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CEO MESSAGE

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ABOUT US

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COMMUNITY

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PEOPLE

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ENVIRONMENT

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FACTORY OF THE FUTURE

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Our Business of Reinvention: Our Business of Sustainable Shared Success Daily C E O

M E S S A G E

F R O M

R A Y M O N D

T A N

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hen we talk about the future, there are facts and forecasts that either bring excitement or anxiety to many. While the future entails exciting technological advances on one hand, we must also contend with the reality of climate change on the other.

We cannot discuss the future without talking about sustainability. Sustainable development means individuals, organizations, and countries working as a whole to meet the needs of the present without compromising the needs of future generations.

Our future depends on the actions that we take today.

Our world today is fundamentally changing. The Information Revolution and the current trend of automation and data exchange (also known as Industry 4.0) is happening now, changing the playing field as we know it. The question we ask ourselves at Luenthai is: what is our position in this changing business environment?

Machine Learning and Big Data are playing a crucial role in the global industry.

Machines are replacing human jobs to do the same work at a lower cost, improved quality, and increased speed and exibility. Automation has become the new outsourcing.

On the consumer end, the increasing popularity of Big Data and e-commerce platforms such as Alibaba and Amazon allow companies to better serve consumers’ specific and unique demands, promising fast delivery of products and providing greater transparency on costs and quality.

Our global client base is directly and significantly affected by this radical restructuring of the world apparel market by these major platforms and the products and services that they provide. In effect, they are continually pushing cost-price and speed-delivery targets.

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This emergence of a true world market in which buyers and sellers are no longer restricted by logistics and suppliers are in direct competition presents both challenges and opportunities for Luenthai.

In order for Luenthai to remain a source of competitive advantage for customers, we have to find new ways to enable our customers to compete successfully.

Our history and culture have prepared us not only to accept the changes required to succeed in this new environment but to embrace them with enthusiasm and passion.

We strive to live up to our vision of Sustainable Shared Success Through Reinvention.

While we are in the business of reinvention, we are equally committed to the business of a shared success that is sustainable.

For over 50 years, Luenthai’s journey of balancing economic prosperity with service and giving back to the community has continuously evolved. We vow to strengthen this commitment amidst today’s business challenges.

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Together, we plan to take on the future and remain a leader in providing EXTRAORDINARY CARE for the community, our people, and the environment, DAILY. -

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T A N ,

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Together we plan to take on the future and remain a leader in providing EXTRAORDINARY CARE for the community, our people, and the environment, DAILY.

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ABOUT US

Luenthai is an Extraordinary Company.

We make extraordinary products. And we provide extraordinary services.

We are a leader in fashion and lifestyle apparel and accessories.

We have 37,000 employees in 17 production facilities, 15 cities and 5 countries around the world. We also give extraordinary care to the communities, our people and the environment in all these locations.

Doing extraordinary business and giving extraordinary care are what we do daily.

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LUENTHAI AND THE GLOBAL MARKET

17 PRODUCTION FACILITIES 15 MAJOR CITIES 5 COUNTRIES ONE MARKET

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STRATEGIC BUSINESS UNITS

Luen Thai is a leader in fashion and lifestyle apparel and accessories working in partnership with the world’s leading apparel and accessories brands through its SBUs.

1987 Design and product development capability with advanced finishes for casual wear, plus online platform

2006 Large range product categories for outwear, casual, performance, knitwear & intimates

2002 A women’s wear expert for fashion and sleepwear

2008 Pride on the Lean Manufacturing model producing computer and camera bags, and backpacks

2004 Successful quick response program for woven, knits and casual tops

2008 Pride on the Lean Manufacturing model producing luxury/fashion bags

2003 Performance active wear produced using advanced technologies

2014 Fabric design and development capability for knit and woven fabrics

2005 Factory-to-store services for sweaters

2016 Advanced fabric developer highlighted by digital sublimation and CO2 dyeing 10

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A LUENTHAI SUSTAINABILITY CULTURE Giving

extraordinary care to our communities, our people and environment is a daily habit in Luenthai.

Adopted from our culture campaign called “Be XO Daily,” we strive to go beyond the ordinary as we launch our sustainability program.

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OUR GROWING COMMITMENT TO SUSTAINABILITY L

uenthai immediately embarked on its philanthropic efforts soon after its founding in 1965. Our founder, Dr. Tan Siu Lin’s desire has always been to give back to the communities where we operate. Since then, our journey towards serving has continuously grown.

2000’s

The Luenthai Sustainability Strategy and Goals will ensure that this commitment will remain in the company as we go further in the 21st century.

“Go Green” Campaign

1990’s

1980’s Tan Siu Lin Foundation in China

1970’s Philantropy’s early beginnings

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Environmental Compliance in Manufacturing

Environmental Compliance in other manufacturing facilities Unified Principles of Social Responsibility and Practice (UPSRP)

EcoProfit Certification Cleaner Production “I Serve, I Give Back”

2022 Achievement of XO Care Targets (Our Community, Our People & the Environment)

2018 2010’s HER Project “Be XO Daily” Tuloy Foundation Partnership Tuloy Foundation Chairmanship

Launching of Luenthai Sustainability Program

Increased engagement with Luenthai employees and other stakeholders

Start of Five-Year Sustainability Monitoring ESG Compliance Reporting

EMBARKING ON A FIVE-YEAR JOURNEY In

setting our Sustainable Goals, Luenthai ensures they are clear and achievable. Thus, the Sustainable Strategy is specific, clear, measurable and encompasses an initial five-year period (2018-2022)

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LUENTHAI SUSTAINABILITY STRATEGY T

here are three core areas which our Sustainability Strategy focuses on: the Community, our People and the Environment. To ensure success, a special Sustainability Committee within Luenthai’s Management Board has been tasked to oversee that the sustainability strategy is effectively rolled out within all strategic business units and in all Luenthai locations around the world.

