BUREAU VERITAS (CPS)

SOCIAL AUDIT SUMMARY REPORT (AS)

BV REPORT #:

CLIENT: RUSSELL CORP.

Date of Audit: Agent Name: Vendor Name: Auditor Name(s): Report Written by: Report Reviewed by:

10063520086 3rd March07 -----------------------------Bahlul Dana & Mozzafar Hossain Taposh Bahlul Dana Atiqur Rahman

Facility Name: Facility Contact: Contact Title: Facility Address: Country: Facility Phone: Facility Fax: Facility E-Mail:

Eve Dress-Shirts Ltd. Md. Iftekhar Matin Director Asulia, Savar, Dhaka Bangladesh 88-02-8826900;9895002 88-02-8821278 plexus@aitlbd.net

This AS provides a summary of the findings and other applicable information found/gathered during the social audit conducted on the above date only and does not officially confirm or certify compliance with any legal regulations or industry standards. The Social Audit process requires that information be gathered and considered from Records Review, Worker Interviews; Management Interviews & Visual Observation. More information is gathered during the Social Audit process than maybe provided here. It is BV's position to ensure that workers of factories will not be retaliated against due to comments or information obtained during the auditing process. In absence of objective evidence and to ensure the integrity of the audit process, BV reserves the right to non disclosure of information obtained from workers. Therefore, information obtained from interviews will be kept confidential and may not be included in this report. However if the payee has previously agreed, then this confidential information may be communicated to retailers & vendors that the factory supplies to.

Complete / Initial Audit

Follow-Up Audit

OVERALL RATING:
NEEDS MAJOR IMPROVEMENT: SATISFACTORY: NEEDS IMPROVEMENT:

Summary of Findings by Section

Monitoring & Documentation:
Needs Major Improvement Non-Compliance Findings: Needs Improvement Satisfactory

Previous Findings:
1. Description of Non-Compliance: Approx. 10 rented security guards who are not directly recruited by this factory do not have personnel file & payroll. Local law or Client Standard: To comply with The Factories Acts, 1965, chapter-6, Section-61, the manager of every factory shall maintain a register of adult workers, to be available to the inspector at all times during working hours, showing- (a) the name of each adult worker in the factory; (b) the nature of his work; (c) the group, if any, in which he is included; (d) where his group works on shifts, the relay to which he is allotted; and (e) such other particulars as may be prescribed. To comply with The Employment Of labor (Record of Services) Act, 1951, The employer shall at the commencement of the employment and during the continuance of the same make such entries therein from time to time as are required by this act and the rules made there under and he and the employee shall sign the entries as they are made. The service book shall contain the particulars of identification of the employee, the name and other particulars of the persons under whom employed from time to time, period of employment, occupation, rate of wages, including allowances, if any, leave taken and records of conduct and efficiency by employees. To comply with The Payment of Wages Rules, 1937, Section-6, the register required by the rules shall be maintained in the Bengali language and shall be preserved for twelve months after the date of the last entry made in them. Recommended Corrective Action: Factory shall maintain payroll record & personnel files for rented security guard. Supporting Information: Based on document review. Appropriate Action Taken: During follow up audit it was found that factory has started to keep personnel file and payroll sheet for all rented
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security guards.

New Findings:
1. Description of Non-Compliance: It was noted that appointment letter was not updated as per new Labor Law 2006. Local law or Client Standard: To comply with Bangladesh Labor Law 2006, Chapter- 2, Section 5, no owner can employed any worker without issuing appointment letter. Recommended Corrective Action: Factory shall update appointment letter as per new Labor law effective from 11th Oct, 06. Supporting Information: Based on document review.

