WASH pledge in order to improve our performance on water, waste water, sanitation, hygiene and health. We have been implementing Higg Index’s Environmental Module, Social & Labour Module and Brand Module to improve our sustainability practices along the value chain.

Mr. Vinod Singh Head, HR


2016-17 : 22.82Target for 2017 : 8

22.82 Training(Hours per capita)

2016-17 : USD 24,297Target for 2017 : USD 10,000

24,297 Community Social Investment)

We adhere to fair Employment practices against all externalities resulting in more technology intensive and innovation driven industry. We aspire to become an equal opportunity employer and do not tolerate child, forced or compulsory labour at the work place and in supply chain in adherence to ILO Conventions 29(Abolition of Child Labour), 105 (Abolition of Forced Labour) and 111 (Non discrimination towards employment opportunities). We provide timely wages and benefits as stipulated by the regulations and follow ILO Conventions 100 to ensure equal remuneration to male and female workers as per their seniority, qualification and skill expertise. We make best efforts to create enabling environment for diverse groups. Ourorganization is disability friendly and in the reporting period we have employed 1 disabled person.

In pursuance of obtaining SA 8000 certification we have undertaken action points during the reporting period which include:-

a. Provision of gym and aerobic centreb. Increased meal allowancec. Dormitory renovationd. Construction of a prayer roome. Increase in working hours for nurses at clinic

Labour Management RelationsOur Collective Bargaining Agreement (CLA) is negotiated and agreed upon once every two years. We enjoy Union support (SPN), and no time was lost due to any dispute in the reporting period and we received no grievances during the reporting period at our grievance box set for the purpose of receiving anonymous grievances from employees. If any dispute/grievance should occur, both management and union meet to solve the matter. We maintain a direct communication with all our employees and the union representatives. Both the management and union reps. meet once in a week and work together to achieve our goals and targets in areas such as productivity, quality, maintaining discipline and upholding our Values.

All the employees are covered in the bargaining agreement.The amount includes local employment generation in landscaping contracts and employee / family gifts etc.

Social & Labour Fair Employment Practices

Social & Labor

Mission

Social Accountability

Policy

SA 8000,Higg Index


New employee hire by age

Employee turnover by age

New employees hired by gender

Employee turnover by gender

Compensation and Benefits Entry level wage, basic salary and remuneration

Retention rate after parental leave

263

462

15

178

15

170

264

423

49

139

49

138

Benefits offered to permanent employees:

• Employment Insurance (BPJS)• Medical Insurance (BPJS)• Eid Mubarak Bonus• Allowance• Others

Benefits offered to temporary/part-time/contract employees:

• Employment Insurance (BPJS)• Medical Insurance (BPJS)• Eid Mubarak Bonus• Allowance• Others

2016-17

3.70%4%1 x basic salaryMealsHousing / Mess


2015-16



2016-17

725

193

185

2015-16

687

188

187

Total number of employees that were entitled to parental leave

Total number of employees that took parental leave

Total number of employees who returned to work after parental leave ended

209

216

14

32

23

21

0

2

0

0

169

164

Under 30 Years

Under 30 Years

30-50 Years Old

30-50 Years Old

Above 50 Years

Above 50 Years

Legend: 2016-172015-16

Female FemaleMale Male

383045 30

145 157187 208

New employees hired by region:

WestJava172

WestJava147

EastJava 11

EastJava 1

Others18

Others09

Cent

ral

Java

31 Cent

ral

Java

26


Total Employees by age groupDiversity is important to the organisation for cross cultural management, engaging people to achieve business objectives, tweaking demographics to suit operational assignments. We find that Indonesian women by nature are as sincere and committed as men, they are focused on their work, disciplined and hence more and more promotions to senior positions are taking place. The following women with us are in senior positions:

1. Renta Sinaga - Finance Section Head,2. Sulistyani - Export Marketing Sub Section Head3. Feronika W. - Stores Senior Officer4. Dewi Arianingsih- Senior Engineer, Quality Department

With a workforce where majority of the employees are female by gender, we have identified 36 leaders in them to lead each of the sub departments under the production department (like blowroom, ringframe and winding).

22.22% of the management positions at ILT are occupied by female employees.We provide requisite training to women for their development in respective work areas based on their KRAs and performance, and also their areas of interest.

We have hired 1 disabled member in the reporting period in functions where the suitable environment could be developed.

Our company policy allows employees to take a maternal leave of 3 months. Post return from maternity leave, they are reinstated to their original role thus reducing any opportunity for dissatisfy action. The mother of a new born is provided special timings (i.e. between morning and night shift) to participate and contribute to the organization. However we take care of our employees on their return by providing them roles that would be of less strain, less hazard prone and accident prone like supervisory.

We provide prayer rooms in our workplace in different zones to enable the devoted religious people to pursue their religious beliefs and requirements and practices. Appropriate dress codes have also been adapted to suit the culture. In addition to this we are providing scholarships to children of permanent employees who are loyal to the company having worked more than 5 years.

Employee Diversity

Diversity for employees

in 2016-17in 2015-16

Total Employees by gender

Total Employees by minority groups

5749ChristianChristian HinduHindu

75

992404

4671818926

Under 30 Years 30-50 Years Old Above 50 Years

Legend: 2016-172015-16

3471067 1044367

Male Female

P.T. INDO LIBERTY TEXTILES SUSTAINABILITY REPORT 2017 | 42P.T. INDO LIBERTY TEXTILES SUSTAINABILITY REPORT 2016 | 44

Indonesia has ratified various human rights treaties and ILO Conventions and therefore, we have a responsibility to make sure that we are not complicit in human rights abuses. International norms, such as the United Nations Guiding Principles on Business and Human Rights recognize that companies should undertake “human rights due diligence” measures to ensure their operations respect human rights and do not contribute to human rights abuses.

ABG is a signatory to the United Nations Global Compact, an international forum that operates under the aegis of the United Nations and ascribes to the human rights policy of the United Nations Global Compact.

Our approach to human rights is aligned with universally accepted human rights standards and we support the human right issues included in the Universal Declaration of Human Rights.

Our human rights policy addresses key aspects such as non-discrimination of any form, prohibition of child and forced labour, and freedom of association and the right to engage in collective bargaining. The same is applicable to every employee.

In upholding human rights the company provides equal opportunities to all workers irrespective of gender, religion and disability. We have not identified any violations during the reporting period.

We have included human rights clauses in our contracts such as labour and supplier contracts. Contractor’s employees can also contact us directly in case of any grievance. Our approach to detect any violations in fair employment practices and human rights is through periodic internal audits, grievance and whistle blower mechanisms. We will also be implementing the SA 8000 standard in the reporting period 2017-18.

Human Rights

Local communities meeting with Management

New employees hired by region:

WestJava1177

WestJava1187

CentralJava 11

CentralJava 1

Others76

Others62

East

Java

150 East

Java

152

Legend: 2016-172015-16

P.T. INDO LIBERTY TEXTILES SUSTAINABILITY REPORT 2017 | 43P.T. INDO LIBERTY TEXTILES SUSTAINABILITY REPORT 2016 | 45

According to the World Bank’s Indonesia development policy review in 2014, the textile sector finds it “very difficult” to fill skilled professional-level positions (engineers), citing insufficient graduates as the reason. Thus, going forward, Indonesia has to focus on equipping graduates and workers with the right technical and employer-valued behavioral skills (discipline, reliability, teamwork and leadership) to support/enable large investments in key sectors. The Indonesian government is now focusing on developing sector specific Bachelors and Masters Courses so that industry requirements can be met.

Training, building knowledge and re-skilling our workforce continues to form an important part of organizational development at ILT.

Trainings are delivered by the HRD in a classroom form. We also arrange for external trainings that are organized by Business HR (BHR).

We have also developed a skill matrix framework to identify competency levels, skills and qualities of employees vis-à-vis skills required to improve on the job performance. Based on such mapping, we develop the training calendar for all employees, and ensure progress in their career. We undertake skill mapping bi-annually, and based on this a development plan is made.

Total number of agreements and contracts that contain clauses on human rights

Number of employees who received training on human rights policies or procedures

Total number of security personnel employed

Is the training also provided to third party organizations providing security personnel?

