Audit Details

Sedex Company ZC: 1020903 Sedex Site ZS: 31037371

Reference: Reference:
(only available on (only available on
Sedex System) Sedex System)

Business name Anowara Knit Composite Ltd.

(Company name):
Site name: Anowara Knit Composite Ltd.
Site address: Mulaid, Mawna, Country: Bangladesh
(Please include full P.O: Tengra,
address) Sreepur, Gazipur
Site contact and Md. Delwar Hossain Bhuiyan – Manager (Compliance, HR & Admin)
job title:
Site phone: +88 017 30 062 Site e–mail: Compliance_manager@anowaragroup.com
846
SMETA Audit Type: Labour Health & Environment Business Ethics
Standards Safety
Date of Audit: 03.08.2017 and 05.08.2017

Audit Company Name & Logo:

Report Owner (payee):

(Anowara Knit Composite Ltd)

Audit Conducted By

Commercial Purchaser
Retailer

Brand owner NGO Trade Union

Multi– Combined Audit (select all that apply)

stakeholder

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 2
Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 3
SMETA Declaration
I declare that the audit underpinning the following report was conducted in accordance
with SMETA Best Practice Guidance and SMETA Measurement Criteria.

(1) Where appropriate non-compliances were raised against the ETI code / SMETA Additions & local law
and recorded as non-compliances on both the audit report, CAPR and on Sedex.

(2) Any Non-Compliance against customer code alone shall not be uploaded to Sedex. However, in
the CAPR these ‘Variances in compliance between ETI code / SMETA Additions/ local law and
customer code’ shall be noted in the observations section of the CAPR.

Any exceptions to this must be recorded here (e.g. different sample size):

Auditor Team (s) (please list all including all interviewers):

Lead auditor: Shamia Rahman
Team auditor: Masuda Khatun, Kamal Hossain Bhuiyan
Interviewers: Masuda Khatun, Kamal Hossain Bhuiyan

Report writer: Shamia Rahman

Report reviewer: Kamal Hossain Bhuiyan

Date of declaration: 05 August 2017

Note: The focus of this ethical audit is on the ETI Base Code and local law. The additional elements will not be audited in
such depth or scope, but the audit process will still highlight any specific issues.

This report 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 and visual observation. More information is gathered during the social audit
process than is provided here. The audit process is a sampling exercise only and does not guarantee that the audited
site prior, during or post–audit, are in full compliance with the Code being audited against. The provisions of this Code
constitute minimum and not maximum standards and this Code should not be used to prevent companies from
exceeding these standards. Companies applying this Code are expected to comply with national and other
applicable laws and where the provisions of law and this Code address the same subject, to apply that provision which
affords the greater protection. The ownership of this report remains with the party who has paid for the audit. Release
permission must be provided by the owner prior to release to any third parties.

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 4
Audit Parameters

Audit Parameters

A: Time in and time out Day 1 Time in: 11:00 Am Day 2 Time in: Day 3 Time in:
Day 1 Time out: 07:00 Pm 09:00 Am Day 3 Time out:
Day 2 Time out:
05:00 Pm

B: Number of Auditor Days Used: 05 Auditors used in 02 day

C: Audit type: Full Initial

Periodic
Full Follow–up
Partial Follow–Up
Partial Other – Define

D: Was the audit announced? Announced

Semi – announced: Window detail: 04 weeks
Unannounced

E: Was the Sedex SAQ available for Yes

review? No
If No, why not

F: Any conflicting information Yes

SAQ/Pre-Audit Info to Audit findings? No
If Yes, please capture detail in appropriate audit by clause

G: Who signed and agreed CAPR Md. Delwar Hossain Bhuiyan – Manager
(Name and job title) (Compliance, HR & Admin)

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 5
H: Is further information available Yes
(if Y please contact audit company for No
details)

