Sparrow Group of IndustriesJoint Venture Partner of Ambattur Clothing Limited, India

Sparrow Group Overview

Bottom 22 L ines, 4500 peop le1700 M ach ine s

4 L ines : F lexib le fo r Tops and PantsProduction : 600,000 pcs/m onth

Sparrow Apparels

Total 30 L ines, 6200 Peop le2300 M ach ines, 850,000 pcs/m onthLad ies Top (7 L ines): 200,000 pcs

M en 's Sh irt (16 L ines): 500,000 Pcs, Pan ts (6 L ines): 170,000 pcs

Crow n W ears

Production Units

Sparrow G roupBangladesh

Joint Venture w ith Am battur Clothing Lim ited (ACL), India

Sparrow revenue and Production

Facility Units in Millions (yearly)

Revenue in Millions (Yearly)

Sparrow 6-7 50-55

Crown 10-11 75-80

Total 16-18 125-135

Sparrow: Brief History

• Started commercial production in 1984• Promoted by local Bangladeshi Entrepreneurs Late Professor Mazharul Islam• Address: Plot No-251, Chandona, Luxmipura, Gazipur, Bangladesh• Phone: +88-02-9261233, +88-02-9261236, Fax: +88-02-9261229• Sparrow and Ambattur Clothing went into Join Venture in Dec’07• Land Area: 4.5 Acres• Building Area: 300,000 Sq Ft• Installed capacity today : 22 assembly lines• Production Per Month: 500,000 to 600,000 pcs

– Men’s, Women’s and Kids Twill Pants, Chinos, shorts, dress pants, wrinkle free pants, Linen Trousers, and Reactive Dyed Garments: 90% of production

– Shirts and Tops: 10% of production and have the flexibility to do both tops and bottoms

Crown: Brief History

• Started commercial production in 2002 • Promoted by local Bangladeshi Entrepreneurs Shovon Islam (Shawn)• Address: Jamirdia, Masterbari, Bhaluka, Mymensingh, Bangladesh • Phone: +88-01730012050 / +88-01771523165 • Land Area: 3.5 Acres• Building Area: 400,000 Sq Ft• Installed capacity today : 30 assembly lines (2300 machines)• Production Per Month: 750,000 to 850,000 pcs

– Ladies tops and Blouses including Georgette and Silk: 7 Lines (200k units/ month)– Sport and Casual Shirts: 16 lines (500K units/month)

• Out of the 16 Shirt lines, 6 lines have capabilities to produce Dress Shirts (automated)

– Pants all types – 6 lines (150k units/month)

Group Turnover

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Turnover 2007-2016 (Bangladesh)

Pcs in Mil US $ in Mil

Buyers: All leading BrandsAnn Taylor

American Eagle Outfitters

AllSAINTS

Banana Republic

Bass Pro

Gap

Kohls

Levis

Old Navy

Talbots

Zara

Zara Kids

Mango

Michael Kors

……

Washing Specialties

Current Capabilities• WATER• ENZYME• BALL• SANDING (Hand and Laser)• PIGMENT• STONE• MANUAL / AUTOMATED DRY

PROCESS• TINTING• GARMENT OVERDYEING• GARMENT DYING (Reactive)

Sparrow have its own advanced Washing Units: Large and advance units at Sparrow and a basic unit at Crown

Quality ControlThe objective is to exceed customer needs and expectations and plan for defect-free Quality performance:

• Technological - Accuracy of product• Psychological - Appearance, Finish• Time Oriented - Reliability • Contractual - Guarantees• Score Card - Consistently Exceeding Expectations• Ethical - Courtesy and Honesty of workers

By

• Structuring the QA department to Create the correct environment and to make Quality a way of life

• Designing and practicing prevention measures • Get all involved in practicing “Do it right first time, and every time” • Adopting the best practices in manufacturing techniques and processes• Investing on human capital • To reduce the cost of re work and rejections

Pre Production

• The pre production departments centralized at Chennai-India, caters to all the production facilities at Bahrain; Dhaka; India and Jordan.

• This department has self sufficient divisions as pattern, sampling (including cutting, sewing and finishing), Quality assurance team and product technician’s team. Also has the Centralized Industrial engineering team associated with.

