March, 2012

To our stakeholders:

I am pleased to confirm that Matex International Limited reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Dro Tan Guan Liang
Executive Director

Matex has published its own Employee Handbook, which in accordance with the Universal Declaration of Human Rights, details employees’ rights and resources within the organization.

The Code of Code includes guidelines related to professional ethics, best management practices as well as other clauses that aim to protect employees and external parties in the conduct of daily operations.

The Company revises this document on a progressive basis, to ensure that it follows the organization’s growth path, reflects encountered experiences and issues and contains timely and accurate provisions for the protection of its stakeholders.

Matex, in its labor contract, maintains a culture of openness, honesty and transparency. Staff is encouraged to discuss issues encountered in the work place so as to find adequate solutions and prevent similar situations from happening in the future.

The Human Resources department is responsible for receiving employees’ issues and suggestions to improve the overall quality of the work environment, while respecting privacy.

HR will then commit to resolve the issues is resolved in conformity with the country’s laws and Universal Human Rights principles.

To date, Matex has not encountered major incidents of Human Rights violation, due to senior management frequently reassessing the Company’s policies and ensuring that its employees and stakeholders are treated fairly and equally.

Matex also encourages its external partners to follow its steps and act ethically in the work place which contributes to a healthier business environment and fewer cases of violation.

Matex recognizes the importance to provide an organizational culture based on respect and trust.
As a result, the Company benefits in terms of productivity and growth.

The Employee Handbook clearly states employee rights and responsibilities and their career path and benefits.

Within the coming year, Matex aims to incorporate and communicate in its compensation packages a wider range of employee’s benefits and foster a greater sense of ownership within the organization.

Matex has written guidelines to ensure that Labor Rights are respected and in case of violation, resolved with the best interest of the neglected party at heart. Below are a few examples of implementation measures taken by the Company:

- Employees are aware of their rights and responsibilities;
- Complaint/suggestion system is in place allow effective communication between top management and the staff.

Human Resources and senior management work in hand to ensure that all employees are given access to the same resources and treated equally in the work place.

Matex is proud to encourage freedom of speech and diversity in the work place, having employees from different nationality, religious and educational backgrounds.

Matex also encourages its external partners to follow its steps and act ethically in the work place which contributes to a healthier business environment.

Matex is a manufacturer and formulator of quality specialty chemicals and dyes focused on sustainable, low-carbon and cleantech initiatives.

In 2011, via its 3R Reduce, Reuse, Recycle initiative to drive towards Zero Emission, Matex channels funds to its in house team and work extensively with consultants from its partners like Sinochem in China, to make use of renewable energy sources and/or develop ways to transform waste into energy and resources still. To date, more than 70% of its products can be produce with its continuously improving production techniques that employ Flow Chemistry Techniques.

In addition to business activities being directly involved in fighting climate change, the Company has put in place simple guidelines to reduce energy consumption in the work place and raise awareness among its stakeholders.

Examples are:

- Windows shut when using air conditioning;
- Turn off lights, air conditioning, computer equipment, including desktops, upon leaving the office;
- Paper in printing documents;
- Reusable kitchenware;
- Use public transport, instead of taxis or Company cars, whenever possible to attend external meetings.

Further to that, the company makes a point to invest 10-15% of its revenues/funds into research and development for clean technologies with an aim to provide a world of innovative solutions and practical technologies in sustainable textile processing. Through close collaborative seminars in various countries, advertisement in ATA and related magazines and Matex webpage, wwww.matex.com.sg and with workshops with the likes of Li & Fung, Kohl's, brands, retailers and industrial partners.etc, Matex shares these ideas to gain market ideas, feedback and acceptance.

On 1st September 2011, together with Singapore's TAFF (Textile & Fashion Federation Singapore, http://www.taff.org.sg/) and WDA (Work Development Authority of Singapore, http://app2.wda.gov.sg/web/Common/homepage.aspx), Matex and its partners co-organize Singapore's inaugural Fashionably Sustainable Competition http://www.fashionablysustainable.com to a global audience, the successful event had a runway fashion show and saw the graduation of 40 over students from the pioneer batch of an interesting diploma course in textile. Over 40 participants joined the competition and only 7 finalist were shortlisted, 2 final winners were recognised for their creative and interesting use of renewable materials. The event also was done in collaboration for SDC (Society of Dyers & Colorist http://www.sdc.org.uk/) to organise their Singapore heat event, our chosen winner represented Singapore at the the SDC's International Design Competition Grand Final's that was further held 2011 Dec in HongKong. http://www.sdc.org.uk/en/events/competitions/sdc-international-design-competition-.cfm

Matex's business solutions aim to find innovative ways to fight climate change and raise awareness among the population.

In addition, energy saving and environment protection guidelines are mentioned in the Company’s Webpage and Employee Handbook.

Matex’s goal, starting in 2012, is to take improving steps to measure its carbon footprint from its day-to-day operations, business travel and events, on a continuous basis. In the coming year, Matex will also look out for right opportunities to partner like minded, environmentally and global compact members to further efforts in saving and caring for the environment.

Via setup guidelines and targets agreed within depts, Matex reviews these regularly, depending on subject matters, can be weekly, monthly and quarterly to measure the targets set against achieved. It also empowers key leaders to come up with creative ideas with its team to further improve on existing plans.

At the office, employees now apply the guidelines stipulated in the Employee Handbook and continuously seek new measures to limit their environmental footprint.

Matex is currently considering the possibility of adopting carbon and water footprint measures through a third party consultant to create its first sustainable report to complement with its annual report.

More emphasis will be placed on WEC emissions through help from finance in its segragation of expenses attributing to these areas and by department to find ways to reduce waste and through the universal popular Kaizen system eliminate waste for increase bottomlines. These are plot into graphs and quick charts for trend analysis and actions to follow.

Matex also encourages its external partners to follow its steps and act ethically in the work place which contributes to a healthier business environment.

Matex's headquarter is located in Singapore and therefore faces a higher risks of corruption and bribery than in developed countries.

In order to avoid such violations, the Company holds a strict zero-tolerance policy for corruption and bribery. The Employee Handbook, available to all employees, contains the Company policy and protocol to follow in the incidence of corruption and bribery violation. In case staff is confronted to situations where corruption and bribery are likely to take place, the Company’s protocol provides guidance on how to react and report this type of violation.

The selection of business partners and opportunities is done through a competitive bidding process, based on transparency and fairness, as to encourage market competitiveness and avoid corruption. Additionally, the Company works with an online platform where employees’ work and responsibilities can be tracked, allowing senior management to closer monitor projects and the way business is conducted with external parties.

Matex also encourages its external partners to follow its steps and act ethically in the work place which contributes to a healthier business environment.

As a result of the Company’s policy, all employees are made aware of consequences related to corruption and bribery violations. Senior management ensures that junior and mid level employees are not put in situations where they can prove guilty or victim of such violations.