I: Previous audit date: Not Applicable

J: Previous audit type: Not Applicable

K: Was any previous audit reviewed Yes No

during this audit
N/A

Audit attendance Management Worker Representatives

Senior management Worker Committee Union representatives

representatives

A: Present at the opening meeting? Yes No Yes No Yes No

B: Present at the audit? Yes No Yes No Yes No

C: Present at the closing meeting? Yes No Yes No Yes No

D: If Worker Representatives were not present please Not Applicable

explain reasons why (only complete if no worker reps
present)

E: If Union Representatives were not present please
explain reasons why:
(only complete if no union reps present)
In Bangladesh there is no obligation to join trade union and freedom of association and collective
bargaining. For an establishment where there is no trade union, until a trade union is formed, the
workers ’representatives to the Participation Committee shall run activities related to workers’
interests in the establishment concerned and workers representative should be elected by direct
vote of workers (amendment 22nd of July 2013, Labor Law 2006).

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 6
Guidance:
The Corrective Action Plan Report summarises the site audit findings and a corrective, and preventative action plan that both the auditor and the site
manager believe is reasonable to ensure conformity with the ETI Base Code, Local Laws and additional audited requirements. After the initial audit, the form is
used to re-record actions taken and to categorise the status of the non-compliances.

N.B. observations and good practice examples should be pointed out at the closing meeting as well as discussing non-compliances and corrective actions.

To ensure that good practice examples are highlighted to the supplier and to give a more ‘balanced’ audit a section to record these has been provided on
the CAPR document (see following pages) which will remain with the supplier. They will be further confirmed on receipt of the audit report.
Root cause (see column 4)
Note: it is not mandatory to complete this column at this time.
Root cause refers to the specific procedure or lack of procedure which caused the issue to arise. Before a corrective action can sustainably rectify the situation
it is important to find out the real cause of the non-compliance and whether a system change is necessary to ensure the issue will not arise again in the future.
See SMETA BPG Chapter 7 ‘Audit Execution’ for more explanation of “root cause’’.
Next Steps:
1. The site shall request, via Sedex, that the audit body upload the audit report, non-compliances, observations and good examples. If you have not
already received instructions on how to do this then please visit the web site www.sedexglobal.com.
2. Sites shall action its non-compliances and document its progress via Sedex.
3. Once the site has effectively progressed through its actions then it shall request via Sedex that the audit body verify its actions. Please visit
www.sedexglobal.com web site for information on how to do this.
4. The audit body shall verify corrective actions taken by the site by either a "Desk-Top” review process via Sedex or by Follow-up Audit (see point 5).
5. Some non-compliances that cannot be closed off by “Desk-Top” review may need to be closed off via a “1 Day Follow Up Audit” charged at normal
fee rates. If this is the case then the site will be notified after its submission of documentary evidence relating to that non-compliance. Any follow-up
audit must take place within twelve months of the initial audit and the information from the initial audit must be available for sign off of corrective
action.

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 7
 6. For changes to wages and hours to be correctly verified it will normally require a follow up site visit. Auditors will generally require to see a minimum of
two months wages and hours records, showing new rates in order to confirm changes (note some clients may ask for a longer period, if in doubt please
check with the client).

Corrective Action Plan

Corrective Action Plan – non-compliances

Non- New or Details of Non-Compliance Root Preventative Timesc Verific Agreed by Verification Status
Complianc Carried Details of Non-Compliance cause and Corrective ale ation Management and Evidence and Open/Close
e Number Over (complete Actions (Immedi Metho Name of Comments d or
The Is this a d by the Details of actions ate, 30, d Responsible Details on comment
reference new site) to be taken to 60, Desktop Person: corrective
number of non- clear non- 90,180,36 / Follow- action evidence
Note if
the non- complia compliance, and 5) Up management agree
compliance nce the system [D/F] to the non-
from the identifie change to compliance, and
Audit d at the prevent re- document name of
Report, follow- occurrence responsible person
for example, up or (agreed between
Discriminatio one site and auditor)
n No.7 carried
over (C)
that is still
outstand
ing