2. Description of Non-Compliance: Inconsistency was found between the provided time cards and Metal detector register, daily out put register of sewing line B. Based on the Metal detector register, daily out put register of sewing line B it was found that factory performed weekend works on 10th, 17th Nov06; 8th, 15th Dec06; 9th Feb07 and 2nd March07; but those weekend works were not listed in the provided time cards. Local law or Client Standard: The factory shall maintain all documents completely and faithfully. Recommended Corrective Action: Factory shall provide all documents completely and faithfully to auditors for review. Supporting Information: Based on document review, Inconsistency was found between the provided time cards and Metal detector register, daily out put register of sewing line B. Based on the Metal detector register, daily out put register of sewing line B it was found that factory performed weekend works on 10th, 17th Nov06; 8th, 15th Dec06; 9th Feb07 and 2nd March07, but those weekend works were not listed in the provided time cards. The provided time cards showed that employees performed 2 hours overtime works daily and off duty on mentioned weekends days. As a result, payment of those weekend works could not be verified due to inconsistency was found. Potential Issues: Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Child Labour:

Needs Major Improvement Non-Compliance Findings: Nothing to report Potential Issues Nothing to report

Needs Improvement

Satisfactory

Current Practice: Factory has a policy that prohibits any under aged employees in this factory and minimum age found in this factory is 18. At the time of first interview, worker is apparently check by nurse and finally if he is selected then certify by factorys own registered doctor to employees depending on interview and physically checked the biological growth. 40 personal files were reviewed where employees have age documentation , joining letter, contract based on listed terms and conditions signed by both parties, personal information, nominee declaration , service record, nationality certificate given by local authority etc. During interview, employees stated they never seen any under aged worker in this factory. Thus, based on observation, reviewing the documents and interview during audit, it was noted that this factory is compliant with this section. Best Practices: Nothing to report
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Forced or Compulsory Labour:

Needs Major Improvement

Needs Improvement

Satisfactory

Non-Compliance Findings: Nothing to report Potential Issues Nothing to report Current Practice: All employees found working voluntarily during audit in the factory. Employees freedom of movement is not restricted as they can easily go to toilet or can drink water. Terms and conditions in personal file doesnt reflect any coercion, limitation to the employees basic right of freedom or forced labor of any kind beyond legal generally accepted obligations . Factory doesnt require any monetary deposits during recruitment. Factory doesnt have system to recruit from manpower agency accept 10 numbers of rented security guards; If any employees want to leave the job, he/she may leave giving 30 days notice prior to leave. Security guards are not allowed in production floors. Thus, based on observation and employees interview during audit, it was noted that this factory is compliant with this section. Best Practices: Nothing to report

Health & Safety

Needs Major Improvement (Production Area): Non-Compliance Findings:

Needs Improvement

Satisfactory

Previous Findings:
1. Description of Non-Compliance: Most of the exit door found opening inward in this factory. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Chapter-6, Section-62, in every factory the doors affording exit from any room shall not be locked or fastened so that they can be easily and immediately opened from inside while any person is within the room, and all such doors, unless they are of the sliding type, shall be constructed to open outwards or where the door is between two rooms, in the direction of the nearest exit from the building and no such door shall be locked or obstructed while work is being carried on the room. Recommended Corrective Action: All doors shall be open outward. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that factory had arrangement to keep the door open by installing hook in side the room.

2. Description of Non-Compliance: There was no emergency light with exit sign at both doors of ground floor, sample, cutting and dinning area. Moreover, no emergency light found in staircases of this factory. Local law or Client Standard: To comply with the Audit Worksheet # 5.65 emergency lighting shall be installed in the halls, stairwells and above each exit. To comply with Bangladesh Labor Law 2006, Chapter- 5, Section 57, In very part of a factory where workers are working or, passing there shall be provided and maintained sufficient and suitable lighting , natural or artificial, or both. To comply with Bangladesh Labor Law 2006, Chapter- 6, Section 62, In every factory every window, door, or other exit affording means of escape in case of fire, other than the means of exit in ordinary use, shall be distinctively marked in a language understood by the majority of the workers and in red letters of adequate size or by some other effective and clearly understood sign. Recommended Corrective Action: Factory shall install the emergency light with exit sign in all required doors, pathways and staircases.
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Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that factory has installed light with exit sign at doors of ground floor, sample, cutting and dinning area and emergency light found in staircases of this factory.