Total number of security personnel receiving formal training in the organization’s human rights policies or specific procedures and their application to security

Total number of hours devoted to employee training on human rights policies or procedures

Training & Development

Investments2016-17

Training

Security Practices

340

67.6%

No

582

210


Men employed on the shop floor are skilled technicians, and OEM representatives provide on-the-job trainings on new developments and any upgradation. Additionally, they are also sent for external training programmes like energy conservation, power saving- two such externals sessions were organised in the reporting period.

We regularly measure the skill index of technical people working on the shop floor and we provide the required trainings that contribute to skill enhancement.New trainings provided:

• Air pollution control • Bisinosis and ISPA • Permit to work training• Working at height training• Preventive loss of hearing tests • Portable hand and power tools• Electrical safety • Occupational stress management• Safety training for operation of the forklift • Management of gas cylinder• Personal protective equipment inspection and testing• Machine girding

Talent Segmentation

Talent Assessment

Talent Review

My Development Plan (MDP) -Implementation & Tracking

Performance Evaluation

All employees including workers, long term contract workers and staff excepting new trainees are evaluated annually by the HR and concerned manager. The grading system is based on the following attributes: absenteeism, attitude, discipline, responsibility, job knowledge, capability, leadership, creativity, cooperation, obedience, health condition, and self-improvement.

Career Development

Staff and workers on shop-floor receive in-house trainings to groom them for senior positions as available as well as chances for higher education, for the following levels such as:• Group Head• Supervisor• Local manager

Workers are also identified in the talent pool based on attendance, attitude, capability, responsibility, initiative, cooperation, punctuality, health condition, discipline, performance, job knowledge and creativity for further promotions to supervisory as well as managerial levels.

We identify a pool of high potential candidates, approx. 15-20% of the total population. These employees are selected through Corporate HR from the following departments like production, finance, marketing, engineering, quality, and HR. Based on competency, skills and performance we have selected 11 local employees from our staff in the reporting period, an Individual Development Plan (IDP) was developed to fast track their growth within ILT.

Workshop on Excellence in Execution & Innovation was undertaken in the reporting period to improve the managerial skills of supervisory staff and local managers at external location.


Our appraisal process helps us to understand our employee’s challenges, strengths and areas where they seek improvement. In the process we identify areas that require improvements in our training module and accordingly adjust the calendar by increasing training hours for a subject or adding new training subjects as demanded by employees based on availability of resources. We provide opportunities for employees to improve their performance through retraining exercises. In 2017-18, we expect to improve effectiveness of training and development and cover more employees on the basis of skill index.

Total number of employees who received regular performance and career development review by gender:

Total number of employees who received regular performance and career development review by category:

Employees who received regular performance and career development review

Step

Trainingneed/

Identified

TrainingPlan

Training

TrainingRecord

TrainingEvaluation

Description PersonInvolved

Superiorand HRD

Trainer

HOD,Superior

Coordination

H R D

H R D

with HRD

H R D

HOD,

Position need

Individual

Course need by employee

Annual Master plan

Training by Department

Actual Training

Individual Record

Department PlanAction Plan

Actual Training Course

Training PlanActual

Training need & Actual

Summary Report

Training TypeTraining by Course

Trainer

Feedback Form

Evaluation of effectiveness

Flow Process Of Training Need Identification

251

74

798

975

914

1,118

287

83

Male

Male

Female

Female

Legend: 2016-172015-16


Total number of training hours provided to employees

Total number of employees trained

Average hours spent on training

Average hours spent on training

Female

Female

Female

Male

Male

Male

1,934

719

6.74

1,094

526

4.36

25,476

12,508

27.84

23,656

11,800

29.64

Legend: 2016-172015-16


Sustainable Sourcing Dear Stakeholders, With stricter labor and industry regulations in Indonesia, it is imperative to work with our suppliers on all sustainability aspects to continue to operate without supply chain disruptions. We are working with reputed companies for our critical supplies and communicate our code of conduct and SCM policies, so that our suppliers also follow the same in true spirit. Our vendor assessment system also includes human rights clauses.

Our regular stakeholders’ meeting with our suppliers include discussions not only about price, but also about the general market environment, market forecast, general economic forecast, exchange rate fluctuations, oil price estimations, supply chain sustenance, geo - political risks, anti-dumping practices and such critical aspects that could affect our performance and that of the value chain. This helps us to predict and fine tune our budget numbers and take necessary actions.

We encourage our suppliers to establish various management systems as mentioned in our supplier evaluation criteria. We are implementing social accountability standard SA 8000 in our operations and will soon extend relevant requirements in the supply chain.

Mr. Ravindra KayarkarManager Store & Purchase


Supply Chain

Procurement from local suppliers (%) (2016-17) : 92%Target for 2017 : 90%

92%

% Suppliers paid on time(2016-17): 100%Target for 2017 : 100%

100%


Procurement from local suppliers in %

89.50%92%

91.57%


Mission

Supply Chain Policy,Supplier Code of Conduct, Procurement

Policy

ISO 14001, SA 8000,ISO 9001,

Higg Index

Indonesian regulations on labour, environment, human rights, and safety have become stringent and the Government is taking serious actions including closure of companies or not complying with these regulations. So, it is essential for our smooth business operations of ILT, that its suppliers comply with these laws in letter and spirit. Also, as per local regulations, we are liable for stakeholders who are not complying with the local regulations.

We look forward to collaborating with our suppliers to understand, share and imbibe sustainability learnings. For example, one of our cone suppliers has started reclaiming used paper cones and cartons from us for further recycling.

In the coming year we are looking to strengthen our supplier assessment by incorporating environmental and social elements based on certifications and evidences from our suppliers. We look forward to collaborating with our suppliers to understand, share and imbibe sustainability learnings.

Legend: 2016-172014 2015-16


Responsibility to Customer

P.T. INDO LIBERTY SUSTAINABILITY REPORT 2016 |

Responsibility to Customer Message from Head, Marketing

Our vision is “to provide better, safer & environment friendly product to our customers”. We operate in over 50 countries worldwide, compete with different competitors in different markets, work with more than 1000 customers having different end uses using different kinds of machines and other complexities.

Customer centricity is our motto. Due to excellent customer service, customization of products through our wide range of specialty yarns and superior customer connect. Since 2013, our global market share has increased from 12% to14%, inspite of international trade having increased.

Our sustainability drive has added certain nuances to our advertising, marketing and product development strategy. We have already initiated the process of preparing our reviewing our marketing communications manual in keeping with the International Chamber of Commerce (ICC) code on advertising practices. Our manuals are reviewed to imbibe ethical guidelines that are self – regulatory from the Code thus minimising the need for legislative and regulatory restrictions, and enabling us to follow best practices in advertising.

Our customer satisfaction survey forms have been reviewed to include sustainability criteria which will include feedback from customer on critical issues and consequently help us improve our performances.

Life cycle impacts study for a few select products will be completed in FY 15. We will utilise the life cycle assessment to evaluate potential impacts of our products throughout in order to create value for us and ensure that our products are safe for the environment and health in all their intended uses. This will also help us to adopt internationally accepted good product stewardship practices.

We are continuously working towards innovating new products which would meet requirement of customers without having any negative impact on the environment and society. This effort would be augmented efforts in R & D which would include training for identification of environment friendly products.

-Kapil Kumar Agrawal

Our vision is “to provide better, safer & environment friendly products to our customers”. We operate in over 50 countries worldwide, compete with different competitors in different markets, and work with more than 1,000 customers having different end uses, using different kinds of machines and other complexities.

Customer centricity is our motto. We provide excellent customer services, do customization of products through our wide range of specialty yarns and superior customer connect. Continuing our journey of servicing our customers in the best possible way in last one year and also in line with group’s customer centricity approach, we initiated various new activities at unit level.

We are closely working with customers to cater to many new products and customisations. In close association with our product development team, we are developing new products and product grades for new applications. The share of VAP in total sales in increasing annually.We provide adequate information to our customers regarding our products. There were many initiatives taken for the customer engagement

• Mission Happiness, • Customer Centricity including Key Account Management, Hello

Bosstomer, Customer Journey Map etc.• Continuous communication through emails, phone calls, mutual

factory visits and exhibitions, trade fairs etc. We also started a quarterly newsletter to keep our Global customers updated about our various activities including our new products.