0. New Issue title: Factory Electrician Certificate found 01 It is 90 D Agreed/ Upload Open
Manage out of 06. Training recommended days Md. Delwar relevant
ment that the facility Hossain evidence
Systems
systems Description of non–compliance: Costs management Bhuiyan – into the
and code It was noted through documents review and lack of should collect Manager SEDEX
impleme management interview that the factory have 06 workers the electrician (Compliance, database to
ntation Electrician but only one person have competency Other License as HR & Admin) verify the
license (Govt. Permit), as required by local Law. – please per rule. issue.
give
No-1 details:
However, factory management has applied and made
payment on 01 August 2017.

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 8
 Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1 and

Bangladesh labor Rule 2015 section 58 (9)

New Issue title: Export Promotion Bureau Enrolment It is 90 D Agreed/ Upload Open
certificate of the factory has been expired Training recommended days Md. Delwar relevant
No-2 that the facility Hossain evidence
Systems
Description of non–compliance: Costs management Bhuiyan – into the
It was noted through document review and lack of should collect Manager SEDEX
management interview that the Export Promotion workers the renewed (Compliance, database to
Bureau Enrolment certificate of the factory has been Other copy of the HR & Admin) verify the
expired from 30th June, 2017 – please Export issue.
give
details:
Promotion
However, factory management has applied and made Permissio Bureau
payment on 21 June, 2017 for the renewal of Export n Enrolment
Promotion Bureau Enrolment certificate to the authority’ certificate
concerned authority. s from the
regency. concerned
Local law and/or ETI requirement: authority.
In accordance with 0. Management systems and code
implementation

New Issue title: Waiver certificate found 1.5 MW instead It is 90 D Agreed/ Uploading Open
of 2.3 MW for generator. Training recommended days Md. Delwar required
No-3 that the Hossain evidence in
Systems
Description of non–compliance: Costs factory Bhuiyan – SEDEX
It was noted through document review and lack of management Manager database to
management interview that the factory have 05 workers should obtain (Compliance, verify the
generator (80+400) KW by disel generator, 770 KW Other waiver HR & Admin) issue.
(gas) + 1030 KW (Gas) + 80 KW (Disel) +400 KW – please certificate for
give
(Disel) = 2280 KW as 2.3 MW. details:
mentioned
generator
The facility have waiver certificate for 1.5 MW instead from
of 2.3 MW generator taken from concerned authority. concerned
authority.
However The facility applied on 23 July 2017 on

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 9
 concern authority.

Local law and/or ETI requirement:

In accordance with Energy Regulatory Commission

Rules 2003, Section 27 & 28.

Working New Issue title: Workers’ periodical health checkup It is 60 D Agreed/ Upload Open
Conditio missing Training recommended days Md. Delwar relevant
ns are that factory Hossain evidence
Systems
Safe and Description of non–compliance: Costs management Bhuiyan – into the
Hygienic Factory did not conduct proper health checkup lack of should have Manager Sedex
(audiometric test) periodically for worker worked in workers the provision (Compliance, database to
No-1 hazardous area like boiler operator, generator Other of conducting HR & Admin) verify the
operator and spot removing operator. – please periodical issue.
give
details:
health
ETI or Local Law requirement: examination
In accordance with the ETI base code 3.1 and for the
Bangladesh Labour rules 2015 rule 68 (05). mentioned
workers.

No-2 New Issue title: Internal audit not found in proper way. It is 30 D Agreed/ Upload Open
Training recommended days Md. Delwar relevant
Description of non–compliance: that factory Hossain evidence
Systems
Factory did not conduct proper internal audit for OHS Costs management Bhuiyan – into the
noted through document review & management lack of should have Manager Sedex
interview. workers internal audit (Compliance, database to
Other system. HR & Admin) verify the
Local law and/or ETI requirement: – please issue.
give
In accordance with ETI Base code 3.1 details:
.