3. Description of Non-Compliance: Temperature felt hotter than normal in sewing and fusing sections. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Chapter-5, Section-52, effective and suitable provisions shall be made in every factory for securing and maintaining in every work-room- (1) adequate ventilation by the circulation of fresh air; and (2) such temperature as will secure to workers therein reasonable conditions of comfort and prevent injury to health, and in particular- (3) The walls and roofs shall be such materials and so designed that such temperature shall not be exceeded but kept as low as practicable; (4) Where the nature of the work carried on in the factory involves, or is likely to involve, the production of excessively high temperature, such adequate measures as are practicable, shall be taken to protect the workers there from by separating the process which produces such temperature from the work-room by insulating the hot parts or by other effective means; (5) Government may express any order to take appropriate step for any organization where the production of excessively high temperature can be reduced by taking any prescribed measures. Recommended Corrective Action: Factory shall reduce the temperature for sewing and fusing sections. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that factory has provided sufficient numbers of fan in both sewing and fusing sections.

4. Description of Non-Compliance: Shortage of portable fire extinguisher operator found in this factory. Factory has only approx. 27 out of about 751 employees who know the use of fie extinguishers where the number should be approx. 187. Local law or Client Standard: To comply with The Factories Rules, 1979, Chapter-4, Section-52, every worker of the factory should, as far as possible, be trained in the use of portable fire extinguishers subject to a minimum of least one fourth of the members engaged separately in each section of the factory. Recommended Corrective Action: Factory shall increase the number of portable fire extinguisher operator by providing training. Supporting Information: Based on factory tour, document review and interview. Appropriate Action Taken: During follow up audit it was found that factory has increased the number of portable fire extinguisher operators as 200 where, required number was 183.

5. Description of Non-Compliance: Width of secondary staircase in few areas found 32 inch. Local law or Client Standard: To comply with The Factories rules, 1979, Chapter-4, Section-51, each room of a factory building shall be provided with not less than two exits for use in case of fire, so positioned that each person will have a reasonably free and unobstructed passage from his work place to an exit. No stair way shall be less than 45 in width. Recommended Corrective Action: Sufficient width of exit shall be arranged in order for safe evacuation. Supporting Information: Based on factory tour. Appropriate Action NOT Taken: During follow up audit it was found that factory has re-arranged width of secondary staircases in one place out of 2 places . Still one secondary staircase width found 31 inch at ground floor.

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6. Description of Non-Compliance: There was no Material Safety Data Sheet (MSDS) & eye wash found for chemical used in spot removing area. Personal Protective Equipments are not used by all employees of spot removing and generator areas. Also existing spot removing room is found open at upper ceiling portion which can affect other employees blowing chemical by fan air. Local law or Client Standard: To comply with The Factories Rules, 1979, Chapter-4, Section-42, no process or work shall be carried on in any factory in such a manner as to cause risk of bodily injury. To comply with Bangladesh Labor Law 2006, Chapter5, Section 53, in every factory in which, by reason of the manufacturing process carried on, there is given off any dust or fume or other impurity of such a nature and to such an extent as is likely to be injurious or offensive to the workers employed therein. Effective measures shall be taken to prevent its accumulation in any work-room and its inhalation by workers. Recommended Corrective Action: Factory to carefully review all handling, storage and disposal procedures of hazardous chemicals and display the related Material Safety Data Sheet (MSDS) in the native language of the workers. Factory shall provide appropriate Personal Protective Equipments (PPE) to spot removing and generator operators and ensure all employees understand the importance of using Personal Protective Equipments (PPE). Factory shall arrange proper separate area for spot removing department to ensure that workers are working under healthy conditions. Supporting Information: Based on factory tour. Appropriate Action NOT Taken: During follow up audit it was found that factory has fully covered the spot removing area and posted MSDS & arranged eye wash inside the room . Moreover, factory has provided appropriate PPE to the spot removing operator, generator operators but it was found that only spot removing operators are working without mask, gloves. 7. Description of Non-Compliance: No evacuation plan, aisle mark, fire alarm, hose pipe found in dinning area. Moreover, dinning area was too congested and shortage of washing (found 3 taps) and seating arrangement found in that area. Local law or Client Standard: To comply with The Factories Rules, 1979, Chapter-4, Section-52, Factory shall prepare a detailed Fire Safety Plan for proper enforcement of fire safety rules and for actions to be taken, in proper sequence, in case of a fire in a factory. To comply with Bangladesh Labor Law 2006, Chapter- 6, Section 62, In every factory every window, door, or other exit affording means of escape in case of fire, other than the means of exit in ordinary use, shall be distinctively marked in a language understood by the majority of the workers and in red letters of adequate size or by some other effective and clearly understood sign. In accordance with Standard X, Rule 4, Clause-1 of the Fire Service Ordinance 1959 Section 47, amended on May 27, 1999, each factory is required to maintain an effective fire hose system for fire safety measures. To comply with The Factories Act, 1965, Chapter-4, Section-22, In every factory there shall be provided effective and clearly audible means of giving warning in case of fire to every person employed therein. To comply with The Factories Rules, 1979, Chapter-5, Section-58, the dining hall shall accommodate at least 30% of the workers working at a time. To comply with The Factories Rules, 1979, chapter5, Section-54, for persons whose work involves contract with any injurious or noxious substance, there shall be at least one tap for every 15 persons and for persons whose work dose not involve such contact the number of taps shall be as upto to 20 no. of workers, no of taps 1; for 21 to 35 no. of workers, no of taps 2; for 36 to 50 no. of workers, no of taps 3; for 51 to 150 no. of workers, no of taps 4; for 151 to 200 no. of workers, no of taps 5; exceeding 200 but not exceeding 500 no of workers, 5 plus 1 tap for every 50 or fraction of 50; exceeding 500 no of workers, 11 plus one tap for every 100 or fraction of 100. Recommended Corrective Action: Factory shall have fire alarm, aisle mark on floor, hose pipe and fire and emergency evacuation plan posted in local language in dinning area. Also sufficient space with washing facility shall be provided in dinning area. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that factory has provided evacuation plot plan, aisles mark, fire alarm, hose pipe in dinning area. Moreover factory has provided additional 10 nos of washing tap and increased the seating arrangement.