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UNDERSTANDING THE FRAMEWORK

ICONS Heart: iServe. iGive Back Launched in 2009, this program was Luenthai’s corporate campaign which drove all of the company’s community and charity works. The “I” in the campaign name meant to highlight that every individual should do his share in giving back to the community.

Hands: Together The interlocking hands connecting the three XO Care programs represent our attitude in infusing the spirit of cooperation and teamwork in achieving our sustainability goals.

SHAPES

COLORS

Circles Represent the unity and totality of our company’s sustainability efforts.

Red: Community Representing our community giving.

Even spacing A balance of business success and giving back to the community.

Blue: People Representing our loyalty to give the very best to our people.

Concentric circles Represent the common goals and targets to achieve.

Green: Environment There would be no business, if we don’t take care of the planet. Thus, we ensure we operate our business with green in mind.

passion

for

Feet: Our Legacy Footsteps represent the forward looking and practical action steps of our sustainability programs. They are the specific ways Luenthai aspires to achieve its sustainability goals.

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OUR XO CARE GOALS Our goals are guided by these

core beliefs:

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“Luenthai cares for the community because we believe it is our responsibility to do our share to meet the needs of society aside from own.�

“Luenthai cares for our people because we believe that their wellbeing and happiness is the foundation of excellent services and great products.”

“Luenthai cares for the environment because we believe that economic prosperity and environmental stewardship can go hand in hand.”

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HOW DO WE MEASURE INFO BITS OUR PROGRESS? ON-GOING HALFWAY FINISHED WE GO BEYOND

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PROGRESS LEVEL ON-GOING We are at the starting point, prepared and ready to implement a project/initiative.

HALFWAY We are halfway on achieving our specific targets. At the same time, we are exploring new opportunities to broaden our impact.

FINISHED We have reached our target. The project is completed successfully.

WE GO BEYOND We know there is always more to be done beyond our targets.

WE GO BEYOND OUR TARGET Committed to transparency, we measure our

progress towards 2022 Goals.

We use three (3) progress levels. As we start our five (5) year journey toward our sustainability goals, we are committed to satisfy the needs and achieve favorable results year after year.

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company is a member of the community. And as a community member, Luenthai considers its corporate social responsibility a top priority. With our leadership status, employee-size and a worldwide presence, we believe we can make a big difference in the everyday lives of people.

We also form partnerships with like-minded institutions and organizations to spread the most meaningful and beneficial programs to the community.

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We can make a big difference in the everyday lives of people.

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OUR COMMUNITY 22

OUR STRATEGY FOR OUR COMMUNITY Our

XO Care for Community plan centers on two specific areas: Upholding Children’s Rights and promoting Employee Volunteerism.

These strategies represent the general company-driven community initiative to care for children and youth. On the other hand, employee volunteerism gives our people the chance and freedom to help their own selected charities.

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XO KIDS The incidence of child labor in the apparel and textile industry has been one of the biggest issues against it. With a strong commitment to uphold Children’s Rights, Luenthai has not only put in place strict policies against child labor, it has also actively pursued supporting and initiating programs that benefit children and youth, especially the underprivileged ones.

DONATE AN HOUR An hour’s work to raise funds to benefit a charity of their own choice is a successful employee volunteerism program at Luenthai. Through this initiative, Luenthai employees team up to help a specific charity or sector of the community that they would like to serve.

To boost participation and to benefit more people, the company matches a portion of the funds raised.

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OUR XO CARE FOR COMMUNITY TARGETS XO KIDS

Youth Development Programs Beyond Children’s Rights are programs that are beneficial to the overall development and gr owt h of t he c hi l d r e n, e sp e c i al l y t he disadvantaged ones. We will continue to develop and support programs that will empower the youth to unleash their full potential.

• Partnership with at least 1 NGO helping children

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• Provide at least 2 major programs per year on youth development on sports, arts and business

Skills Training for the Youth

Uphold Children’s Rights As a leader in the apparel and accessories industry, Luenthai supports Children’s Rights by preventing harm to children and youth and at the same time protecting their interests. We integrate this thinking into our core strategies and operations.

We believe that every child has the right to better themselves. We want to inspire the youth to have access to programs to help them realize their career goals. We will continue to provide life skills and technical skills training to youth, equipping them to dream big

• Provide scholarship • Put up learning classes

• Zero tolerance on child labor

• Provide access to livelihood opportunities

• Establish policy statements on child labor

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We support Children’s Rights. We work in partnership with others to create a world where every child can have health, peace, and an opportunity to become successful adults.

