Makalot Industrial Co., Ltd. 2011

CSR Annual Report

MAKALOT CSR REPORT IN 2011

【INDEX】 A Message from the Chairman 1. Overview 2. CSR structure 3. Customer service 4. Supplier Management 5. Talent Development & Employee

Relationship 6. Love & Charity and Green Earth

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A Message from the Chairman Makalot was born out of the endeavors from a group of people with the same goal. Our dream is to create a

company which is not only professionally managed, but also gives all the employees the feeling of belongingness. Moreover, core values of Makalot are based on “integrity, teamwork and sharing”, where the fruits of all the hard work are shared by employees and shareholders at both the material and spiritual levels. By sharing, more outstanding talents can be attracted to generate better performance which can be fed back to both our employees and shareholders.

As the enterprise prospered, it became very clear that Makalot should be more active and shoulder heavier corporate social responsibility. To this end, the Makalot Foundation was established. The foundation assists colleges and universities in Taiwan to conduct research projects and cultivate talents in the textile and apparel industry through industrial and academic collaboration, as well as sponsorship programs. Meanwhile, we established the Makalot Social Accountability Team, which regularly engages in public welfare activities. These include organization of environmental protection events in conjunction with the Society of Wilderness, the adoption of disadvantaged children in collaboration with the Taiwan Fund for Children and Families, blood donation drives, resource donation etc. All these events receive enthusiastic support from the Makalot employees. In addition, Makalot R&D department is contributing to environmental protection by developing recycled fabric material so as to make the fashion apparel industry eco-friendly as well.

Furthermore, Makalot production facilities span five Asian countries with 26,000 employees worldwide. All these production facilities are engaged in local public welfare activities as well. After major natural disasters struck these various countries － the tsunami in Southeast Asia, the earthquake in Sichuan, China － Makalot was there to lend a helping hand and also donated resources and money. We have been involved in public welfare overseas for more than a decade.

I often encourage Makalot employees with the expression “advance with time” to strive to pursue higher goals. I believe that Makalot still has room to fulfill corporate social responsibility. Through this annual CSR Reports, we can share Makalot philosophies and practices. Your opinions and feedback are most welcome and serve as the impetus for the continued advancement and improvement of Makalot.

1 Chairman

Major events ★ Won "2011 Taiwan Top 100 innovative companies “ by the Industrial Development Bureau of the Ministry of Economic Affairs ★Rated A+ enterprise for 8th Publicly-listed and OTC Companies Information Transparency and Disclosure Evaluation by the ROC Securities and Futures Market Development Foundation ★ Won 5-star rating for Top 69 of Taiwan A+ Club of 2011 edition Global Views Magazine ★ Rated No. 29 in Large size enterprise of Excellence in Corporate Social Responsibility 2011 by Common Wealth Magazine ★ Won second place in textile and garments industry of the 2011 Common Wealth magazine "Most Admired Company" 。

★ Won second place in textile and garments industry of the 2010 Common Wealth magazine "Most Admired Company" ★ Won 4-star rating for Top 69 of Taiwan A+ Club of 2010 edition Global Views Magazine

★ Rated No. 10 in Medium size Enterprise of Excellence in Corporate Social Responsibility 2009 by Common Wealth Magazine ★ Won second place in textile and garments industry of the 2009 Common Wealth magazine "Most Admired Company"

1.1 Company profile

2011

2010

2009

1. Overview

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• Founded in 1990, the Company’s core business is garments manufacturing mainly for export to the American, European and Asian countries. Reputed in management performance, the Company has over 25,000 employees in 5 countries across the world. They are responsible for global logistics, sales and marketing, design, R&D, manufacturing, market trend analysis and various other businesses and services. Presently, the Company is the principal cooperative partner for various American, European and Asian large retailers.

• As a multinational corporation, the Company has continuously innovated new business models over the past 20 years. It has transcended the framework of traditional OEM and has played a critical role in the value chain of the global garments industry. With its advanced ERP system, the Company has set up a global network across the Philippines, Indonesia, Vietnam, Cambodia and China. The network has fostered close cooperation among the 25,000 employees and more across the world.