8. Description of Non-Compliance: During factory tour it was observed that pressing and quality section of finishing area does not have adequate space for safe movement of employees.
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Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Chapter-5, Section-57 (1) no work-room in any factory shall be overcrowded to an extent injurious to health of workers employed therein. To comply with Bangladesh Labour Law, 2006, Chapter-5, Section-57 (2) at least 9.5 cubic meter of space shall be arranged for each worker in every working room. Recommended Corrective Action: Factory shall arrange adequate space in order to provide safe working environment. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that factory has reorganized pressing and quality section of finishing area so that adequate space was available for safe movement of employees.

9. Description of Non-Compliance: Outgoing steam pipe was not wrapped properly. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Chapter-5, Section-52, where the nature of the work carried on in the factory involves, or is likely to involve, the production of excessively high temperature, such adequate measures as are practicable, shall be taken to protect the workers there from by separating the process which produces such temperature from the work-room by insulating the hot parts or by other effective means. Recommended Corrective Action: Factory shall provide the safety devices with all machine and equipment to protect heat as to keep the temperature as tolerable in the factory. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that outgoing steam pipe was wrapped properly.

10. Description of Non-Compliance: No nurse/doctor found in this factory for all working hour. Existing medical personnel work from 8 am morning to 5 pm evening whereas factory is working from 8 am to 8-9-10 pm. Local law or Client Standard: To comply with The Factories Rules, 1979, Chapter-5, Section-56, the ambulance room or dispensary shall be in charge of a qualified medical practitioner assisted by at least one qualified compounder and nurse and such subordinate staff as the Chief Inspector may direct. The medical practitioner shall always be available on call during working hours. Recommended Corrective Action: Factory shall appoint a full time medical professional during all worked hours in the factory. Supporting Information: Based on interview. Appropriate Action Taken: Based on management / medical personnel interview and finally confirmed with employees it was found that existing medical personnel working for all worked hours. Potential Issues Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Health & Safety

(Dormitories / Housing): Needs Major Improvement Needs Improvement Satisfactory

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Non-Compliance Findings:

Previous Findings:
1. Description of Non-Compliance: No emergency light found in exit doors of the dormitory where in approx. 5 employees are living. Local law or Client Standard: To comply with the Audit Worksheet # 5.65 emergency lighting shall be installed in the halls, stairwells and above each exit. To comply with Bangladesh Labor Law 2006, Chapter- 5, Section 57, In very part of a factory where workers are working or, passing there shall be provided and maintained sufficient and suitable lighting , natural or artificial, or both. To comply with Bangladesh Labor Law 2006, Chapter- 6, Section 62, In every factory every window, door, or other exit affording means of escape in case of fire, other than the means of exit in ordinary use, shall be distinctively marked in a language understood by the majority of the workers and in red letters of adequate size or by some other effective and clearly understood sign. Recommended Corrective Action: Factory shall install emergency light in all required doors. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that emergency light was installed in exit doors of the dormitory.