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FIVE-YEAR TARGET: XO KIDS PROGRESS TARGET PROGRESS

Youth Development Program

Upload Children’s Rights

Skills Training for the Youth

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OUR XO CARE FOR COMMUNITY TARGETS DONATE AN HOUR

Employee Volunteerism We will give our employees the opportunity to share and serve the community as volunteers. More importantly, we will continue to inspire our employees to consider volunteerism as a way of life. • 80% of employees donating an hour worth of time • Commit to over 1,000 volunteer hours per year per business unit

Community Projects

Collaboration with Other Partners We believe the key to sustainable shared success is collaboration. We will expand our cause by collaborating with other stakeholders (customers, vendors, government, non-government organizations, and educational institutions, among others) who share the same values with our company.

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We recognize that every community has its own needs and potentials. We will find ways to make a positive impact to the community by regularly assessing their needs and providing them access to better resources.

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Adopt a community by sponsoring projects especially focused on helping children

Create community projects in collaboration with government and non-government organizations

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Employee volunteerism does not only help others, it helps our people to realize their value and contribution to the community.

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FIVE-YEAR TARGET: DONATE AN HOUR PROGRESS

TARGET PROGRESS

Employee Volunteerism

Collaboration with Other Partners

Community Projects

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OUR INITIATIVES FOR THE COMMUNITY LUENTHAI FOOTBALL SCHOOL:

YOUTH DEVELOPMENT THROUGH SPORTS

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he Luenthai Football School was established in February 2013. Inspired by the success of the Chelsea Soccer School in Hong Kong (CSSHK), the company initiated a similar program that offers free football training to children and youth in the Philippines. Initially, the program catered to the children or young dependents of Verte employees Philippine Air Force in Clark (Angeles, Pampanga); and Clark Development Corporation (CDC), the governing authority in the business zone.

Due to its success, it is now open to the public and benefits the underprivileged children from Tuloy sa Don Bosco Foundation, Inc. (Tuloy) in Alabang and Pampanga. On top of these centers, the Football School has initiated programs reaching the indigenous communities around Clark. The Aetas, an indigenous group who live in the mountainous regions near Clark, ha joined the football family in the latter part of 2016.

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The school maintains its program of regular, free football training, providing uniforms and equipment needed for competitions and trainings sessions.

The Luenthai Football School also partners with private schools and football clubs. Its partnership with CSSHK also resulted in bringing batches of deserving kids from Tuloy to Hong Kong for training. To date, there have been 6 batches of kids and coaches from the Philippines who have gone to Hong Kong.

Luenthai Football School believes that “Every Child has the Right to Play�

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OUR INITIATIVES FOR THE COMMUNITY CONTINUED FROM PAGE 29

Since its inception, the program has produced top caliber players due to the hiring of nationally acclaimed football coaches who have had experiences in competing in international football tournaments.

The top players who have been trained in the Luenthai Football School were offered full football scholarships from their universities as well as entrance to women’s national teams.

These achievements bring both pride and credibility to the Luenthai Football School as it is now getting national

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attention through its hallmark activity, the Luenthai Cup, a nationally attended tournament for-a-cause now on its 3rd year.

To date, the Luenthai Football Program has been keeping its charitable spirit alive. Having served hundreds of kids, it continues to inculcate athletic excellence, discipline and a source of fun and friendship for the children and youth of the community.

CHELSEA SOCCER SCHOOL HONG KONG I

n 2008, Luenthai CEO Raymond Tan co-founded the Chelsea Soccer School (formerly Chelsea Football Foundation), together with one of Hong Kong’s best footballers, Leslie Santos; and business partner-friend, Ben Lam. Since its inception, Chelsea Soccer School (CSSHK), has helped less fortunate children by providing them free access to professionally crafted football training. At the same time, CSSHK offers ex-professional footballers the chance to give back to the community and the sport by providing them with coaching opportunities and sharing their passion with the children.

FUN FACT: The oldest student is an 82 year old grandma, who attends the session weekly.

The unique business model of CSS allows it to provide free schooling for less financially capable students by charging paying students with a premium fee, which is double the amount of other football schools. This allows all students regardless of financial ability the opportunity to play football competitively. CSS also requires all registered students to participate in mandatory community service to instill and share Luenthai’s value for social responsibility. Further, CSSHK provides weekly training sessions to various marginalized groups in Hong Kong such as juvenile delinquents, children with special needs and the elderly.

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OUR INITIATIVES FOR THE COMMUNITY GLOBAL KIDS IN CAMBODIA Luenthai

in Cambodia has There are about 200 children and launched “Global Kids”, a campaign 50 staff and volunteers at FLOW. in partnership primarily with Future Other than providing food and Light Orphanage (FLOW). shelter, the orphanage delivers educat io nal o pport unit ies and Phaly Noun, one of the millions vocational training to children. expelled during Pol Pot’s regime in the 1970’s, founded FLOW. In 1993 s h e re t u rn e d on a mi ssi on to provide care and new livelihood for children in Cambodia.

Luenthai and volunteer-employees have raised charity money and donated to FLOW. In June 2015, volunteers also spent time with children and residents of FLOW providing fun activities, facility improvements and a feeding program. The activity has h e l p e d L u e n t h a i re f oc us i ts community program in Cambodia.

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OUR INITIATIVES FOR THE COMMUNITY

MY JOURNEY TO COMMUNITY SERVICE

LUENTHAI AND TULOY PARTNERSHIP I

wanted my legacy to be someone who uses football to positively impact people’s lives. Football has given me my health, a lifetime friendship with my son, and useful business strategies and I want to give back.