No-3 New Issue title: Improper machine safety It is 30 D Agreed/ Upload Open
Training recommended days Md. Delwar relevant
Description of non–compliance: that facility Hossain evidence
Systems
Costs management Bhuiyan – into the
Following issues were noted during plant tour: should aware Manager Sedex

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 10
 Around 50% needle guard of sewing machines were lack of workers to (Compliance, database to
found displaced, when randomly checked workers use safety HR & Admin) verify the
Other
guard issue.
– please
Around 30% over lock machine eye guard found give properly as
displaced and bartek machine eye guard were found well as
displaced, when randomly checked. installment of
safety guards
in mentioned
ETI or Local Law requirement: machine.
In accordance with the Bangladesh Labour Law-2013,
section-63(1, d, 3).

No-4 New Issue title: Workers were not using sufficient PPE It is 30 D Agreed/ Upload Open
Training recommended days Md. Delwar relevant
Description of non–compliance: that the Hossain evidence
Systems
During plant tour following PPE related issue were Costs factory should Bhuiyan – into the
noted: lack of ensure proper Manager Sedex
workers use of PPE in (Compliance, database to
Approx 60 % workers at sewing and cutting section Other all respective HR & Admin) verify the
were not using face mask during working period. – please areas. issue.
give
details:
.
Fusing machine operator was not using hand gloves.

Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1 and
Bangladesh Labour (Amendment) Law-2013, section-
78(a-1).

No-05 New Issue title: Chemical store eye wash station found at It is 30 D Agreed/ Upload Open
open floor Training recommended days Md. Delwar relevant
that factory Hossain evidence
Systems
Description of non–compliance: Costs management Bhuiyan – into the
It was noted through plant tour that eye wash station lack of should ensure Manager Sedex
at chemical store were at open floor of Building -2 workers chemical (Compliance, database to
Ground floor which may affect those employees who Other store at HR & Admin) verify the
were working there. – please restricted area issue.
give
and .

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 11
 Local law and/or ETI requirement: details: installation
In accordance with ETI Base Code 3.1: proper eye
wash station
in spot
removing
room.

No-06 New Issue title: Aisles and employees found partially It is 30 D Agreed/ Upload Open
obstructed. Training recommended days Md. Delwar relevant
that factory Hossain evidence
Systems
Description of non–compliance: Costs management Bhuiyan – into the
During plant tour following obstruction related issues lack of should ensure Manager Sedex
were noted- workers free passage (Compliance, database to
Other way for safe HR & Admin) verify the
Aisles found partially obstructed by goods at yarn – please evacuation. issue.
give
store of Building -4(1st floor). details:
.

Employees found partially obstructed by semi-finished

goods.

Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1 and
Bangladesh Labour Law, 2006, section 72(c):

No-07 New Issue title: 6 months primary first-aid course was not Company 30 D Agreed/ Upload Open
produced during the audit. Training should organize days Md. Delwar relevant
training for first Hossain evidence
Systems aide according
Description of non–compliance: Costs Bhuiyan – into the
to law.
The selection criteria of the first aid personnel were lack of Manager Sedex
not correctly established as stipulated in the local law. workers (Compliance, database to
(E.g. the certificate of proficiency of undergoing Other HR & Admin) verify the
through a mandatory 6 months primary first-aid – please issue.
give
course was not produced during the audit.) details:
.

Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1 and

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 12
 Bangladesh Labour law-2006, Section 2, amendment
on July 22, 2013, Section 3 (e).

No-08 New Issue title: No safety record book found It is 30 D Agreed/ Upload Open
Training recommended days Md. Delwar relevant
Description of non–compliance: that the facility Hossain evidence
Systems
It was noted through document review and Costs management Bhuiyan – into the
management interview that the facility management lack of should Manager Sedex
does not maintain ‘Safety Record Book’ as per legal workers maintain (Compliance, database to
requirement. Other ‘Safety HR & Admin) verify the
– please Record Book’ issue.
give
details:
as per legal .
Local law and/or ETI requirement: requirement.
In accordance with ETI Base Code 3.1 and
Bangladesh Labour Rules, 2015, Rule 80.