2. Description of Non-Compliance: There is no first aid box found in dormitory area. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Chapter-8, Section-89, there shall, in every factory or section of a factory, be provided and maintained, so as to be readily accessible during all working hours, first-aid boxes or cupboards equipped with the prescribed contents and the number of such boxes or cupboards shall not be less than one for every one hundred and fifty workers ordinarily employed in the factory. Recommended Corrective Action: Factory shall equip first aid box in dormitory area. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit, it was found that factory has provided first aid box in dormitory area.

3. Description of Non-Compliance: No hose pipe found in dormitory area. Local law or Client Standard: In accordance with Fire Service Ordinance 1959 amended on May 27, 1999, each factory is required to maintain an effective fire hose system for fire safety measures. Recommended Corrective Action: Factory shall provide hose pipe in dormitory area. Supporting Information: Based on factory tour. Appropriate Action Taken: During follow up audit it was found that hose pipe was installed in dormitory area. Potential Issues Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Freedom of

Needs Major Improvement

Needs Improvement

Satisfactory

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Association / Collective Bargaining:

Non-Compliance Findings:

Previous Findings:
1. Description of Non-Compliance: There is no designated welfare officer found in this factory. Local law or Client Standard: To comply with The Factories Rules, 1979, Section-93, in every factory wherein five hundred or more workers are ordinarily employed their shall be appointed at least one welfare officer , and when the number of workers exceed two thousand , one welfare officer shall be appointed for every two thousand workers or a fraction thereof. Recommended Corrective Action: Designated welfare officer shall be appointed in order to establish effective welfare system. Supporting Information: Based on workers and management interview. Appropriate Action Taken: During follow up audit it was found that factory has appointed a designated welfare officer. Potential Issues Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Non-discrimination:

Needs Major Improvement Non-Compliance Findings: Nothing to report Potential Issues Nothing to report

Needs Improvement

Satisfactory

Current Practice: Based on audit process such as interviewing, documentation factory tour etc, no discrimination practice observed in hiring, compensation, access to training, promotion, caste, national origin, religion, age, gender, marital status etc. in this factory. Factory has own discrimination policy. Thus, this factory is fully compliant with this section. Best Practices: Nothing to report

Disciplinary Practices: Previous Findings:

Needs Major Improvement

Needs Improvement

Satisfactory

Non-Compliance Findings:

1. Description of Non-Compliance: Unauthorized deduction found in this factory. There was no effective disciplinary system found in this factory. Based on disciplinary documents /notice: factory practice is to deduct full day wage instead of half day wage if employees do not come after lunch; if time card is missing so factory takes Tk-20 for issuing a new card which is more than actual price; if any worker remain absent for 3 days without permission so his/her salary will be with held for some days as disciplinary practice, etc. Local law or Client Standard: To comply with Bangladesh Labor Law, 2006, Chapter-24 & 25, no order for punishment shall be made unless the allegation against him are recorded in writing, he is given a copy thereof and not less than seven days time to explain, he is given a hearing. The total amount of fine which may be imposed in any one wage period on any
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employed person shall not exceed one tenth amount of the wages payable to him in respect of the wage period. All fines and all realizations thereof shall be recorded in a register. Recommended Corrective Action: Factory shall follow effective disciplinary procedure for the employees. The procedures must include an escalating series of verbal and written warnings prior to taking any action. Factory shall cease this policy to ensure compliance with the law. Supporting Information: Based on document review and workers interview. Appropriate Action Taken: During follow up audit it was found that after initial audit factory has stopped all kind of unauthorised deduction. Potential Issues Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Harassment & Abuse: Previous Findings:

Needs Major Improvement

Needs Improvement

Satisfactory

Non-Compliance Findings:

