Sln teks.sust.2011

GRI REPORT

Sustainable Threads

2010-2011

Sustainability Report

2010-2011 Sustainability Report

2 | Sustainability Report /

ABOUT USABOUT US

About Us

About this Report 3

Statement from the Executive Board 4

ompan ro le

SLN With Numbers 8

Our Approach to Sustainability 10

Corporate Governance 11

Vision and Mission 12

Sustainabilit in the Suppl Chain 12

Compan Goals 1

Stakeholder Engagement 18

ur Sta eholders and ialo ue rocess 1

ur rimar Sta eholders 1

eterminin our riorities 21

Economic Performance 22

Mana ement Approach to our Economic mpact 23

Economic ata 2

Product Responsibility 31

Social Performance 36

Mana ement Approach to our Social mpact 3

ur Suppl Chain and Contract Manufacturer olic 41

Emplo ee ealth and Safet 43

Environmental Performance 48

Mana ement Approach to our Environmental mpact 4

Waste Mana ement 2

Water se

Ener se 8

Carbon ootprint 3

Water ootprint

GRI Index 66

Annexes 1

Sustainability Report / | 3

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ABOUT USABOUT US

Esteemed shareholders,

The global nancial crisis experienced in seriously a ected all industries

overall, along with the textile industry in which we operate as SLN.

This challenging period indicated that we have to create a new road map, strengthening our proactive, permanent and universal values both globally and on country basis. The balance of production and consumption needs to be carefully reviewed, and all the negative e ects originated in this period have to be collaboratively assessed in a transparent and accountable way by the whole chain of shareholders.

In order to obtain a nancially sustainable state, we need to have an ethical and accountable attitude to the other shareholders. This is the most signi cant ey element to create a successful business model. In line with this, we need to adopt the act of contributing to the solutions of social, environmental and economic problems in the community as a primary corporate responsibility.

At SLN, we are striving to implement the principle of sustainability successfully to the whole company, in order to have a sustainable state and to share our in uences with all our shareholders. We now that sustainability is a critical strategic element that plays a signi cant part to shape our future.

We are sharing with you our report of performance and sustainability e orts, the rst of which was in and the second of which is in

. ur goal is to convey our administrative, environmental and social performance along with our innovative management approach to you, our esteemed shareholders.

We integrated our sustainable business model with our innovative product and service approach, staying loyal to all ethical values.

In this process, we were attentive to develop our shareholder dialogue and to ful l our reassurances to the primary shareholder groups. “Empowering internal communication in collaboration with S GEP, English language education within the scope of life long education programs, “Shareholder Attendance in collaboration with Marmara niversity are examples of signi cant social pro ects within

reporting term.We assured that our contract manufacturers,

who hold a signi cant part in our chain of supply, participate in many social pro ects and acquire awareness together with us.

In order to determine our impact on the environment, we added the new Water ootprint measurements in this term in addition to the Carbon ootprint measurements that we launched in 2 .

In 2 1 11, we also maintained the Plain Production LEAN Program that we launched in

. We reached a production e ciency of % as SLN Te stil ve onfe siyon, reali ing our goal for the pro ect.

In order to integrate our most important product of supply, the dyed fabric production into the company, we performed our dye house investment in the start of . It too more time than planned to form company values and a sense of quality for the dye house unit, adapting it to the SLN Te stil in the desired conditions. Involving challenges both in terms of cost and time planning, this process was completed to the end of . After the integration of the dye house unit, the integrated production unit was formed. We believe that this change will bring us advantages both in service and price.

At SLN, our most signi cant goal for the upcoming years is to maintain our current customer portfolio and add new brand customers to it.

We hope that this report containing our sustainability performance from will be a guide for you in terms of our sustainability approach and practices. Our report for this term has been prepared again according to GRI principles on a B level with an extended scope. GC Principles were ta en as guidelines to determine the scope of extension.

SincerelySelin G rSLN Te stil ve onfe siyon CEO

C AIRWOMAN O T E E EC TIVE BOAR SEL N G R

STATEMENT FROM THE EXECUTIVE BOARD


Esteemed Shareholders,

At SLN, the corporate success and responsibilities of the company are of equal

value and importance to us with the short and long term nancial achievements, while carrying out our investment pro ects. As our previous experiences and our six year company history showed us, a company, which is unable to ful l its corporate responsibilities, will never achieve nancial success to carry the company forward in the long term.

Achieving success and satisfaction incorporating the whole chain of shareholders is only possible through maintaining and sharing corporate values along with the company culture.

Our dye house investment in has been established to better respond to the customer demands in terms of quality, speed and price. rom the day SLN dye unit was integrated in the

company, we have been determined to set SLN culture and values in this company as well. On this purpose, there has been a month program at the dye house unit, which hosts employees. In this long, challenging and costly process, the program turned out to be longer and more comprehensive than we planned. owever, we are graceful that SLN corporate values and priorities are now integrated in the SLN dye culture.

In we started to improve the social and environmental conditions of the company. Eventually, the social conditions of the company were brought to an equal level with SLN Te stil ve

onfe siyon. Increasing awareness for employees and creating an employee portfolio that goes parallel with general SLN values were the most challenging and time consuming processes.

Arrangement and process optimi ation studies on the environment proved to have positive e ects on the visual and production processes of the company. With the changing processes and new machines, we use less energy while saving more time and water. We achieved up to 3 % water

and steam savings than s to process and machine amendments.

With the environmental arrangements around the company, our dye house now loo s greener and cleaner. The insulation and puri cation applications for pipes and water channels throughout the company brought energy savings while enabling safer transfer of water to the water unit. Our most signi cant goal in this sub ect is to develop our water puri cation system and contribute to the recovery of the Ergene Basin in Thrace.

We hope that this report will provide enlightening sustainability and performance data for all our manufacturing units. In our next reporting term, we are going to maintain the energy and water usage pro ects related to the dye house and share the performance indicators with you, our ey shareholders.

We are than ful to you for your interest and contribution in creating the report.

SincerelySalih G rSLN Boya Chairman of the Board

C AIRMAN O T E E EC TIVE BOAR SAL G R


ABOUT USABOUT US

Since its foundation in , SLN managed to stay at the forefront of the industry through

its product portfolio, its approach to customers, products and employees and its ability to adopt and adapt to technological and quality trends. As a result, it wor ed with global brands in the sportswear industry and succeeded in creating a business relationship, which still continues today. The dye unit that was established in helped increase SLN s competitive power with regards to quality, cost and manufacturing times.

The trade name of the parent company, which is located in Istanbul, was changed to SLN Te stil Moda n . Ve Tur. San. Ltd. ti. referred to as SLN Te stil in this report) as new companies oined the group in . In addition to the parent company, SLN onfe siyon San. Tic. Ltd. ti. referred to as SLN onfe siyon in this report) and SLN Boya ve Apre San.Tic.A. . referred to as SLN Boya in this report) are also included in this report as organi ations carrying out the textile operations

for the parent company. SLN Tekstil is the main o ce where the

organi ation and coordination of the company s entire textile activities are carried out. It contains a model shop and cutting and manufacturing units. Moreover, it is the textile manufacturer and exporter, which performs the commercial activities of the company. SLN exports % of its textile products.

SLN Konfeksiyon, which maintained its structure as it was described in the previous report, is located in the same building as the main o ce. The company performs 4 % of the sewing, ironing and pac ing operations of SLN Te stil. Contract manufacturers outside the company carry out the remaining %. Additional information concerning the contract manufacturers has been provided in the relevant section.

SLN Te stil s building, which has a . m2 closed area, is located in Istanbul, Tur ey, and has a monthly capacity of . pieces.

% of SLN Te stil s product range consists of sportswear for men, women and children, while

% consists of outwear for the same groups. % of our products are nitted fabric. Although

the main fabric used in these products are cotton, polyester and cotton polyester mixtures, we also produce garments with bres with high added value, some of which are pima cotton, organic cotton, CMIA cotton, tencel, meryl, modal, designed dyed yarn.

SLN s clients include global companies from Germany, England, Scotland and the Netherlands. P MA, a sportswear company, has been wor ing with SLN for years and has the greatest share

COMPANY PROFILE

With its 350.000 unit/month apparel, 15 tonnes/day dye production capacity and its quality standards, SLN is among the leading textile and apparel companies in Turkey.


of production. SLN has been wor ing with Tommy il ger for years, Lyle and Scott for 3 years,

Leassig for years, Gaastra and 1 for years, and Thomas Pink for one year. We have added Christian ior and Museum among our customers in . Since all our clients are global brands, SLN exports apparel to di erent countries upon their request. We frequently export our products to Germany, Scotland, Netherlands and England.

SLN Boya oined the group at the beginning of . It is a knitted fabric and chemical nish unit founded in B y kkar t ran town of rklareli

L leburga Region. After frequent changes of ownership, the dye house became a member of the SLN group in .

yed knitted fabric is manufactured at the dye house, which has a knitted fabric dyeing machinery park. All kinds of knitted fabric mostly cotton, polyester and cotton polyester mixtures) are dyed and chemically nished in these machines.

SLN Boya is a % contract dyeing house. Customers supply the raw fabric, while the dye house is solely responsible for the dyeing. Its biggest client is SLN Tekstil, which utili es % of its capacity. Likewise As Tekstil, Erse Tekstil, Celion, rma and ns Tekstil are among the 3 textile manufacturers SLN Boya works with of these companies are passive. All of its customers are textile companies, which manufacture ready to wear garments. Some of them are exporters, like SLN, while other sell their products only in Turkey.

SLN Boya was founded on a . m2 area, . m2 of which are closed. Its daily production

capacity is between to tonnes.

There are various factories from di erent industries in the L leburga B y kkar t ran region, where the plant is located. Textile, energy, glass, machinery and chemicals are the leading industries. Although the energy industry contributes signi cantly to the region s economy, textile industry has the highest number of employees %). As a member of the textile industry, SLN Boya contributes to the development of the region with its employees.

Agriculture plays a very important role in the economy of the region and provides % of the obs, whereas workmanship accounts for % of

the obs. Trade comes third with %.The total number of employees in the group

is . People work in SLN Tekstil, in SLN onfeksiyon and in SLN Boya.

MEMBERSHIPS

Memberships of SLN Tekstil ve Konfeksiyonstanbul Textile and Garment Exporters Association T B stanbul Chamber of Industry SOstanbul Chamber of Commerce TO

Memberships of SLN Boya L leburga Chamber of Commerce and Industry


ABOUT USABOUT US

WORK FLOW

SLN WITH NUMBERS

Piece Garment,

tons yed abric

Raw fabric

Dying

Quality control

Cutting

CapacityEmployees


PUMA Sustainability Award; SLN acquired this award from P MA, as a result of

its successful sustainability e orts in 2 1

stanbul Textile and Garment

Exporters Association

AWARDS

Sewing Packaging

Final control

PRODUCTION VOLUME IN YEARS

pieces pieces pieces


OUR APPROACH TO SUSTAINABILITY

VISION

MISSION

VALUES

RISK MANAGEMENT

SUSTAINABILITY

SUPPLY CHAIN

OUR APPROACH TO SUSTAINABILITY


A board of directors consisting of three shareholders manages SLN companies. The

board is made up of Salih G r, the chairman, Selin G r and Serkan G r. All members of the board are actively involved in the management of the company and strictly responsible for sustainability related issues.

The board of directors meets on a monthly basis and inspects the functionality of the internal supervision procedures of the three companies. They evaluate the performance potentials, risks and opportunities relating to the goals of the company.

Promotion of the company in domestic and foreign markets, analysis of potential customers, and resource management are also among the

material topics the board of directors addresses.In the monthly management review meetings

held with the participation of managers of the company, the company s internal procedures are examined and issues and goals concerning sustainability, marketing, production, personnel and technical details are discussed. Supplier evaluation activities are conducted with the participation of the managers of relevant departments.

In the meetings of the board of directors held twice a year, the goals of the company are evaluated, the resources are assessed within the framework of foreseen risks and potential opportunities, and the company investments are determined.

Management Board

ManufacturingPattern Shop

AccountingExportation

Purchaising

Finance

InformaticsAccountRepresentative

Quality AssuranceGeneral Manager Human Resources

Management Board Chairman

Management Board Member Management Board Member

QualityAssurance

PurchaisingMachinery

EnergyDye House

ExecPlanning Informatics Finance

Human Resources

Physics Lab.Raw FabricControl

OperationsManager

Plant Manager

CORPORATE GOVERNANCE


OUR APPROACH TO SUSTAINABILITYOUR APPROACH TO SUSTAINABILITY

Our vision to be the most popular and preferred sportswear manufacturer in the Turkish textile

market forced us to understand the developments in the global business world and to investigate common practices. We are very well aware of the fact that SLN is a company within the global production process. In addition to the uality

Time Cost triangle, SLN is a company with organi ational responsibility which is essential for the continuity of its business. This is a process, which must be undertaken and put into practice. Our main client P MA s expectations and requests

played an important role in the development of this understanding in our company.

We are aware that in order for social responsibility to ourish in our company, we need to understand all of our social, environmental and economic impact, which do or will exist. To this end, we are making every e ort to develop various practices to carry out our responsibilities to all our key stakeholders and to achieve an ethical and transparent production as part of our corporate culture.

In preparing SLN s Sustainability Policy, we used

VISION AND MISSION

Corporate Governance Occupational health and safety Energy e ciency

Customer s requests sustainable production

Internal communication and organi ation

Climate changes Carbon Emission

Sub supplier management Contract manufacturer managementWater use water treatment systems

ialogue with stakeholders Waste management

Local employment

Relations with universities

SUSTAINABILITY IN THE SUPPLY CHAINSustainability Topics

To become the most widely known and preferred sportswear manufacturer in Turkey.

To generate sustainable value for our stakeholders by focusing on our social, environmental and economic impact and by using our innovative production approach which treasures superior quality. To keep the customer satisfaction at the highest level possible through our customer oriented working system, and to manufacture products with the highest added value and the best quality in the shortest time possible.

Service and quality oriented Employee satisfaction Ethical and reliable production lexible and innovative approach Responsible corporate citi enship Built to last


In SLN, risk management is handled based on the concept of sustainability. Our sustainability

committee carries out evaluations regarding procedures and risk analyses. Relevant topics are determined and a risk analysis action plan is prepared. All risk analyses are carried out with the participation of heads of the relevant departments. In determining the topics, social, environmental and economic impact are considered and scrutini ed with the participation of top managers. Our primary topics, which constitute foreseen risks, are as follows

Customer satisfaction Business continuity Employee satisfaction Employee health and safety Energy e ciency Emission management Product quality “Right the rst time Lean

Management

The sustainability goals that are determined annually by the board of directors are determined by analysing the risk factors de ned during the year.

RISK MANAGEMENT

SustainabilityManagement

SustainabilityApplications

Data Collection &Analiysis

Dyehouse Data Collection & Analiysis

Responsible For Energy Dyehouse

Data Collection &Analiysis

the nited Nations Global Compact as a guide. Our activity areas related to these principles were determined in accordance with the characteristics of our country, our industry and our working conditions. We conducted our studies mostly in those areas. All company practices were taken into consideration within the framework of legal obligations and necessary regulatory and preventive activities were determined in the

process.In addition to the Global Compact, P MA s

Safe compliance system and the LA air Labor Association) code of conduct helped us form our policy. All GC practices continue to develop as living processes and all policies established within the company are based on this sustainability approach. see the next page)



Businesses should support and respect the protection of internationally proclaimed human rights.

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct, Social Policy, Company s Contract Manufacturer Policy, Company s Employment procedure, Company s Suggestions and Complaints Procedure and Applications, Company s O S Policies, Practices and O S trainings, O SAS 18 1 certification, Company s Supplier and Contract Manufacturer Policies, In house trainings.

Businesses should make sure that they are not complicit in human rights abuses.

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct Social Policy, Company s Contract Manufacturer Policy, In house trainings.

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct, Social Policy, Company s Contract Manufacturer Policy, Company s O S Policies, Practices and O S trainings.

the elimination of all forms of forced and compulsory labour

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct, Social Policy, Company s Contract Manufacturer Policy, Company s O S Policies, Practices and O S trainings.

the effective abolition of child labour and

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct, Social Policy, Company s Contract Manufacturer Policy, Company s Employment procedure,

the elimination of discrimination in respect of employment and occupation.