CSR = Business

Sparrow Value

System

Invest in People: Training,

Retention &, Ownership

Salary and

Profit Sharing

Career & OpportunityHealth

and Nutrition

Safety and Work

Environment

Compliance (lead by Example)

• Result => 80% of the Workforce are with Sparrow for 5+ years• No Interruption of work in the middle of all the Political and social issues

AccountabilityTransparencyEthical BehaviorRespect for Stakeholder InterestsRespect for the rule of lawRespect for International norms of behaviorRespect for human rights

Guiding PrinciplesInfluenced by ISO 26000

• Lead in Fire Safety in Bangladesh• Lead in Environmentally responsible green company

– Reach HIGG LEVEL 3 by 2015• Maximum workers satisfaction and minimum workers attrition• Empowering women and improve women health standards• First Participant of Alliance Helpline “Amader Kotha”• Training and constant communication with the employees• Elected Workers Participatory Committee

– Involved in decision making, constant Voice of the workforce surveys• Incentive and reward system: productivity, rework and quality• Maximum transparency and partnership with vendors

Sparrow-ACL CSR Programs

Well Rewarded Workers = Retention, Quality & Productivity

Two Incentive Bonuses per

year (55-75%)

Attendance Bonus

(Tiered) - 5 to 10% per month

Production Target

Bonus 3%

Yearly Profit Sharing 5% of the Yearly Net Profit

Employee Ownership

Skill Set Of Workers

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SAM

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JOIN

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(Tra

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1 Operation

2 Operation

3 Operation

3+ Operation

All Operations + Patterns

1 ye

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3+ y

ears

1 to

2+

year

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4 to

5+

year

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5 to

10+

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Worker Distribution in Production Lines

Large number of highly Skilled Labors

Very low attrition rateHigh ProductivityLow Defect and Rework

Worker's Skill

A+ A B C

Path to Safety

Prevention

Detection

Training & Awareness

EvacuationFlow of People via stairs, smoke free

evacuation path

InfrastructureFire doors, Sprinklers, dedicated reservoir, Fire

Hydrants

• Started joint initiative with Gap Inc. on October 2012– Full electrical system audit and Structural Audit by International

Consultants– Be the first Garment industry in Bangladesh to install a centralized Fire

Detection and Monitoring System– Install automatic Sprinkler System, and Fire doors– Have dedicated Fire safety department with Fire Marshall and trained fire

fighting staff– Have 300 trained staff with Fire Training certificate (In Each Unit)

• Trained all 5000 employees on basic fire safety (in each unit)

– Conduct Fire Drill every month in the presence of Fire Department• Fully Complaint Sprinkler and Fire Hydrant Systems

– Completed the underground water reservoir, diesel operated high pressure fire pump, High Pressure fire hydrant system around the building and every floor

Lead in Fire Safety

Electrical System Upgrades

• Completely Dust Free Electrical Circuit Box• Fully load balanced Circuit• Continuous monitoring and maintenance

Prevention: Stop Electrical Short Circuit to happen

Automatic Fire Detection Systems Centralized monitoring

Advance Fire Detection

Manual Fire Alerts Powerful Audio Visual Alerts

Training and awareness

Fire Training and safety Practical training and demonstration

Certified Fire Fighting Team Regular Fire Evacuation Drill

Sprinkler System

Sprinkler System in the Warehouse

Fire Door Protecting Warehouse to Factory – Smoke and Fire Protection

• Working very closely with Alliance and Accord team– Pioneer in working with Accord on Safety from 2013– Currently Part of the Alliance Inspection and Remediation path– Goal is to be the first set of 20 fully compliance Alliance Factory – Target

date June 30th

• “Better Work” signee and training with Better Work team have already started– ILO, IFC partnership and 30+ Large Brands including GAP, ANN Taylor ,

Talbots and many others– Phases: Training, Factory Assessment, Advisory Service– Transparent Reporting: Factory Reports, Public Reports