CEO, RAYMOND TAN

In 2008 I started my personal charity by co-founding Chelsea Soccer School. Inspired with its success, I wanted to replicate its success in Luenthai. I started the first Luenthai Football Program at Clark, Philippines. I met Mr. Arthur Tugade, then CEO/ President of Clark Development Corporation, and he told me about a 70-year-old priest, Fr. Rocky Evangelista of Tuloy Foundation who is also passionate about charity football. A few months later, I met Fr. Rocky while he was coaching tons of street kids at the orphanage he runs in Tuloy Foundation. Immediately, I knew this was the start of something beautiful.

To support Fr. Rocky, I donated football shoes, sent our Clark coaches to Tuloy, and started fundraising. With opportunity to send Tuloy to train with professional Hong Kong coaches of Chelsea, we sent batches after batches. For kids that don’t

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have travel documents and cannot travel, Chelsea Hong Kong has been sending two coaches to Tuloy regularly. While originally focused on the training of girls in the hope of making the Philippines national team, we expanded our attention to Tuloy boys, as well, after the success of the Tuloy Boys in beating Chelsea Hong Kong U14 team, 7-1.

In J u n e 2 0 1 7 , w e r e gi s t e r e d T u l o y FC w i t h Philippines Football Association. Our goal is to merge our Clark and Bahay Bata kids into TuloyFC and see them become Philippine champions, youth national team players, and adult national team players. I have full confidence that this will happen.

I have promised them jobs as professional players, coaches, assistant coaches, or workers in my factories so that the children do not have to worry and can enjoy playing the beautiful game with passion and discipline.

EMPOWERING THE KIDS. Aside from football, Luenthai also supports various programs like Performing Arts, Culinary Arts and other Skills Training at Tuloy sa Don Bosco

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CONTINUED FROM PAGE 39

Be XO Daily

In 2016, Yuenthai Philippines Inc., a Luenthai company in Cebu, Philippines started to plan a “factory of the future” and I was contemplating on a culture campaign to drive this project. Then an idea came to me, when in one of my visits to Tuloy, while chatting with two ex-Tuloy kids, one girl shared a principle that she proudly said she learned in Tuloy: ”Doing ordinary duties extraordinarily well!”. I took this inspiration and launched “Be XO (eXtraOrdinary) Daily”, which is now Luenthai’s new corporate culture.

Tuloy Bahay Bata Witnessing my own personal transformation at Tuloy, I told Fr. Rocky that I hope to support meaningful community projects within 30 minutes of each Luenthai factory so that our employees can regularly help. One day, Fr. Rocky told me about a center for street children in Angeles, Pampanga, Philippines that wasn’t properly managed and was being offered to Tuloy. With donations from my Philippines management team, Tuloy re-opened the center last October. Our past Christmas parties at Clark have raised over US$300,000 and our Clark workers continue donating one hour of their overtime pay to this center each year.

Our Clark workers further formed “LT Volunteers” and have an extensive volunteerism program in place.

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But Tuloy has been an amazing blessing to my life and my business, allowing me to see miracles, and challenging me to grow and dream beyond anything I could imagine. If this is God’s plan, who am I to say no?

Global expansion On a geopolitical and international level, my eldest brother Henry Tan advised me in May 2017 that Hong Kong’s Chief Executive CY Leung wished to meet Fr. Rocky and I to better understand Tuloy. While Mr. Leung stepped down as Hong Kong’s Chief Executive in late June 2017, he took up a senior position in the Chinese Central government where he wishes to connect Chinese people with Filipinos through the “One Belt, One Road” initiative. Through this program, we hope to see Tuloy become a “brand name” for “XO Kids”.

Chairmanship of Tuloy I first met Tuloy and Fr. Rocky four years ago and it has been the most fruitful journey of my life. I can’t stop sharing these experiences with my family, friends, and business partners. Frankly speaking, I don’t know how to repay Tuloy so when Fr. Rocky asked me to be part of the Tuloy Board in 2016, I was honored and accepted this invitation without any hesitation.

In April 2017, to my surprise, I was appointed by the Board as the new Chairman of Tuloy Foundation. I didn’t think I was qualified for the job as I had only been on Tuloy’s board for one year, I am not Filipino, and not even a resident of the Philippines.

Tuloy has been an amazing blessing to my life and my business, allowing me to see miracles, and challenging me to grow and dream beyond anything I could imagine. If this is God’s plan, who am I to say no?

FATHER ROCKY EVANGELISTA F

r. Marciano “Rocky” Evangelista, SDB is the founder of Tuloy Foundation, Inc., a non-government, non-profit organization that provides residential care services for thousands of children and youth. As a Salesian priest, he does what St. John Bosco did to help street children during his time. The Tuloy sa Don Bosco started in 1993 caring for 12 children in a 40- sqm room.

To date, the Foundation has helped over 10,000 children and the small facility now occupies a sprawling 4.5 hectares of land that serves as both home and school for the children.

Because of his work in uplifting the lives of children and the youth, Fr. Rocky has been bestowed with much recognition such as the Miss World Humanitarian Award for 2017 and Most Outstanding Kapampangan Award.

He began his life of priesthood in 1970 when Pope Paul VI at St. Peter’s Square ordained him. Prior to forming Tuloy, he was doing academic and administrative responsibilities within the order, having an MA in Educate and a doctorate degree in Organizational Development.