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct, Social Policy, Company s Contract Manufacturer Policy, Company s Employment procedure.

Businesses should support a precautionary approach to environmental challenges

Issues and practices concerning were addressed through our company s Environmental policy and relevant practices.

Undertake initiatives to promote greater environmental responsibility and

Issues and practices concerning were addressed through our company s Environmental policy and relevant practices ISO 14 1, ekoTex 1 , GOTs certifications

encourage the development and diffusion of environmentally friendly technologies.

Issues and practices concerning were addressed through our company s Environmental policy and relevant practices In house trainings.

Businesses should work agains corruption in all its forms, including extortion and bribery.

Issues and practices concerning were addressed through our company s SLN Tekstil Code of Conduct Throughout SLN Tekstil s existence, no relevant inappropriate active was

detected.


OUR CODE OF CONDUCT

WE SLN TEKSTIL COMPANY DECLARE that we will abide by the provisions of the laws regulating human rights. Therefore, our company is obligated to comply with higher ethical standards. This also includes the code of conduct of our suppliers. As a result, our company guarantees to comply with the Code of Conduct below.

YOUTH LABOR AND PREVENTION OF CHILD LABOR: In accordance with the rules regulating human rights and domestic laws, persons younger than 1 years old or those who have not completed compulsory education are not employed. Employees older than 1 and younger than 18 have special working hours and breaks, which are laid down by law. oung workers are employed after taking into consideration their health, mental, moral and psychosocial development, and personal skills.

FORCED LABOR: orced or compulsory labour is any work or service that is required from any person under the menace of any penalty, and for which that person has not offered himself or herself voluntarily. Providing wages or other compensation to a worker does not necessarily indicate that the labour is not forced or compulsory. SLN Tekstil believes that making an employee work overtime without taking his or her consent constitutes forced labour. orced labour is a fundamental violation

of human rights. orced labour or physical psychological punishment will under no circumstances be allowed.

OCCUPATIONAL HEALTH AND SAFETY: SLN has adopted a working system, which prioriti es compliance with obligations arising from legal arrangements regarding occupational health and safety, taking measures for determining risks at workplace, and the health of the employees. SLN commits to perform the occupational health and safety activities in accordance with the internationally recogni ed standards and by aiming to improve itself in this regard continuously. SLN provides protective gear to its employees who are necessitated by the nature of the work and requires them to be used. SLN

commits to abide by all laws concerning workplace conditions, safety and environment.

WAGES AND PAYMENTS: Our fundamental approach to wage management is to develop a fair and competitive wages policy in order to recruit qualified employees and to ensure that they stay with the company. In determining the wages policy, a system is established by considering the legal minimum wage, average wages in the industry and the strategies of our company in order to increase the motivation and performance of the employees. Wages are increased in relation to the inflation rate and the market conditions. The skills, efficiency and conduct of the employees are also considered while determining their wages. Our employees en oy all benefits foreseen by the law.

NON-DISCRIMINATION: In accordance with Article 2 of Universal eclaration of uman Rights, SLN makes no distinction of any kind among its employees such as colour, language, race, sect, political opinion, ethnic origin, age, sex or region. It applies an equal wage policy when recruiting or distributing work. It treats all employees equally and protects their rights and encourages their protection. SLN does not use or allow the usage of any criteria other than the professional background and capacity of the employees while employing workers, determining their wages and benefits, allocating training opportunities and distributing tasks, promoting, disciplining, laying off and retiring employees. All of our employees are under our company s guarantee and they are sub ect to equal treatment regardless of their position or seniority.

ABUSE AND HARASSMENT: SLN commits to provide its employees a working environment which becomes human dignity and which is in conformity with the universal principles of human rights. Therefore SLN does not allow the abuse and harassment overtaxing) of the subordinates by

their superiors and vice versa, drudgery giving employees work which lie

outside their ob description) or mobbing psychological or emotional harassment)

in the workplace.

FREEDOM OF ASSOCIATION: SLN regards freedom association a constitutional right, respects, encourages and supports its employees membership in organi ations and unions of their choosing and their active involvement in them so long as these carried out in accordance with national laws and regulations.

ENVIRONMENT: SLN commits that it will comply with all relevant environmental laws and regulations, prevent environmental pollution, reduce pollution at its source, adopt all necessary recycling and or recovery practices, and conform to the internationally recogni ed standards in its environmental management activities when conductions its operations. Our aim is to increase the quality of our products and activities while minimi ing our negative impact on the environment and to leave future generations a clean and healthy environment.

ANTI-CORRUPTION: SLN undertakes to work in accordance with all laws and regulations in its work flow, regards struggle against corruption as a part of its daily business activities, and encourages all of its employees and suppliers to be a part of this struggle.



Possible steps for decreasing carbon emission

Sub ecting papers internally used to recycling

Our carbon emission between 2 1 and 2 11 was reduced by %. All paper products used in the company are sent to recycling through TEMA foundation. In this

regard, all packaging papers used have been purchased as recycled products for the last 2 years. Awareness increasing training programs were conducted within the company promises for being

more environmental friendly, with regard to use of energy and emissions.

Sharing in house est practices with all our stakeholders

Continuity in Employee Training

Implementing new corporate social responsibility CSR) pro ects

ecreasing the absence rate from 2.2 % to 1.2 %

The company shared all its financial, social and environmental pro ects and implementations with its stakeholders in the sustainability report of 2 . The company also shares its pro ects with all its key stakeholders, mostly with customers and employees, through presentations, press bulletins and newsletters periodically prepared for various activities. SLN management has made a commitment to its stakeholders to maintain the stakeholder information activities in a more efficient manner in the future.

The hours of training given on various sub ects were 23 hours in 2 1 and 13 hours in 2 11. In 2 11, corporate communication enhancement pro ect was implemented in cooperation with

SOGEP and PUMA. In addition, in 2 11, research phases of 3 different CSR pro ects prepared in cooperation with Marmara University and PUMA were completed. One of the pro ect out of these 3 is included in the targets to be implemented in 2 12.

The absence rate was increased from 2.2 % to 3.1 %.

Increasing the domestic competitive power

ollowing global production standards to increase productivity Implementing Lean action Plan by 1 % in all production units

Increasing production capacity by 10%

Increase in the company turnover and new investments made with various investments made outside stanbul, the competitive power of the company in the domestic market has been increased.

With the investment of dyehouse undertaken in L leburga , a fabric painting unit which will meet the dyed knitted fabric needs of SLN Tekstil commenced operations in 2011. The unit also provides an additional income for the company s budget by acting as a contract dyehouse for other ready to wear companies.

We are prapering to start working with a new subcontractor established in Ordu sewing and packaging). Invesments made to render the workshop to comply with the quality and sustainability standards of SLN are still ongoing.

Lean pro ect practices were implemented in all production fields by 100% between 2002010 including the contract workshops) and the production efficiency was achieved by 8 %. Currently, in order to ensure the continuity of the pro ects and implementations, pro ect training is carried on together with the implementing company.

The production capacity has been increased by 3 % from 200 to 2011.


ollowing the relocation of the cutting unit, transportation between departments will be considerably reduced by means of proper planning and thus, carbon emission will decrease. Locating the cutting unit at the dye house area

Thanks to the energy efficiency pro ects and their implementations at our subcontractors,

OR U) will generate employment in Anatolia and will help employees relocate from stanbul to Anatolia. These pro ects also provide support for the city planning pro ects of stanbul. If a sector with a high demand for workers such as the ready made clothing sector is moved outside stanbul, this will both contribute to a decrease in stanbul s population and to the city s environmental planning.

by means of the energy saving pro ects to be implemented at SLN Tekstil.

The purchase of machines running with a low rate of water will continue. These Investments together with other technical

optimi ation processes Installing advanced treatment systems at the wastewater treatment plant. The purpose here is to

Investing outside stanbul, it is also targeted to All CSR pro ects which cover SLN s company policy and which are performed in the new units

also will contribute to their training on labour rights and will raise their cultural level. Implementing Internet Communication CSR pro ect which was targeted in 2011 and prepared in

which has been prepared together with Sogep and which covers new arrangements about uman Rights and Labour law.

in stanbul to the dye house area in L leburga . With this pro ect, it is targeted to

decrease the costs of transportation and manufacturing. The cost of cutting, which currently

which is located in Ordu, will start with 1 % capacity of the whole sewing and packaging process and will be increased by 40% during 2012. With this, the costs of sewing and packaging, which constitute 20% of the production costs, will be decreased by 20%.

will have replaced the sewing machines of SLN onfeksiyon with the latest technology machines, which

all gasoline powered company we will continue investing in the latest dye machine technologies used in our production

processes.


STAKEHOLDER ENGAGEMENTSTAKEHOLDER ENGAGEMENT

"We accept that Stakeholder engagement is as crucial to an organization's sustainability and success."

– Selin Gür


In order to improve our report with regards to stakeholder engagement, we used the

international standard AA1000 Stakeholder ialogue 2011 as a guide, in addition to the GRI

stakeholder engagement principle.The underlying principle behind the AA1000

Stakeholder Engagement Standard represents a process carried out by the organi ation in order to facilitate the e ective implementation of the stakeholder engagement process through appropriate methods and analyses. As a result, during the stakeholder analyses of the organi ations, stakeholder expectations, which must be strategically prioriti ed, are determined. This method prevents the organi ation from allocating resources to irrelevant areas. Moreover, it also assists the development of strategies, which meet the primary expectations of the society, which is a very important stakeholder in it and which generally includes the consumer customer group. The bene ts of a company arise from ful lling its corporate responsibilities, e ciently allocating its resources, and by creating a corporate image in the eyes of its stakeholders, which honours its social, environmental and economic responsibilities.

AA1000 standard achieved great success with respect to CSR applications. It is the only standard which many corporations use as a reference in the stakeholder engagement CSR applications.

We aimed three fundamental principles within the scope of AA1000

1. Stakeholder Engagement2. Prioriti ing3. Responsiveness

In preparing our report, we rst contacted the appropriate key stakeholders through methods determined previously. The data obtained through our dialogues with them were evaluated by the sustainability committee and the possible risks and opportunities for our company were taken into consideration. As a result, the material topics included in this report were determined. We hope to have met the requests and expectations of our stakeholders with the topics we included in our report as a result of the stakeholder dialogue.

OUR PRIMARY STAKEHOLDERSAs SLN, we are always trying to improve our position within the Turkish textile industry. We are aware of the fact that it is very important to be in a permanent dialogue with our key stakeholders which are a ected by the activities, products and services of our company and which also a ect the implementation of our corporate strategies and formation of our goals through their own actions.

The processes which were initiated as a result of the dialogues with our main stakeholders and which are mentioned in our previous report are still being implemented. In order to strengthen these dialogues we carried out a more e ective dialogue process by means of the AA1000SES principles in this reporting period.

Below are our key stakeholders, which were determined according to the standards and our methods of dialogue.

The key stakeholders were determined through annual meetings, top management meetings, department meetings and employee trainings by

OUR STAKEHOLDERS AND DIALOGUE PROCESS

Employee loyalty and satisfaction survey, SLN training programs, information meetings, communication meetings, meetings held on a department basis.

Training programs, improvement audits, one on one surveys.

Regular meetings, one on one interviews.

oint CSR pro ects, quality based meetings and surveys, company visits, conferences.

Regular visits, various means of communication e mail, telephone, fax, etc.).

One on one interviews, improvement audits, means of communication.

Pro ect partnerships, organi ational and employee memberships, conference participations and presentations

Pro ect partnerships, conference participations and presentations, one onone interviews

Surveys and opinion gathering


STAKEHOLDER ENGAGEMENTSTAKEHOLDER ENGAGEMENT

taking into consideration SLN s economic, social and environmental interactions. Accordingly, we determined our key stakeholders to be our employees, customers and suppliers, as in the previous year. The other stakeholders who are also part of SLN Tekstil s group of stakeholders are shareholders, public institutions and organi ations municipalities, tax o ces), NGOs, banks,

local community and academicians with equal importance. iversity of our dialogues acted as a driving force in measuring the expectations and needs of our stakeholders.

Dialogue with EmployeesSelin G r, chairwoman of the board, adopted oneon one interviews with the personnel or managers or direct reporting as methods of communication in order to evaluate the comments received from lower levels of the corporate hierarchy more e ciently.

All SLN employees are able to communicate their requests, suggestions and opinions to top management during regular personnel meetings, through worker s representatives, or by means of suggestion complaint boxes placed around the production areas. Moreover, they can communicate their feedback directly to top management during meetings and trainings held periodically.

Dialogue with CustomersSLN is continuously in dialogue with PUMA, its main client, through the CSR pro ects they organi e together. These pro ects constitute the most e ective means of communication between PUMA and SLN. Moreover, in house and supplier improvement pro ects improvement pro ects applied for product quality, social elements, etc.) also enable regular communication with the customers and constitute a feedback mechanism which a ects the determination of the topics of the reports. In addition to this, customer oriented meetings, conferences, customer surveys which address CSR topics) and general means

of communication telephone, e mail, fax, etc.) are other methods used in the dialogue with the customers.

Dialogue with SuppliersThrough our CSR activities, performed in order to improve social and environmental conditions, we stay in touch with our main suppliers contract manufacturers, dye house). Their periodical feedbacks are communicated to SLN regularly. In addition to this, one on one surveys conducted during reporting provide feedback from both the main suppliers i.e. contract manufacturers) and the

Corporate Governance

Client s Requests Sustainable production

Occupational health and safety

Internal communication and organi ation

Contract manufacturer management

Sub supplier management

ialogue with Stakeholders

Energy E ciency

Climate changes Carbon emission

Water use – Water treatment systems

Waste management

Local employment

Relations with universities


secondary suppliers raw material suppliers).In the following sections of our report, we used

quotes from the personnel who has been working with SLN and who had signi cant experiences, by taking into consideration the trainings and workshops it participated in and the surveys. We believe that the reader will be able to understand the report from the viewpoint of an SLN employee.

ialogues which re ect the views and thoughts of our other key stakeholders customers, suppliers and NGOs) are cited in the following sections of this report.

DETERMINING OUR PRIORITIESGRI principles were used in forming the basis of our reporting approach and in determining the material topics. Potential material topics were determined

through preliminary meetings and workshops, which the sustainability committee held in the company within the scope of the GRI prioriti ing test. The top management approved the topics afterwards. Stakeholder dialogue platforms that would

provide the most efficient feedback regarding these topics were developed with reference to the topics determined as a result of the preliminary surveys. As such, stakeholder feedback mechanisms were formed. At the last stage, stakeholders feedback was

analysed in detail and the environmental, social and economic topics, which were most relevant to the company, were included in the report.

When determining the material topics, the Global Compact principles, the national laws and the topics related to the industry were considered. In this context, Topics which directly a ect SLN s performance

and which are signi cant for key stakeholders were selected as rst material topics Topics which are signi cant to our key

stakeholders and which are regarded highly by the society were selected as second material topics Topics which did not a ect our performance

directly and which were not regarded by our key stakeholders to be material, but might constitute a risk in the future within the framework of sustainability, were determined to be third material topics.


ECONOMIC PERFORMANCEECONOMIC PERFORMANCE

Increasing quantity of products with a high added value by adding various brands to the production chain.

in stanbul to the dye house area in L leburga . With this pro ect, it is targeted to

decrease the costs of transportation and manufacturing. The cost of cutting, which currently

which is located in Ordu, will start with 1 % capacity of the whole sewing and packaging process and will be increased by 40% during 2012. With this, the costs of sewing and packaging, which constitute 20% of the production costs, will be decreased by 20%.

will have replaced the sewing machines of SLN onfeksiyon with the latest technology machines, which

all gasoline powered company

we will continue investing in the latest dye machine technologies used in our production processes.


MANAGEMENT APPROACH TO OUR ECONOMIC IMPACTTEXTILE AND APPAREL INDUSTRY IN TURKEY

When assessed together, textile and apparel industry is the fifth biggest industry in

Turkey in terms of gross domestic product, their share in the manufacturing industry and total industry production, exportation, their nominal foreign exchange contribution to economy, employment, investments, openness and macroeconomic industries. Textile and apparel industries provide 10% of Turkey s gross domestic product.