1. Description of Non-Compliance: Employees are verbally abused if they make simple mistake. Local law or Client Standard: To comply with The Audit worksheet # 9, Each employee shall be treated with dignity and respect. The employer shall not engage in or support for any reason the use of physical punishment, mental or physical coercion and verbal abuse. To comply with Bangladesh Constitution 1972, Fundamental Rights (Part III), No person shall be subjected to torture or to cruel, inhuman, or degrading punishment or treatment. Recommended Corrective Action: Management shall realize the respect and dignity of all individual employees and try to practice on that ground. Factory shall properly investigate the matter thoroughly to ensure workers satisfaction for keeping smooth production & to regain their confidence on workplace. Workers shall receive instruction more often on their rights under national law and company's expectations and where relevant, best practices .Also factory shall effectively communicate disciplinary procedures to employees, supervisor & Manager. Supporting Information: Employees are frequently verbally abused for simple mistake with slang language by their in charge which was reported by most of the interviewed employees during interview session. Appropriate Action Taken: During follow up audit it was found that employees were not verablly abused by their Incahrges/supervisor anymore. Potential Issues Nothing to report Current Practice: Nothing to report Best Practices: Nothing to report

Compensation & Benefits: Previous Findings:

Needs Major Improvement

Needs Improvement

Satisfactory

Non-Compliance Findings:

1. Description of Non-Compliance:
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Delay payment found in this factory. Till audit date(8 th Oct,06) factory didnt pay the wages for Sep,06 which supposed to be paid by 7th Oct,06. Usually factory pays wages by 10th of next month. Local law or Client Standard: To comply with Bangladesh Labour Law -2006, Chapter- 10, Wages of each worker will have to pay within the 7th working day following the pay period for which the wages are being payable. Recommended Corrective Action: Factory shall adjust the pay date so that wages are paid on time i.e. by 7th of next month. Supporting Information: Based on document review. Appropriate Action Taken: During follow up audit it was found that factory has started to pay salary within 7th of next month.

2. Description of Non-Compliance: Approx 15 employees who are working as security guard, store asst. Generator operator, boiler operator, etc. are not getting overtime wages after completion of their general duty. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, chapter-9, Section-108, where a worker works in a factory more than mentioned in this law in any day or week, he shall, in respect of overtime work, be entitled to allowance at the rate of twice his ordinary rate of basic wages, dearness allowances and adhoc or interim wages (if any). Recommended Corrective Action: After completion of general duty all worked hour shall be counted as overtime and paid according to law. Supporting Information: Factory counted them as staff instead of worker thus not paying overtime but they are paid high salary. Appropriate Action Taken: During follow up audit it was found that factory has provided overtime wages to all above mentioned employees.

3. Description of Non-Compliance: When the employees absent for few days, the deduction would be deducted from the gross salary instead of basic salary. This would affect the allowances (house rent and medical allowance). Local law or Client Standard: In accordance with section 2 & 6, The Payment of Wages Act, 1936, Wages means all remuneration but does not include the value of any house accommodation, supply of light, water, medical, attendance, or other amenity or of any service excluded by general or special order of the Government. Deduction from the wages of an employed person shall be made only in accordance with the provisions of this act, and may be of the following kinds only, namely: fines, deduction for absence from duty, deduction for damage to or loss of goods expressly entrusted to the employed person for custody etc. Recommended Corrective Action: In case of absenteeism from work, deduction shall be made from basic wage instead of gross wage. Supporting Information: Based on document review. Appropriate Action Taken: Based on payroll sheet during follow up audit , it was found that all deduction has been made from basic instead of gross. Potential Issues: Overtime compensation cannot be fully verified due to inconsistencies was found. Please see Monitoring and Documentation section for more details. Current Practice: Nothing to report Best Practices: a) Attendance Bonus Tk 100/monthly b) Line wise production bonus Tk 2000/monthly c) Free Transportation d) Although the factory has not worked for year, they have provided two festival bonuses during EID festivals. e) Although the worker didnt work for the stipulated time the company has provided maternity benefit to female workers.