We have completed the life cycle analysis for most of our product grades and all of our products are Oeko-Tex certified and Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) compliant. Our customer satisfaction survey forms have been reviewed to include sustainability criteria which will include feedback from the customer on critical issues and consequently help us improve our performance.

Mr. Kapil Kumar Agrawal Chief Marketing Officer, Overseas Spinning Business


Market DynamicsWe are in a business where supply of yarn is in excess of demand and newer products are coming up every day. Customers in different geographical regions have different requirements, expectation of better products with complete solution/ services at competitive prices and shorter lead time have become the norm.

Thus, making the environment very dynamic. Customer management has hence become an important aspect. In view of these conditions, apart from maintaining the best quality of our existing products which are well accepted in the market, we are also in a spree of developing new products in order to stay ahead in the value game. We are having three strategic directions for product development. Our state of the art technology supports us to produce quality products in the most cost effective way.

Product Stewardship

Higg Index score %(Env Module) : (2016-17) 76%Target for 2017 : 80%

76%

Facility Module Score %( Social and Labour)(2016-17) 72.65%Target for 2017 : 80%

72.65%

Product Development 3 strategic years

1. Product development for immediate market need - already provided by other companies, however is new to ILT

3. Product from branding fibres & tie-ups with branded fibre manufactures to leverage on their brand value

2. Building “VALUE” around commodity & developing differentiated / engineeered product by targeting applications on different functional platform and branding

Product Stewardship

Policy

ISO 9001, Oeko-Tex

Product Stewardship

Misssion


% of products Oeko Tex certified(2016-17): 100%Target for 2017 : 100%

100%

We provide information related to certifications, yarn count, blend percentage, and ply of yarn. During the reporting period, there were no cases registered related to non-compliance concerning product information and labelling.

Over capacity built up across various industry segments, margins in commodity products are going to remain under tremendous pressure for some time to come. Therefore product differentiation through a higher value added product (VAP) portfolio seems to be the only sustainable way forward for our businesses. However the success factors for a specialty player are very different from that of commodity, therefore, this shift in business strategy will require a change in mind-set, value inculcation, and working styles. We are constantly analysing our business, yarn performance and benchmarking ourselves against industry players. Improvements are effected on a continual basis based on outcome of analyses and benchmarking.

Our product development today considers utilisation of both natural and man-made fibres. We understand the impacts that fibres have across its life cycle, hence we have included 100% recycled polyester and blends in our product basket.

We continue to test a number of products that blend both recycled and non-renewable fibres with cellulosic fibres, these offerings are in demand by certain key fashion brands. We develop our own samples based on market place potential.

Product labelling

Research & Development

Product: Injected Slub Yarn

This fancy yarn is produced with special injected slub-attachments on ring frames. In this yarn structure, there are two components with different dyeing property. One component is called base which runs continuously to form the yarn body and second component is called injection which runs intermittently as per the signals from electronic device and laid down program made as per the requirements of the customer. This yarn is normally used for knitting in apparel and after dyeing of any one components, thefancy effect is visible on the fabric. In this yarn thickness and length of injection portion may be tailor made as per customers’ choice. The base and effect strand fibre components may be selected suitably for variety of effects.

Potential Application: Circular knitting for fancy ladies top wearPotential Opportunity: As Injected Slub technology is new, opportunity of capturing market on this is quite goodFibre Details: Base: 1.2D x 44mm Rayon or Polyester or CottonEffect: 1.2D x 44mm Rayon or Polyester or CottonMarket Size: Growing market with customers in Europe, Turkey, Korea and USA


We have a pilot plant and a Centre of Excellence (COE) where we undertake both product sampling as well as knitting, dyeing and garmenting to showcase products to our customers. We have a product display studio where we showcase our products as well as our end customer’s product wherever the same has been developed through collaborative efforts.

ILT has conducted Life Cycle Assessment of Rayon Yarn. This assessment is based on ISO 14040/44 standard and is developed for communication to the stakeholders. One outcome of the study is identification of hotspots along the value chain (raw materials, manufacturing, transport, packaging material, use stage impacts and end of life) across the varios identified environmental impacts. For comparability purposes, ILT has

All our products such as rayon, polyester, modal, bamboo viscose, polyester rayon, modal/cotton, core spun yarn, polyester viscose including flame retardant yarn are Oeko Tex certified.

All our products comply with REACH regulations which restricts the use of identified chemicals and substances, and also comply with product health and safety regulatory requirements as required in the markets.

Use and service We provide guide lines to our customer on how to use our product. We take adequate care during transportation of our product to customers and ensure that packaging is robust enough to avoid any deterioration of product quality. We also have a customer technical service (CTS) department which proactively reaches out and manages the customer’s requirements. Occasionally we engage with our supply chain partners in this activity.

Customer Health & Safety

Managing Impacts in Life Cycle

conducted Life Cycle Assessment of Rayon Yarn. This assessment is based on ISO 14040/44 standard and is developed for communicationto the stakeholders.

One outcome of the study is identification of hotspots along the value chain (raw materials, manufacturing, transport, packaging material, use stage impacts and end of life) across the varios identified environmental impacts. For comparability purposes, we have chosen the functional unit as: 1. 1 kg of packed rayon yarn (Cradle to gate system boundary)2. 25 time’s use of a garment (blouse) made from 70% viscose, 25%

nylon and 5% elastane (Cradle to grave life cycle).

We have also compared our performance across the life cycle with that of Defra Study for 1 kg of viscose fabric manufacturing & Textile Exchange Study for 1 kg of viscose and TENCEL fabric manufacturing (both undyed and unfinished fabric) and identified improvement areas in the manufacturing as also in other parts of supply chain. We as a spinner in the value chain cause a small fraction of the total environmental impact in the value chain and to reduce impacts along the life cycle of the products we have to make appropriate and pragmatic choices.



No. of stakeholder meetings (2016-17) : 149Target for 2017 : 12

149Satisfaction Levels (Supplier, Community, Employee) (2016-17) - 95.57 | - | 93.2 | 96.17

Target for 2017 : 90%

95.57 93.2 96.17NPS Score (2016-17): 25Target for 2017: 40

25

StakeholderEngagement

AA 1000 guidance

Stakeholder engagement

policy and other policies Stakeholder

EngagementMission


We at PT ILT operate at only one location. Hence, we are an integral part of the region in which we operate and will continue to contribute to the local economy through local recruitment and value generation.

We have regularly met with the local village heads and representatives to identify their requirements and provide them with the required necessities:

1. Provides baby scales and scales for adults to neighborhood centre health centre

2. Senior high school sends 12 students for training3. Family planning in collaboration with Govt of Indonesia under the

department BKKBN-5304. Mosque construction5. Renovation of building and provision of fan6. 59% employment from local community

Listening to communitiesSTAKEHOLDERS

Suppliers

Employees

Local Community

Banker

Customers

Mode of communication, Frequency of meeting

Meetings, phones, emails, fax, supplier visiting us

Meetings, seminars, news letters

Meetings, Messages

Meetings, Mails

Meetings, smart phones applications, phones, emails, fax, customer visiting us, surveys both internal and external

Concerns : Payment terms, new business

Concerns : Increments, promotions, amenities, work satisfaction, safety, training, Performance

Concerns : Employment for locals, expansion of CSR activities, environmental impacts

Concerns : New loan off take, financing cost, market information, risk mitigation, business strategy, company performance

Concerns : Timely delivery, product quality, value-added products, Service Quality


a. Enterprise themesb. Business Themes

Enterprise Themesa. Engagement Index1. Pride2. Advocacy3. Intent to stay4. Energy

b. Agility1. Anticipating change2. Leading change

c. Alignment1. Clear goals2. Aligned with vision

d. Workplace Themes1. Employee brand2. Values3. Workplace engagement4. Performance culture5. Development and learning6. career

Business Themes· Growth Quality Focused· Low cost leadership· Solution based· Innovation· Continuous improvement· Cultural centricity· Business Transformation

We have not received any issue or complaints from nearby communities on environmental parameters or other issues in the reporting period.