Current status and development

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1.1 Company profile

1.1Company profile

Organization Chart

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Business environment overview

Uncertain global economic recovery: Under negative impact of the Euro debt crisis, the American and European market’s economic recovery is feeble. The China market shows signs of slowdown. Fashion brands have turned conservative under the negative impact of high inventory and reversed high growth in store expansion. The Fukushima nuclear disaster in Japan has seriously undermined its economic recovery. Under unfavorable and uncertain factors of the various major markets, pursuit of corporate growth has become rather difficult.

Low price trend to continue: The major American and European fashion brands and retailers have continuously lowered retail prices amidst sustained recession of the market, thereby also impact upon the order taking price of the garment manufacturers.

Migration of production blocs: In view of labor shortage and wage increase in China, the international brands, which formerly have China as the principal production base, are actively searching for new production bases including Indonesia, Vietnam and Cambodia. The Company also has intensified deployment in these countries, and expanded production capacity to meet production requirement.

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1.1Company profile

Business environment overview

Rise of on-line shopping market: The on-line shopping markets of major nations are under rapid expansion. In the past, the physical channels (such as shopping malls, department stores, etc.) are the principal marketing models. A quiet transformation is under way along with popularization of the internet and mature development of ecommerce. The future on-line shopping market is an emerging market of considerable significance.

Continuous brewing of environmental protection and green energy issues: The major American and European fashion brands and channel distributors have launched various promotion plans for environmental protection and green energy. The Twelfth Five-Year Development Plan proposed by the Chinese government regarding the textile industry will develop in the direction of environmental protection and energy conservation. Predictably, R&D of various environmental protection materials will be an important development trend. Aside from utilizing the various recyclable materials for textile raw materials, various functional materials will also be used to give warmth in winter and coolness in summer and improve wearing comfort, and reduce the use of heaters and coolers. This is an important environmental protection issue.

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1.1Company profile

• The Company’s net sales in 2011 was NT$14,864,936,000, a

growth of 5.23% compared to NT$14,126,339,000 in 2010. Net income in 2011 was NT$1,110,651,000, a growth of 20.99% compared to NT$918,003,000 in 2010.

Operation performance

Implementation result and budget execution of 2011 operation plan

Financial revenue, expenditure and profitability analysis

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1.1Company profile

1.2 Corporate governance

• The Company strives to implement the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies regarding protection of shareholders’ rights and benefits, improving the function of the board of directors, bringing into play the function of the stakeholders, enhancing information transparency and other important principles for corporate governance. In view of the current status of the Company , laws and regulations, relevant rules and regulations are specified in the Article of Incorporation, Rules and Procedures of Shareholders Meeting, Rules and Procedures of Board of Director Meetings, Procedures for Preventing Insider Trading, and the Compensation Committee Charter, etc. for implementation step by step.

• The Company adheres to the most important principle of “lawful operation” in good faith policy and formulated the internal control system, internal auditing system and various management methods. Auditors and external professionals (accountants) would carry out sampling inspection on an irregular basis. The Company also attaches importance to honest disclosure of operation information. The Company website provides public inquiry. It is an open information website for timely disclosure of major financial and business information in accordance with the law.

• The Company will continue to promote the policy of good faith, fair corporate governance and risk control mechanism so as to create a sustainable operation environment.

Corporate governance and principle

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Structure of corporate governance

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1.2 Corporate governance

• Compensation for directors, supervisors and managers follow Article of Incorporation and regularly reviewed by the compensation committee.

Corporate governance and compensation for directors, supervisors and senior managers

• Set up an auditing office with dedicated person responsible for auditing of all financial and business operation and management functions of this Company and its subsidiaries. In addition to routine auditing items of the yearly plan, special auditing is also carried out as required in order to timely find out possible shortcomings of the internal control system and propose specific improvement recommendations. Its results are regularly reported to the Board of Directors on a quarterly basis.