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Hours of Work:

Needs Major Improvement Non-Compliance Findings:

Needs Improvement

Satisfactory

Previous Findings:
1. Description of Non-Compliance: Approx. 7 to 10 numbers of adolescent / young employees (age is 16+) are working in this factory for whom working hour is as like the adult workers. Also there is no separate working hour register found for these employees. Moreover, 1 out of them found working as sewing machine operator and other some workers were found working in front of sewing machine as helper. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, chapter-3, Section-41, (1) No adolescent shall be required or allowed to work in any factory- (a) for more than five hours in any day; and (b) between the hours of 7 p.m. and 7 a.m. c) weekly not more than 30 hrs. (2) The period of work of all children employed in a factory shall be limited to two shifts which shall not overlap or spread over more than seven and a half hours each. To comply with Bangladesh Labour Law, 2006, chapter-3, Section-43, every factory in which adolescent are employed shall maintain a notice as per rules mentioning the particular work hour of adolescent workers. To comply with Bangladesh Labour Law, 2006, chapter-3, Section-39 & 40, No adolescent shall be allowed in any factory to clean, lubricate or adjust any part of machinery while that part is in motion, or to work between moving parts or between fixed and moving parts, of any machinery which is in motion. No young person shall work at any machine unless he has been fully instructed as to the dangers arising in connection with the machine and the precautions to be observed. Recommended Corrective Action: Identify young /adolescent workers and communicate to supervisors and workers the required legal working hours restrictions and restrictions on jobs (no hazardous jobs). Create/maintain separate register and implement young/adolescent employment restrictions. Adolescent/young workers are prohibited from working at night or conducting work in machineries, as defined by law. Supporting Information: Nothing to report Appropriate Action Taken: During follow up audit it was noted that there was no adolescent / young employees found in this factory.

2. Description of Non-Compliance: Based on overtime register/payroll/night bill document, highest overtime hours found daily 10 hrs (overnight work) in June, 06; weekly 16 hrs in August, 06; monthly 90 hrs in the month of August, 06. All actual worked hours didnt list in provided time cards. Local law or Client Standard: To comply with Bangladesh Labour Law, 2006, Section-102, no adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week. To comply with Bangladesh Labour Law, 2006, Section102, the total hours of work of an adult worker shall not exceed sixty hours in any week and on the average fifty-six hours per week in any year. Recommended Corrective Action: Factory shall ensure working hours do not exceed 60 hours per week as per law. Factory shall work harder to improve the working hours policy applied to each worker. Factory shall maintain one set of time card/attendance record in order to avoid any confusion. Supporting Information: Based on document review. Appropriate Action NOT Taken: Could not be verified as inconsistencies was found between provided time card and Metal detector register, Daily out put register of sewing line B. Please see section Monitoring & Documentation for more information.

3. Description of Non-Compliance: As per weekends work records, approx 278 employees performed weekend work on 15th Sep (Friday/weekend), 06 and approx. 55 employees worked 22nd Sep(Friday/weekend), 06 without any compensatory leave. Local law or Client Standard: To comply with Bangladesh Labour Law, section-103, any worker working in a factory shall be entitled to get one
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day off in a week as weekly holiday. To comply with Bangladesh Labour Law, section-103, where any worker become deprived to get weekly holiday as mentioned in section 103, compensatory leave have to provide to the said worker as according to the circumstances as early as possible. Recommended Corrective Action: Factory shall ensure every worker enjoy at least 1 rest day in a week. Supporting Information: Based on document review. Appropriate Action NOT Taken: Could not be verified as inconsistencies was found between provided time card and Metal detector register, Daily out put register of sewing line B. Please see section Monitoring & Documentation for more information. Remark: Fcatory written their comments in draft report as per our Govt. regulation the work force are allowed to obtain 3 days festival holiday in each Eid holiday . As the workforces visit their home town in the eid holidays only , we give them additional leave and adjust the same in later period . This is done only looking the benefit of the workforces . We forget to make any notice for it . However we are immediately issuing a notice for this. Potential Issues Although not classed as a non-compliance issue, it was noted that, Metal detector register & daily out put register of sewing line B, it was found that factory performed weekend works on 10th, 17th Nov06; 8th, 15th Dec06; 9th Feb07 and 2nd March07, But the provided time cards and payroll sheets showed no such activity. Therefore, it was unable to fully verify the working hours, overtime hours and the seventh day of rest during the current audit. Please see section Monitoring & Documentation for more information. Current Practice: Nothing to report Best Practices: Nothing to report

Environmental:

Needs Major Improvement Non-Compliance Findings: Nothing to report Potential Issues Nothing to report