With the abolition of quotas applied to textile and apparel products after 200 and China s export on the rise, the textile and apparel industry started to go through a restructuring period. In 200 , textile industry s share in manufacturing industry was 10, % while apparel s share was ,4%. Textile production decreased by 12% in

comparison to previous year, whereas apparel production decreased by 1 , %. In 200 , the share of apparel and ready to wear export in general export was 1 % but it dropped to 1 % in 200 and to %12 in 2008. Textile s share in general export dropped from % to %.

The regression in the apparel industry, which suffered a 2,1% decrease in 2008 a first since 1 ), continued in 200 when the global crisis shrunk the world economy considerably.

According to T B stanbul Textile and Apparel

Exporters Associations), the industry s export figures decreased by 1 , % in comparison with the previous year. espite this loss, the industry maintained its position as the second largest export industry right behind the automotive sector, which suffered a 31,8% decrease in exports.

Turkey s general export decreased by 23% in 200 , whereas industrial export decreased by 2 , %. Starting from October 2010, however, the effects of the economic crisis and other factors that damaged our export started to decline.

In this context, developments in the global market conditions, the domestic production costs and the course of the exchange rate are the main factors that affect the apparel industry s export performance. Today, Turkish Textile and Apparel Industry is the driving force of Turkish economy with the employment it provides and its monthly export income that exceeds 1 billion US . In addition, ready to wear and apparel industry was the second greatest export industry in 2011, behind automotive, which increased its export by 20,4% in the anuary September 2011 period. espite the shrinkage in the EU countries, which constitute 80% of its exports, the apparel export is expected to reach US 1 billion in 2012 with the help of the exchange rate. owever, it is also asserted by taking into consideration the crisis expectations that the industry may preserve its current status instead of growing.

The problems which plague the textile and apparel industry in Turkey are high financing and energy costs, overcapacity, underground production, lack of branding and the weakness in the capital structures of the companies. owever, the industry en oys certain advantages as well, which are short delivery times, proximity to target markets, wide range of products, a developed textile and finishing industry, to name a few.



OUR ECONOMIC PERFORMANCE

The fundamental policy of our company commits to achieving sustainable economic growth through a flexible and transparent production, while managing a client portfolio that contains leading global brands.

SLN contributes to the economy significantly in the geographical areas it carries out its operations i.e. stanbul, L leburga – B y kkar t ran).

The employment we create with our average 3.800.000 pcs year apparel and 4. 00 tonnesyear dyed fabric capacity has a positive influence on the region s economy.

SLN s production increased five fold within years since its establishment. The production,

which was 34.000 pcs in 200 rose to 3.3 4.2 in 2011. When it was founded, SLN s goal was to reach a 3.000.000 pcs year production capacity within years. espite the .3% decrease it suffered due to economic crisis in 2008 200 , production increased steadily and we managed to achieve our goals. Our next ob ective is to maintain this production capacity while adding new clients to our portfolio and producing goods with higher added values.

In order not to allow a decrease in the quality of our products or an increase in production time while manufacturing products with high added value, and to keep production costs under control, we opened our dye house in 2011. This investment amounted to .000.000. We also started to work with a contract manufacturer in the Middle Black Sea Region to transfer our apparel production to Anatolia.

The dye house investment, which was reali ed

through a si able budget, constitutes a risk for SLN since it is a different branch of business with costs higher than those in the apparel manufacturing.

owever, despite its setbacks, it also offers SLN many advantages by making it an integrated plant that can be closely monitored by the management of our company.

There are no significant economic challenges or risks in the apparel industry where SLN operates. This is partly due to the fact that SLN is doing business with few but loyal clients, which are leaders in their respective sectors. Reliable clientele constitutes a very important economic stability factor for SLN.

In addition to its existing portfolio, SLN focused on the U market in 2011 in order to increase its ratio of products with higher added value and to develop new collections. We hope that different markets will give our company a broader perspective.

ecreasing cost ratios, improvements observed in our economic data and energy efficiency investments we made for a sustainable environment brought significant economic benefits to our company in 2011, particularly within the dye house. ou can find information about energy efficiency

and carbon footprint in the environment section.The Lean Pro ect, which we started to

implement in the apparel manufacturing department in 200 in order to increase productivity, is still running. The expert controls and audits performed within the scope of this pro ect will continue in the future as well.

Our economic performance is monitored carefully through the Sente Vogue ollow up Software utili ed in our company.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2006 2007 2008 2009 2010 2011(PIECES)

(YEAR)


THE SENTEZ VOGUE FOLLOW-UP SYSTEM

The Sente epartment, which is directly connected to the Board of irectors, analyses and calculates the product costs, orders, and models of all exported orders by using the Sente Vogue Apparel ollow up System. This department is in charge

of entering, monitoring and confirming all the incoming invoices and submitting a cost report to the management based on the quantity of orders. The fabric and accessory details of every order, their subcontractor manufacturing and general expenses ratios are also included in this report. After the analysis of piece orders and models, the statistical and graphical representation of every detail is also submitted to the management. The Sente epartment prepares a customer based cost report every month which consists of the details of all sent fabrics, formulas, dyes, chemicals, labour, electricity, natural gas, packing, transport and general expenses by using the Sente

YE ye ouse follow up system. The formulas are brought together in a single report and the customer formula analysis report is prepared. The

epartment also submits to the management the reports, which were produced as a result of Lean production. Monthly Lean Production Report (includes R Ts, Si

Time Analyses, Customer Analyses) Monthly Lean inancial Report (formuli es

Expense Items and Production uantities) Monthly Lean Cost Analysis Report (consists of

Time and Performances)

LEAN PRODUCTION SYSTEM

The Lean evelopment Program, which we started to implement in SLN Tekstil and SLN onfeksiyon in the previous reporting term, accelerates the product and service flow and achieves continuity in production.

The purpose of this system is to manufacture high quality products at a low cost in a short time.

nowing that only the manufacturers who

maintain these conditions will survive, SLN established the Lean Production System in 2009 in order to establish effective business processes. In order to ensure that the system is integrated firmly within the company and continuity is maintained, SLN continued to work with expert pro ect consultants in the 2010 2011 period. The system s effectiveness is followed through Sente , SLN s production control software.

SLN encouraged the contract manufacturers to establish Lean Production Systems as well. The same expert consultants carry out the pro ects, which are currently being implemented at our contract manufacturers.

There are five areas which support Lean Production practices Cost, uality, elivery, Safety, and Morale. Lean helps us in this direction as an important improvement tool and philosophy.

elimination of 8 wastes:1. Overproduction2. Waiting3. Transportation4. Inventory5. Motion6. Over processing7. Correction of defective units8. Constant flow in information exchange and implementation of production concepts upon customers requests

Benefits of the System: Waste reduction Production cost reduction Shorter manufacturing lead times Increased productivity Inventory reduction Increased capacity in current facilities Space saving igher quality igher profits igher system flexibility in reacting to changes More strategic focus Improved cash flow through increased shipping

and billing frequencies



2010-2011 LEAN SYSTEM

Our lean production ourney, which we set out in 2009, still continues. ollowing the middle and top level lean production trainings, the value chain analysis of the company was conducted and areas with a potential for improvement were determined. This was followed by production area and supplier applications.

In 2010, 5S (Sort, Set in Order, Shine, Standardi e, Sustain) and Visual Workplace development activities were carried out. Unnecessary materials were removed from the production area and appropriate places were designed and arranged for all materials and equipment. Cleaning of workstations became

a part of the daily routine and all employees received 5S training to ensure continuity.

Visual displays and controls were developed in relation to production area employees, materials, workstations, real time tracking of the production performance, methods, and occupational safety.

Within the scope of standardi ed business applications, they were informed about the standard sequence of action and work in process inventory amounts.

Product amily Analyses were conducted in order to use the production lines effectively.

uality improvement ai en teams use CE AC (Cause and Effect with Addition of Cards) and Application Methodologies intensively.

Lean metrics and factory store card were formed and thus the company was made “measurable .

E ciency increased by 85% in standard products and 75% in other groups. They were able to operate at 95% and more R T.

Satisfactory results in customer deadlines. Capacity increase without increasing costs and workforce.

Improvement of work ow and cost reduction.

SUSTAINMaintain

established procedures

A sustainable life in corporations is possible only through the elimination of wastes from all work processes in the “value chain” (i.e. the process starting from the reception of the order to

competitive power in work processes, plants and supply chain. We cite SLN Tekstil as an important reference for the project model.

–


SLN s contribution to the economy occurs through the payments we make to our employees, to our suppliers (as production costs) and to the state (in the form of taxes). The costs we refer to as “general expenses include the energy and water costs and other various expenditures of the company.

The Social Security Institution insures all our employees the pension contribution is 20% (9% is paid by the employee whereas 11% is paid by the employer).

Pension Contribution

2010 (TL) 2011 (TL)

Textile 64.496,33 95.320,70

Apparel 86.329,44 99.481,29

Dye house 0 121.270,72

TOTAL 150.825,77 316.072,71

Although SLN does not have an established policy regarding the selection of local suppliers, food, shuttle services, transportation of products and employees, and consumables need to be supplied from local suppliers in L leburga – B y kkar t ran, where SLN Boya is located. On the other hand, the dyes and chemicals used at the factory are purchased mainly from European companies. Since these expenses constitute a great share of purchases, 91% of SLN Boya s supply products are purchased from foreign suppliers.

SLN Tekstil and onfeksiyon meet their supply needs basically from suppliers in stanbul (%96).

Even though a second tier supplier policy is not in place, SLN has some guidelines for green local procurement.

Supplier Distribution

ECONOMIC DATA

LOCAL 96%FOREIGN 4%

LOCAL 9%FOREIGN 91%

SLN Boya SLN Tekstil ve Konfeksiyon

Economic Value We Created and Distributed Textile & Apparel &Dye

Economic Value Created and Distributed Unit 2010 2011 GRI

Production TL 20.100.722,00 48.205.256,56 EC1

Labour TL 1.973.345,00 5.783.608,21 EC1

Tax TL 1.459.402,00 3.805.846,81 EC1

General EXPENSES TL 1.281.587,00 2.169.597,83 EC1

Turnover TL 38.625.221,00 58.370.056,98 EC1

Investment TL 614.606,80 2.787.283,98 EC1



Employee Wagesetailed information on the wage policies of SLN

is provided in the social practices section of this report. Below is a summary of our contributions to our employees in economic terms

Of the 184 employees who work in SLN Tekstil ve onfeksiyon, 18 are working with minimum wage,

which is 9,78% of the workforce. If our employees in SLN Boya are included, the total number rises to 334 and this ratio drops to 5,38%, since there are no employees in SLN Boya who receive minimum wage. As of ecember 2011, gross minimum wage in Turkey is 838 TL, however, the average gross wage in SLN, even in the production departments, is around 1150 TL.

There is no employee in SLN Boya who receives minimum wage.

State SubsidiesSLN did not receive a signi cant amount of subsidy in this reporting period. Those we received, which are relatively small, are as follows

Employment subsidy this is a 5% discount in the insurance contributions, which is provided to companies who pay their insurance contributions regularly and who do not have any insurance liability.

Inward processing subsidy this is a subsidy which promotes the use of imported products in

domestic productions and their export and the reimbursement of import taxes. The customs duty, which is refunded, depends on the kind of the material.

Dye House InvestmentAs a company that has been active in the ready towear and apparel industry for the last 5 years, SLN decided to invest in a dye house. This decision was taken to keep the cost and quality factors under control as an integrated textile company. SLN s management wanted to use its experience it gained in the apparel industry in other textile production units to expand the company.

The fabric dyeing factory ( ye House) that maintained its existence through di erent companies was purchased by SLN at the beginning of 2011 with its current machine park and its name was changed to SLN Boya.

When it was rst purchased, the plant had the appearance and operations of a company losing money, but thanks to the considerable e orts and investments made last year, it became one of the leading modern textile dye houses in the region. However, the installation and improvement processes in the management and operation system are still continuing.

“When we consider the fact that 35% of local people are working in the textile industry, it becomes evident how much the existence and ethical production of SLN is important for our region. As B y kkar t ran Municipality, we are aware of the change the ye House, which had been operating in the area for a long time, underwent seeing the improvements in the physical environment and the company s payments and we support them.

After becoming a member of the SLN Group, the ye House underwent an internal and external renovation process. Environmental design was made and the machinery park was renewed (details concerning the new machinery park can be found in the environment section of this report due to the energy and water savings it achieved).

OTHER 94,62%MINUMUM WAGE 5,38%

SLN Group

“When we consider the fact that 35% of local people are working in the textile industry, it becomes evident how much the existence and ethical production of SLN is

the Dye House, which had been operating in the area for a long time, underwent seeing the improvements in the physical environment and the company’s payments and we support them. We are very happy with SLN’s investments concerning environmental design inside the Dye House, and as the local municipality, we are expecting further contributions from SLN particularly about the local transportation and roads.

–




SCHOLARSHIPS AND AIDS IN KIND

1011 “Golden Hearts” Supporting the Handicapped: This pro ect was organi ed to help disabled people from the eytinburnu Handicapped Association, as well as from all over Turkey Mehmet Topal, Sel uk nan and smail yba who are professional

football players from the Turkish Super League, also oined the pro ect. Many celebrities from different fields like sports and arts attended the event held on 24 May 2011 at the Olivium Mall. The sponsors came together at a dinner and were offered placards. SLN donated 11 wheelchairs to this pro ect.

Scholarships: SLN Textile grants scholarships to secondary education and university students studying in different regions of Turkey. SLN Tekstil, which attaches great importance to education, offers scholarships to 15 students.

Sportswear Sponsorship for Sports Teams of Evren Elementary SchoolWith a view to act on Corporate Social Responsibility, SLN Tekstil aims at developing Ba c lar, the district where its production unit is located and where most of its employees live, through the pro ects it will carry out. To this end SLN has decided to be the sportswear sponsor of all sports teams of Ba c lar Evren Elementary School for 5 years. 140 sportswear sets (two sets for each student) were produced for 70 students from football, basketball, volleyball and athletics teams. In addition to tracksuits, two t shirts were made for students as well. Furthermore, SLN Tekstil also provided basketballs, volleyballs, footballs and umping ropes needed by the Evren Elementary School.

T-shirts distributed to employees at SLN Boya and Contract Manufacturers SLN attaches great importance to all of its stakeholders and distributes t shirts to employees at SLN Boya and its contract manufacturers twice a year.

SOCIAL BENEFITS


PRODUCT RESPONSIBILITY

"SLN is a highly committed key partner with the service they provide where we rely on totaly."–

PRODUCT RESPONSIBILITY


PRODUCT RESPONSIBILITYPRODUCT RESPONSIBILITY

OUR UNDERSTANDING OF QUALITY

As we stated in our mission, in order to minimi e our negative social, environmental and

economic impact and to honour the commitments we made to our customers by achieving innovation and high quality, SLN integrates all current legal, industrial and customer based product responsibilities within its production processes.

Production of the goods right the rst time is the general production strategy of our company.

In order to generate correct solutions within the Time, Energy and Cost triangle, SLN uses cutting edge technology machinery and modern production systems. Within the quality system process, all stages (from the purchase of raw materials to the delivery of the goods to customers) have been planned in detail with relevant policies and procedures.

Through continuous development and improvement programs, customer satisfaction was adopted as the rst quality ob ective in all units. E ective product ow and process management were established through ISO 9001 2008 uality Management System.

The chemical and physics laboratories of SLN Boya where raw and dyed fabric tests are conducted have been accredited by SGS in 2011 in accordance with PUMA Standards. SLN Tekstil

nal product quality control laboratory has a SGS certi cation since 2007.

Raw and dyed fabric tests conducted in SLN Boya laboratories help us create the physical and chemical conditions requested by our customers.

The chemicals and dyes used in our company do not contain substances that are ha ardous for human health and the Eco Tex Standard 100 certi cate received by our company many years ago

has certi ed this fact.Our general production goal is the achievement

of highest possible customer satisfaction through our customer oriented working system.

We tried to measure the level of satisfaction of our customers regarding SLN s services and learn about their requests and opinions through the customer satisfaction surveys conducted during the reporting period and general customer noti cations.

The feedback we received from our customers indicates that they are generally satis ed with SLN products and product services. In addition to this, our management carefully addresses requests and improvement suggestions they communicated to us.