Internal control auditing mechanism

• The Company adheres to the principle of correct, specific and fair disclosure, and timely provides shareholders various operation data, financial, and major resolutions of the board of directors meeting and other information. In addition to the disclosure items required by the the competent authority, the Company also actively and voluntarily discloses relevant operation and financial data and actively participate in large investors seminars at home and abroad.

Financial information disclosure system

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1.2 Corporate governance

• The Company has incorporated risk control in management in order to maximize profits for clients and investors, prevent possible risks and enhance corporate value under the premise of balance between risk control and remuneration.

• Set up and promote the risk control system to effectively identify, analyze, evaluate and handle the entailed risks of various businesses, as well as to monitor and review its operation performance; also make sure all departments fully understand and appropriately control the risks confronted in order to ensure sustainable operation of the Company.

• From top to bottom, the Company commits to continuously deepen the risk consciousness of the management level and employees. Make sure company decisions have included risk in consideration, cultivate employees’ risk control capability and consequently shape the Company risk control culture and implement risk control in the operation flows.

Risk control policy 1.3 Risk Control

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• The Company officially organized the risk control project team in October 2006. The primary objective of the overall risk control policy is for prevention of risk which possibly could impair company reputation, order (objective accomplishment and customer rating…), production and delivery (inadequate production capacity or idling, garment quality, shipment delay, etc.) , and functional risk to the person and properties, raw material supply (poor quality or supply procrastination, etc.), and information. A risk alert network of different frequencies and report system have been set up to orderly control and monitor risks, and respond to various accidental circumstances so as to effectively implement management and minimize impact from risks.

Organization of Risk control

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1.3 Risk Control

2. CSR infrastructure

2.1 CSR policy • Makalot holds fast to the philosophy of “service,

speed and innovation” to manage our operations in the fashion apparel industry and satisfy the human need and desire for clothing. As a result, we have become the “most trustworthy” apparel supplier by creating maximum value for our clients, stockholders and employees. We also believe our enterprise reputation and values are derived from an acknowledgement of our core values by each of our members. In addition to sharing company profits with our employees and shareholders, through various public welfare programs, sharing love to every corner of society so as to accomplish our corporate social responsibility is to fulfill one of Makalot’s core value, “Integrity, Teamwork and Sharing” continuously.

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2.2 CSR organization

At Makalot, we understand that a prosperous enterprise can exert considerable influence on society. As a lead apparel enterprise in Taiwan, we are aware of the importance of CSR. Therefore, in August 2004, we established Social Accountability Team, which is in charge of handling matters that factory evaluation related to Social compliance overseas to ensure that our factories are in compliance with local regulations and the standards set by our clients. In particular, these include the forbiddance of child labor, forced labor and discrimination (on race, religion, age, national origin, gender, sexual orientation or political affiliation); providing fair wage and benefit, and create a safe and healthy employee work environment. In addition, Makalot is also dedicated to promoting and implementing various public welfare events. In Taiwan, we collaborate with social welfare organizations on a long term basis and make every endeavor to care disadvantaged minorities and promote the concept of environmental education. We are doing the same things in our oversea regions, sharing love and care to local residents.

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3. Customer Service

3.1 Provide Total Service •Makalot possesses a professional and comprehensive service team which includes

fashion design, material R&D, workmanship research, deployment, production and manufacture, quality control to provide total service to our customer, create added-value for Makalot and promptly respond to and satisfy customer requirements.

3.2 Raise Customer Satisfaction •Customer satisfaction is extremely important to Makalot. Shipment on-time rates,

work error rate, pass approval rate are all included in supplier evaluation. In addition to customer evaluations, our company has set up an internal self-inspection system and project teams are formed to submit and implement corrective actions for improvement items as well as track their effectiveness. Through steady and continuous improvement of our work, our company can raise customer service quality and overall satisfaction.