We measure air, dust and noise levels in and around the plant and also conduct water discharge quality checks on a yearly or monthly basis and maintain records. Our union & its members actively participates in discussions with our community and suppliers regarding environmental issues, if any, and proactively take actions to address the same.

ILT acknowledges that creating an open environment of continuous engagement is vital to maintaining motivation and efficiency levels of its employees. The ABY units across Indonesia also organize welfare activities such as company picnics for the employees and their families. Similarly during the annual Id-ul-Fitri celebrations, employees including contract workers and their families are provided to and fro transportation to their native places to celebrate the festival along with their families.

We also annually celebrate Halal Bi-Halal jointly within the company campus. We organize sports events every year on 17th August to mark the independence of our country. On this day families of employees come together to have a morning walk which is followed by the sports events at our housing colony, that include volleyball, badminton, football, chess to name a few.

We organize picnics every year, competitions related to quiz, cooking, slogan composition, poster making and participate in various technical competitions within the company and within the group as a whole on topics like Kaizen, 5S, Why-why analysis, one point lesson, quality circle and poka yoke.

We organize health talks and blood donation camps for the employees.The Vibes Survey conducted in the reporting period focused on two themes:

Social Grievances

Engaging Employees


We have established Grievance Redressal Mechanisms for our employees. The system involves communication of procedures, recording and investigating grievances, redressing grievances and communicating; and finally reviewing the effectiveness of the mechanism annually. During the reporting period, we have not registered any grievance through this mechanism.

Grievance Redressal Mechanisms

Communication of Procedures

PreparingResponse

Evaluation of the grievance mechanism

Communication of response and seeking consent

Reviewing and investing

grievances

Our regular stake holders’ meeting with our suppliers include discussions not only about price, but also about the general market environment, market forecast, general economic forecast, exchange rate fluctuations, oil price estimations, supply chain sustenance, geo - political risks, anti-dumping practices and other such critical aspects which could affect our performance and that of the value chain. This helps us to predict and fine tune our budget numbers and take necessary actions.

We constantly work with our key local suppliers on improving the quality of products. Joint improvement projects such as improving the quality at supplier end, testing the improved product at our end and at our customers’ end, and using this input to further improve the quality of product of our supplier is being done continuously.

In the reporting period we have formed a CPC(Central PurchaseCommittee). Our actions include:

Supplier Engagement

There were no supplier grievances in the reporting period. We understand that effective grievances redressal is critical for our business . Our supplier grievance mechanism is taken care through our sustainability portal.

Supplier Grievance Mechanism

• Identification of a supplier for making bricks from cotton dust which will be later consumed as briquettes in boilers.

• Negotiation with local suppliers for installation of solar panels at our rooftops.

• Redesign the packing layers from 5 ply to 3 ply

• Direct procurement of cotton from jinning factory as a sustainable sourcing initiative.

• Negotiation with suppliers to reduce weight of paper cones. • They have reduced weight from 45 to 38 g. Now it is a target

to reduce to 35 gm


At ILT we do believe in that “Customer is the focus of everything we do”. The attributes such as nearness to the markets, long-term relationship with customers, unique customer technical support services, quick complaint resolution and strategy of product customization to improve customers’ productivity has helped us to develop loyal & regular customers and has given us a competitive advantage.

However, in order to support our long-term strategy of capacity growth, it was necessary to increase the share of regular and loyal customers. The more detailed knowledge of customer & market needs and the expectation of customers’ customers in the entire value chain have helped in increasing the brand image of our yarn. Our long term approach is oriented towards developing customers as business partners.

Our Customer Relationship Management is process driven and is focused at creating higher value for customer. Further, as a standard practice we share the market information that we have with our customers including future market trends to enable customers to take timely business decisions and take maximum advantage of the market situations.

The Customer Technical Service Head (CTSH) also has a fixed schedule whereby he interacts with customers in different regions every quarter with the purpose of understanding customer requirements and product performance. He also interacts with domestic customers once in a month. Our work heads also meet customers bi-annually. The CMO meets customers once in a quarter and the CEO also meets selected customers periodically.

We also have a Value Creation Engine (VCE) team who interact with customers on a regular basis and showcase our products to them. As demonstrated, we are keen to continually collaborate with our customers in the value chain which will enhance the production of value added products which help us to expand our product offerings.

Customer Engagement

Customer SatisfactionOSB conducts customer satisfaction surveys bi annually. However to get a more authentic feedback from customers we initiated the Net Promoter Score (NPS) study in 2015-16. We were reviewed against 22 attributes including quality, performance, service, delivery, pricing, and product basket.

This survey gathered information from our customers with regards to our products and services vis-à-vis our competitors and on customer loyalty. Our NPS score is 25% overall and 50% for Indonesia.


Customer centricity is about continuously listening closely to customers, gaining insights and designing and offering better solutions and experiences at every important touch point, consistently. Customer Centricity business in ABG is culture, process, strategic stance and execution centered in a deep, continuous understanding and agile response to the customer’s demand to deliver faster growth and achieve greater profitability than our competition.

Many initiatives are taken for improving the customer centricity such as:

a. Hello Bosstomer, where we drive more for new ideas for the development in the customer engagementb. Customer Technical Services helping in improving performance at the customer end.

We are also planning on few other projects like Mission Happiness, Quantum Jump Project in the coming years for development in the customer engagement. We have customer data controls with IT Policy and Code of Conduct.

There were no breaches of private customer information in the reporting period.

The time taken from receipt of complaint, to acknowledgement and resolution of the same is detailed below:

We follow a well-established system of addressing our customer’s grievances. The Customer Complaint Handling responsibility is fixed and it is tracked regularly. This system is effective as a good relationship building measure and to spot areas of improvement. We urge our customers to share all entire problem including minor issues to help us to proactively avoid any major deviations. Customer complaint reports circulate across the units for further improvement and avoiding recurrence of complaints of similar type.

Customer Centricity

Customer Grievance Mechanism

1. Acknowledgement of complaint / feedback2. Reply from plant post routine investigation3. Analysis of samples received from customers4. Analysis of fabric samples received from

customer with assistance from Development Assistance Committee

5. Analysis of fabric samples from outside agencies

6. Claim resolution for critical complaints

Complaint feedback and resolution process

24 hours3 days7 days15 days

30 days

90 days

Time Taken

Approach & Deployment

OSB Units have a structured process of Customer Complaint Handling and the system is inbuilt to handle the complaint. For each process the responsibility and measurement is fixed so that the customers’ complaints are used as a good relationship building measure and for areas of improvement. OSB encourages customers to share their entire problem so that minor issues re also brought to light helping us to proactively avoid any major deviation.

Assessment & Refinement

Customer complaint reports are treated as learning and circulated across the units for further improvement and avoiding recurrence of complaints of similar type.

Evidence Available

Customers complaint reports


Our sustainability portal http://oneabgtextiles-sustainability.com/ facilitates internal and external stakeholder engagement. On this portal, our stakeholders can record their grievances, queries and suggestions. Besides, the forum also has an option which includes discussions amongst stakeholders further leading to collaboration and co creation projects. Through this forum, our businesses will share sustainability success stories, advances, performance on a continuous basis. From now on, our sustainability report would be culmination of our continuous engagement and disclosures.



STRATEGIC STAKE HOLDER ENGAGEMENT & FUTURE PROOFING To understand the external changes that will inevitably impact our company in the future, we build strong relationships with our stakeholders and key technical experts on climate change, water and waste management, developments in human rights legislation, safety standards, health impacts and the like. We embed sustainability trends into our strategic business plans to minimise the risks and find new opportunities that will be presented by the requirements of a sustainable planet and society by 2030 and 2050 and make our businesses sustainable.


As a part of Responsible Stewardship, all entities of ABG textiles, are engaging with stakeholders through different modes regularly. A stakeholder engagement platform is operational online to record stakeholder concerns and suggestions.