In order to increase customer satisfaction concerning the product quality and deadlines, we are aiming to decrease internal repairs.

OUR SUSTAINABLE PRODUCTS

Creating sustainable value and products for our stakeholders by focusing on our social, environmental and economic impact with our innovative and high quality production methods is one of our ma or management approaches.

To this end, we included a collection consisting of CMIA and Organic Cotton products into our product range in the last three years by taking into consideration PUMA s product requests.

Since we mainly work in accordance with the requests of our customers, we are unable to generate a direct drive for the production of sustainable products or for their increase. However, we communicate our commitments in this regard and our desire to produce sustainable products on various occasions.

the ecological standards of textile products during production and thus supports product responsibility and customer health.


Jürgen Mahn-PUMA, Global Sourcing Director Apparel World Cat Ltd.

Dilek Ergen-PUMA, Senior Head of Apparel Sourcing EEMEA

Stefan Seidel-PUMA, Safe Ecology Team Head

PUMA.Safe Humanity and Ecology Auditor and Responsible for Continuous Improvement

OUR MAIN CUSTOMER'S OPINIONS

Jürgen Mahn: ue to the fact Selin has been a key person to the Puma business even before SLN, we have a perfect and very close partnership which has been grown over the years. Trust is the basis for everything we do together as a Team.

Dilek Ergen: Highly committed, a key partner with the service they provide where we rely on totally.

Stefan Seidel: I can mostly comment on compliance and sustainability. Here SLN is one of our leading suppliers on a global scale and certainly o ers great exibility when it comes to short delivery times.

Being a young and energetic company, SLN does not have a traditional and fro en character. Therefore it is very quick and exible in adapting to developing processes. SLN is one of the companies that we work with very smoothly and comfortably thanks to the e ective communication between us.

Jürgen Mahn Price is still an issue because Europe is more expensive than other markets. This is a problem, but we need to overcome this together.

Dilek Ergen: SLN needs to invest in competitive locations and stay committed to productive production processes such as Lean, should not pay e ort on short term investments and strategies but aim to have a min 5 years planning with stakeholders. SLN can certainly further improve with Communication about the activities achievements, better manage the supply chain and the dialogues with stakeholders, can still do much more in the area of sustainable bre usage (recycling).

Stefan Seidel: While SLN is certainly already on the right track compared to its peers, I think the ma or challenge is to fully integrate subcontractors and sub suppliers into the sustainability e orts.Continue the path with development and production of more sustainable products, evaluation of recycling options for production waste and products at the end of their product life, inclusion of subcontractors into sustainability e orts and reporting, continue to engage with critical stakeholders such as NGOs as well as experts (academics, consultants, etc.)

Jürgen Mahn: Partnership, SAFE, Sustainability, PI s Competitiveness oined strategy.

Dilek Ergen: We target to meet ey performance criteria for Purchasing such as Price, lead time, on time development and production delivery, product ability and service level sure are the other two main considerations.

Stefan Seidel: Again, focusing on the sustainability aspect it is the material (e.g. organic cotton, recyclable material) but also the connected certi cations such as GOTS, ISO 14001, Oeko Tex, etc.


PRODUCT RESPONSIBILITYPRODUCT RESPONSIBILITY

OUR AFRICAN COTTON

“A hand for trade - a heart for Africa”SLN oined the Cotton Made in Africa pro ect with PUMA s encouragement in 2009 and its participation increased steadily in the last three years.

Cotton made in Africa is a strategic alliance of partners from trade and industry, the public sector and non governmental organi ations (NGOs) which contribute to the fight against poverty and environmental degradation in sub Saharan Africa and help local cotton farmers and their families to raise their own standard of living. The pro ect is maintained by the Aid by Trade Foundation (AbT), which was founded in 2005 by r. Michael Otto. Besides AbT, further participants and supporters are for example the German Ministry of Economic Cooperation and evelopment (BM ) and the Bill

Melinda Gates Foundation. Up to now about 150.000 smallholders are involved, located in Benin, Burkina Faso, Mo ambique and ambia.

The aim of the pro ect is to improve the growing conditions of cotton and make production sustainable in the CmiA pro ect regions while exploiting synergies that amplify pro ect effectiveness. Another pro ect goal is to enhance the competitiveness of African cotton, while adding a new dimension of corporate responsibility. The concept of CmiA is a self help principle for smallholders. The cotton is traded at a market price and not at increased prices. The idea behind the pro ect is to provide training in the form of workshops to farmers about how to cultivate cotton while also enhancing their productivity and simultaneously lowering the environmental impact of cotton production. At the same time, demand is

created by the alliance partners, for example PUMA and the Otto group, who commit to merchandising a specific amount of cotton, which assures sales volume for the farmers. Members of the alliance pay a license fee which is then reinvested in the pro ect countries to assure education, raise living standards and preserve the natural environment in the pro ect countries.

Collections of CMIA products have been created with the participation of African designers for the last two years. Thus a connection is built between the fashion and development pro ects. The success of the pro ect is measured by sustainability indicators such as its contribution to the elimination of poverty and to preservation of environment in the region, the percentage of educated children, farmers income, efficiency of water usage, and the use of pesticides and fertili ers.

CMIA cotton purchased by SLN in 2010 2011 has reached 300 tonnes. As of 2011, this corresponds to the 30,7% of the production.

Activation of market forces in the sales markets (Europe USA)

Improvement of social condutions in developing

countries

Promotion of environmental protection in developing countries


ORGANIC COTTON PRODUCTIONWe started Organic Cotton production in 2010 with PUMA. When we started the pro ect, our goal was to minimi e the environmental damage of the conventional cotton production and to support pro ects, which would increase environmental awareness to prevent the destruction of natural resources in the future.

What is Organic Agriculture?According to IFOAM s (International Federation of Organic Agriculture) basic norms, organic agriculture is a whole system approach based upon a set of processes resulting in a sustainable ecosystem, safe food, good nutrition, animal welfare and social ustice. Organic production therefore is more than a system of production that includes or excludes certain inputs. By definition, organic products do not contain any toxic substances or pesticides, synthetic fertili ers, sewage, radiation or genetic engineering which damage the environment permanently.

Independent certification companies certify organic agriculture process and organic products are secured in all stages of production.

In the 2010 2011 harvest period, 25 million tonnes of cotton was produced in the world. Approximately 1% of this production consisted of organic cotton agriculture. Although this may seem small, it increases steadily every year and has great impact on all textile production systems as a production philosophy. In 2010, 5% of the organic cotton grown around the world was produced in Turkey. According to data from Organic Exchange, 80% of organic cotton production occurs in India, Syria, China and USA.

SLN textile and dye units have been certified by GOTS, an independent accreditation organi ation. In order to ensure that our products are produced at the organic standards, our company was certified with the global organic textile standard. As of 2010, our organic production reached 3,36 tonnes and constitutes 8,86% of our total production.

Africa CottonOrganic CottonRegular Cotton

2010 20112009

business organization that focuses on facilitating the growth of a global organic cotton industry. It also reduces the usage of synthetic fertilizer and pesticides in the cultivation of cotton.


SOCIAL PERFORMANCESOCIAL PERFORMANCE

Investing outside stanbul, it is also targeted to

All CSR pro ects which cover SLN s company policy and which are performed in the new units also will contribute to their training on human and labour rights and will raise their

cultural level.

Implementing CSR pro ects which was targeted in 2011 and prepared in

which has been prepared together with Sogep and which covers new arrangements about Human Rights and Labour law.


MANAGEMENT APPROACH TO OUR SOCIAL IMPACT

Our Social Policies and Practices

Ws SLN we provide equal opportunities and social rights to our employees in accordance

with the Turkish labour law, social security law, and the internationally accepted Global Compact.

In preparing and applying its policies with the cooperation of our partners (i.e. our customers, consultants and NGOs), SLN committed to respecting fundamental human rights, the dignity and worth of human beings, the equal rights of men and women and to promoting social progress and better standards of life, as stated in the preamble of the United Nations Universal eclaration of Human Rights. SLN references the Global Compact principles as a guide and focuses on them when carrying out its activities. All matters and practices in force have been prepared in detail within SLN s social policies and procedures and shared with our employees. SLN s Code of Conduct forms the basis of all our policies. Our leading principle here is non discrimination in accordance with Global Compact Principle 6, which states “the elimination of discrimination in respect of employment and occupation . In recruiting, waging, relocating or promoting its employees, SLN makes no distinction of any kind such as religion, language, colour, race, sect, political view, ethnic origin, sex, physical handicap, political or other opinions. It treats all employees equally, protects their rights and regards human rights matters as a part of its daily business operations. In order to train employees with regard to the non discrimination principle, a training which included the topics of “Improving Human Rights in the Work Place and at Home, Gender and Social equality, iscrimination Prevention was

given to workers together with SOGEP and A AV in 2009. Our own training staff repeated these training programs in the last two years. All of SLN s employees (100%) attended this training at least once in the last three years.

In accordance with domestic laws, persons younger than 16 or those who have not completed compulsory education are not employed as explained in the Code of Conduct. Young employees older than 16 and younger than 18 are called unior employees and they have special working hours and breaks established by law. Similarly, pregnant or nursing women en oy tasks, breaks and special arrangements suitable for their physical condition. They are under no circumstances asked to work overtime.

SLN takes necessary measures to enable its employees to work in a comfortable environment without being exposed to mobbing and harassment and trains its employees on this topic. In 2011, 21 mid level and top managers received a 5 week training titled “Improvement of Communication Within the Company and Prevention of Mobbing and Harassment.

SLN attaches great importance to the equality of working conditions and takes necessary measures in this regard. We utili e a wage promotion policy based on the qualities, professional pro ciency and performance of our employees.

WorkforceSLN Tekstil believes that a healthy and safe workplace and happy employees lead to success. High employee turnover rates in the textile industry and heavy reliance on manual skills make it very di cult to nd and keep quali ed workers. In SLN, we are aware of the importance of employees loyalty and make our investments in human resources accordingly.



2010 – 2011 employee turnover rate

Resigning

Military service

ismissal

Marriage

Total

Resigning

Military service

ismissal

Marriage

Total

Retirement Resigning

ismissal

Retirement

0

5

10

15

20

25

30

35

40

RetirmentMarriage

DissmissalMilitary

ServiceResigning

7

11

14

24

5

4

40

31

95 52

0

10

20

30

40

50ManWoman

Employee Employee

ManWoman

DissmissalResing

Since SLN Boya is in a period of reorgani ation in 2011, the rate of employee turnover is generally high. It is expected to drop in future years.


Whenever an employee s contract is terminated by the employer for any reason, minimum noti cation periods foreseen by law are observed.

We provide and support training and selfimprovement activities that improve our employees professionally and personally. Our company regards supporting and empowerment of women labour as a part of its CSR activities. In Turkey, textile is one of the industries where female workers are employed to a high degree. We in SLN encourage our young female workers to continue their education and provide support in this direction. In this reporting period, 23 (12,43 %) of our employees, most of whom are young female workers, are enrolled in elementary school, high school or university.

As a continuation of this support, we are planning to o er English lessons to our employees in manufacturing in 2012, a practice which is not observed in our country very often and which we hope it will set an example.

As we stated in our previous report, all our CSR activities are conducted in accordance with PUMA Safe management system in general. Their compliance is continuously monitored through internal and external audits. PUMA Safe is a social and environmental compliance system. PUMA.Safe includes the rules and expectations which suppliers in the supply chain are expected to adhere to. PUMA structures the supply chain according to Code of Conduct, monitors applications and audits them periodically. PUMA.Safe program focuses on company rules and policies, employment policies, child labour, working conditions and times of unior handicapped pregnant workers, working

hours and breaks, wages, vested bene ts and overtime, promotions and transfers, termination of labour contracts, prevention of mobbing and harassment, non discrimination, forced labour, freedom of association, suggestion and complaint policies, occupational health and safety, and environment.

Company Training Program Per employee 2010 2011 GRI

Total OHS (Occupational Health and Safety) training Hours Year 18 97 LA10

Company Policies and Procedures Hours Year 6 12 LA10,HR3

Awareness Trainings (Energy e ciency, common diseases) Hours Year 4 8 LA10

Communication Improvement training (Managers) Hours Year 20 SO3

English (Administrative Sta ) Hours Year 208 LA10

Total Hours Year 236 137

Total Employees Unit 2010 2011 GRI

White collar personnel Employee 47 86 LA1

Blue collar personnel Employee 120 246 LA1

Total Employees Unit 2010 2011 GRI

Contract Employees with and Inde nite Period Employee 167 332 LA1

Employees with provisional contract Employee 0 0 LA1

Full time employees Employee 167 332 LA1

Part time employees Employee 0 0 LA1

Gender Unit 2010 2011 GRI

Male Employee 91 217 LA13

Female Employee 76 115 LA13

Age Group 18-30 30-40 40-50 50-60 GRI

2010 64 74 32 1 LA13

2011 128 134 70 0 LA13



Our Employment ProcedureSLN has a fair employment and promotion procedure, which does not discriminate people according to religion, language, ethnic origin, age, civil status, sexual orientation or political view. We only consider the professional knowledge and training of a person when employing him or her. The ratio of women in the workforce is a signi cant indicator in this regard.

Due to the business culture, workers interest and the nature of the work performed at SLN Boya, men are mostly employed in this unit. This creates the impression that the number of female SLN employees has decreased when compared to previous years. In fact, this is a result of SLN Boya s participation in the group.

SLN utili es an equal and fair wage policy. Men and women from di erent ages working in similar positions receive the same wage and en oy same bene ts. Accordingly, when wages are analysed based on employees, the rate of wages of male and female employees is 1.

We sub ect our candidates to an ob ective evaluation process based on the competencies required by the industry and determined by our company and pro ciencies required by the work. The most important criterion in the employment procedure is the compatibility of the candidates to the corporate culture and values and the existence of a potential, which will enable them to develop qualities in line with the goals of the company.

Our resources for employment are web based human resources systems, individual applications and candidates, which are suggested from within the company.

All of our employees, including the top management, are selected from the regions where our production units are located.

and Overtime Practices SLN established a balanced remuneration policy in order to improve the quality and standard of life of

our employees within the scope of our companies facilities and strategies. Our remuneration system is based on equality of opportunity and fairness.

Increases in salaries are made based on economic indicators, legal increases and industrial wage studies. The ratio of employees who receive minimum wage in SLN is 5,38%. Our company aims to be among the most preferred textile companies.

Our company provides all payments and bene ts to its employees foreseen by the law. All our employees en oy bene ts such as maternity and death leaves, marriage bene t, food bene t, and transportation and dinner bene t during overtime. Our employees are assigned company vehicles, computers and mobile phones based on the nature of the work they do.

Working hours at SLN consist of 45 hours per week as stipulated by applicable laws and regulations. Any hours in excess are referred to as overtime and paid in accordance with the applicable laws and regulations.

Freedom of AssociationOne of the Global Compact principles we focus on is Principle 3 “Businesses should uphold the freedom of association and the e ective recognition of the right to collective bargaining. At SLN we regard freedom of association as a constitutional and democratic right. Accordingly, all employees are free to establish and become members of associations, unions, and political parties. Due to the fact that our employees are not members of any unions, and taking into considerance PUMA s Safe and FLA s systems, which guide us in social matters, a “Worker Representative is elected every year. These representatives meet with Human Resources Social Compliance Manager once or twice a month regularly. The minutes of these meetings are later communicated to the top management and are discussed in detail. Topics which are in conformity with company strategies and policies and which are urgent for the employees are evaluated immediately and the results are announced to all employees through notice boards. In this way the requests and complaints of the employees are directly noti ed to the management.

Suggestions Complaints Policy We regard employee satisfaction as one of our ma or goals. Our employees can communicate all kinds of opinions, suggestions, requests and complaints directly or through worker representatives in spoken or written form or through the suggestion complaint boxes placed around the company or they can send an e mail to

as stated in the Code of Conduct.

65 %35 %


OUR SUPPLY CHAIN AND CONTRACT MANUFACTURER POLICY

In selecting its contract manufacturers, SLN Tekstil expects compliance with the criteria it

set within the framework of the “Supply Chain Compliance Policy . This was developed with regard to PUMA.Safe and FLA compliance systems, which address social, occupational health and safety and environment issues. We are aware of the importance of establishing a sustainable relationship based on trust with our business partners. Therefore we expect our partners to understand, accept and internali e our values. To this end, we perform various information and auditing activities to our contract suppliers at di erent times through our “Supply Chain Compliance Manager employed in the company.