Better Work Program, Alliance and Accord

Visual Tour

Sewing Finishing

Washing Quality Control

Safe, Environment Friendly work place

Sparrow Crown

Natural Green Setting

• Heat Recovery from by returning steam into condensate unit to Boiler

• Natural Gas based boilers with water softener• Special valves and Condensate Recovery for steam loss

protection in finishing• Solar Panels providing power to warehouses – 12%• Committed to HIGG Index 2 by Dec 2013 and HIGG Index 3 by

2015• Replacement of lights with LED and T5 Light-set• Energy Efficient Servo motors for Sewing Machines• Front loading washers and Zero water based washer –

gradually by 2016

Green Initiative and Energy Efficiency

• Sparrow is Making a Saving Pledge of USD 118,313• The Pledge is to save 32% of Total Energy Usage by

end of 2014– This will reduce Greenhouse Gas (Carbon) by 1300 CO2e

• The Pledge will be met by Dec 2015• The Implementation will be done in phases and

continuous and monthly reports will show the progress – Total Investment will be around USD 310,000

Summary of HIGG Index 2Saving Pledge

Green Initiatives

Solar Panels – 8% of the energy needs ETP Plant

ETP Plant Treated Water Reused for Gardening

• Open Door Policy, Group Meeting and 1:1 meeting with Employees and Top Management

• Alliance Help Line Participant – Signed up as the First Participant• RO Plant for safe drinking water• In house Doctors and Nurses• Maternity Benefit and special maternity care

– First Doctor Visit and doctor assisted child birth support• Child Care and educational scholarship on basis of merit• Medical Assistance• Marital Assistance• Special assistance for special needs:

– Emergency medical expense for the family– Family special needs

Employee Relationship & Welfare

Employee Welfare

Medical and Day Care Center

In house doctor and Nurse Financial Support for Special needs

HERs Project Participated Twice and trained 500+ women

Women health, sanity, safety, discipline and empowerment

• Getting on boarded with P.A.C.E Program• P.A.C.E in a nutshell:

– Program for Women primarily and facilitated by GAP Inc.– Education and Training: Life Skills and Technical Skills for Leadership– Train, Encourage and facilitate Women Leadership and Management– Local NGO provides the training

• Our Goal:– Targeting 25% of Women workers with 3+ years of Employment and

participation from all department

P.A.C.E ProgramPersonal Advancement and Career Enhancement

Alliance Helpline for Workers• First Participant from Bangladesh on Alliance Helpline for

Employees• Employees can directly call to the Alliance Operated Helpline• All the Employees have been trained to use the helpline and

express their happiness or grievances• Encouraged and spearheaded by the CEO Shawn Islam

• Training program for Sewing operators– Special retention and promotion program for Helpers or

entry level people• University affiliated practical training program

– Merchandisers– Industrial Engineers– Production Technicians

(Currently working with Santo Maria University in Dhaka)• Training sessions for different employees at all

levels

Continuous training & Skill improvements

Training – All levels, All the time

IT Users training

Orientation Program Security Team training

Mid Management Training

• Elected Workers Participatory Committee (WPC)– Elected by direct voting by the workers and election

conducted by the Government Labor department– WPC is involved in all decision making along with the

factory Owners and Management– Regular WPC committee meeting with HR department,

and Top Management– Constant two way communications – Satisfied workers

who does not use violence as a mean– Open door policy by Factory owners

Elected and Active Workers CommitteeEmployees voices are heard and represented

Empowered WPC

Employees Voting for WPC

Regular meeting with Management and WPC

• Employee society– Owns two Trucks used for transportation of the company goods and

profits return to workers – Employee managed• Annual Picnic and recreation program• Annual Sports• Annual Celebration of New Years• Profit Sharing Program• Continuous training of middle Management, KPI for Managers

on worker retention and very active and trained HR team– Orientation program, promotions and growth, talent management,

exit interviews

Employee Retention Programs – Just do it

We give employees ownership

Annual Picnic where the top Entertainers of the country Performs

Worker’s Appreciation and RewardsAnnual Sports and Games

10 years completion Award

Sparrow – Committed to Excellence in Product Quality and Customer Satisfaction while maintaining level of

highest level of CSR, Sustainability and People

A Group Company of Ambattur Clothing Limited