The purpose of strategic stakeholder engagement conducted for ILT during June 2016, was to feed into future proofing of the business. Strategic Stakeholder Engagement, the second component of ABG Sustainability Framework is defined as: ‘Horizontal scanning and megatrend analysis to gain knowledge of how, and how fast externalities will change usually by disruptions’. The goal of Stakeholder Engagement, as per the ABG framework, is to build strong relationships with our stakeholders and key technical experts on climate change, water and waste management, demographic changes, developments in human rights legislation, safety standards, health impacts, technology changes and the like. By doing so ABG expects to learn what trends will most likely affect ABG textile businesses in the future and how they are likely to change. This is the reason why ABG Textiles conducts strategic stakeholder engagement.

ABG engages with industry experts, regional and sectoral experts along with key players along the value chain who would deliberate on environmental, social, economic, technological, and business trends that would impact the business’ operations and products in the next 3-5 years, The invitees to the engagement will contribute to:

Horizontal scanning Understanding the megatrends that contribute to shaping national and global responses to these changes. Visualize future threats and opportunities to the business and develop strategies to gain an advantage.

Scenario Planning Taking inputs from the strategic stakeholder engagements, arrive at key

driving forces by understanding social, economic and environmental trends that are certain to occur and combine this with future proofing factors (uncertainties) such as unprecedented shift in regulations, changing needs of stakeholders and business environment, thus developing a possible scenarios and responses.

Methodology and Limitations1. Identify stakeholders as given in guidance notes circulated 2. Circulate a draft on megatrends and queries around it to stakeholders 3. Call a meeting of internal and external stakeholders for 6 hours 4. Conduct brainstorming to identify trends of some relevance and

attempt convergence around relevance and impact contour of such trends to business and possible responses

5. Summarise the outcome, if another round of (offline dialogue) is not required.

However, ILT felt that a meeting of strategic stakeholders at one venue or video conference call will not be practical. Hence individual meetings of external stakeholders along with relevant internal stakeholders were planned.

Strategic Stakeholder Engagement and Future Proofing


Demographics & Associated ChangesDemographics & Associated Changes Protectionism-Fragmentation of Global markets

Demographics of Indonesia and increasing skill levels of the population would result in work force (skilled) availability easier

While some stakeholders felt growing fragmentation – reversal of globalization- is temporary, many felt that forms of protectionism in commerce, trade and migration would continue.

Government is driving skill development in Indonesia and hence skilled labor availability will increase

Protectionism in markets would also grow…….could be beyond non-tariff trade barriers of environment and social aspect related. Opinions were divided and uncertain on how it will affect the access to ultimate markets

Increase in wages is given and labour union unrest will be minimal due to government interventions to safeguard labour rights Regional groupings in trade will be new form of globalization

Future markets in Asia will be facilitated further by FTA

Indonesia will grow as a market

Present developing countries in Asia and Africa will witness faster market growth for end products

However nature of markets will be driven by brands more than demographics

Immigration will become more difficult and hence local employment at all levels will have to increase

Regulations on immigration, worker rights and safety will be more structured and stricter

There is an ageing population in developed countries, and in some markets a younger population is prevalent. But fashion is becoming more uniform and hence will not impact markets for yarn and fabrics

Labour

Labour unions will be more accommodative and government mediation and intervention will be positive

Equal Pay for Equal Work will be the norm

Labour unions will demand safety and health


Structural Changes

Size and Efficiency is not enough. Agility and innovation(differentiation) is necessary to survive

Indonesia will witness higher rates of growth

Consumer as fashion engineer

Citizens are becoming ‘fashion engineers’ enabled by the web and open source platforms and this trend is likely to increase.

Consumers can also purchase online ”fashion kits” and use them to make outfits and accessories out of locally available materials.

3D Printing could be adopted earlier in apparels

Clothing Care & Sustainable Consumption

Customers will prefer minimal clothing care, including cost for care …..minimal care schedules, electricity, water etc.

Customers may also be happy if the cloth at the time of disposal does not harm environment or is recyclable or is made out of renewable material or with least life cycle impacts

Will recycling apparels/fabrics and recovery of fibre/fabric be a significant economic activity in the next decade? Such signs are already seen by brands asking for supplies from recycled materials and technology for recycling has overcome many separation barriers.

Instances of Japanese customers enquiring for recyclability of products are reported

Climate ChangeGHG Mitigation & Energy Constraints

Restrictions due to GHG mitigation related regulatory requirements addressing this sector is likely……..voluntarily reducing emissions and disclosing the same will give first mover advantage

In Indonesia energy prices are not likely to increase out of pace with past trends. Some felt that the prices will increase as the government withdraws subsidies and invests in renewables. Voluntarily adopting renewable energy and continued efforts in energy efficiency will have reputational advantage. Government in Indonesia is promoting energy efficiency.

Indonesia has committed for 41% decrease in GHG intensity of the economy by 2020 over 2005 and is also aligned with market mechanism of Japan


Consumer preferences, customers and regulations will require GHG foot print information

Adapting to Climate Change

Manufacturing locations are more likely to face the effects of extreme weather events

Climate change impact on markets (risks and opportunities) could not be ascertained

Fresh Water AvailabilityWater Resource Risk

Water resource risk (fresh water availability and effluent discharge) is faced by customers and will become severe. Significant water resource risk is faced by customers in Indonesia located around Batum

Water resource risk is not very significant in manufacturing except at ILT

Information Technology & Smart/Functional FabricsInformation Management

Information Technology - 3D Printing

Management of information related to manufacturing, inventory etc. will become essential to address flexible demands of customers

3D printing or any other similar technology will not eliminate spinning….fiber to fabric applications will be limited to industrial applications

Information management of Products to demonstrate traceability to customers

Robotics

Automation may increase significantly in the face of labour shortages, demand for quality and smaller batch sizes

In near future very few operations may be amenable for robotic handling

IT application in controls will increase

Though regulators may not encourage robotics, application of robotics in unsafe tasks and transportation within manufacturing will happen


Smart/Functional Fabrics

R&D and Innovation

Smart fabrics and their applications can rise in some specific segments ...medical, sports etc.

R& D Innovation will be the absolute ingredient of business success in future

Smart fabrics would require incorporation of smartness at the stage of spinning

More importantly, demand for functional/function enhancing fabrics….medical and sports would grow

Regulatory EnvironmentShareholders

Labour & Immigration

Shareholders expectation on disclosures is increasing

Regulations related to work conditions and wages will be more stringent

Companies will be expected to contribute to local economy

Regulations on immigration /work visas etc. will be more stringent

Regulations related to employing/ non-discrimination of differently abled personnel

Diversity related regulations for boards and executives…not sure

Environment

Regulations related to product responsibility & related disclosures will increase in developed countries and also in developing country markets

Climate mitigation regulations will be applicable for manufacturing but disclosures will be required in product declarations

Regulations will continuously increase in rigor

Regulations on recyclability and textile (synthetic/non-renewable) waste disposal will become stringent

Customers will face significant rigor in environmental regulations


DEMOGRAPHICS

• Modernization/Automation, including robotics, wherever feasible may be adopted

• Workplace improvements to attract and retain talent• Transition to significant share of Indonesians in supervisory and

managerial workforce• Prepare for rigorous and structured immigration regulations• Continue efforts to overcome non-tariff trade barriers in

developing countries • Asian markets – focus….observe FTA progress and detail • Safe & Healthy work place will continue to be a priority with

unsafe work being automated • Ensure equal pay for equal work for all including expats/migrants

Organisational culture has to be built around to be agile, responsive and innovative.