When selecting our contract suppliers, we attach great importance to compliance with Global Compact principle(s), social security laws and fundamental human rights which are internationally accepted and which we focus on. Employees of the contract suppliers, which provide services to us through, purchase contracts and service contracts must be insured within the framework of the Social Security Law No 5510. We

expect our suppliers to adopt a working system in which a wage policy that meets the basic needs of the employees and which comply with domestic laws and regulations is applied, where the employees work 45 hours per week in accordance with the Labour Law No 4857, and where any work in excess of these is referred to as overtime and paid accordingly, and where at least one day of the week is accepted as holiday.

As SLN, we commit that we will comply with the principles stated in our Code of Conduct and that we will require our partners in our supply chain to do the same. No employee in our supply chain will be discriminated against based on religion, language, ethnic origin, sect, colour, sexual orientation or political view. Child workers or minors who have not completed their compulsory education cannot be employed. Young employees (those older than 16 and younger than 18) are employed according to the social security law and have special working hours and breaks. Our suppliers encourage regular trainings and we audit them periodically with our social compliance manager.

In accordance with our Code of Conduct, which was renewed together with our social policy developed in 2010 2011, SLN required its suppliers not to allow forced labour, mobbing and harassment in their businesses. With the participation of PUMA. Safe and SOGEP, a pilot

Contract Supplier Diagram

“We have been working with SLN for approximately 5 years. Our cooperation increased every year. Their work takes up approximately 60-70% of our production. The most important characteristic of SLN for us is that it is reliable and has a supporting nature. They act equitably in case of a problem.”

–

“We have been working with SLN for a long

characteristic of the system for us is the product organization which should be made in a programmed way that does not cause any problems regarding time and capacity.”

–



pro ect which will include trainings on Human Rights, Gender Equality and Labour Law will be carried out in 2012 in Ha ar Tekstil Ltd., one of SLN s contract suppliers. PUMA will reimburse the budget of the pro ect, which was initiated by SLN. Employees in our supply chain are free to establish and become members of and work actively in associations and unions, and register in political parties. This is one of SLN s social compliance terms.

Within the scope of the service contracts we make with our contract manufacturers, we require them to take necessary measures regarding occupational health and safety. All our suppliers are obligated to work with an occupational safety engineering – consultancy company, to have necessary technical controls performed, to ensure that occupational health and safety trainings are given, to provide personal protective equipment where necessary, to perform necessary health controls of their employees, to establish an in rmary in the workplace, to make a contractual arrangement with a hospital, to work with a doctor under a contract, and to employ a nurse who will be present at the workplace at all times, if possible. In accordance with occupational health and safety regulations, our suppliers are required to build emergency exit lines and exit doors, which are illuminated su ciently, and to keep su cient amount of re ghting equipment in the workplace.

We expect our supply chain to have healthy and safe workplaces and happy employees. We continuously control these through our audits. There was only one occupational accident with a minor in ury in our supply chain during the reporting period, which supports this principle. At SLN, we require our all contract manufacturers to perform risk analyses in accordance with regulations, to take necessary actions based on the

risky situations stated in the report, and to perform and evaluate this analysis every year.

We condition our contract manufacturers within the framework of the environmental and sustainable development policies we determined in order to minimi e our environmental impact and to contribute to the protection of nature. Our rst aim is to reduce waste at its sources. Therefore all our contract manufacturers use the “Lean system, ust as we do in SLN. Here the main ob ective is

to reduce the waste ratios and utili e resources e ciently. Energy e ciency and waste separation is another step we expect our suppliers to take. Through the monthly energy consumption and waste monitoring system, our suppliers are able to study their environmental performance, ust like we do. Our suppliers have been conditioned about the disposal of the wastes as well. After separating their waste, they donate paper and plastic to the TEMA Foundation. They dispose of the other waste contractually in accordance with the environmental legislation. At SLN Tekstil, we require our suppliers to give training on energy saving measures. We expect them to raise the awareness of their employees in this regard.

The contract manufacturers, which work for SLN, are a lar Tekstil, Ha ar Tekstil for sewing, Printsan for printing and Efe Ege Tekstil for printing and embroidery.

According to PUMA s 2015 suppliers social targets, all PUMA suppliers (like SLN) should reach the performance level A. According to criteria set by PUMA, the levels range from D to A and all of the supplier s subcontractors (in this case a lar Tekstil, Printsan, Efe Ege Tekstil and Ha ar Tekstil) should achieve the B level.

SLN is an A level supplier of PUMA and all its subcontractors achieved the B level.

“All employees working at contract manufacturers are insured and receive minimum wage. However, overtime may be problematic in certain times of the year. I believe that 99% of the conditions

the announced and unannounced audits conducted throughout the year.” “There are problems regarding the development of a management system and environmental issues in contract manufacturers.”

–


Duygu Aytekin Dönmez, the

“Particularly the trainings concerning breast cancer created great interest and sensitivity among female employees. Women want to learn more about this condition which was frequently brought to public attention and the methods for its early diagnosis and treatment.”

EMPLOYEE HEALTH AND SAFETYIn order to catch the wind of change and to grow, we commit that we will be open to continuous development and relevant parties. In this process, we are aware that occupational health and safety is our greatest responsibility in our workplace and in the workplaces of our contract manufacturers. To this end, our goal at SLN is a healthy and safe workplace and ero (“0 ) work accidents. In addition to complying with the legal arrangements concerning occupational health and safety, SLN introduced several practices, which might set an example in the industry. In order to increase the awareness about occupational safety, to control the OHS risks in our company and to increase the e ciency of occupational safety procedures, which are in use, we have established the OHSAS 18001 Occupational Safety System in 2009. We are continuously controlling and managing our system according to this system. SLN Boya also received the OHSAS 18001 certi cation after it oined the SLN group in 2011.

Employee health and occupational safety is the responsibility of all employees at SLN. Employee health and occupational safety is as important as our other business goals. According to data from Social Security Institution, 62.903 work accidents occurred in di erent industries in Turkey. Of these, 3.474 (5,5%) occurred in the textile industry. Textile is the fourth or fth industry where work accidents occur most frequently.

In the rst year of reporting (2010), there were no work accidents at SLN. In the second reporting year (2011), there were 2 work accidents with minor in uries. At SLN we believe that all accidents are preventable. There were 4 work accidents in our dye house in the rst half of 2011. However, as a result of the precautions we have taken, this gure dropped to 2 in the second half of the year.

In order to achieve our “ ero accident goal, SLN hired a licensed occupational safety expert accredited by T rkak to perform our risk analysis. We listed the risks found by the expert according to their severity and si e and took immediate measures for the severe risks we renewed

some machines or removed others if necessary precautions could not be taken. We introduced precautions for smaller risks in short time and prepared Action Plans for risks, which required more time and investment.

In order to increase awareness of our employees regarding Occupational Health and Safety, we regularly carry out training programs.

Our company doctor and occupational safety consultant give these trainings, which are performed according to the OHS regulation and legislation. In the survey in which we measured the e ciency of these trainings

The Occupational Health and Safety Committee convenes regularly every month in order to assess the current risks and to evaluate the completed tasks within the scope of OHS. Human Resources and manufacturing representatives and worker representatives elected by the employees attend the committee meetings. The committee considers the actions to be taken that month, reviews the actions missing from the action plan, and discusses the measures that need to be taken. At the end of the meeting, decisions are rendered which are then communicated to the management and necessary actions are taken.

We control the compliance of the drinking water we provide to employees with the “Water Intended for Human Consumption requirement through the laboratory tests that are being conducted every six months. The employees working in the kitchen undergo periodical health examination every six months in accordance with the domestic law. Employees working in the dye house are vaccinated for tetanus. All our employees undergo health control once a year in accordance with domestic laws.

Similarly, in accordance with the OHS applications, the company doctor and nurse give awareness trainings to employees concerning common diseases that constitute a risk.

Diseases covered by training programs types of in uen a and methods of protection breast cancer, methods of diagnosis and treatment prostate cancer, methods of diagnosis and treatment.

Rates of absenteeism by our

Textile Dye

2010 2011 2011

Total workforce 167 184 148

Annual working days 272 262 298

Total number of working days 45.507 48.300 44.178

Casual leave days 518 1.064 729

Sick leave days 962 456 539

Total number of lost days 1.480 1.521 1.268

Absenteeism rate 3,25% 3,15% 2,87%



Communication within the Company“E ective Internal Communication contributes to the pursuit of organi ational goals, the strengthening of the feeling of internal belongingness, the formation of a team spirit, the continuity of the motivation in the company and the increase in total productivity. Moreover, it improves the dialogue conditions at the workplace and creates a more e cient work environment. The strong communication among employees plays an important role in the creation of a successful working environment.

Research indicates that the success of a manager is 85% dependent of his or her communications skills. At this point, the communication skills of those in the management plan a vital role. Communication skills improve performance. In order for the communication process to be e ective, we need to regard the other person as our equal. Equality means regarding the other person as important as us. Gender, status, cultural di erences all disrupts this equality.

“Organi ational Stress Management , another training given within the scope of the pro ect, is also very important for productivity. Organi ational stress management is possible only through supporting the employees and team work, improving working conditions, managing work overload or too little work, and having open and compatible role expectations.

Ceren Isat, the trainer from SOGEP (Social Development and Gender Equality Policies Centre) gave a training titled “Improving the Internal Communication . Olgun Ayd n, who is the “humanity representative of the PUMA.Safe program, also observed this training. Mr Ayd n

also gave a speech about PUMA s code of conduct and sustainability activities. The content of the workshops which were organi ed within the scope of the “Improving the Internal Communication pro ect which was carried out in order to develop the management s communication skills and to create a more e ective and happy working environment was developed by SLN Tekstil, SOGEP, and the PUMA.Safe Humanity representatives. SLN s management participated in this training.

Five weekly training programs were carried out during the course of this pro ect. The following topics were addressed in these trainings Communication process and its importance Equitable communication process Tips on e ective communication Leadership Stress Management

Puma s Code of Conduct, Puma s Safe program, Puma s sustainability goals for 2015 and SLN s contribution to these goals were also addressed in these trainings.

In addition to these ma or headlines, the internal communication mechanism and its malfunctions were also discussed. These discussions constituted the most productive parts of the group trainings. The participants were actively involved in the trainings and team work, group formation and simulation methods were frequently used. Moreover, an hour in every workshop was assigned to the internal communication mechanism and its dysfunctional aspects.

In order to assess the e ectiveness of the pro ect, an attitude scale speci c to the topics to be addressed within the pro ect and the goals of the pro ect was developed and applied to the participants before the beginning of the pro ect. Participants lled the same attitude scale after the pro ect ended and the di erences between the two scales were evaluated. According to the results, those who believed that their co workers did not understand them and those who believed that their communication skills were insu cient decreased signi cantly. This demonstrated that the training

“With this project, we aimed at increasing the communication between the mid-level and top

(sewing dept.) “As a result of these trainings I learned many

corrected all the misbeliefs I had”.

Canan Var, (packing dept.)“I learned a lot about occupational safety that I did not know. I shared this knowledge with those around me.”


has reached its goals.Moreover, it was observed that the group

trainings increased not only the communication among people but also the trust they felt towards each other. As the participants stated, coming together for the group trainings contributed to the improvement of communication ust as much as the content of the workshops.

Lifelong Learning Program – English Lessons The purpose of this pro ect is to support the continuous employability of the employees and to have them learn a skill, which will help them at the end of their careers, which is one of the GRI (Global Reporting Initiative) sustainability indicators. Thus we will contribute to the lifelong learning processes of our employees. The importance of the lifelong learning concept has increased recently. Through published research studies, lifelong learning was deemed necessary for occupational mobility and personal improvement in a global economy and competitive environment.

As a result of the globali ation of the world economy, companies started to extend their operations beyond their countries of origin. Therefore, learning English, which is considered the common language around the world, is very important in this respect. The aim of these trainings was to increase the quali cation of the employees. These trainings were carried out with the participation of a foreign instructor.

The trainings were carried out between 03.08.2010 and 03.08.2011. The attendants received 208 hours of training where they improved their reading, writing, listening and speaking skills. They used books, laptops, posters, CDs, and other learning tools during the lessons. Participants took a placement test at the end of the training to measure their level.

The placement test showed that a great ma ority of the participants who knew English only at elementary level improved considerably. These trainings were immensely useful for SLN who has many foreign connections and who always needs the language skills of its employees. The

employees were also very satis ed with these trainings. A group of participants consisting of midlevel and top managers and some employees from the model shop also attended these trainings.

OUR CONTRIBUTIONS TO

Stakeholder Engagement

One of the most important aspects of “Corporate Social Responsibility is the ethical and

responsible attitude of the companies towards their stakeholders at their own will. Increasing competition and global conditions forced the companies to adapt to these new circumstances. Today, success is not de ned only in terms of highest pro ts and lowest costs, because the companies are in cooperation with many di erent institutions and actors (e.g. customers and suppliers of a company, public and civil organi ations) at the same time. All of these actors have di erent expectations from the companies.

In this context, Assoc. Prof. Dr. Dilek amant l Nay r, Deputy Head of Department of German Business Administration at Marmara University, developed a pro ect analysing SLN s relationship with its stakeholders. This pro ect complemented the other CSR pro ect developed for SLN for the CSR lecture. This pro ect aimed at uncovering SLN Tekstil s dialogue with its suppliers, and observing the contributions of the social compliance conditions SLN imposed to its suppliers. The pro ect was carried out in a 3 month period (April – May – une). 4 contract suppliers ( a lar Tekstil, Ha ar LTD. ti, Ha ar A. ., Printsan) that manufacture goods for SLN were interviewed personally. In these interviews, both SLN and its stakeholders voiced their suggestions and complaints in order to improve the communication between them.

The data obtained within the scope of the pro ect indicated that SLN has gained shortly after its foundation an important position on the textile market and in relation to its suppliers.

“In order to be a sustainable company its necessary to integrate the subject into its business strategy in all respects. Its not all about using the environmental friendly products, the issue should be considered at each stage of the company operations from purchase to sale...

and encouraging step” –

From SLN Tekstil Collective Employee Dialogues

“SLN is far more reliable than the companies we worked with before. We are very

the work and employee health, payments and insurance. We do not experience any problems whatsoever.”

From SLN Tekstil Collective Employee Dialogues

“We used to work 12 hours a day. Now we are working 8 hours a day since SLN bought the dye house. The wages, food and working conditions have improved compared to before. We regularly receive trainings concerning work and workers’ health and the environment.”



A common view among the companies interviewed was that expectations of SLN Tekstil were higher than those of other rms they worked with. At the beginning, the suppliers thought that it was very di cult to meet SLN Tekstil s expectations concerning the environment, needs of the employees, and certain standards. However, in time they came to reali e that these expectations were legitimate and that they bene ted both sides. In this context, SLN Tekstil s expectations solved the customers already existing problems. They improved their working conditions, rights and duties of the employees were systemi ed, insurance problems were eliminated, and legal responsibilities were ful lled properly. At the end of these e orts it was determined that overall productivity had increased, which strengthened the bond between SLN Tekstil and its customer and ensured business continuity.

Employees and partners of the companies, which were analysed for the pro ect, also constitute SLN Tekstil s other stakeholders. It was discovered that two of these companies were family businesses whereas the other two were regular corporations. However none of them received professional assistance from outside. In other words they did not employ professional managers. It was also discovered that the level of education among the employees was very low, a situation observed throughout the industry. It is also a fact that the companies, which are institutionali ed, attach more importance to improving the educational level of their employees.

All of the suppliers seemed aware that the inputs they used had to comply with the standards set by PUMA. Therefore, when they were choosing their suppliers, they picked the suppliers determined and approved by SLN Tekstil.

The state and o cial organi ations are among the important stakeholders of companies and they a ect them considerably through law making or other activities. However, suppliers also stated that they were exceedingly meeting the expectations of o cial institutions and the state when ful lling their customers requirements.

