WFSGI COMMUNICATION ON ACTION Reporting Template

Company Name: CAPITAL SPORTS CORP. (PVT.) LTD.

Type of Company: Supplier

Number of Employees 200

Country: PAKISTAN

Filled in by:

Name: Shahid Latif

Position: GM/Sustainability Coordinator

Email: shahid@capital-sports.net

Phone number: 0092-52-4265831-33

Date: December 20, 2016

Reporting period: Jan-Dec., 2016

After you complete this document, please send a copy to WFSGI (preferably by email) to:

Karolina Brazyte Email: kbrazyte@wfsgi.org

or

Marc-Ivar Magnus Email: mmagnus@wfsgi.org

WFSGI – World Federation of Sporting Goods Industry

Obere Zollgasse 75, P.O. Box 1664,

3072 Ostermundigen/Bern Switzerland

Fax: +41 31 939 60 69

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Part A

Commitment to the WFSGI Code of Conduct: Statement by Senior Decision-Maker

Provide a statement from a senior decision-maker of the organization (e.g. CEO, Chair, Senior Corporate Responsibility Manager, etc.) that expresses continued support for the WFSGI Code of Conduct and ongoing commitment to its provisions. Please include the individual’s name and job title at the bottom of the statement. The statement could include:

- The importance of commitment to the principles of the WFSGI Code of Conduct - Key corporate responsibility issues for the company - An outlook on the organization’s main challenges - An overview of CR governance at the company - Broader trends (i.e. political or economic) that affect the company and its corporate responsibility

performance, etc.

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

Capital Sports well realizes the significant importance of CSR issues in the successful business operations

of companies in the present global CSR perspectives. Capital Sports is engaged in the manufacturing and export of sports goods and as such deals with world renowned sports brands. Our company, being a corporate citizen, diligently fulfills all of its legal, moral and social obligations relating to Labor, Health & Safety , Environment, Community Welfare, etc. Capital Sports manage these matters as an integral part of its business. Capital Sports signed WFSGI Code of Conduct about 2-3 years ago. This CoC is based on ILO’s conventions and we give it a high priority for its implementation. We reiterate our committment towards the principles of WFSGI’s Code of Conduct. We believe that by implementing this CoC, a better picture of our coporate social responsibility affairs can be shown to our existing as well as the prospective new customers. Following are the key corporate responsibility issues for our company: A, Child Labor B, Fair Wages & Working Hours C, Right of Association D,Harassment & Discrimination E, Health & Safety of workers F, Environment Capital Sports is currently facing the following challenges in the discharge of its CSR obligations: A, Mindset of production workers who are usually illiterate or semi illiterate persons and not willing to follow rules relevant to compliance matters. B, Training of workers. C, Lack of sufficient resources/budgets being small in size. D, Increased cost of production due to compliance matters as Brands/Customers are not willing to pay/share compliance costs. Capital, since its inception in 1975, has been following all legal requirements in respect of labor rights, health & safety of workers, environment and community welfare. During the last about 20 years, when buyers/brands started to stress on their own COCs for implementation, we are religiously implementing all social compliance matters in our factories. We have a dedicated Social Compliance department who is working under Director HR & HSE. Internal audits are conducted by our compliance team once in a year in addition to annual 3rd party social audits required by our customers and WFSGI. Capital employs a very

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strict CR governance in its business operations. We have a written HRM & HSE Manuals containing company rules, regulations, policies and procedures in respect of social compliances. We also make 3 years Strategic compliance Plans which shows our future social action plans. Director HR & HSE of our company reviews the Strategic Compliance Plans as well as annual reports. Org. Chart of our compliance department is given below:

ORG. CHART OF HRM & HSE DEPARTMENTS

All of our political governments, present and past, have always shown strong committment to ensure implementation on all labor and environmental laws of our country to protect the rights of industrial workers as well as the environment. Shahid Latif Gen. Manager/Sustainability Coordinator

Director HR & HSE

G. Manager/ Sustainability Coordinator

HR Manager

HR Supervisor

HR Assistant(1)

Sustainability Manager/ AR

HSE Supervisor

HSE Monitors (3)

Maintenance Staff (3)