CONSUMER AS FASHION ENGINEER

• Be prepared for customisation…..larger machines with flexibility for smaller batches

• Explore opportunities and threats if 3D printing in apparels becomes a material fraction of the market

CLOTHING CARE AND SUSTAINABLE CONSUMPTION

• Product development suitable for being…anti-bacterial, dust repelling, wrinkle free, requiring less chemicals and water in washing, durability

• Product development suitable for recyclability and improve share of products from recycled materials

• Prepare for product information management and disclosures and systems to demonstrate traceability to customers (e.g., to demonstrate source of viscose fibre from sustainably managed forests or carbon/energy/water footprint in a specific product)

• Explore possibility of ABY becoming top 10 brands for Yarn made from recycled material

CLIMATE CHANGE

• Continue with efforts in GHG Mitigation/Energy Efficiency and Renewable Energy and its disclosure

• Continue GHG foot printing assessments and disclosures for select products

• Assess whether the risk alleviation is adequate in the face of climate change at the manufacturing locations

FRESH WATER AVAILABILITY

• Continue with efforts in water conservation as the region faces fresh water availability risk and all industries may face risk of water resource allocation

• Product innovation to alleviate customer risk in water resources and effluents

• Keep information/assessment of customers that are likely to face water resource risk

INFORMATION TECHNOLOGY & SMART/FUNCTIONAL FABRICS

• Integrated (Supply Chain, Manufacturing, Customer) real time information management

• Traceability through information management is to be managed • Continue focus on automation and explore robotic applications

in operations with risk of safety and occupational health and for transportation within manufacturing

• Explore developing yarn products for Functional/Function enhancing fabrics in health care and sport applications

• Prudent, participatory and collaborative (along the value chain) investments in R&D

Future Proofing


• Innovation across all functions and levels is to be promoted

REGULATORY ENVIRONMENT

• Wage advantages are only short term. Prepare for improved automation and productivity

• Management composition to change to include significant proportion of Indonesians

• Disclosures to shareholders be on par with listed entities • Improved efforts to contribute to local economy • Aggressive continuation of positive compliance in

manufacturing • Increase products under product stewardship performance

and disclosures • Identify and watch significant customers and suppliers with

high environmental compliance risk


CSO’s EpilogueCommitment to Results

Dear Stakeholders,

We have returned to you with full account of our sustainability performance during the reporting period this year is 01st April 2016 to 31st March 2017. As you would appreciate, this is our third sustainability report following GRI G4 guidelines and there has been no significant change in the entity boundary. Our product portfolio varies and across reporting periods and accordingly, we have redefined our productivity measure to ensure comparability across the reporting periods. We continue with our commitment by contributing to UNGC and SDGs and have elaborated the same in this report.

As you have noticed, Sustainability Initiatives at ILT are guided by Sustainability Apex. Through Apex Council, entities belonging to Aditya Birla Group in Acrylic Fiber, Textiles and Yarn business work together, exchange experiences and traverse the sustainability path. We are also advised by an external advisory council, consists of experts in various sustainability areas from different countries of our operation.

Based on the foundation of ABG framework and our policies, technical and management standards aligned to international standards as defined by the IFC, OECD, UNGC, Oeko-Tex, REACH, ISO and OHSAS, we addressed the challenges of being responsible steward. Our Ten Mission teams having members from all three businesses address the challenges and it is used as a learning & sharing platform for sustainability across all our units. Our policies, management frameworks and performance is internally and externally audited at least once in two years.


As you have noticed, we have made significant strides in our performance and in many cases exceeded our targets for 2017. Much of it is made possible by our recent technological modernization, collective efforts (with other ABG companies) in R&D, product development, branding and marketing. Besides performance improvement in many sustainability KPIs, we note with pride that our approach and efforts in hygiene, health and safety are yielding significant results. This year, we have assessed our product life cycle impacts and made efforts to determine science based GHG emission reduction targets. We have begun using recycled raw materials in some of our products, contributing to circular economy, in a modest way.

We have strengthened our stakeholder engagement with communities, regulators, suppliers, customers and employees. We have supplemented engagement media through our portal www.MyABGTextiles.com. We have targeted to achieve co-creation projects with suppliers, customers and communities by 2017.

We have been successful in integrating, to a significant extent, sustainability in business decision making. We are sure that this will be reinforced through our focus on strategic stakeholder engagement and future proofing. We will continue to have strong focus on the stakeholder engagement along the value chain to deliver long term stakeholder value.

This report is a critical part of our accountability to stakeholders. We hope we have addressed your concerns and expectations. Requests for additional information and feedback on this Sustainability Report may be sent to me.

Dr. Jagadish BarikChief Sustainability Officer

http://www.MyABGTextiles.com


AssuranceAssurance Policy

We believe that independent assurance leads to quality and process improvements, and reassures readers and our management that the information we publish is accurate and material, and therefore contributes to building trust and credibility with key interest groups.We engage professional assurance providers who combine the strengths of non-financial assurance experience with technical competency in environmental and social standards. This report has

been assured by Bureau Veritas, third party assurance provider.

INDEPENDENT ASSURANCE STATEMENT

To: The Stakeholders of PT. INDO LIBERTY TEXTILES

Introduction and objectives of work

BUREAU VERITAS (India) Pvt Ltd. has been engaged by PT. INDO LIBERTY TEXTILES (ILT) to conduct an independent assurance of its Sustainability Report 2016-17. This Assurance Statement applies to the related information included within the scope of work described below.

This information and its presentation in the Sustainability Report 2016-17 are the sole responsibility of the management of ILT. Bureau Veritas was not involved in the drafting of the Report. Our sole responsibility was to provide independent assurance on its content.

Scope of work

The scope of work for this assurance included:

Data and information included in Sustainability Report 2016-17 for the reporting period 1st April 2016 to 31st March 2017;

Appropriateness and robustness of underlying reporting systems and processes, used to collect, analyse and review the information reported;

Evaluation of the Report against the principles of Accuracy, Accessibility, Balance, Clarity, Comparability, Reliability, Timeliness and Stakeholder Inclusiveness, as defined in the GRI Sustainability Reporting Guidelines G4;

The level of assurance has been applied as “Limited” for all sections of the report.

Methodology

As part of its independent assurance, Bureau Veritas undertook the following activities:

1. Visit to the manufacturing location of ILT on 27.09.2017 and 28.09.2017 and interviews with relevant personnel of ILT including the plant in-charge and heads of various departments functions such as Production, Energy, Environment, Safety, Procurement, Human Relations, Marketing and Corporate Finance & Accounts;

2. Review of documentary evidence produced by ILT;

3. Audit of performance data, on a sampling basis


4. Review of ILT data and information systems for collection, aggregation, analysis and review;

5. Review of stakeholder engagement activities by review of the Stakeholder Engagement minutes and report prepared by RSM GC consultants who were engaged by ILT

6. Direct interviews with a few stakeholders such as suppliers, customers, staff and shop floor employees during the site visit

Our work was conducted against Bureau Veritas’ standard procedures and guidelines for external Assurance of Sustainability Reports, based on current best practice in independent assurance.

The work was planned and carried out to provide “Limited” level of assurance and we believe it provides an appropriate basis for our conclusions.

Our findings

On the basis of our methodology and the activities described above, it is our opinion that:

Nothing has come to our attention to indicate that the reviewed statements within the scope of our verification are inaccurate and the information included therein is not fairly stated;

It is our opinion that ILT has established appropriate systems for the collection, aggregation and analysis of quantitative data such as Environmental, Health & Safety, Human Resource, Labour, Social & Community welfare as well as Product, Customer and Investor related data.

Inclusivity

ILT has developed and put in place processes for engaging with key stakeholders including external and internal stakeholders, investors, government officials and local representatives. It had undertaken stakeholder engagement activities in 2015-16 to gauge stakeholder views on Customer satisfaction, Employee welfare, Supply Chain, Community Welfare and Environment.

Materiality

The Report addresses the range of environmental, social and economic issues of concern that ILT has identified as being of highest material importance. The identification of material issues has considered both internal assessments of risks and opportunities to the business, as well as stakeholders’ views and concerns. The material issues were identified by a process of stakeholder engagement and interaction. In all, a total of 29 issues in the 3 categories of Business, Environment and Social were identified as material through this process.

Responsiveness

ILT is responding to those issues it has identified as material and demonstrates this in its policies, objectives, indicators and performance targets. The reported information can be used by the organisation and its stakeholders as a reasonable basis for their opinions and decision-making. The company has taken various initiatives towards making environmentally friendly textile products and the reduction of waste through recycling and usage minimisation. It has also given priority to occupational health and safety at work and community and local development activities.