3.3 Respect for Human Rights and Apparel Safety •Apparel is a labor-intensive industry and various customers have established strict

standards regarding human rights. Makalot has set up a dedicated social responsibility team to ensure that each factory not only abides by local laws and regulations but also follows the human rights standards set down by each customer. Moreover, Makalot also cares deeply about apparel safety. For instance, fire-resistant materials and baby clothing must pass through strict inspection procedures and quality control system so as to guarantee that the clothing meets the highest safety standards. 15

Transparent Purchasing System Makalot has established an on-line price inquiry and quotation system since 2010. Through the system, suppliers could quote back to Makalot in a transparent way immediately, and in that way both sides could reduce abuse behaviors due to the fairly operation.

Strengthen Supplier Chain Management 1. Supplier evaluations are conducted twice a year with quality, price, service and speed being the major evaluation items. Through these evaluations, our company is able to establish a qualified supplier system to create long-term partnerships, provide access to related purchasing activities and perform corporate governance of our supplier chain. 2. Every six months, our company invites major suppliers to attend executive meetings to enhance strategic cooperation, strengthen supplier management and solidify our partnerships.

Supplier Chain Management

4. Supplier Chain Management

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♥Innovation ♥ Feel touched ♥ Happiness

Provide a competitive compensation system, offer

comprehensive care and benefits, maintain transparent

communication channels and enjoy sharing corporate culture.

The basic credo of Makalot people is sincerity and we have created a

sustainable business that fulfills our social responsibility based on

sincerity.

5. Talent Development & Employee Relationship

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5. Talent Development & Employee Relationship

• Taipei City Government: “2012 Award for Best Companies to Work for” ─ three star award.

• Global Views Monthly: Top honor of 8th CSR Award in the occupational health category.

• 2012: Received outstanding nursery room certification from the Department of Health, Taipei City Government.

• Taipei healthy workplace: 2011 Excellent Healthy Workplace Award. • 2011Self-accreditation of healthy workplace: Health Promotion badge. • 2009 Bureau of Employment and Vocational Training: Bronze medal for

Taiwan TrainQuali System (TTQS). • Introduction of the multilingual E-Learning system, received “2008

Enterprise First Application Award” from the Industrial Development Bureau, Ministry of Economic Affairs.

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5.1 Staff Employment

Categories Age

2011

Male Female Subtotal

Managers

Under 30 0 1 1

31~40 24 52 76

41~50 16 31 47

Above 51 23 18 41

Employees

Under 30 25 107 132

31~40 32 103 135

41~50 6 18 24

Above 51 2 9 11

Total 128 339 467

Employee by Gender 27% 73% 100%

Employment Type

Regular 127 337 464

Temp 1 2 3

Avg. Service Yrs. 6.59 6.61 6.60

Avg. Age 39.57 35.35 37.46 *Includes Headquarters and expatriates.

▼Makalot Workforce Structure

After the global economic crisis, the company turned its focus to upgrading the quality of our business operations. In 2011, we were richly rewarded for our efforts by a 20% increase in profits. Looking towards the future, the company will continue to expand and grow in global markets, develop and enlarge overseas production facilities and add new businesses (brands). We also will actively recruit talented periods from various fields to make our workforce is more diverse and well-rounded. Through the concerted effort of our team, Makalot hopes to seek out new opportunities for growth.

The company employed 467 employees as of the end of 2011. The basic employee composition, gender and age distribution is shown in the Fig on the left.. The male / female ratio is 27 : 73. Average years of service is 6.60 years and females who are 31~40 years of age comprises the largest group of employees at the company.

▼Employees by Education

Master 22%

Bachelor 66%

High School 12%

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5.2 Stable and Healthy Workforce

▼New employed and Turnover

In 2011, the number of new hires exceeded the number of departing employees and percentage of women exceeded the percentage of men. In general, the departure rate for 2011 was just 8.85%. This is much lower than the 32.64% average yearly departure rate for office personnel reported in the Get Consultant Company Salary Survey which means our workforce is stable and there is normal elimination and replacement.

Age

2011

New employed Turnover

Male Female Male Female

Under 30 8 32 10 18

31~40 4 7 4 9

41~50 2 0 2 1

Above 51 2 1 3 0

Subtotal by Age 16 40 19 28

Total 56 47

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5.3 Comprehensive and Transparent Communication Channels

Listening to the thoughts and opinions of our employees is a major source of power for Makalot!