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Part B

Description of Actions Taken during the Reporting Year to Implement the WFSGI Code of Conduct

B.1 Programs and Actions

Provide a description of practical actions that the company has taken (or plans to undertake) to implement the WFSGI Code of Conduct. This includes programs or activities that address specific areas such as human rights, decent working conditions, community involvement, the environment, etc. For example:

- Operating programs to implement own or other Codes of Conduct - Operating environmental programs (including waste reduction, responsible usage of water and

energy resources, recycling practices, hazardous waste management policies, fuel reduction, etc.) - Employee education and training programs - Supplier capacity building and training programs (including human resources management, health,

safety & environment) - Community Affairs programs (including charities, sponsorships, corporate volunteering, corporate

giving, etc.)

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

Development Action Plan for 2016.

1. The HR & HSE Managers will analyze the workers awareness about compliance policies. 2. The HR/HSE Managers will also evaluate the effectiveness of compliance policy

enforcement. 3. The HODs of HR & HSE will review all existing compliance policies and procedures. 4. Following new policies will be developed:

a) Medical Testing Policy b) Job Transfer Policy c) Performance Appraisel Policy d) Worker Empowerment Policy e) Women Empowerment policy

5. The company will increase its compliance budget to meet the yearly needs/plans. 6. The company will provide advance trainings to the concerned staff of

compliance/sustainability team, if needed. 7. The company will continue conducting annual internal audits of HR & HSE departments

and monitoring of quick implementation of CAPs. 8. The grievance system will be improved for better worker-mamagement communication. 9. Crises Management Plan will be redeveloped covering all possible emergencies. 10. Yearly trainings will be provided to the workers on the basis of TNAs. 11. Company’s top management will review all the annual reports regarding compliance

activities. 12. Company will set targets for reduction of energy, water, solvents, solid & liquid wastes,

etc. on yearly basis. 13. Company will collect environmental indicator data & will integrate it into company’s daily

operatins.

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14. Company will complete at least one recycling project in this year. 15. Comany will start working on capacity building and training of its main suppliers. 16. Company will continue its charity activities for the welfare of the needy persons in the

community as well as sponsoring a foot ball team for healthy activities of the youth.

B.2 Policies

Briefly describe any company policies that are relevant to the WFSGI Code of Conduct. For example:

- Non-discrimination policy - Environmental policy - Child labor policy, etc.

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

CHILD LABOR POLICY: At CAPITAL SPORTS, we strongly condemn the hiring of CHILD LABOR (Person less than the age of 15 years). It is company’s mother policy implemented and exercised at all costs. We do believe in giving our share to build our society on strong footings, serve our nation with the best and to help our workers to raise their children in a healthy atmosphere in which they can give their children good schooling and train them to be good citizens. We do believe in sharing positive thoughts as mentioned above with all of our stake holders and we also undertake that if any person, having below the minimum age for employment, is employed unintentionally/inadvertently by the company’s concerned HR staff, then as a matter of our social responsiveness we are committed to do the following: 1.0 Immediately terminate the child worker from job. 2.0 Provide all necessary resources, required for schooling to such child. 3.0 Promote sense of education among him and guide him to spend required phase of

time for being educated. 4.0 Give him means, needed to join school.

2. POLICY COMMUNICATION/TRAINING/IMPLEMENTATION: CAPITAL; has assigned qualified person(s) with responsibility for communicating, training and monitoring to ensure the implementation of child labor policies. 3. RESPONSIBILITY: 3.1 Person responsible for policy communication, training, implementation & monitoring is Manager HR

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4. RECORDS / DEFINITIONS: 4.1 Child: Any person less than 15 years of age, unless local minimum age law

stipulates a higher age for work or mandatory schooling, in which case the higher age would apply. If, however, local minimum age law is set at 15 years of age in accordance with developing country exceptions under ILO Convention 138, the lower age will apply.

4.2.1 The minimum age for admission to any type of employment or work which by its nature or the circumstances in which it is carried out is likely to jeopardize the health, safety or morals of young persons shall not be less than 18 years.