Specified Sustainability Performance Data

Performance data within the report continues to be gathered through a variety of data systems and processes. Though the data as presented in the report could be regarded as reliable, we recommend to ILT that they review the data carefully, gathering inputs against the key performance indicator stated in the report to ensure that performance against these metrics can be consistently and regularly reviewed and continues to provide accurate and reliable information.

Evaluation against Global Reporting Initiative (GRI) G4 Sustainability Reporting Guidelines

Bureau Veritas undertook an evaluation of ILT Sustainability Report 2016-17 against the G4 Sustainability Reporting Guidelines. This included cross checking the GRI index table against all the reference documents to provide an opinion on the self-declared GRI reporting option.

Based on our work, it is our opinion that the Sustainability Report 2016-17 has been prepared in accordance with the GRI Reporting Framework including appropriate consideration of the Reporting Principles and necessary indicators to meet the requirements of GRI G4 Reporting Option “In accordance- Core”.

Best practices and observations

• Positive efforts taken to improve energy intensity by 4.8%

• Increase in contribution of Value added products (VAP)

• Local purchase account for 92% of total purchase.

• Community satisfaction level has shown improvement from 69% to 93%

• Consideration may be given for seeing of New suppliers for Human Rights

• There is a need for accurate quantification of energy consumption outside the organisation such as energy spent in the transportation of products and opportunities to reduce the same.

http://www.nestle.com/CSV/AboutOurReporting/GlobalReportingInitiative/Pages/GlobalReportingInitiative.aspx

http://www.nestle.com/CSV/AboutOurReporting/GlobalReportingInitiative/Pages/GlobalReportingInitiative.aspx


Limitations and Exclusions

Excluded from the scope of our work is any assurance of information relating to:

Activities outside the defined assurance period stated hereinabove;

Positional statements (expressions of opinion, belief, aim or future intention) by ILT and statements of future commitment;

Our assurance does not extend to the activities and operations of ILT outside of the scope and geographical boundaries as well as the operations undertaken by any subsidiaries or joint ventures of the Company.

This independent statement should not be relied upon to detect all errors, omissions or misstatements that may exist within the Report.

Statement of independence, impartiality and competence

Bureau Veritas is an independent professional services company that specialises in Quality, Health, Safety, and Social and Environmental management with almost 180 years history in providing independent assurance services, and an annual turnover in 2016 in excess of Euros 4.55 billion.

Bureau Veritas has implemented a Code of Ethics across the business to maintain high ethical standards among staff in their day to day business activities. We are particularly vigilant in the prevention of conflicts of interest.

No member of the assurance team has a business relationship with ILT, its Directors or Managers beyond that required of this assignment. We have conducted this verification independently, and there has been no conflict of interest.

The assurance team has extensive experience in conducting assurance over environmental, social, ethical and health and safety information, systems and processes and has over 5 years combined experience in this field and an excellent understanding of Bureau Veritas standard methodology for the Assurance of Sustainability Reports.

Bureau Veritas (India) Pvt. Ltd.

6th Floor, Marwah Centre, K. Marwah Lane, Off. Saki-Vihar Road, Saki Naka, Andheri (East) Mumbai-400072 India.

----------------------------- Sanjay Patankar Lead Assuror Product Manager- Sustainability & Climate Change Services Date: 20 December 2017Mumbai, India


CEO Letter

Organization NamePrimary brands, products and servicesHeadquarters locationWhere the organization operatesNature of ownership and legal formMarkets servedScale of the organizationTotal number of employees by typeCollective bargaining agreementsSupply clahin descriptionOrganizational changes during the reporting periodPrecautionary PrincipleExternal charters, principles or other initiativesMembership Associations

Entities included in financial statementsProcess for defining report boundaries and contentMaterial aspects included in the reportDescriptions of material aspect boundaries within the organizationDescriptions of material aspect boundaries outside the organizationRestatementsChanges from previous reports in terms of scope and/or boundaries

Stakeholder groups

GRI IndexGeneral Standard Disclosures

Strategy & Analysis

Organizational Profile

*Supplier, customer and transport are included from outside organisation boundary. Rest all material indicators are in single location

Identified Material Aspects & Boundaries


Fully

FullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFully

FullyFullyFullyFullyFullyFullyFully

Fully

Vision and Approach

Company ProfileProduct PortfolioOperations and ProductsOperations and ProductsOperations and ProductsOperations and ProductsOperations and ProductsEmployee DiversitySocial and LabourResponsible Supply ChainOperations and ProductsGovernanceVision and ApproachOperations and Products

Scope and BoundaryReporting PrinciplesMaterial IssuesMaterial IssuesMaterial IssuesCSO MessageCSO Message

Creating Stakeholder Value

2

coverpage76666622, 41404861677

131313**69-7069-70

55

G4-1

G4-3G4-4G4-5G4-6G4-7G4-8G4-9G4-10G4-11G4-12G4-13G4-14G4-15G4-16

G4-17G4-18G4-19G4-20G4-21G4-22G4-23

G4-24

Disclosures Coverage Section Pg. No.


Pg. No.

General Standard Disclosures


Report Profile

Governance

Ethics & Integrity

Specific Disclosures

FullyFullyFully

FullyFullyFullyFullyFullyFully

Fully

Fully

Fully

FullyPartiallyFullyFullyFully

FullyNAFullyFully

Fully

Creating Stakeholder ValueCreating Stakeholder ValueCreating Stakeholder Value

Scope and BoundaryScope and BoundaryScope and BoundaryFeedbackScope and BoundaryAssurance

Governance

Norms of Behaviour

Material Issues, Governance

Economic PerformanceClimate RisksEmployee BenefitsEconomic PerformanceEntry level wage, basic salary and remunerationSenior Management HiringIndirect Economic ImpactSocio-economic contributionProcurement Practices

Materials and Waste

54-5554-5554-55

69-7069-7069-7080, backcover71-7771-72

17-18

15

13

2267402240

22222222, 48

32-33

G4-25G4-26G4-27

G4-28G4-29G4-30G4-31G4-32G4-33

G4-34

G4-56

G4-DMA

G4-EC1G4-EC2 G4-EC3G4-EC4G4-EC5

G4-EC6G4-EC7G4-EC8G4-EC9

G4-EN1


How stakeholders were identifiedApproach to stakeholder engagementTopics raised during stakeholder engagements

Reporting PeriodDate of most recent reportReporting CycleReport Conflict“In accordance” option, GRI Index and report assurancePolicy regarding report assurance

Governance structure of the organization

Code of Conduct

Disclosures on management approach(DMA)

Economic ValueClimate change risksBenefit plan coverageFinancial assistance from the governmentRatio of entry level wage to local minimum wage

Proportion of senior management hired from local communityInfrastructure investmentsIndirect economic impactsLocal suppliers

Materials by weight or volume

Economic

Environment



EnvironmentFullyFullyFullyFullyFullyNAFullyFullyFullyFullyNANAFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyFullyNAPartiallyPartiallyFullyFully

FullyFullyFullyFully

Materials and WasteEnergy and Carbon-Energy and CarbonEnergy and Carbon--Water & EffluentsWater & EffluentsWater & Effluents-BiodiversityBiodiversityBiodiversityBiodiversityEnergy and CarbonEnergy and CarbonEnergy and CarbonEnergy and CarbonEnergy and CarbonEnergy and CarbonEnergy and CarbonWater & EffluentsMaterials and WasteMaterials and WasteMaterials and Waste-Products and ServicesMaterials & WasteComplianceEnergy and Carbon

Environmental ExpendituresResponsible supply chainResponsble supply chainGrievance Redressal Mechanisms

3225-2526-282829313131312727272727272729323332-34322325

22484856

G4-EN2G4-EN3G4-EN4G4-EN5G4-EN6G4-EN7G4-EN8G4-EN9G4-EN10G4-EN11G4-EN12G4-EN13G4-EN14G4-EN15G4-EN16G4-EN17G4-EN18G4-EN19G4-EN20G4-EN21G4-EN22G4-EN23G4-EN24G4-EN25G4-EN26G4-EN27G4-EN28G4-EN29G4-EN30

