January, 2015

To our stakeholders:

2014: Celebrating Matex 25th Year!

A very big thank you to all for your support, trust and confidence. Sincere appreciation to our staff around the world for your continued dedicated contributions.

As a result, Matex continues to have sustainable growth. This enables us to deliver and strive harder for credible, balanced and profitable business growth.

Listed on the Singapore Stock Exchange Main board (SGX-ST) in 2004, Matex is a leading global clean color science technology, material and specialty chemical company committed to innovation, world-class quality standards, high service levels technical support, cost-efficiency and sustainability.

As a solution provider, the Group offers a comprehensive range of colorants, auxiliaries and services with a reliable and long term commitment to develop new product solutions, application development, process technologies and services which delivers enhanced sustainability performance, introduces significant cost savings, and reduces raw material cost.

Established and headquartered in Singapore since 1989, Matex has its global sales presence, offices, centers of excellence, agencies and production plants in over 40 countries. With more than 500 employees worldwide armed with a collaborative culture and active engagement of people, this forms the driving force to achieve success in culture and commitment to shape the businesses of today and the world of tomorrow.

Encouraged by its credible successes, Matex remains grounded and adheres to the values of clean ethical business practices, technology upgrades, consistent learning, selfless environmental concerns, and all this while keeping the customer and his needs at the centre of all that we do.

Our never-ending exploration and proactiveness for innovation within our interest areas makes us an ideal one stop strategic partner of choice.

Lifestyle, Products, Performance Value Add – “Living the culture of Colour !”.

2014 marked another historical milestone for the group as we registered a new high in the Group’s revenue turnover and with it turning 25 years old as it continues to be recognized amongst Singapore Top 1000 Companies. It is also the group’s first decade as a public listed entity on the mainboard of the Singapore Stock Exchange. With that we recalibrated our vision, mission, values and brand promise as follows:

Our Vision
To be a world-class integrated service provider in CLEAN COLOUR SCIENCE TECHNOLOGIES the WORLD seeks, with our Center of Excellence in Singapore for PEOPLE, INNOVATIONS, PRODUCTS, SERVICES, TECHNOLOGIES and SOLUTIONS to our Markets.

Our Mission
To EXCEL as a global Competent SOLUTIONS PROVIDER with Pools of INNOVATIVE TALENTS ready to Explore BUSINESS Opportunities and to deliver credible and sustainable business growth.

Our Values
We Are CUSTOMER-FOCUSED for full SATISFACTION and we aim TO BE ON-TARGET to the RIGHT NEEDS, provide on time DELIVERY on-demand for the HIGHEST AND CONSISTENT QUALITY at AFFORDABLE PRICEs.

Our Promise
To meet the needs of our customers we value add through competitive and innovative VIABLE SOLUTIONS. The needs of our EMPLOYEES – with our CORPORATE VALUES. The needs of our STAKEHOLDERS – with HEALTHY RETURNS. And the needs of our ENVIRONMENT – by BEING SUSTAINABLE.

On 15th July 2014, we were much honoured and priviledged to have Singapore’s Minister of State for Trade and Industry Mr Teo Ser Luck, visiting the new Matex Innovation Centre in Singapore. In an official statement, he confirmed the company's innovative approach was something that SMEs could learn from in order to transform their business and stay globally competitive.

Some other colourful highlights throughout the year included:

1) Our pledge to the commitment for Fair Employment Practises under the framework of TAFEP (Tripartite Alliance for Fair & Progressive Employment Practises),

2) Being invited to speak at InnovFest 2014 Asian Innovations Going Global on Industry Involvement in Research: "How to get it RIGHT!" & TechInnovation 2014 sharing our experience and interacting with others about “How Open Innovation works for SMEs.”

3) For the 4th year running, we helped the SDC (Society of Dyers and Colourists) organize and produce a country winner in Singapore by working closely with Singapore’s local Textile and Fashion Schools along with JCC (Japan Creative Center) our partner’s help. Mr Chan Jian Hong (Temasek Polytechnic) represented Singapore at the Grand Final of SDC’s International Design Competition in Huizhou China. The SDC is the world’s leading independent, educational charity dedicated to advancing the science and technology of colour worldwide. Established in 1884, they have been representing their members and industry for over 125 years. The SDC is a professional, chartered society. Their mission is to communicate the science of colour in a changing world.

