January, 2013

To our stakeholders:

2012 continues to be a year of challenges, exploration and surprises. We were told the world would end 21st Dec 2012, but like the same as any other day, we woke to a new beginning. Sustainability and good practices continue to be universal and common global themes that focus to bind and intertwined our actions closer.

Rio+20 is a good exemplary of the amalgamation of the further call to action and case studies for us to treasure, learn from and rethink our future. A wonderful brainchild of UGC initiatives to embrace partnership and grow this critical platform to enlighten us all. Likewise Matex strategies and its carbon footprint continues to evolve to suit changing trends and in anticipation for others to come.

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 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.

Sincerely yours,

Dro Tan Guan Liang
Executive Director

Globalisation, technological change and changing family structures are redefining the way organisations engage their employees. Amidst tight labour market, Matex like many organisations see the need for a supportive work environment to attract, retain and motivate talent who are looking beyond the pay package, but for greater work flexibility to fulfill both their work and family aspirations.

Matex reviewed and updated its own Employee Handbook, which 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 comply to the handbook.

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.

Further incentive systems are looked at to encourage more proactive and reward good ideas.

Taking a step in the direction of Work Life Strategy, we have started to develop programmes and infrastructures to support.
Themed “Workplace Success: Embracing Family as a Business Strategy” some items were taken from the shared http://www.employeralliance.sg/toolkit/index.html

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.

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 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 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 common resources and treated 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 recently launched its new range of low temperature reactive dyestuffs under the Megapro™ RE brandname. The company states that this launch typifies its growing commitment towards sustainability in the global textile industry.

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.

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, tradeshows 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.

Matex continues to support international competitions that promotes the theme of sustainability. With SDC, as in 2011.
For 2012

Mr Shane Poh Leong Peng , a BA(HONS) Fashion & Marketing student from Nanyang Academy of Fine Arts who took first place at the Singapore heat of the International Design Competition with his design ‘ More than just a string’.
79 students from Singapore participated in the successful event which was jointly organised by the Textile & Fashion Federation (Singapore), the Singapore Design Council and Japan Creative Centre, sponsored by Matex, held on 13thOctober.
Shane joint finalists from all over the world in December at the Grand Final in Hong Kong.

Further it was awarded Green Technology Awards Selected Finalist from 15 Industries for Singapore Sustainability Award 2012 organized by SBF Singapore Business Federation and supported by IE (International Enterprise), EDB (Economic Development Board), NEA (National Environment Agency), ITE (Institute of Technical Education), F&S (Frost & Sullivan).
at Singapore Sustainability Awards 2012 (Green Technology Awards) 03/07/2012

Commitment to Responsible Care, as a member of the SCIC, Matex is committed to implement the Responsible Care initiative on the basis of the following Guiding Principles so as to ensure a high level of protection for the health & safety of its employees, customers, the public and the environment. and we had as of 08/10/2012 taken up the pledge to work towards the goals of the programme.

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.

It plans to embark on ISO 14064 part 1 & 2 Green House Gas Management System and ISO 50001 Energy Management and has been awarded by Spring a local govt body supporting local companies the initiatives. With 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 faces 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 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.