In 2010, Fr. Rocky published a book called “Finally I AM HOME” detailing his personal journey as a little boy growing up in Pampanga and his eventual calling that led him to start the foundation for underprivileged children and youth in Manila.

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OUR INITIATIVES FOR THE COMMUNITY GJM COMMUNITY INITIATIVES G

JM, Luenthai’s womenswear division, demonstrates its extraordinary care for the community by being a company people could rely on especially when natural disasters strike.

The employees and company raised and donated funds amounting to over RMB200,000 to the victims of the 2004 South Asia Tsunami; 2008 5.12 Sichuan Earthquake; 2010 Haiti Earthquake:2010 Qinghai Earthquake: 2010 Gansu Mudflow and 2013 Sichuan Yuan Earthquake.

Moreover, GJM has demonstrated its care towards children and people with disabilities.

In 2015, GJM Panyu visited the Panyu Disabled Children Rehabilitation Centre. The team donated food, books, toys and 50 pieces of t-shirt which the children wore during their celebration of International Children’s Day.

Because of GJM’s continuous commitment to help people with disabilities as well as providing them with employment opportunities, the company has been receiving yearly awards from the Panyu Disabled People’s Federation since 2012.

Another continuous community effort by GJM is the annual blood donation which started from 2011.

DESKTOP SUPPORTS SCHOOLS & INDIGENOUS COMMUNITIES Desktop, Luenthai’s computer, camera and backpacks division, has been demonstrating its

extraordinary care to the community by supporting public schools and indigenous communities in Bataan, Philippines.

Its 2016 Adopt-a-School Program was led by Desktop Philippines Inc. (DTPI) management and employees. General manager Johnson Tam led the distribution of tote bags with school supplies and 1 pair of shoes to 400 pupils of Ipag Elementary School, Brgy Ipag, Mariveles, Bataan.

The Adopt-a-School Program was held again in 2017. This time, two others schoosl, the Sta. Mariana De Jesus Academy Inc. and Bayview Elementary School received in-kind donations from for their 300 and 470 students, respectively.

These events have been held during the months of July and August.

Meanwhile, a blood donation program was also held at DTPI in October 2016. The event was held in cooperation with the Philippine National Red Cross (PNRC). One hundred eighteen employees (118) joined. The PNRC supplies one-fourth of the country’s national blood requirement. The organization encourages donating blood to help save lives in the country.

Another program, “Pamaskong Handog “ (Christmas Gift) was held in 2016 for the benefit of the Aetas of Bataan. Some 80 employees from DTPI went to the Aeta community in Old Bataan, Mariveles and distributed grocery packages in time for the Christmas holiday. The Aetas are a group of indigenous people scattered throughout the northern island of Luzon , Philippines.

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s a highly intensive labor company, Luenthai recognizes the importance of providing excellent care for our people. We approach this strategy from two areas – Happy People and Best Place to Work.

When we see our people happy, this is proof that we are succeeding in our goal to give them extraordinary care. Whether it’s in the area of developing their skills and talents, advancing their careers, giving them mentorship, engaging them and valuing their contributions, we want to see happy people at Luenthai.

In line with this, we also want to be considered as the Best Place to Work. We do this by ensuring our workplace has the highest standards in health and safety.

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Extraordinary Care for Our People means making them happy and providing them with the Best Place to Work.

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OUR PEOPLE 46

OUR STRATEGY FOR PEOPLE A

motivated workforce is a productive workforce. This is one of our core beliefs when we think of our strategy for people.

Our people strategy is based o n dual-factor theory that says there are certain factors in the workplace that cause job satisfaction, while a separate set of factors can cause dissatisfaction.

Our strategy therefore is to focus on various hygiene factors under Best Place to Work, and motivation factors under Happy People.

As an employer, we believe that our people’s wellbeing is the foundation of excellent services and great products.

This program highlights motivational factors like recognition, sense of achievement, growth and promotional opportunities, responsibility and meaningfulness of work.

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This program under XO Care for our People spans from basic health, safety and social compliance to Worklife Integration and Wellness.

We believe that through our BEST PLACE to Work initiative, our growing number of production locations will have consistent programs that support only the best quality of work environment, serving as examples of extraordinary care for employees.

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OUR XO CARE FOR OUR PEOPLE TARGETS HAPPY PEOPLE

EMPLOYEE ENGAGEMENT

PEOPLE DEVELOPMENT Provide talent development opportunities to employees in different tiers, covering leadership, soft and technical skills.

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Providing right conditions and motivation for employees to contribute to the organizational success, translating to positive Employee Net Promoter Scores / Employee Satisfaction Survey.

• Annual employee satisfaction survey / net promoters score

• 70 hours of training per employee per year

• Invest at least 20 hours of management time on structured exchange with people

•100% orientation coverage for new hires

• 60% Retention of new hires reaching 1 year

• Annual increase in the number of Mentors / Specialists

TRANSPARENCY AND COMMUNICATION

PERFORMANCE AWARDS & RECOGNITION Linking Performance with incentives; as well as providing employee recognition through awards.

Providing two-way communication channels accessible to employees. The effort has to be regular and consistent.

• 100% submission of Government mandated reports • Recognize improvement ideas by employees

• Establish employee recognition programs • Establish Reward for Performance

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Luenthai cares for our people because we believe their wellbeing is the foundation of excellent services and great products.