Needs Improvement

Satisfactory

Current Practice: Factory use thinner for spot removing and stored in safe way. Factory preserves sewerage permission from government and no objection certificate from local government. Thus, based on observation, document review and management interview during audit, it was noted that this factory is compliant with this section. Best Practices: Nothing to report

Sub-Contracting & Homework:

Needs Major Improvement

Needs Improvement

Satisfactory

Non-Compliance Findings: N/A Potential Issues N/A Current Practice: N/A Best Practices: N/A

BV_GENERIC_ AS_ REPORT _REV6_(APRIL 2006).DOC

Other Laws:

Needs Major Improvement Non-Compliance Findings: Nothing to report Potential Issues Nothing to report

Needs Improvement

Satisfactory

Current Practice: Factory has a HR/compliance team to look after, obtain, implement and update the laws and regulations relevant for operating the factory and educate workers accordingly. All business license documents are found updated. Beside it was observed that management has a positive view towards compliance. Thus, based on document review, interview and observation, it was observed that factory is compliant with this section. Best Practices: Nothing to report

Worker Interview Summary

Number of Worker Interviews Conducted? Interviews were done in private and the confidentiality of the interview process was communicated to the workers? In general, the attitude of the workers towards their workplace was? Does each worker record (punch) his/her own timecard? What was the most common worker complaint? What did the workers like the most about working at this facility? Any additional comment(s) regarding interviews: Are there Worker Statement Reports associated with this report 16

Yes

NO

Favorable Non-favorable Indifferent N/A

Yes

NO

Nothing to report Free transport facility & Health and safety condition Nothing to report

Yes

NO

Local Law
Legal normal work week: Legal max allowed overtime: hours (per day, week, month): Legal minimum work age: Legal minimum work age for Unrestricted work: Legal minimum wage(s): Legal overtime wage(s): 6 days a week ( 6 days X 8 hours= 48 hours ) Daily 2 hours/ weekly 12 hours/ monthly 52 hours 14+ years with significant restriction. 18 years. Monthly Tk-1662.50 / Tk-1200 ( only for three months as a trainee) Double of The Basic.

This Facility
Were adequate records available to verify hours of work and correct wages: Yes NO Applicable Business & other legally required license numbers: In corporation # C56540/2005; Environment # 4398; Factory License # 12706; Fire # DHK19040
Shift 1: Saturday -Thursday 8:00 am to 5:00 pm Shift2: Shift3: Per Day: 2 Hrs

Month(s) of Peak Season:

Jan to July

Normal Work Days & Hours (include all shifts)

BV_GENERIC_ AS_ REPORT _REV6_(APRIL 2006).DOC

Number of Workers on Payroll:

870

Max Overtime Hours found (per day, week):

Per Week: 12 hrs Per Month: 44 hrs

Were all workers clocked in?

Yes 729

NO

Normal Overtime Worked during peak period (per day, week)): Combined Hours (Reg & OT) over 60 per week found:

Based on provided time card for the month of Jan07 2 Hrs/ 12hrs/ 44 Hrs. Based on provided time card for the month of Jan07 Yes NO

Number of Workers in Sample: (worker files & payroll)

40 & 20

Based on provided time card working hrs found within 60 hrs /week but Inconsistency was found between the provided time cards & Metal detector register, Daily out put register of sewing line B. Type of Work Activity Observed: Youngest Worker found: Workers under 18 subject to hazardous work assignments? % of Piece Rate Workers: % of Workers Living in Dorms: % of production for this clients products: Which time keeping system is used? Audit results reviewed with facility management and draft CAP report signed? Any Additional Comments: Cutting, Sewing, Finishing 18 Years Yes N/A 5 persons 40% NO Lowest wage paid: Highest wage paid: Are wages paid in cash? Are migrant or guest workers from other countries present? If applicable, Name of Union & Union representative: Is there a Collective Bargaining Agreement (CBA) between workers and the facility? Manual Tk-1663 per month Tk-4500 per month Yes NO

Yes NO If yes, from where? N/A Yes N/A NO

Time Cards Swipe Cards Yes NO If NO explain: Nil

Other:

BV_GENERIC_ AS_ REPORT _REV6_(APRIL 2006).DOC