All suppliers stated that their customers – SLN Tekstil in particular – had certain social responsibility pro ects. Apart from that, SLN provided material and moral support to its stakeholders so that they obtain the certi cates (such as ISO 9001) showing an increase in quality standards.

Students of Management and Organi ation Department of Business Administration Faculty at Marmara University and SLN Tekstil carried out a oint corporate social responsibility pro ect.

In this pro ect, which was carried out within the scope of the CSR (Corporate Social Responsibility) lecture taught by Assoc. Prof. Dilek amant l Nay r, the students were asked to apply the theoretical information they learned in their lessons on a company – SLN Tekstil. Thus, SLN would nd various opportunities to ful l its corporate social responsibilities, and the awareness of university students regarding CSR would be increased. When developing the pro ects, the students were inspired by other pro ects applied all around the world. At the end, they created pro ects that were compatible with SLN s nature and eld of activity.

Divided into groups, the students developed 3 pro ects titled “Sponsorship “Volunteering and “Internet Access . Out of these three pro ects, SLN plans to implement the “Internet Communication pro ect in 2012. Moreover, SLN s management is also considering implementing the other pro ects in the following years.

and internalized. I believe SLN is very successful in this regard. Otherwise the projects run the risk of not being sustainable within themselves.”

internalization, assimilation, and institutionalization of the subject matter. I believe that SLN’s

–

The trainings that are organized by SLN are very informative and useful for the employees. The company supports us in this regard continuously.

women. As a result of these trainings, we learned about the rights women have during pregnancy, e.g. nursing leave, etc.”


THE CONTENT OF THESE THREE PROJECTS DEVELOPED BY STUDENTS IS AS FOLLOWS:

1) Sponsorship This pro ect, whose target group are disabled persons, consists of three stages “Ba c lar Handicapped Festival sponsorship, “Handicapped Marathon sponsorship and supporting the Engelliler Saray (Handicapped Palace) being built in Ba c lar.

“Handicapped Festival sponsorship will bring the local people and SLN together on a common ground and raise the awareness of people concerning the disabled. In the “Handicapped Marathon , a marathon will be organi ed in which national sportsmen and women, national handicapped sportsmen and citi ens will participate. SLN will sponsor this pro ect and make the sportswear of the national sportsmen who will run the marathon.

Lastly, SLN will facilitate the construction of the “Handicapped Palace which is being built in Ba c lar. 250 ob opportunities will be created once the Palace is completed. There will be a centre for the rehabilitation of the families of disabled people.

The general purpose of these pro ects is to demonstrate that all obstacles vanish once the disabled are o ered necessary opportunities.

2) Internet Communication In this pro ect, which was developed for our disabled citi ens, SLN will produce t shirts bearing the letters HET (“Hayat Engel Tan ma , which means “Life Without Obstacles ) and these t shirts will be sold on the Internet. Moreover, o cial Facebook and Twitter pages will be created to promote the pro ect. The t shirts will be sold on online shopping websites such as “trendyol , “markafoni , “gittigidiyor etc. Most of the money coming from the sales of the t shirts will be used for the reintegration of disabled citi ens in the society. Since this pro ect is compatible with SLN s product range and will bene t to the company in the long run, it has stood out among others. Moreover, Internet and social media play a very important role in our daily lives. A campaign carried out through social media will be much more e ective.

3) Volunteering 1This pro ect, which also integrates SLN employees, consists of four parts. The headlines of the pro ect are “employees , “health , “environment and “society . It aims to produce bene ts for the various groups of the society at minimum cost. Within the scope of this pro ect Under the “Employees headline, social clubs

will be established (Women s club, Children s Club, Travel Club, etc.) Weekly meetings will be held for these clubs. Under the “Health headline, employees will

donate blood to the Red Crescent. Under the “Environment headline, oint pro ects

will be conducted with the TEMA Foundation (Memorial Forest). Under the “Society headline, tailoring courses

will be opened for the housewives in the Ba c lar District in order to reintegrate them into the society. As a result, women living in the region will have learned a skill to support themselves.

4) Volunteering 2In the last pro ect, one or more kindergartens within the Ba c lar district which are operated by the Municipality will be selected and moral and material support will be provided to them. The maintenance, repair, painting, etc. needs school bus needs table, stationary, toy, etc. needs of these kindergartens will be ful lled by SLN. It has been scienti cally proven that kindergartens help build a solid foundation for further education and signi cantly contribute to their success later in life. During the pro ect, some of SLN employees devote parts of their time to the pro ect. Volunteering employees will constitute the workforce of the pro ect. In this context, improvement of the physical conditions of the kindergarten will increase the quality of the education children attending to the pro ect schools are receiving. This pro ect aims at sociali ing the employees, increasing their social and individual awareness, environmental consciousness, and helping them become individuals who contribute to the society, to themselves and to the company and the corporate social policies of the company.

“We are like a family here. We are

the communication with the management or our chiefs. This is so much so that we know about the projects SLN conducts in relation to the environment.

learned a lot through the trainings held within the company. Enver was one of them and we both applied our knowledge in our daily life and told it to our friends. Thus we not only contributed to the workplace but to people around us.”SLN Tekstil Employee Representative– Burcu Kurt


ENVIRONMENTAL PERFORMANCEENVIRONMENTAL PERFORMANCE

Following the relocation of the cutting unit, transportation between departments will be considerably reduced by means of proper planning and thus, carbon emission will decrease. Locating the cutting unit at the dye house area

Thanks to the energy efficiency pro ects and their implementations at our subcontractors,

(ORDU) will generate employment in Anatolia and will help employees relocate from stanbul to Anatolia. These pro ects also provide support for the city planning pro ects of stanbul. If a sector with a high demand for workers such as the ready made clothing sector is moved outside stanbul, this will both contribute to a decrease in stanbul s population and to the city s environmental planning.

by means of the energy saving pro ects to be implemented at SLN Tekstil.

The purchase of machines running with a low rate of water will continue. These Investments together with other technical optimi ation processes

Installing advanced treatment systems at the wastewater treatment plant. The purpose here is to


MANAGEMENT APPROACH TO OUR ENVIRONMENTAL IMPACT

Our Environmental PolicyWe at SLN strive to minimi e our negative impact on the environment without making any compromises in the quality of our products. We are aware that natural resources must be used effectively and efficiently so that the future generations benefit from them ust as we do. To this end, we have adopted the following principles To comply with the domestic environmental

legislation and to take steps which are not even required by the law. To use natural resources and all kinds of energy

resources as effectively and economically as possible. To minimi e the negative impact of our activities

on the environment and the human health. To achieve measurable and continuous

development in every area related to environment. To determine environmental dimensions and all of

our different environmental aspects. To minimi e pollution and waste and ensure the

disposal of ha ardous wastes after minimi ing their environmental impact. To give trainings to raise the awareness of our

employees and our contract manufacturers and to encourage them to apply these principles. To lay down company goals and ob ectives in line

with these principles, to review them every year and to announce the progress achieved. To improve our environmental management

system in the light of these principles.

Our Environmental Management PracticesIn 2009 we integrated ISO 14001 Environmental Management System into our operations, in addition to the ISO 9001 uality Management System, which played an important role in the continuity of our production quality. Within this framework, our “Sustainability Team is in charge of auditing our Environmental Management System in addition to economic and social factors and to monitor the company s negative impact on the environment. Our Sustainability Team develops environmental protection activities and pro ects and prepares a regulatory and preventive action plan. It also keeps the top management informed.

In addition to our Environmental Management System, we have also obtained the eko Tex Standard 100, Organic Cotton OE Standard 100, Organic Cotton OE Blended and GOTS (Global Organic Textile Certificate) certificates, which are acknowledged both in our industry and internationally. This underlines the fact that our products are eco friendly and chemicals that are ha ardous for health and environment are not used at any stage of our production.

Aware of the fact that a sustainable economic growth is possible only through effective use of resources, our company is monitoring all natural resources it is utili ing during its production activities (including those of contract manufacturers) through 4 ey Performance Indicators on a monthly basis. These key indicators are energy consumption, water usage, fuel usage of company vehicles and solid wastes. The data obtained as a result of these examinations are evaluated by the top management at the end of every year and short and medium term production and investment decisions are made.

The ey Performance Indicators ( PI) we are monitoring are entered to Puma.Safe Ecology s Enablon system every six months as necessitated by the Puma.Safe.Ecology system

Enablon is a software system developed to



monitor the impact made on the environment as a result of production activities. By entering the required data to the system, the energy consumption, solid and liquid waste amounts, and wastewater ratios of companies can be monitored and the resultant ecological footprint can be automatically calculated. The data then is compared and analysed periodically. Calculations are based on the number of employees and the total area of the companies.

Enablon covers for the moment only SLN Tekstil

ve onfeksiyon units. SLN Boya is not included in the system.

The charts below give an overview of SLN s 2011 water, energy and waste consumption per unit in comparison to the 2010 average benchmark and PUMA s 2015 target calculation started in 2010 and PUMA set targets for SLN for each of the three criteria (water, energy and waste). SLN is responsible for reaching those targets until 2015. According to PUMA s environmental targets, each supplier should reduce its environmental impacts by 25%.

SLN ENVIRONMENTAL PERFORMANCE ACCORDING TO PUMA ENABLON PROGRAM

liter/ pair or pc

Average 2010 Benchmark: 90 litre/pair or pc

2015 Target: 70 liter/pair or pc

DecemberNovember

OctoberSeptember

AugustJulyJuneMayAprilMarch

FebruaryJanuary

0

20

40

60

80

100

2015 Target: 1 kWh/pair or pc

Average 2010 Benchmark: 1,30 kWh/pair or pc

DecemberNovember

OctoberSeptember


FebruaryJanuary

0,0

0,3

0,6

0,9

1,2

1,5kWh/pair or pc

Average 2010 Benchmark: 70 grams /pair or pc

DecemberNovember

OctoberSeptember


FebruaryJanuary

2015 Target: 50 grams /pair or pc

10

20

30

40

50

60

70

80grams/pair or pc


Turkey signed the yoto Protocol in 2009. Although the country does not have an emission reduction commitment for the 2008 2012 period, we at SLN have been measuring our carbon footprint since 2009. We have been trying to determine our impact on the climate and to implement relevant action plans to reduce our emissions.

There is detailed information about the pro ects that were developed with regards to emission measurements and water and energy efficiency in the later parts of the report. Relevant environmental indicators are also addressed in

these sections.Furthermore, although domestic environmental

laws require Indoor Emission Measurements (dust measurement) to be performed once in every 3 years, we at SLN have been measuring them every year.

Raw Material UseEnergy and raw materials are extensively used in the textile industry. As a result, we are making every effort to use resources effectively, to purchase them according to legal procedures, and to select our suppliers accordingly.

SLN provides its raw materials by working with

Unit

g. 1.019.655,00 1.169.770,00

Meter 19.113,00 45.539,00

Item 15.401.828,00 14.950.924,00

Item 9.902.568,00 8.042.435,00

Item 4.694.654,00 7.297.050,00

Item 3.276.434,00 2.781.991,00

Item 129.745,00 97.545,00

Item 3.395.988,00 3.939.256,00

Item 123.280,00 123.647,00

Meter 53.170,00 97.960,00

Coil 21.440,00 22.550,00

Unit

SALT g. 5.773.845

g. 230.000,00

g. 95.000,00

g. 50.000,00

g. 75.000,00

g. 90.000,00

g. 1.300,00

g. 4.500,00

g. 15.000,00

g. 1.800,00

g. 3.500.000,00

g. 70.000,00

g. 8.500,00

g. 15.000,00

Unit

g. 15.000,00

g. 90.000,00

g. 70.000,00

g. 115.000,00



suppliers that stand out not only because of their quality and price policies, but also because of their environmental and social practices. There are both domestic and foreign companies that supply SLN with raw materials. Some of these companies are Dystar, Seta , Rodolf and CHT from which we purchase our dyes and auxiliary agent chemicals.

In choosing the most suitable and efficient materials for our production processes, we are constantly cooperating with our suppliers and value their opinions of our company.

WASTE MANAGEMENT

At SLN, our main goal when performing our activities is to use all resources effectively and efficiently. To that end we defined the different types of waste we are generating and the damage they may cause to the environment. In order to raise the awareness of our own employees and of the employees of our contract manufacturers regarding recycling and the effective use of resources, these are trained every year on waste separation and recycling

SLN commits to implementing the activities below in order to fulfil its environmental and social responsibilities and to make its employees responsible in this matter.

Electrical – electronic wasteHa ardous wastes such as fluorescent lamps, condensers, starters, electric cables, printers, etc. are kept in a special area and put in special packages to be sent to authori e collectors. The

ha ardous wastes are collected when the total amount reaches 50 kg. At that point Evciler imya Madencilik ve At k Ayr t rma and Anel Doga Entegre companies are collecting from SLN the electronic waste for disposal.

Non ha ardous wastes such as waste paper, cardboard, cylinder and plastic are collected in separate recycling boxes that are located in every department. These waste papers and cardboards are packaged and then collected by Tema Foundation for recycling or reuse.

All cardboard boxes used within the company are made from recycled materials.

Our nylon wastes that come into the company wrapped around cloth batches are collected in a separate area in our waste unit. Our non ha ardous nylon wastes are collected by ahraman Hurda ve Metal Company every month.

Our fabric waste originates form cut cloth or clippings and second grade clothes produced at our company. After being processed, they are made into fibres to be used as filling material and used in home textile products. Deni Otomotiv collects our cloth wastes every two weeks.

SLN employees see these waste papers as trees saved.

Chemical WasteWe strive to minimi e our use of dyes, auxiliary chemicals, salts and volatile substances utili ed as raw materials in the production process. These chemicals are preserved in the Chemical Dye Store


in accordance with the environmental legislation concerning their storage and the conditions of occupational health and safety chemical storage rules. Wastewater pools and channels are supposed to prevent the leakage of wastewater and ha ardous materials and thus damage human health and environment.

Our chemical waste is preserved within the closed chemical waste area inside our waste unit. Our contaminated chemical barrels are collected by

i ek At k D n m company every 20 days and are disposed of. Our contaminated nylon and paper wastes, on the other hand, are collected by Evciler

imya Madencilik ve At k Ayr t rma company every six months and disposed of. The chemical barrels and chemical tanks (IBC) (plastic barrels used by the companies we work with to transport chemicals and which are put in iron cages and have a 1000 kg capacity) are collected by companies authori ed by the Ministry of Environment.

The users and employees are informed about these chemicals that contain carcinogenic substances through MSDS reports. They are also given trainings about them and provided with necessary personal equipment in accordance with the MSDS information.

Packaging WasteThe packaging waste from our company is collected by ahramanlar ve ayk s lar Company with delivery note and invoice. This waste is transformed

into granules after going through certain processes. Nylon garbage bags or plastic kitchen utensils can be produced from this raw material. The packaging waste collected from us is transformed into second grade garbage bags and sold on the market.

Domestic Waste and Waste OilThe domestic waste produced at our company is collected in nylon bags at the end of the day. These bags are then sealed and put in containers provided by the local municipality for disposal and recycling. Ba c lar and B y kkar t ran Municipalities collect these containers from our company twice a week.

Waste oil produced at our company is stored in the waste unit of our company. Chemical waste oil from machinery maintenance is separated accordingly and disposed of by o a S nai Ya , whereas vegetable oil from the kitchen is separated and disposed of by o a Geri a an m.

"SLN Boya purchases 80% of its dye spectrum from our company. In order to serve them better, we attach great importance to the placement of orders systematically in advance."

–



WASTESRELEVANT REGULATIONS

SECTION CONDITIONS AT THE MAIN WASTE STORAGE AREA

STORAGE CONDITIONS

Contaminated Wastes Regulation on the Control of Ha ardous Wastes

Must be collected in separate vessels in the unit

Ha ardous wastes must be stored in the temporary storage area

O ce waste paper, Cardboard, Nylon wastes

Regulation on the Control of Packaging and Packaging Waste

Waste paper container Must be stored in the temporary storage area

Waste oil (Used after the maintenance of machinery and equipment)

Regulation on the Control of Waste Oils

Waste oil tank Ha ardous wastes must be stored in the temporary storage area

Waste battery Regulation on the Control of Used Batteries and Accumulators

Waste battery container Ha ardous wastes must be stored in the temporary storage area

Fluorescent Regulation on the Control of Ha ardous Wastes

Waste uorescent container


Adhesive Packages Regulation on the Control of Ha ardous Wastes

Waste paper container Ha ardous wastes must be stored in the temporary storage area

Electronic Wastes Regulation on the Control of Ha ardous Wastes

Electronic waste container Ha ardous wastes must be stored in the temporary storage area

Packaging Wastes (Paper, Cardboard, Nylon, Metal, etc.)