A variety of communication channels have been set up internally to encourage thinking and expression of opinions. Senior executives give employees time to engage in face-to-face communication to build mutual trust, harmony and win-win situation for both labor and management.

Regularly hold on-line employee satisfaction surveys. In 2011, overall satisfaction was higher than the general industry. The survey showed that external satisfaction of employees is generally speaking higher than the industry. This means that the company provides better external conditions than the industry, As for internal satisfaction, sense of achievement and approval / praise were lower than the general industry.

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Action Plan Description

Boldly shout out what you love

Encourage supervisors and employees to acknowledge. encourage and compliment each other.

Total incentive plan Direct give back through instant incentives, reinforce exceptional behavior, create a positive work environment and atmosphere.

Improve work efficiency

• Organization adjustment, reassign manpower, analysis showed that the sources of work loads were from personnel assignments, steady improvement has been made through work / manpower reassignment through organizational adjustment.

• Innovation proposal system: Encourage employees to think about whether there is room for improvement in processes and working modes and possible solutions to affect change on the system and make work more efficient.

• A total of 257 innovation proposals and process improvements were made in 2011 and 67% were adopted. $145,500 in proposal bonuses was issued.

Optimize the performance

evaluation system

• Let relevant personnel clearly understand the performance management procedures through continuous announcements, and communication so that the system may be fully implemented by our joint effort.

• Employee interviews conducted by the Human Resource Department to learn about the implementation status of performance interviews and receive suggestions to serve as a basis for adjustment and improvement.

• Good can always be better!

• An analysis conducted by a psychology professor from Fu Jen Catholic University found directions and action plan for doing things better and continuous improvement to raise overall satisfaction.

5.3 Comprehensive and Transparent Communication Channels

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A important business policy at Makalot is to pass down expertise and foster talent in order to develop human resource potential. Adjust the annual business strategies, education and training requirements each year, conduct overall planning, draw up dedicated budgets to provide orderly and stratified training and development and ensure optimal utilization of resources.

• 2011 training results: Total hours of training offered was 499.7 hours (including hands-on training courses and on-line courses).

Overall attendance rate was 98.2%. Number of people who participated in training was 4,217.

Total hours e-Learning system used: 2,378 hours and over 7,427 visits were made to the system.

Yearly class satisfaction score : 4.23.

Makalot Learning College serves as the core of our training and development system. The e-Learning system acts as a complementary system to extend the Training and Development System (see Fig above).

5.4 Diversified Training and Development programs

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Orientation On the Job

training

Management Function

Learning and Development

Makalot College

• 「Curriculum Committee」： Develop professional training courses that combine theory with practice to emphasize functional competence.

• To provides external training subsidy, as well as other various elective courses.

• Provides diverse development and individual learning channels for employees.

• Includes New Manager Program, Experienced Manager Program, Senior Manager Program.

• To optimize our developments, we personalize in accordance to each talent’s needs, known as IDP.

• Systemized blended learning mode lets new people learn about company rules, rights and obligations in a quick, efficient and orderly way.

• Big sister are individually assigned to employees for hands-on instruction and experience sharing.

• Concepts, culture and values are incorporated into courses to increase adoption and acceptance by new employees so they can quickly acclimate themselves to Makalot.

5.4 Diversified Training and Development programs

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5.5 Comprehensive Cares & Benefits

• Taipei City Government: “2012 Award for Best Companies to Work for” ─ three star award. • 2012: Received outstanding nursery room certification from the Department of Health, Taipei

City Government. • 2011 Taipei healthy workplace: Excellent Healthy Workplace Award. • 2011 Self-accreditation of healthy workplace: Health Promotion badge.

Recognition

• Employee receive full reimbursement and work leave. • The company provides a comprehensive health management system including: personal diet

evaluation, medical / nutritional consulting and e-health management webpage.

Annual Health Examination

(of a higher standard than the legal requirement).