4.2.2 Age of worker for full time job is set as 18 years.

4.3 Young Worker: Any worker over the age of a child, as defined above and under the age of 18.

5. AGE VERIFICATION AT THE TIME OF HIRING:

5.1. Bio-data of each employee is maintained in its personal file using “Job Application Form”

5.2. Whenever a new hiring is made official evidence of age is obtained alongwith other information and documents.

5.3 Within the factory each worker is issued a Company Identity Card, which identifies the person. This ID card bears all necessary information.

5.4 “Child Labor” policy is prominently posted on main gate & properly communicated at all levels through posters, training sessions and displaying this policy publicly in english / local language.

B.3 Collaborations & Memberships

List any relevant collaborations and memberships of corporate responsibility initiatives and programs. For example:

- Business Social Compliance Initiative (BSCI) - Ethical Trading Initiative (ETI) - Fair Labor Association (FLA) - Fair Wear Foundation (FWF) - Social Accountability International (SAI), etc.

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

Currently, don’t have membership of any of the above initiatives.

B.4 Certifications & Awards

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List any relevant corporate responsibility certifications or awards that your company has received. For example:

- OHSAS 18000 certification - ISO 26000 certification - SA 8000 certification - ISO 14000 certification, etc.

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

OHSAS 18001 Certified, ISO-14001 Certified,

Part C

Progress against Previously Set Targets

Provide information about the company’s progress against relevant targets or performance, or other qualitative and/or quantitative measurements of results. For example:

- Reduction in the number of accidents at the workplace - Progress against energy saving targets, water saving targets, emission reduction targets - Use of more environmentally-sound materials - Phase-out of critical chemicals, etc.

The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

Capital Sports is an ISO-14001 & OHSAS-18001 certified company. Its comprehensive HS&E system has helped prevent accidents on the work places and now rarely any accident is occurred on the work floors. We have started working on energy saving, water saving, emission reduction, solvent reduction in our factory this year and hope to get good results next year. We have banned the use of hazardous chemicals in our production i.e. Toluen, Perklone, etc. We have stopped using PVC material in our products not being environment friendly. We are also looking the possibility to replace normal cotton fabric with “Better Cotton” in our foot ball making. This “Better Cotton” is a sustainable material. We are using water based inks instead of solvent based inks in our few ball articles. Water based inks are environment friendly. We have achieved about 10% reduction in production waste of our repliqa rugby ball in our efforts to reduce production wastes.

Part D

Goals & Targets

List your long-term goals and priority targets for the next reporting period, and highlight priority areas the company intends to focus on in the next planning cycle. This section should illustrate the continuous improvement that the company is striving to achieve.

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The statement can include links to the relevant section of the member’s corporate website where more detailed information is available.

Long Term Objectives/Targets: A, Completely safe and secure work places. B, Well trained/awared work force regarding HSE matters. C, To improve Worker-Management communication up to a higer level. D, Prosperous and satisfied workforce. E, To achieve better, clean & safe environment conditions. F, Increased use of enmironmentaly sound materials in our production processes. G, Bring more sustainability in our business practices. H, Increased opportunities for women workers. I, Improvement in community welfare activities.

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Submission Deadlines for the Communication on Action (COA)

All member organizations are asked to submit their first COA to the WFSGI by December 31, 2016. This establishes a ‘line in the sand’ for the SGI. This first submission should cover one year’s actions and progress and should align with your standard reporting year. In future, any company wishing to become a member will have to submit a COA along with their membership application. Thereafter, member companies will be asked to report at least every two years. Companies can choose to report annually – this may be easier for those with annual reporting cycles. Each COA will have to cover actions and progress over the previous one or two years and the submission deadline is six months after the end of the company’s reporting period. For example, if you are reporting for the period from April 1, 2016 to March 31, 2018, the COA is due on or before September 30, 2018. In the event of an anticipated delay in submitting the COA, the organization may request an extension of the deadline by three months, providing a reasonable explanation for the delay and stating the date when the COA will be available. In the event that the member organization is not able to provide the COA, it should explain the reason to the WFSGI (the so-called “Comply or Explain” principle). For further information on the COA, please contact Mr. Marc Magnus at mmagnus@wfsgi.org or Ms. Karolina Brazyte at kbrazyte@wfsgi.org.