Regulation on the Control of Packaging and Packaging Waste

Waste paper container Must be stored in the temporary storage area

Metal Wastes Communiqu on Recycling of Some Non Haardous Wastes


Waste Accumulator Regulation on the Control of Used Batteries and Accumulators


Composite Waste Regulation on the Control of Packaging and Packaging Waste

Separate waste containers are kept in the unit

There is a closed top concrete ground composite waste area which is outside the main building, which can contain large amounts of waste, and where leakage and rain water drainage lines are separete.

Vegetable Oil Waste Regulation on the Control of Waste Vegetable Oils

Waste oil container kept in the cafeteria


Fabric Waste Communiqu on Recycling of Some Non Haardous Wastes

Separate Waste containers are kept in the unit


Medical Wastes Regulation on the Control of Medical Wastes

Collected in the Medical Waste Container in the in rmary


Waste Water Regulation for Water Pollution Control

Waste water channel Waste water channel

Emission Regulation on Industrial Air Pollution Control

Released to atmosphere from chimney

Sludge Regulation on the Control of Ha ardous Wastes

At the treatment plant Ha ardous wastes must be stored in the temporary storage area


METHOD OF DISPOSAL EXPLANATION

DATE OF OFFICIAL GAZETTE

QUANTITY (kg)

(ACTIONS TO BE TAKEN AS PER REGULATIONS) LAW

Recovery (RDF ont. At k Bertaraf – S reko At k Y n. Nak.)

Must be given to a licensed plant. Waste declaration form is lled online at the end of every year.

14,03,2005257555

7.565

Recovery (TEMA Foundation, ahraman Hurda Metal – ayk s Hurda)

Must be given to licensed companies as per Regulation on the Control of Packaging and Packaging Waste

8 24 112835

29.655

Recovery ( o a S nai Ya lar)

Must be given to licensed companies as per Regulation on the Control of Waste Oils. Waste oil declaration form is lled at the end of every yerar and submitted.

30,07,200826952

NA

Disposal (TAP) Moveable Battery Producers and Importers Association

Must be given to licensed disposal plant. Declaration is made at the end of the year.

31,08,200425569

NA

Disposal (Evciler imya Anel Do a Entegre)

Must be given to a licensed disposal plant. Waste declaration form is lled online at the end of every year.

14,03,200525755

111

Disposal(Ekolo ik Ener i)


14,03,200525755

NA

Recovery(Evciler imya Anel Do a Entegre)


14.03.2005 25755

400

( ahraman Hurda Metal ayk s Hurda)

Must be given to lincensed companies as per Regulation on the Control of Packaging and Packaging Waste

24.08.2011 28035

13.750

( ahraman Hurda Metal) Must be given to a licensed disposal plant. Waste declaration form is lled online at the end of every year.

17.06.2011 27967

2.880

Disposal(Ak der)

Must be given to licensed disposal plant. 31.08.2004 25569

NA

Recovery( ayk s Ticaret)

Must be given to licensed plant. Non ha ardous declaration form is lled at the end of every year.

24.08.2011 28035

37.500

Recovery( o a Geri a an m)

Must be given to a licensed plant. Waste declaration form is lled online at the end of every year.

19.04.2005 25791

NA

Recovery(Deni Otomotiv)

Must be given to a licensed plant. Non ha ardous declaration form is lled at the end of every year.

17.06.2011 27967

161.060

Disposal(Asr n T p Merke i)

Medical Wastes are transported and disposed of by vehicles and institutions organi ation which are licensed by the Ministry.

22.07.2005 25883

NA

Treatment Plant Limit values must be met. Samples are taken from treatment plants every month and analy ed. Discharge license is renewed every 5 years.

31.12.2004 25687

All of service water

Necessary emission measurements are made by ev DanHali evre Company licensed by the Ministry of Environment

After limit values are met, emissions are released to the atmosphere. Renewed every time process is changed, capacity is increased, emission is changed, coordinates are changed. Tested once in every 3 years.

03.07.2009 27277

Dye House Chimney gas emission values

Recovery(Bumerang At k Bertaraf)

Must be given to licensed disposal plant. Tests are conducted every year and results are indicated in the waste declaration form, which is submitted.

14.03.200525755

8.600



WATER USE

The procedure of dyeing requires a lot of water. As a result, textile is one of the industries which impact the environment to a great extent due to the abundant use of water and the amount of wastewater produced.

Through the machinery replacement and process optimi ations we performed in the dye house we purchased in 2011, we strived to minimi e the amount of water and energy we used. Our activities in this eld will continue to be one of our main priorities.

The wastewater used in SLN Tekstil and onfeksiyon is given to the sewage system of the

municipality.

There are two water wells on our premises. One of them has a 73 m3 h capacity whereas the other has a 60 m3 h capacity. According to the performance of the plant, one of them is operated as the primary well while the other one is operated as replacement.

After the initial treatment, the water drawn from the well is then sent to soft water retention ponds for processing.

During the fabric dyeing process, 84 lt. water is used to dye 1 kg of fabric.

As a result of the renovations we carried out in 2011, the processes were re arranged and new machinery was brought in. As a result, the amount of water necessary for dyeing 1 kg fabric dropped to 70 lt. The goal for 2012 is to use 60 lt. of water. We are in the process of purchasing the required machinery and improve the dyeing processes.

980 m3 water is consumed in our plant where

14.000 kg fabric is dyed daily. All of this water is given to the waste water system after processing.

Heat Recovery from Waste Water Before the hot water created during the dyeing processes is given to the waste water system, its heat energy is used through the heat recovery system. The amount of water heated through the energy from wastewater is 590 m3.

With this system, the amount of energy (steam energy) necessary to heat the process water decreased by 60%. In parallel to this, the system reduces the amount of steam used in the entire plant by 20 25%.

An overview of the heat recovery system: The hot waste process water from the dyeing machines is accumulated in retention ponds. The clean water that is later used in dyeing processes is circulated around this pool through thin plates or pipes and the heat recovery is achieved (this is called heat exchange). The water used in dyeing processes is usually 90 130 degrees C. Transferring this water to the waste water system without recovering this heat would mean a severe loss of energy.

The wastewater cannot be used as process water again since it is coloured and impure, however, its energy is re used through the heat transfer system.

After the heat recovery process, the water sent to the treatment system is cooled down below 35 degrees C, which facilitates the treatment procedure. This system lowers the energy consumption and the amount of emissions created by the company.

SLN Boya Water Treatment SystemThe wastewater, which is produced as a result of the production processes in the dye house, is carried by the wastewater channels and circulated through rotating drum lter and its bres are removed. The water coming from here passes through the heat recovery system where its heat is decreased and carried to the treatment plant via channels.

The wastewater treatment is completed through the biological treatment system and returns to

Sln Tekstil

Unit 2010 2011 GRI

Water consumption m³ 2.430 2.636 EN8

Sln Boya

Unit 2011 GRI

Water consumption m³ 310.000


nature at values stipulated by the Ministry of Environment. The amount of wastewater returned to nature almost equals the amount of water used (sama for the water lost or evaporated during production).

The solidi ed sludge produced as a result of the biological treatment system is packed and stored in the special storage area in our plant at values stipulated by the Ministry of Environment. This sludge is collected by Bumerang At k Bertaraf and disposed of every three months.

Companies that produce concrete usually use the sludge.

ERGENE BASINThe waste water produced as a result of the dyeing process and returned to nature through streams

causes severe pollution with its colour, odour and looks, despite being treated at conditions stipulated by the Ministry of Environment.

This pollution is widely observed in the Ergene Basin of the Thrace Region, where our plant is located. The textile factories consume the natural spring waters and cause serious pollution.

Various measures are taken in this regard. The Ministry of Environment is developing new procedures concerning water treatment systems. One of these procedures require that the factories render their dyeing water colourless and odourless through di erent treatment systems before returning it to nature.



ENERGY USEIt is known that the textile industry is very energy intensive. Therefore the e cient use of energy at every stage of the production is very important and essential both for the reduction of costs and of the environmental impact.

In SLN Tekstil ve onfeksiyon, located in Istanbul, electricity is directly taken from the grid. Steam generators that run on electricity produce the steam. The building is heated with natural gas.

In SLN Boya, located in L leburga B y kkar t ran region, the electricity and the steam energy used at the plant are provided by orlu Ener i Elektrik retim A. ., which is located

next to our company. Due to the fact that steam is purchased, no steam generator exists in the plant. The natural gas consumed in the factory is necessary for operating certain machinery and the quantities are very low compared to other factories.

We use diesel fuel or gasoline in the vehicles used for transporting employees or products.

Unit 2010 KJ 2011 KJ GRI

Electricity Consumption kWh 381,464 1,373,270,400 373,195 1,343,502,000 EN4

Steam Consumption m³ 9.2 23,111,136 9.5 23,864,760 EN4

Natural Gas Consumption m³ 5,745 198,438,619 8,367 289,005,383 EN3

Vehicle Diesel Consumption (Shuttle busses, Transportation Vehicles)

Liter 30,841 1,097,563,339 35,968 1,280,021,990 EN3

Vehicle Gasoline Consumption (Shuttle busses, Transportation Vehicles)

Liter 7,622 252,103,137 11,349 375,376,346 EN3

Unit 2011 joule GRI

Electricity Consumption kWh 4,554,000 16,358,400,000 EN4

Steam Consumption m³ 26,056 65,454,756,480 EN4

Natural Gas Consumption Sm³ 1,201,681 41,507,383,589 EN3

Vehicle Diesel Consumption (Shuttle busses, Transportation Vehicles)

Liter 12,429.80 23,864,760 EN3

SLN Boya Electricity and

SLN Boya s electricity and steam energy is supplied from the cogeneration system established by orlu Energy, which in turn increases the company

expenses. However, this arrangement prevents the electricity distribution and transmission losses as well.

In a cogeneration system, the steam is obtained by turning the waste heat, which is produced during electricity generation into steam energy. Therefore the steam used in our company is a recycled product.

Cogeneration SystemCogeneration is the generation of both electricity and steam energy in the same system. This arrangement leads to very economic results compared to the generation of electricity and steam separately at di erent locations. A gas turbine that only generates electricity can transform only 30 40% of the energy it uses. When a cogeneration system is used, on the other hand, most of the heat energy to be discharged from the system may also be utili ed. This waste heat is then transformed into steam energy, which results in the utili ation of the energy input at 70 90%. This technique is called “Combined Heat and Power Systems (CHP) or “cogeneration in short.

SLN BOYA ENERGY SAVING PRACTICES

Changes in the Machine ParkDyeing Machines

The liquor ratio, which is used during fabric dyeing processes carried out in certain dyeing machines, is 1 7. However, this ratio drops to 1 5 in the new dyeing machines we purchased. As a result of the special designs of the new machines, the amount of water that directly contacts fabrics is minimi ed.


This results in a decrease in the liquor ratio. The bene ts of this decrease are as follows: The amount of water used in dyeing process

decreased by 30%. Since the water that needs to be heated for this

process decreases, the steam to be used for heating decreases by 30%. The amount of chemicals to be used decreases by

30% as a result of less water usage. The amount of wastewater decreases, which takes

the load o the treatment plant and decreases the amount of energy used for treatment.The replacement of machinery will be completed by 2012 13.

Chemical and Dyeing Automation SystemThe following systems were established in the dye house: Barcode controlled weighing, solution and

distribution system for the Powder Paint. Fully automated measurement and distribution

system for liquid chemicals. Fully automated weighing, solution and

distribution systems for powder chemicals.

Rapid measurement of the chemicals and dyes and their transfer to the machines. Ensure the timely and correct weighing of the

formulas used in dyeing machines. Prevent wastes resulting from manual operation. Eliminate contamination in the Dye and

Chemical itchen and create a healthy working

environment for the employees. Since the chemicals used in the plant are sent

to the machines untouched by humans, chemical work accidents caused by human factor will be prevented. The workload of dye operators is decreased, as a

result of which the workforce will be scaled down.

Maintenance of the machinery and pipelinesThe entire factory underwent general maintenance and repair in 2011. Below are some of the improvements, which resulted in energy savings: Steam traps in the factory (an apparatus which

prevents steam leakages in the steam pipeline) are controlled and changed. As a result, 10.753 kg steam leakage per day was prevented and a 10% steam saving was achieved. The open width levelling drying machine

circulation fan revision. With this maintenance, 324.000 kWh electricity will be saved annually based on the assumption that the machine is operated 12 hours a day, 300 days a year. Cylinder changes in the ram machine: the power

transfer systems decreased as a result of this maintenance, which in turn lowered the energy consumption. Optimizations in the dyeing processesAs a result of the optimi ations made in the dyeing processes, the process times decreased, and less energy and water were consumed as a result of lower temperatures and smaller number of baths.



SLN Tekstil ve Konfeksiyon Energy Saving PracticesBelow are our practices carried out in the reporting period to minimi e our negative impact on the environment: All lighting systems in common areas were changed into motion sensor lamps. Lamps in all o ces and manufacturing areas were

changed with energy e cient uorescent lamps. 15 sewing machines were replaced with new ones

which resulted in 60% energy saving. Softening lters were installed to the water used

in our steam benches and laboratories. These lters soften the water and allow them to get hot fasters. The energy saving achieved here is approximately 20%. All pipes carrying steam to self boiler ironing

benches were isolated in order to prevent energy leakages. Believing that we cannot manage the data we

cannot measure, we hired Altensis Bes Ener i Ltd. in the reporting period to measure our energy e ciency. During this measurement, the heating and cooling systems, pressure air systems, the steam generator used in the production of steam and lighting systems in our company were examined. We gave “Energy E ciency, Water Economy and

Environmental Awareness (“Enver ) trainings to all our employees and the employees of our contract manufacturers. We placed “Use Less Water signs in areas where

water is used. We switched to diesel powered company vehicles,

which cause less CO2 emission.

In November 2011, Altensis BES Ener i Dan manl k – Leed and Breeam Certi ed – was hired to carry out the energy audit of SLN Tekstil s management building. Energy audit is an extensive analysis of the energy use in the buildings. The purpose of the audit is to determine the most useful opportunities for increasing the e cient use of energy based on the needs of the company. The building was audited in accordance with the national and international auditing principles. The scope of the audit includes: HVAC Systems Compressed Air Circuit Steam Boiler Lighting systems and lighting controls

Various energy e ciency measurements have been used to perform the analyses and to o er alternatives to increase the energy performance of these systems. These measurements included: heat analysis of systems, power factor, compatibility of electrical circuits and energy usage.

The tables below demonstrate the energy usage in the SLN Management Building according to di erent resources and their current states of cost ratios.

Since apparel manufacturing requires lighting and use of electrical machinery, electricity is the most widely used type of energy.

The report prepared by Bes Energy at the end of the audit was submitted to the management. The suggestions for improving energy e ciency were included in the company s program for 2012.

Some of the suggestions included in the report are: elimination of de cient isolation in certain parts of the building, installation of thermostatic valves to radiators, use of 100% electronic ballasts, development of energy e ciency training programs.

NATURAL GAS

ELECTRICITY

Energy Cost %

Energy Cosumption %


The “ENVER Pro ect (Energy E ciency), which is carried out by the Ministry of Energy, was initiated in order to increase awareness regarding energy e ciency. The mascot of the pro ect is a boy named Enver (En Ver is the short form of Energy E ciency) who stands for energy e ciency. Enver informs people around him about the e cient use of energy resources.

All our employees (including those at SLN Boya) received a 2 hour training given by Ahmet kan, an electrical engineer, within the scope of this pro ect. Brochures and booklets explaining the Enver Pro ect were given to participants. These brochures were provided by the Ministry of Energy

and Natural Resources.The purpose of the training was to raise the

awareness of the personnel in this regard and help them contribute both to their own economy and to the economy of the country. The de nition and importance of energy e ciency, Turkey s situation in this respect, the bene ts and methods of energy e ciency were all explained during these trainings.