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FIVE-YEAR TARGET: HAPPY PEOPLE PROGRESS

TARGET PROGRESS

People Development

Employee Engagement

Performance Awards and Recognition

Transparency and Communication

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OUR XO CARE FOR OUR PEOPLE TARGETS BEST PLACE TO WORK

RESPONSIBLE EMPLOYMENT

DIVERSITY AND INCLUSION We will uphold the highest ethical standard in support of equal employment and career advancement opportunities.

We will uphold the highest ethical standard for employment in compliance to applicable local and international laws customers standards.

• Zero Harassment and Abuse at Work • Compliance with labor laws

• Compliance with local and international laws on employment discrimination • Hiring and advancement of marginalized sector

WORKLIFE INTEGRATION

Create synergy between all areas that defines “Life” that spans work, home/ family, wellbeing and wellness

WORKPLACE SAFETY We will comply with applicable local laws and international standards on work place safety.

• 1000 Wellness Hours per year per business • Reduction on absences due to sickness

•Compliance with international standard on safety •Training and education on health & safety

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This program spans from basic health, safety and social compliance to worklife integration and wellness.

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FIVE-YEAR TARGET: BEST PLACE PROGRESS

TARGET PROGRESS

Diversity and Inclusion

Responsible Employment

Workplace Safety

Worklife Integration

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n 2012, GJM, a Luenthai Company, adopted HER Project. HER stands for Health Enable Returns and collaboration with Ann Inc. and BSR, a global nonprofit organization for sustainability.

HER Project is a program that promotes hygiene and health knowledge among female employees by means of education, consultation and seminars.

HER Project also produces Peer Educators who train and in turn train others on various health campaigns.

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GJM’s HER Project has helped improve the health of its female employees, and has helped mothers and health guardians of the family to bring home the knowledge and spread to their wider community the benefit gained in the program.

In 2013, GJM was accorded the “Responsible ANN Leadership Award” in recognition of its success with HER Project. Inspired by this success, Luenthai has expanded the program to other locations.

OUR INITIATIVES FOR OUR PEOPLE

HER Project promotes hygiene and health knowledge among female employees by means of education, consultation, and seminars. But beyond that, the program helped the employees to be more inspired and empowered.

EMPOWERED WOMEN

BETTER MORALE AND HARMONY IN WORKPLACE

IMPROVED LEADERSHIP SKILLS

BOOSTED HEALTH AWARENESS

LEADERSHIP AWARD

BY ANN INC.

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JM, a Luenthai Company, was a recipient of the “Leadership Award 2013” from ANN INC during its Vendor Conference in January 2014.

The award recognized GJM¹s achievements in CSR and its commitment to improving women¹s health and welfare in the workplace.

GJM launched HER Project under the platform of Healthy Workers: Enterprise Excellence!

The project allowed GJM to sponsor breast cancer screening to women 40 years old and above; and successfully trained many female Peer Educators who led various health related education programs.

Further, over 1,000 employees also benefited from a company-wide Female Health Open Day in coordination with a local community hospital, which provided free physical check up, ultrasound and routine blood test.

GJM is the first factory in China that was sponsored by ANN INC for this project.

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OUR INITIATIVES FOR OUR PEOPLE XO EMPLOYEE AWARDS This

recognition program honors employees who strive to become better, believe in success, exceed expectations and embrace change. The same values that are within our “Be XO Daily” culture campaign.

To be an XO Employee Awardee, employees will have to undergo rigorous screening by a panel appointed from management, supervisors, and from the ranks.

Screening is multiple levels with meticulously crafted steps ensuring that the most deserving are recognized.

Winners and nominees of the XO Employee Awards naturally become part of the building and beefing up of the leadership and talent pool within Luenthai.the leadership and talent pool.

XO Employee Awards recognizes employees who strive to better, believe in success, exceed expectations and embrace change – the values espoused in the Luenthai “Be XO Daily” culture campaign.

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OUR INITIATIVES FOR OUR PEOPLE Empowering Communities through Skills Development & Employment

Luenthai

empowers members of the community by partnering with government, non-government and educational institutions in providing skills development to the local people.

Through these collaborations, people in Luenthai’s 17 production locations around the world are provided the opportunity to gain employment in the manufacturing industry.

In the Philippines, for example, Luenthai partners with TESDA (Technical Educational and Skills Development Authority) in launching an accredited 3 month sewing program that trains zero skill learners with the necessary know-how to get a job in various apparel manufacturing companies, not just Luenthai.

Aside from this, there are 7 technical-vocational schools that offer a similar training program wherein Luenthai provides the machines, trainers and materials.

On University/College Collaboration Beyond sewing and production, Luenthai provides opportunities in employment of other high-skills, office-based jobs as well. Through our collaborations with universities and colleges such as the University of the Philippines, we provide lectures and technical orientation on the apparel business and do our share in sharing our expertise in topics such as leadership, organizational behavior, and industrial engineering, among other.

Through community skills development and sharing our expertise, Luenthai helps members of the community to give them a chance to gain skills, knowledge and contribute to their own communities by becoming productive members.

For Luenthai, one of the biggest ways we serve the community is by providing them with skills, career advancement and employment.

Training our people doesn’t stop in the pre-hiring stage as well.

With the advent of new technology, new machines and other demands, Luenthai people need constant training and upgrading of skills which the company provides and invests on.