•Cooperate with neighboring daycare centers to provide daycare expense discounts and child care financial assistance so employees leave their worries behind

Childcare Subsidy

• Male and female employee can apply for leave after working for a full year. If application is acceptance, the company will reserve job position and annual salary.

• Starting in 2011. 9 people applied. The average period was 14 months. At present, 4 people are on parental leave. Of these, three have requested an extension. Of the six people that should have returned to work, one person returned (Return to Work Rate 17%) and 3 people extended their leave.

Unpaid Parental Leave

Provide welfare that is better than that mandated under the Labor Standards Act and related laws. Raise employee efficiency and morale to achieve an optimal work / life balance. Divide into three categories: Friendly workplace, broad concern and LOHAS actions.

: 1. Friendly workplace

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2. Broad Concern

• Service coverage includes: Live, work, financial planning, legal, medical, administration. This service is provided to help employees solve individual work-related problems.

• Employee emergency assistance regulations set up for employees to provide medical care allowance to those in need.

Employee Assistance Programs

• Encourage employees to recommends talented persons with professional / special skills. Employee

Referral Bonus

• Implementation started in August 2009. Participation rate reached 98%. Employee Stock Ownership Plan

• Annual outing allowances and 3 Days Paid Leave. • Encourage employees to make good use of vacation time to achieve a good work, life and

family balance. Work-Life Balance

• Diverse incentive programs: Outstanding Employee, Outstanding Lecturer, Outstanding Team, Professional Certification Accreditation, and Senior Employee Accreditation.

•Wedding and funeral allowances; Departmental luncheons; Gift vouchers for the Dragon Boat Festival and Mid-Autumn Festival and Chinese New Year; Cash gifts for employee birthdays; Sample sales.

Various Award Programs

5.5 Comprehensive Cares & Benefits

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3. LOHAS actions

• Global Views Monthly: Top honor of 8th CSR Award in the occupational health category.

• Company executives led groups to participate in Taipei 101 climb and PUMA Night Run and

other activities.

• Employee health discounts: Zhong Shan Sports Center and Curves Gym.

Health Promotion Activities

• Arrange annual get-together for employees and their families to create a memorable experience for all.

Makalot Family Day

• Social club allowances ; A five-star Chinese New Year party; Acupressure massage service.

• Diverse lectures. Benefits

5.5 Comprehensive Cares & Benefits

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6. Love & Charity and Green Earth

In recent years, Makalot has become increasingly committed to caring for disadvantaged minorities and has deepened the concept of environmental protection education. In addition, the Makalot Foundation was formed to offer more resources to the partnering public welfare organizations. Makalot provides them with physical resources and financial aid. Besides, by cooperating with them in holding related events, Makalot’s employees, their families and friends can gain further insight into the organization of public welfare. By partaking in the charity events, more people are given the opportunity to contribute their love and care. We also share our love to abroad. In the event of natural disasters, Makalot initiates relief operations to distribute resources and donations to the areas destroyed by disaster. Local colleagues holds periodical charity activity to contribute to local society.

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6.1 The Makalot Baby Project: Sponsoring children from Taiwan Fund for Children and Families (TFCF)

The company and our employees jointly adopt children from disadvantaged families both in Taiwan and abroad. A sum of NT$700 – NT$1000 is donated to each child every month. If an employee chooses to join the adoption program, the company will provide half of the amount and jointly sponsor the child with the employee. Also, employees that decide to sponsor a disadvantaged child do not have make arrangements to wire the funds themselves, the company will provide assistance by directly deducting the amount from their salary so they have a convenient way to participate charity activity.

In 2011, a total of 55 disadvantaged children were adopted in our country and a total of 30 were adopted internationally (Vietnam). The total amount of money donated by the company and our employees for this adoption program this year was NTD912,000.