4) Matex participates in The Color Run Singapore- The Happiest 5K On The Planet! 30th August 2014.
The Color Run is a global event to promote healthiness and happiness by bringing the community together to participate in the “Happiest 5k on the Planet”. It also focuses on giving back. The Singapore side will be donating $1 from race entry to Singapore Disability Sports Council.

With reference to http://thecolorrun.com.sg/ and http://thecolorrun.com/

These key events and activities further encourages the group's efforts in its growing success and its passion to continue to embrace innovation, leading best practises and ideas, to differentiate and make meaningful contributions and differences.
Matex International Limited's unwaveringly 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 will further 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, wherever possible.
Sincere appreciation

On behalf of the Board, we wish once again to extend our deepest gratitude and heartfelt thanks to all our valued customers, clients, business partners, associates, suppliers and shareholders, for your unwavering trust, support and confidence.

People continue to be the greatest assets of the Group. To our fellow board members, management and all staff around the world, we say a very big thank you for your loyalty, contributions, dedication, hard work and high level of commitment.

Wishing one and all a great new year ahead with many a good tidings!

Sincerely yours,
Dro Tan Guan Liang
Executive Director

Amidst tighter labour markets and increases in cost, Matex understands the need for a supportive work environment to attract, retain and motivate talents who are looking beyond the pay package, but for greater work flexibility to fulfill both their work and family aspirations. Globalisation, technological change and changing family structures are redefining the way organizations have to engage their employees.

Matex continues to review and update its own Employee Handbook, which is in accordance with the Universal Declaration of Human Rights, details employees’ rights and resources within the organization. Employees are invited to give suggestions and once adopted as Code of Conduct, comply to the handbook.

The 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 revisits 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.
As a next step the group has pledged its commitment to implementing fair and merit-based employment practices being that it makes good business sense and is also the right thing to do. It enables the group to have

Access to Wider Talent Pool
Finding the right people with right skills and ability is essential. By hiring fairly and based on merit, Matex is assured that it can have access to the widest pool of candidates. This is especially important as there is a growing need to tap on older workers and women.

Increased Productivity and Staff Retention
When the group attracts, retains and develops employees based on merit, ie ability and skill rather than age, gender, or skin colour, it ensures that the best available person can get the job. In this way, it maximises the abilities and potential of employees as well as help to raise their morale and reduce turnover. In a long run it ensures that the group amasses a large group of loyal human capital and valued assets.

Innovation and Tapping into New Markets
By adopting fair employment practices, Matex can find it better able to attract talent from different backgrounds, leading to the formation of a diverse workforce. A diverse workforce is beneficial to increasing innovation and creativity within the organisation, resulting in new ideas, new products and different ways of doing things.

Improved Customer Satisfaction
Having a diverse workforce comprising different background such as age, gender and race will help the organisation better understand the needs of the different customers and market segments.

Deployment Flexibility
Having a diverse workforce has its advantage especially during festive and holiday periods where the organisation is able to minimise scheduling conflicts. By employing people from diverse ethnicities, the group will have more flexibility in maintaining the right staff levels during the different festive holidays.

Be an Employer of Choice
The organisation can gain a reputation for embracing fair employment practices will find it easier to attract and recruit employees. It will also enjoy a good reputation which will help in creating a positive impact for on sales and customer satisfaction levels.

Fair Employment is also the right thing to do.
Hire on merit, be a fair employer.

Matex aims to be a progressive employer and in making the organization one of the best places in the world to work in!

Matex, in its labor contract, maintains a culture of openness, honesty and transparency. Its staff are 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 be committed to resolve the issues until they are resolved in conformity with the country’s laws and Universal Human Rights principles.

Further incentive systems are looked at to encourage more proactive and reward good ideas.
On Work Life Strategy, we have continue to progressively develop programmes and infrastructures to support based around the
Themed “Workplace Success: Embracing Family as a Business Strategy” and drawing references from http://www.employeralliance.sg/toolkit/index.html

In 2014, we pledged our commitment to Fair Employment Practises under the framework of TAFEP (Tripartite Alliance for Fair & Progressive Employment Practises) organized and endorsed by Ministry of Manpower of Singapore, NTUC (National Trade Union Congress) and SNEF (Singapore National Employers Federation). http://www.tafep.sg/fairemployment.asp
Adopting fair employment practices allows Matex as much as possible to recruit and treat employees on the basis of merit, such as skills, experience or ability to perform the job and also look at the reemployment possibilities of our aging work force, by retraining them and repositioning them suitably. It constantly reminds ourselves to be sensitive and not using factors, such as age, race, gender, religion, marital status and family responsibilities, or disability for employment-related decisions.