G4-EN31G4-EN32G4-EN33G4-EN34


Recycled input materialsEnergy consumption within organizationEnergy consumption outside organizationEnergy intensityEnergy reductionsEnergy reductions in products & servicesWater withdrawals by sourceWater sources affected by withdrawalsWater recycled and reusedFacilities in or near areas of high diversityImpacts on biodiversityHabitals protected or restoredIUCN Red list speciesGHG emissions(Scope1)GHG emissions(Scope 2)GHG emissions(Scope 3)GHG emissions intensityReduction of GHG emissionsOzone-depleting substances(ODS)Nox, SOx and other emissionsWater dischargeWaste by type and disposal methodSignificant spillsHazardous wasteBiodiversity affected by runoffMitigation of environment impacts of products and servicesProducts and packaging materials reclaimedEnvironmental fines and sanctionsEnvironmental impacts from product distribution and employee travelEnvironmental investmentsNew suppliers screened using environmental criteriaSupply chain environmental impactsEnvironmental grievances


Pg. No.General Standard Disclosures

Social - Labour PracticesFullyFullyFullyFullyFullyFully

FullyFullyFullyNAFullyFullyFullyFullyFullyFully

Fully

FullyFullyFullyFullyFully

FullyNAFullyFullyFullyFully

Social & LabourSocial & labourSocial & LabourLabour Management RelationsHealth and SafetyHealth and Safety

Health and SafetyLabour Management RelationsSocial & Labour-Social & LabourGovernance & ManagementResponsible Supply ChainResponsible Supply ChainGrievance Redressal Mechanisms

Human Rights

Human RightsHuman RightsHuman RightsHuman RightsHuman Rights

Human Rights-Human RightsResponsible Supply ChainResponsible Supply ChainGrievance Redressal Mechanisms

404040393435

353939-4415-1848484646

42

4242424242

43-42484846

G4-LA1G4-LA2G4-LA3G4-LA4G4-LA5G4-LA6

G4-LA7G4-LA8G4-LA9G4-LA10G4-LA11G4-LA12G4-LA13 G4-LA14 G4-LA15G4-LA16

G4-HR1

G4-HR2 G4-HR3G4-HR4 G4-HR5 G4-HR6 G4-HR7 G4-HR8G4-HR9G4-HR10G4-HR11G4-HR12


Number and rate of new employee hires and turnoverBenefits provided to full time employeesReturn to work and retention rates after parental leaveNotice periods regarding operational changesWorkforce represented in health and safety committeesRates of injury, occupational disease, lost days, absenteeism and work related fatalitiesWorkers with high incidence risk of diseasesHealth and safety topics covered in agreements with trade unionsAverage hours of training for employeesPrograms for skills management managing career endingsEmployees receiving performance and career development reviewsComposition of governance bodies and employeesRatio of basic salary and remuneration of women to menNew suppliers that were screened using labor practices criteriaNegative impacts for labor practices in the supply chainGrievances about labor practices

Investment agreements and contracts that include human rights clauses or underwent screeningEmployee training on human rightsIncidents of discriminationSignificant risk of freedom of association in operations and suppliersSignificant risk of child labor in operations and suppliersSignificant risk of forced or compulsory labor in operations and suppliersSecurity personnel trained in the organization’s human rights policiesIncidents of violations involving rights of indigenous peopleOperations that have been subjected to human rights assessmentsNew suppliers screened for human rightsHuman rights impacts in the supply chainGrievances about human rights impacts

Social - Human Rights



Social - SocialFullyFullyFullyFullyFullyFullyFullyFullyNot CoveredFullyFully

FullyFully

FullyFully

FullyNAFully

Fully

Fully

Investing into communitiesInvesting into communitiesAnti - CorruptionAnti - CorruptionAnti - Corruption--ComplianceResponsible Supply ChainResponsible Supply ChainGrievance Redressal Mechanisms

Health and SafetyHealth and Safety

Products StewardshipProducts Stewardship

Customer Satisfaction-Responsible Advertising and Marketing communicationsProducts Stewardship

Products Stewardship

5555151515--23484857

34-3634-36

50-5150-51

58-23

50-51

50

G4-SO1G4-SO2G4-SO3G4-SO4G4-SO5G4-SO6G4-SO7G4-SO8G4-SO9G4-SO10G4-SO11

G4-PR1G4-PR2

G4-PR3 G4-PR4

G4-PR5 G4-PR6 G4-PR7 G4-PR8

G4-PR9


Local community engagement, impact assessmentsNegative impacts on local communitiesRisks related to corruptionCommunications and training on anti-corruptionConfirmed incidents of corruptionPolitical ContributionsAnti-competitive behaviorFines for non-compliance with lawsNew suppliers screened for impacts on societyNegative impacts oon society in the supply chainGrievances about impacts on society

Health and safety impact assessments of products and servicesNon-compliance concerning the health and safety impacts of products and servicesProduct and service information required for labellingNon-compliance with regulations concerning product and service labelingSurveys measuring customer satisfactionSale of banned or disputed productsNon-compliance with regulations concerning marketing communicationsComplaints regarding breaches of customer privacy and losses of customer dataFines for non-compliance with laws and regulations concerning products and services

Social - Product Responsibility

UNGC* - Our performance as per the UN Global Compact’s ten principles


Pg. No.

Contribution to UN SDG

3GOOD HEALTH AND WELL-BEING

6CLEAN

WATER ANDSANITATION

7AFFORDABLEAND CLEANENERGY 8

DECENT WORKAND ECONOMIC

GROWTH

9

INDUSTRY,INNOVATION AND

INFRASTRUCTURE

10

REDUCEDINEQUALITIES

12

RESPONSIBLECONSUMPTION

AND PRODUCTION

13

CLIMATEACTION

7.3ENERGYEFFICIENCY

8.8

SAFE ANDHEALTHY

WORKSPACE

9.2

INDUSTRYAND SUSTAINABLE

INDUSTRIALISATION

9.4

CLIMATE CHANGEADAPTATION FOR

INDUSTRIALGROWTH

10.3

EQUAL OPPURTUNITY WITH APPROPRIATE REGULATION, LEGISLATION, POLICIES AND ACTION

12.2

EFFICIENTMATERIAL USE

12.4

HAZARDOUS WASTE GENERATION

12.5

MATERIALREACTION

RATE

13.2

CLIMATECHANGE MITIGATION

3.9

POLLUTIONPREVENTION

6.3IMPROVED

WATER AVAILABILITY

6.4WATER USEEFFICIENCY

PG:26PG:36

PG:41-42

PG:34-35

PG:49

PG:-

PG:38

PG:37

PG:32

PG:48PG:26

PG:56


Definitions & AcronymsCoE: Centre of Excellence

Compliance: It means conforming to a rule, such as a specification, policy, standard or law.

CTS: Customer Satisfaction

CTS: Customer Technical Service

DfE: Design for Environment

EHS: Environment, Health and Safety

GHGs: Greenhouse Gases

GRI: Global Reporting Initiative

Higg Index: It is an apparel and footwear industry self-assessment standard for assessing environmental and social sustainability throughout the supply chain.

KPIs: Key Performance Indicators

ODS: Ozone Depleting Substances

OEKO-TEX: OEKO-TEX examines all stages of production and tests for harmful substances used in production systems to ensure customer safety

OHS: Occupational, Health and Safety

ILT: Indo Liberty Textiles

QC: Quality Circles

Scope 1 Emissions: These are direct GHG emissions from sources that are owned or controlled by the entity

Scope 2 Emissions: Indirect GHG emissions from consumption of purchased electricity, heat or steam

Scope 3 Emissions: Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2, outsourced activities, waste disposal etc.

Stakeholders: A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization’s actions, objectives and policies.

Stewardship: It is an ethic that embodies the responsible planning and management of resources.

Sustainability: Sustainability is meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Whistleblower: Anyone who has and reports insider knowledge of illegal activities occurring in an organization

SUSTAINABLEVALUE

We welcome your feedback on ourSustainability Report 2016-17.

For any additional information, or toprovide feedback on this report,

please write to:

[email protected]@adityabirla.com

SUSTAINABLE VALUE · Compact yarn, Rayon/ Cotton Yarn, High Twist Yarn, Slub Yarn, and Rayon Silk...

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