Love & Charity

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Thanks letter from TFCF kids

6.3 Sponsor Chinese Children Home & Shelter Association (CCSA) to Provide Education Opportunities to Homeless Youth

Encourage orphaned youth with excellent academic achievement and enrolled in graduate schools to continue their studies by subsidizing two years of their tuition fees, so they can concentrate on their studies and complete their degree. By means of emergency rescue assistance, the economic burden can be reduced for children that have become homeless due to domestic problems so that the children can carry on their studies without any disruption.

Invite Makalot employees to participate in the “one day volunteer” event to give the orphaned children encouragement and support.

In April 2011,. Makalot employees served as volunteers to accompany the kids from the children's home on a field trip to Taipei Mucha Zoo for some fun activities.

6.2 Scholarship for low income family students

Each semester, NT$10,000~20,000 is awarded to low income family students to assist them in accomplishing their studies.

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6.4 community blood donation drives

Recycling income is donated to Syin-Lu, while the whole event contributes also to environmental protection.

6.5 Toner cartridge recycling in collaboration with the Syin-Lu Social Welfare Foundation

Yearly two to three community blood donation drives: When the blood bank supply becomes low, Makalot holds a blood donation drive. Employees and the surrounding community residents are all invited to donate blood. Employees always respond with enthusiasm each time. Most of time, we could break the record of previous time.

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6.6 Donation and sponsor the Eden Foundation When major disasters occurred in Taiwan and abroad, we always gather our employees to support the donation to the disasters. A total of $462,000 was donated to 2011 Fukushima earthquake. A total of $2,000,000 was donated to 2009 flood. Gave NT$100,000 to help sponsor the Eden Foundation's Nick Vujicic - Never Give Up speech to promote positive thinking and lifestyles. Tickets to the speech were offered in order to encourage employees to enthusiastically participate in charitable activities.

6.7 Donations and Charity Bazaar

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2011/6/18-Donation and Charity Bazaar on Makalot Family Day Makalot appeals to its employees to collect all their things that are no longer being used, and bring them for charity bazaar held during Makalot family day. The income is therefore donated to public welfare groups. All the unsold items are donated to the Kuang Jen second hand store.

6.8 Overseas plants – Sharing happiness and love

Cambodia: Public welfare activities are held twice a year to contribute to the local society. In the event of natural disasters, Makalot also initiates relief operations to distribute resources and donations to the areas destroyed by disaster. 。 Flood disaster relief in 2011

Indonesia: Since 2009, Makalot has worked with our client Gap to organize courses related to enhancing the life skills of our factory employees. The employees all indicated significant benefits of the training to their work and family life.

Philippines: Makalot sponsors local schools for the disadvantaged and physically challenged to help them build up their infrastructure. It also raised funds for disaster victims and families, including flood & fire.

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6.9 Green procurement

Development of eco-friendly textile products: Makalot is considering the increased environmental awareness among consumers and the emphasis on global warming related issues. For the 2010 Walmart order, 50% out of 510 tons of poly mesh fabric produced by Makalot came from recycled poly. This polymer is made from recycled plastic soda bottles. Makalot continues developing fabrics from recycled materials and it plans to popularize them from the fall and winter of 2013 onwards.

Recycle poly Participation in

environmental fabric exhibition

Green Earth

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6.10 Makalot green partner – The Society of Wilderness

At regular times each year, the Society of the Wilderness cooperates with our company to hold environmental protection activities and lectures. By participation in these activities, our employees can experience the beauty of the natural world and gain a greater understanding of environmental protection concepts. Environment protection lecture series - 2010/06/29 Natural Magic School in the City 2011/07/23 – Ilan Shuanglian Peak tour to explore and experience ecological wonders

History and in-depth exploration of the Shuanglian Peak ecological base Enjoyed the learning from the on-site tour – Introduction to the marvelous scenery, plants and insects in and around the wetlands 2011/12 100 year old elementary school in Wanhua-Laosong Elementary School (ecology classroom) culture in-depth guided tour

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Promoting environmental protection in office Advocating energy conservation to reduce the waste of resources. Makalot

regularly shares knowledge about energy conservation and carbon reduction with all its employees. Environmental protection measures in production areas.

6.11 Energy conservation, environmental policies & measures

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