It was intended that the brochures and storybooks distributed help the employees to raise this awareness among their families and friends.

The surveys and interviews conducted following the trainings generated positive feedback about these trainings.

"Following the Enver training, our main topic of discussion became the projects for achieving energy

homes. With this training we learned information that will help us to reduce the natural gas and electricity bills during the winter.As a result of the trainings we received about the environment, our environmental consciousness increased. We started to separate our waste. Thanks to the trainings concerning occupational health and safety, we realized that we are living in a world full of potential work accidents and that we should take preventive measures."

SLN Tekstil Employee Representative– Özkan Özöç



CARBON AND WATER FOOTPRINTThrough our energy e ciency pro ects we conducted at SLN Tekstil and onfeksiyon in 2010 and 2011 we aimed at reducing our energy consumption and carbon emission. Our carbon emission measurements of 2010 2011 demonstrate that we have been successful in this regard.

Since we do not have any carbon emission data regarding our SLN Boya unit for previous years, we are unable to make a comparison with the past. The emission data in this reporting period belongs only to 2011.

In this reporting period, our water footprint was also measured in addition to our carbon footprint.

The Carbon and Water Footprint Project“In 2009 SLN evaluated its Carbon Emission for the company premises in stanbul, including the transportation. For 2010 2011 the evaluation includes also SLN Boya and all of its subcontractors in order to have the whole SLN s production Carbon Footprint.

Being an equally important indicator, the Water Footprint was also included this year in the evaluation.

The e ects of global warming have become evident in the last few years. Natural disasters such as droughts, oods, and storms are becoming more frequent. Rising temperatures endanger ecosystems and cause irreversible damages to mankind and nature. The International Panel on Climate Change (IPCC), the nominated United Nations body for research on this issue, has revealed in its studies that the increasing level of carbon emissions (CO2) by human activity is the ma or driver of climate change. With increasing population and economic growth the demand for fossil fuels has risen in the last decades, leading to the release of more CO2 emissions into the atmosphere. Surveys show an increasing interest among consumers in addressing this problem. For that reason, it is important that innovative companies show their responsibility and take an active role in their leadership function. By taking energy saving actions, those producers also pro t from bene ts such as reduced costs as well.

To proactively manage its CO2 emissions and water consumptions and to support clients in their activities, SLN has evaluated its company carbon and water footprint for the year of 2010 2011.

SLN Boya (dyeing) 86%

Hazar Ltd. (sewing/subcontractor) 6%

a lar (sewing/subcontractor) 2%

SLN Tekstil onfeksiyon 4%

SLN Efe (pirinting) 2%

“In general SLN emissions per piece are generally very low compared to other

continuous improvement.’’ –


Carbon FootprintThe company’s Carbon Footprint indicates the total amount of GHG emissions which includes both all direct emissions at the site of the company (e.g. boiler, generator), cars emissions, as well as indirect emissions of purchased electricity, heat or steam of SLN. Besides obtaining a detailed overview of the company’s carbon emissions, we also wanted to learn about the potential ways to reduce our emissions. Systain Consulting carried out the carbon footprint evaluation as it was in 2009. In 2009, the results were included into the SLN Sustainability Report 2009. For this reporting term, the data were updated and the scope was enlarged with including new units and also subcontractors. Additionally the water footprint has been assessed into the report.

The footprint calculation includes data from SLN Tekstil ve onfeksiyon, SLN Efe (printing), SLN Boya (dyeing) and two sewing subcontractors (Hazar Ltd. and Caglar). Data about SLN’s fuel, energy and electricity consumption, as well as production and water consumption data was collected on a monthly basis from November 2010 to October 2011. This data was analysed and compared with the last report (2009). For these two periods, the absolute carbon footprint, the output related carbon footprint, energy costs, the absolute and output related water footprint, as

well as water costs were calculated for each of the company divisions, respectively subcontractors.

According to the results of the evaluation, all units caused in total 4.882 tonnes CO2e emissions in 2010 2011, with the dyeing unit having the largest share (86%). This amount would be equal to the annual per capita emission of 1220 Turkish citizens or 508 German citizens (4 tonnes of CO2 per year per capita in Turkey and 9,6 tonnes of CO2 per year per capita in Germany).

SLN Tekstil and onfeksiyon succeeded in reducing its absolute, as well as relative carbon footprint. Comparing the total emission between 2009 and 2010, the total emission decreased by 7%, from 302 tonnes in 2009 to 280,2 tonnes in 2010. The company’s target of emission reduction was 10% in 2009, which means we have almost reached our target.

The chart below shows the share of CO2eemissions of each unit for the year 2011. Regarding SLN Boya, only data from 2011 was considered due to the fact that the dye house belonged to another company in 2010, before SLN purchased the factory. In the rst nine months of 2011, the absolute carbon emissions of SLN Boya amounted to 4.197 tonnes CO2e emissions. Due to the nature of the business (high energy usage), the dyeing unit generates more emissions and for this reasons the reduction should be evaluated as unit based.



0.00

kg/piece

2010

SLN Efe(printing)

2011

0.020.040.060.080.100.120.140.160.180.200.22

2010

SLN Tekstil veonfeksiyon

2011 2010

a lar (sewing / subcontractor)

2011 2010

Hazar (sewing / subcontractor)

2011

fuel oil dieselnatural gas electricity

SLN Tekstil’s energy costs in 2010-2011The diagram below gives an overview of each unit and its energy costs per piece for comparison purposes. Again, SLN Boya (dyeing unit) is excluded.

The diagram shows that all companies have a slight increase in energy related costs from 2010 to 2011, even when emissions dropped. This has to do with the increasing level of energy prices in general.

0.00

SLN Efe(printing)




2010 2011

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

2010 2011 2010 2011 2010 2011

fuel oil dieselnatural gas electricity

SLN Tekstil CO2 emission sources in 2011The carbon footprint per piece of SLN Tekstil ve

onfeksiyon was reduced by 44% to a level of 87 grams CO2e emissions per piece in the past two years. However, it has to be considered that the produced number of pieces increased by 50%. As such, productivity has increased remarkably.

The following diagram provides a comparison for each unit on the CO2e emissions per piece. SLN

Boya (dyeing unit) is excluded. Due to the particular processing, the printing unit has the lowest emissions per piece.

The diagram below shows the water footprint for the various units. SLN Efe has the lowest water consumption per piece, but on the same time has to pay the highest water costs per piece. Beside Hazar Ltd., all units show a slight increase in water usage per piece compared to 2010.


Water FootprintConcerning environmental protection, water consumption is another ma or issue. For this reason, the so called Water Footprint has been evaluated. In total all, the total consumption of water of all units was 6.912 m3 in 2010. In the rst nine months of 2011 all units consumed 370.252 m3 water. The signi cant di erence between 2010 and 2011 is

due to the inclusion of SLN Boya (see chart below). Most of the water consumption arises from SLN Boya, although, this result lies in the middle eld compared to other dyeing factories. The outputrelated water usage amounted to 3,17 Iitre per piece in 2010 and increased in 2011 to approximately 92 lt per piece. The total water costs account for 28.429 TL in 2010 and 393.660 TL in 2011.

The diagram below shows the water footprint for the various units. SLN Efe has the lowest water consumption per piece, but on the same time has to pay the highest water costs per piece. Beside Hazar Ltd., all units show a slight increase in water usage per piece compared to 2010.

Sln Boya

Hazar (subcontractor)

a lar (subcontractor

Taketim (stiching)

Efe Ege Printing

liter/piece

SLN Efe(printing)




2010 20110.00

1.40

1.20

1.00

0,80

0,60

0,40

0,20

2010 2011 2010 2011 2010 2011


GRIGRI

GRI indicators

Explanation Reference pages / Comments

Reporting status

1. Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organization. 4 Full

1,2 Description of key impacts, risks, and opportunities. 19-21 Full

Corporate Profile

2.1 Name of the organization. 3 Full

2.2 Primary brands, products, and/or services. 6-9; Full

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

11-12 Full

2.4 Location of organization's headquarters. 3 Full

2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

The organization operates only in Turkey.

Full

2.6 Nature of ownership and legal form. 11 – Owned by two family members Selin and Salih Gur and company is not a stock corporation.

Full

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).

6-7 Full

2.8 Scale of the reporting organization. 18-9;27 – Company total capitalization; 8.738.116,14 TL equity; 3.738.116,14 TL Debt; 4.000.000 TL

Full

2.9 Significant changes during the reporting period regarding size, structure, or ownership.

6-7 Full

2.10 Awards received in the reporting period. 9 Full

Report Profile

3.1 Reporting period 3 Full

3.2 Date of most recent previous report. 3 Full

3.3 Reporting cycle 3 Full

3.4 Contact point for questions regarding the report or its contents. 3 Full

3.5 Process for defining report content. 3;19-21 Full

3.6 Boundary of the report 3 Full

3.7 Any specific limitations on the scope or boundary of the report. 3 Full

3.8 Basis for reporting on joint ventures and other subsidiaries. 3 Full

3.9 Data measurement techniques and the bases of calculations This report is compliant with GRI B level. Data gathering processes are conducted within the database of SLN and same calculation methods are used throughout the SLN software database.

Full

3.10 Reasons for any re-statements of information provided in earlier reports

SLN 2009 report was our first report. Some projects that are included in this report were initiated in 2009 and continued during 2010-2011.

Full

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

3 Full


GRI indicators


Reporting status

3.12 GRI indicators table. 66 Full

3.13 External audit of the report. SLN 2010-11 Sustainability Report is prepared at GRI B level. The report is self-assessed according to GRI disclosed methodology and no external assurance is included.

Full

Governance, Commitments and Engagement Practices

4.1 Governance structure of the organization 11 Full

4.2 Chairman of the Board of Directors. 11 Full

4.3 Number of independent members of the board of directors. There is no independent board member. All board members are executives.

Full

4.4 Participation of shareholders and employees to the management. Shareholders who have an active role in the company management form the Board of Directors.

Full

4.5 Linkage between compensation for members of top management (including departure arrangements), and the organization's performance (including social and environmental performance).

The members of the board of directors are remunerated as company employees and the management’s salary system is set for management by the executive committee.

Full

4.6 Processes in place for the board of directors to ensure conflicts of interest are avoided.

Board members are executives of SLN Group companies and this committee makes all managerial decisions.

Full

4.7 Process for determining the qualifications and expertise of the members of the board of directors for guiding the organization's strategy on economic, environmental, and social topics.

Board member and SLN Tekstil’s CEO Selin Gur is the head of the sustainability team. CSR initiatives are supervised by all of the board members; however, Selin Gur is the initiator of SLN’s CSR projects.

Full

4.8 Mission or codes of conduct relevant to CSR performance of the corporation and the status of their implementation.

14-15 Full

4.9 Procedures of the highest governance body for overseeing the organization's CSR performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.

11 Full

4.10 Processes for evaluating the highest governance body's CSR performance.

11-13

The highest governance body's self-inspection regarding its CSR performance

14-17 Full

4.11 The corporation’s risk management approach to CSR-related areas. 13 Full


GRIGRI

GRI indicators


Reporting status

4.12 Externally developed CSR charters, principles, or other initiatives to which the organization subscribes or endorses.

12 Full

4.13 Corporation’s memberships in associations (such as industry associations) and/or national/international advocacy organizations.

7 Full

4.14 List of stakeholder groups. 19 Full

4.15 Basis for identification and selection of stakeholders with whom to engage.

19 Full

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

19-20 Full

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

21 Full

Performance Indicators

Economic Performance

Management Approach 23-24 Full

EC1 Direct economic value generated and distributed. 27 Full

EC3 Coverage of the organization's defined benefit plan obligations. 27 Full

EC4 Significant financial assistance received from government. 24 Full

EC5 Standard entry-level wages compared to local minimum wages. Wages are paid taking into consideration living conditions in all locations and are above the minimum wage.

EC6 Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation.

27 Full

EC7 Procedures for local hiring and proportion of senior management hired from the local community.

Dye house settlement areas of white-collar employees.

Workforce Practices

Management Approach 37 Full

LA1 (Main) Total workforce by employment type, employment contract, and region.

39 Full

LA2 (Main) Total number and rate of employee turnover by age group, gender, and region.

38 Full

LA5 (Main) Minimum notice period(s) regarding significant operational changes.

38 Full

LA6 (Annex) Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

43 Full

LA7 (Main) Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.

43 Full

LA8 (Main) Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

43-45 Full

LA10 (Main) Average hours of training per year per employee by employee category.

33 Full

LA11 (Annex) Programs for skills management and lifelong learning that support the continued employability of employees.

44-45 Partial

LA13 (Main) Breakdown of employees per category according to gender, age group, minority group membership.

39 Full

LA14 (Main) Ratio of basic salary of men to women by employee category. 40 Full


GRI indicators


Reporting status

Human Rights Management Approach 14,15, 36, 37, 41 Full

HR1 (Main) Investment agreements that include human rights clauses. 14, 15, 41 Full

HR2 (Main) Percentage of significant suppliers that have undergone screening on human rights and actions taken.

41 Full

HR3 (Annex) Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations.

39 Full

HR4 (Main) Total number of incidents of discrimination and actions taken. There were no discrimination-related incidents in the reporting period.

Full

HR5 (Main) Operations identified in which the right to exercise freedom of association may be at significant risk, and actions taken to support these rights.

14, 15, 40, 41 Full

HR6 (Main) Operations identified as having significant risk for incidents of child labour, and measures taken to the elimination of child labour.

14, 15, 37, 41, Full

HR7 (Main) Operations identified as having significant risk for incidents of forced or compulsory labour, and measures taken to eliminate forced or compulsory labour.

14, 15, 40, 41 Full

Society Management Approach 37

SO2 Business Units analysed for corruption.

Business Units analysed for corruption.

Percentage and total number of business units analysed for risks related to corruption.

No corruption incident ocurred in the reporting period. Full

Product Responsibility

Management Approach 32, 34-35

PR1 (Main) Life cycle stages in which health and safety impact of products and services are assessed for improvement.

32 Partial

PR2 (Annex) Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impact of products and services.

No such incident occurred during the reporting period.

Full

PR3 (Main) Products and services subject to product and service information and labelling concerning their usage.

34, 35 Full

PR4 (Annex) Incidents of non-compliance with regulations concerning product and service information and labelling.


Full

PR5 (Annex) Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

32, 33 Full

PR8 (Annex) Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.


Full

Environment Management Approach

Management Approach 48, 49 Full

EN1 Materials used by weight or volume. 51 Full

EN3 Direct energy consumption by primary energy source. 58 Full

EN4 Indirect energy consumption by primary source. 58 Full

EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

58-60 Full


GRIGRI

GRI indicators


Reporting status

EN8 Total water withdrawal by source. 56 Full

EN16 Total direct and indirect greenhouse gas emissions by weight. 62, 64 Full

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved.

60, 61; 63, 64 Full

EN21 Total water discharge by quality and destination. 56 Full

EN22 Total weight of waste by type and disposal method. 52-55 Full

EN26 Initiatives to mitigate environmental impact of products and services, and extent of impact mitigation.

62-65 Full

EN26 Initiatives to mitigate environmental impact of products and services, and extent of impact mitigation.

+ Full


Businesses should support and respect the protection of internationally proclaimed human rights

Page 14

Businesses should make sure that they are not complicit in human rights abuses.

Page 14

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining

Page 14

the elimination of all forms of forced and compulsory labour

Page 14

the effective abolition of child labour Page 14

the elimination of discrimination in respect of employment and occupation.

Page 14

Businesses should support a precautionary approach to environmental challenges

Page 14

undertake initiatives to promote greater environmental responsibility

Page 14

encourage the development and diffusion of environmentally friendly technologies.

Businesses should work against corruption in all its forms, including extortion and bribery.

Page 14


GRIGRI

Sln Tekstil Ve Moda San. Tic. Ltd. ti.Evren Mah. Halkal Cad.Turgut Reis SokakNo. 1 Ba c lar 34212stanbul TUR EY

Tel : (90) 212 489 35 40 ( pbx )Fax: (90) 212 489 35 49www.slnmoda.com.tr

This report is printed on 100% recycled paper

This report was prepared with the support of Systain Consulting www.systain.com

This report was designed by

Documents

Sln teks.sust.2011