The 5 key principles of Fair Employment Practices that Matex has reinforced and readopted are:

a. Recruit and select employees on the basis of merit (such as skills, experience or ability to perform the job), and regardless of age, race, gender, religion, marital status and family responsibilities, or disability.

b. Treat employees fairly and with respect and implement progressive human resource management systems.

c. Provide employees with equal opportunity to be considered for training and development based on their strengths and needs to help them achieve their full potential.

d. Reward employees fairly based on their ability, performance, contribution and experience.

e. Abide by labour laws and adopt the Tripartite Guidelines on Fair Employment Practices.

The practice of fair employment will help to foster an inclusive workplace, one that is built on merit and based on progressive HR practices.

To date, Matex has not encountered major incidents of Human Rights violation, due to its senior management frequently reassessing the Company’s policies and ensuring that its employees and stakeholders are treated fairly and equally helped by its in house IA and its external IA Internal Audit teams.

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.

Some indicators that were developed to monitor and evaluate to show performance were
A) Increased Employee Productivity, KPI scores and company business growth
B) Lower Absenteeism
C) Lower Sick Leave
D) Higher levels of engagement
E) Higher retention of talent
F) Increase ability to attract talent

Maintaining the mindset that People are our assets, capital and not cost.
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. At company gatherings, management takes the opportunity to further inculcate the importance of this aspect.

Within the coming year, Matex aims to continue 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 and a common spirit of esprit de corps.

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 to allow effective communications between top management and the staff.

Human Resources and senior management work hand in hand to ensure that all employees are given access to common resources and treated possibly as best, 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.

Targeting to be a world leader and a specialist in clean colour science technologies through its’ dyestuffs and chemicals production. Matex has continue to promote its energy and water saving range of low temperature reactive dyestuffs under the Megapro RE brand name. The company typifies its growing commitment towards sustainability in the global textile industry further with Megapro CF a solution to T/C, CVC blends to increase significant savings and enhanced productivity.

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. For 2012, more than 80% from 70% in 2011 of its products can now be produce with its continuously improving production techniques that employ Flow Chemistry Techniques.

For 2013&2014, a combined of the above efforts allows up to 80% of the plants waste to be recovered or reused with a target to push for zero discharge in the next 3 to 5 years as the pinnacle and its duty to be a leading example to its contemporaries and share the benefits with its global customers.

In addition to business activities being directly involved in fighting climate change, the Company has continue its easy to adopt and simple guidelines to reduce energy consumption in the work place and raise awareness among its stakeholders, rewarding appropriatedly good ideas and best practises of workable schemes. Encouraging and motivating the inventors and stakeholders internally.

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, tradeshows in various countries, advertisement in ATA and related magazines and Matex webpage, wwww.matex.com.sg and with workshops with the brands, retailers and industrial partners etc, Matex shares these ideas to gain market ideas, feedback and acceptance.

Matex continues to support international competitions that promote the theme of sustainability. With SDC, as in last 3 years, 2014’s theme of

"Mixed Culture & High Fashion"

Mr Chan Jian Hong (Temasek Polytechnic) represented Singapore at the Grand Final of SDC’s International Design Competition in Huizhou China.

Mr Chan Jian Hong took first place at the Singapore heat of the International Design Competition with his design.

67 students from Singapore participated in the successful event which was jointly organised and sponsored by both Japan Creative Centre Singapore and Matex, final judging was held on 24th September at JCC Singapore and with the awards ceremony held on the 15th October.

Matex's business solutions aim to find innovative ways to fight climate change and raise awareness among the population.
and this is by actively participating at the seminars and competition as described earlier.

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

Matex’s goal, continues 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 departments, 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 started a programme on carbon and water footprint measures internally with its IA team and hopes to utilise some of these information as part of its sustainable report to complement with its annual report in the near future.

More emphasis will be placed on WEC emissions through help from finance in its segregation 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 bottom lines. 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.

It continues to work on its prospects for ISO 14064 part 1 & 2 Green House Gas Management System and ISO 50001 Energy Management. Hopefully with the guiding principles of these processes, identify more ways to better monitor and evaluate our environmental impact as baseline and performance as guiding targets.

Matex's headquarter is located in Singapore. As a public listed company it tends to face a higher need to uphold transparency and corporate governance.

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 closely 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 as best that junior and mid level employees are best trained and a open system allows transparency to best reduce possibilities of such undesirable incidents occurring.