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OUR INITIATIVES FOR OUR PEOPLE “iServe.iGive Back” WINS EXCELLENCE AWARD T

he People Management Association of the Philippines HRM Foundation (PMAP) has recognized Luenthai’s “iServe.iGive Back” program in the 2015 CSR Excellence Award).

The program was rated high on innovation, sustainability, replication, scalability, social and business impact – besting other entries in this nationwide search under the Livelihood Category.

The “iServe.iGive Back” is a community service and transformational program that marries the Luenthai’s long running community outreach activities with its culture building initiative. As a transformational program, it promotes giving back as an inside out motivation, a commitment, and a habit.

Born as a corporate initiative in 2009, Verte Philippines has adopted this program in 2012. Since then, through this program, the company has reached out and touched lives in the community. Verte has also partnered with other organizations that share the same aspirations of giving care to others.

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OUR INITIATIVES FOR OUR PEOPLE WELLNESS PROGRAMS TOWARDS A HEALTHIER LIFESTYLE Luenthai is committed to be a healthy employer,

taking an active role in workplace wellness advocacy and partnering with employees towards a healthier lifestyle.

As such, we invest in their health and wellbeing. The company holds continuous health-related activities such as disease awareness talks, consultations and provision of services by health professionals including doctors, nurses and nutritionists.

We also hold fitness and sports events, employing the services of coaches and experts so that our employees can reap the benefits of a healthy lifestyle.

We do all these as part of our extraordinary care to our people. After all, healthy employees become happy people.

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OUR INITIATIVES FOR OUR PEOPLE

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Climate change is a real global phenomenon and has become a growing

concern by many manufacturing companies, including Luenthai.

As we expand our market, we r e c ogni z e t he ne e d t o b e m or e environmentally conscious in the way we conduct our business. From sourcing our materials up to the distribution to the end consumers, we will purposively trace and reduce our environmental footprint.

Further, we will engage the whole company and our partners in our goal to leave more handprint towards improved environmental sustainability.

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Luenthai recognizes its responsibility to trace its footprint and to leave more handprint towards environmental sustainability.

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OUR ENVIRONMENT 66

OUR STRATEGY FOR OUR ENVIRONMENT E

xtraordinary care for the environment encompasses not only adherence and compliance with environmental laws and regulations in every location where we operate. It means that green thinking will be embedded in all that we do.

Aside from carefully monitoring and controlling our carbon footprint, Luenthai will measure and address all our environmental impacts as we deliver our commitment to our customers.

In short, our XO Care for Environment strategy focuses on minimizing our environmental footprint and maximizing our environmental handprint.

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To minimize our environmental footprint, our strategy is to reduce our impact while achieving economic growth.

To maximize our environmental handprint, our strategy is to empower our employees towards environmental leadership. We believe that we can successfully achieve sustainability by cultivating a sense of awareness and responsibility in our workplace and in our community.

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OUR XO CARE FOR ENVIRONMENT TARGETS: MINIMIZING OUR FOOTPRINT L

uenthai recognizes we cannot practice a “business as usual” stance in the face of climate change. We therefore embark to achieve these specific targets within a five-year period.

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SUSTAINABLE MATERIALS

WASTE

10% INCREASE IN THE USE OF RECYCLED INPUT MATERIALS

50% OPERATIONAL WASTE DIVERSION

INCREASE THE USE OF SUSTAINABLE MATERIALS

20% REDUCTION IN PAPER CONSUMPTION

CARBON AND ENERGY 20% REDUCTION IN ENERGY CONSUMPTION 5% REDUCTION IN CO2 EMISSIONS PER GARMENT 30% INCREASE IN THE USE OF RENEWABLE ENERGY

WATER 10% REDUCTION IN FRESH WATER CONSUMPTION PER GARMENT 50% INCREASE IN THE USE OF RECYCLED WATER

CHEMICALS ENABLE ZERO DISCHARGE OF HAZARDOUS CHEMICALS 70

We cannot practice a ‘business as usual’ stance in the face of climate change.

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FIVE-YEAR TARGET: OUR IMPACT PROGRESS

TARGET PROGRESS

SUSTAINABLE MATERIALS

WASTE

CARBON AND ENERGY

WATER

CHEMICALS

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OUR XO CARE FOR ENVIRONMENT TARGETS: MAXIMIZING OUR HANDPRINT

COLLABORATE WITH OTHER EDUCTATIONAL INSTITUTIONS ON RESEARCH AND DEVELOPMENT

G

iving extraordinary care for the environment means we will minimize our environmental footprint – the harm that we cause to our planet – while maximizing our handprint – the positive impacts that we cause or enable to happen.

In the next five years and beyond, we will expand our circle of influence to raise awareness, to collaborate with other institutions, to venture in transparent reporting, to support green innovations and social enterprise, and support the United Nations Sustainable Development Goals.

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CONDUCT ENVIRONMENTAL LEADERSHIP SESSIONS FOR OUR EMPLOYEES AND STAKEHOLDERS

SUPPORT AND SPEARHEAD GREEN INNOVATION COMPETITION FOR STUDENTS

SUPPORT SOCIAL ENTERPRISE THAT ADVOCATES GO GREEN

HELP PROMOTE THE UNITED NATIONS SUSTAINABLE GOALS 74

Go Green is a company advocacy promoting environmental awareness and encouraging everyone to take care of the environment in their own ways.

From saving water, energy, tree planting, using less paper and ink, as well as celebrating important environmental events such as Earth Hour, World Environment Day and World Water Day. We believe green should be the way of the future.

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FIVE-YEAR TARGET: GO GREEN PROGRESS

TARGET PROGRESS

Environmental Leadership

Green Partnership

Green Contest

Recycling

International Campaign

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OUR INITIATIVES FOR ENVIRONMENT PLANTING TREES, CULTIVATING AWARENESS W

ith its commitment to maximize the handprint for the environment, Luenthai has started a tree-planting program in 2009. Trees provide oxygen and improve air quality. Over the past seven years, Luenthai has planted thousands of trees.

But more than the trees, Luenthai has cultivated a sense of awareness and responsibility in the hearts of its employees to continuously foster an extraordinary care for the environment.

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But more than the trees, Luenthai has cultivated a sense of awareness and responsibility in the hearts of its employees to continuously foster an extraordinary care for the environment.

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OUR INITIATIVES FOR THE COMMUNITY OUR INITIATIVES FOR ENVIRONMENT

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OUR INITIATIVES FOR ENVIRONMENT FACTORY OF THE FUTURE A

sustainable supply chain is both technologically driven as well as environmentally friendly, besides being customer-focused and responsive.

The company realizes that in the 21st century, there is a need more than ever to be ready to change – to be flexible and adaptable like water.

SMART FACTORY In 2016, Yuenthai Philippines Inc., (YTI) a Luenthai Company in Cebu, Philippines made a bold move in technology by building “Factory of the Future”. The “Factory of the Future” envisions to become not just a hub for smart innovations but also an example of responsible and sustainable manufacturing. Taking a cue from Industry 4.0, the smart factory at YTI features real time control of 28 critical processes, facilitates immediate corrective action, reduces global, non-productive time, and reduces cycle time to below 30 days.

SMART ENTERPRISE Moving forward, this smart capability in production will extend to other functions that will also improve drastically from a digitalization strategy. This includes standardized, automated and integrated financial and operational reporting beyond SAP, HR functions within and across SBU’s such as CSR monitoring, 81

as well as systems for monitoring and controlling our environmental impacts.

SMART SUPPLY CHAIN The end goal for this smart strategy is to have a sustainable supply chain which is not only customer-focused, flexible and efficient but also green. Throughout our supply chain management – from product design, material sourcing, manufacturing, logistics and even endof-life of products – our systems and processes will have been integrated with our environmental commitment and goals.

AUTOMATED FOLDING AND BAGGING SPEED AND FLEXIBILITY IN HIGH-VOLUME REQUIREMENTS

WHOLE GARMENT KNITTING MACHINE SUSTAINABLE COST EFFICIENT AND MINIMIZES WASTE

DRY DYE WATERLESS DYEING PROCESS THAT USES PURE DYE STUFF WITH NO CHEMICAL ADDITIVES

LASER PRINTING REDUCES EXPOSURE TO CHEMICALS

GET CONNECTED A

way of moving forward towards a sustainable future, GetConnected is Luenthai’s latest drive towards its transformation into a Smart Factory, Smart Enterprise and Smart Supply Chain.

It supports sustainability through technology in the following ways: Artificial Intelligence (AI) will automatically create unique, complex and complete project plans for 25-30 processes typically found in manufacturing operations. AI will eliminate the long time and hard work usually involved in this process.

Flexibility, a much needed criteria in meeting customer needs in a constantly changing environment, is ensured with an AI algorithym in place since it will adapt to new customers and products instantly.

Real-time, transparent, off-site status of processes can be done through mobile devices (smart phones, tablets, laptops, other display boards) thereby facilitating an environmentally-friendly paperless environment.

An estimated 400K pieces of paper for the group would be saved in the digitalization process within the first quarter of the year. This translates into 48 trees and 4,000 liters of water annually.

In line with Luenthai’s objective of minimizing our environmental impact, YTI has made investments on saving energy because it directly affects the volume of greenhouse gas (GHG) emissions that cause global warming.

With regard to renewable energy, YTI’s “Factory of the Future” has a 500 KWH solar installation which will support about 25% of its electricity needs.

Construction-wise, YTI’s “Factory of the Future” in Cebu was built from Aerated Concrete Blocks (AAC) which use about a fifth of the material of traditional concrete cinder block construction.

These blocks are also made mostly from recycled materials (waste material) in the fabrication process. Because of its lightness, the blocks also require much less energy to make and transport to the job site.

A further reduction in electric consumption, will be supported by the skylights on the the third floor which enables natural lighting and painted with Boysen Shade paint for optimal thermal efficiency. Cooling pads, an evaporative air cooling system, will also create a comfortable working environment with low energy consumption and costs.

STP WATER RECYCLING

AERATED CONCRETE BLOCKS

EVAPORATIVE COOLING SYSTEMS RAINWATER HARVESTING SYSTEM

2018 Technology and Sustainability at YTI. Luenthai rolls out the GetConnected plan at its sports activewear division, YTI.

SKYLIGHT ROOF

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E M B R A C I N G C H A N G E B U I L D I N G O U R F U T U R E S H A R I N G S U C C E S S P R O V I D I N G

X O

C A R E

D A I L Y !

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Contact Us U n i t 1001-5, N a n y a n g P l a za , 57 H u n g T o Ro a d K w u n T ong, Kowloon, Hong Kong ( 852) 2193-3000 www.luenthai.com

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