No-09 New Issue title: No procedure and notice is posted near Company 30 D Agreed/ Upload Open
any grievance boxes Training should post days Md. Delwar relevant
related Hossain evidence
Systems documents
Description of non–compliance: Costs Bhuiyan – into the
near grievance.
It was noted through plant tour that, no procedure and lack of Manager Sedex
notice is posted near any grievance boxes inside the workers (Compliance, database to
toilet areas, also seemed non-functional; the system Other HR & Admin) verify the
is found non-functional. – please issue.
give
details:
.
Moreover toilet area found unclean.

Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1

No-10 New Issue title: Fire drills are not noticed to the fire department It is 30 F Agreed/ Upload Open
Training recommended days Md. Delwar relevant
Description of non–compliance: that company Hossain evidence
Systems should start
It was noted through document review and management
Costs Bhuiyan – into the
interview that Fire drills are not noticed to the fire noticing
lack of concerned
Manager Sedex
department as required by Bangladesh Labour Rule 2015, workers (Compliance, database to
authority for fire

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 13
 Section 55 (14). Other drill according HR & Admin) verify the
– please to local law. issue.
Local law and/or ETI requirement: give
.
details:
In accordance with ETI Base Code 3.1

No-11 New Issue title: PA Systems found not sufficient in dyeing and It is 30 F Agreed/ Upload Open
knitting section. Fire Alarm switch found without sign or Training recommended days Md. Delwar relevant
identification. that company Hossain evidence
Systems should install
Costs Bhuiyan – into the
Description of non–compliance: PA Systems.
lack of Manager Sedex
It was noted through document review and management workers (Compliance, database to
interview that PA system found insufficient in dying section Other
and knitting section.
HR & Admin) verify the
– please issue.
give
Moreover Fire alarm switch found without sign or details:
.
identification.

Local law and/or ETI requirement:

In accordance with ETI Base Code 3.1

8: Regular New Issue title: few required information/criteria were not It is 60 D Agreed/ Uploading Open
employme mentioned in around 100% of the workers ID card Training recommended days Md. Delwar required
nt is that facility Hossain evidence in
provided: Systems should main ID
Description of non–compliance: Costs Bhuiyan – SEDEX
Ref. It was noted through facility management representative card of
lack of employees as
Manager database to
Clause interview that few required information/criteria were not workers per law. (Compliance, verify the
mentioned in around 100% of the workers ID card as Other HR & Admin) issue.
No-1 permanent address, blood group, type of work etc. are not – please
mentioned in Identity Card of employees as per law of the. give
details:

Local law and/or ETI requirement:

In accordance with Bangladesh Labour Rules, 2015,

section 19(5).

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 14
 Corrective Action Plan – Observations

Observation New or Details of Observation Root cause Any improvement actions discussed
Number Carried Over Details of Observation (completed by the site) (Not uploaded on to SEDEX)
The reference Is this a new
number of the observation
observation identified at
from the Audit the follow-up or
Report, one carried
for example, over (C) that is
Discrimination still outstanding
No.7

NA NA NA NA NA

Good examples

Good example Details of good example noted Any relevant Evidence and
Number Comments
The reference
number of the non-
compliance from
the Audit Report,
for example,
Discrimination No.7

None Observed

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 15
Confirmation
Please sign this document confirming that the above findings have been discussed with and understood by you: (site management)
If actual signatures are not possible in electronic versions, please state the name of the signatory in applicable boxes, as indicating the signature.

A: Site Representative Signature: Md. Delwar Hossain Bhuiyan Title: Manager (Compliance, HR & Admin)

Date: 05 August 2017

B: Auditor Signature: Shamia Rahman Title: Lead Auditor

Date: 05 August 2017

C: Please indicate below if you, the site management, dispute any of the findings. No need to complete D-E, if no disputes.

D: I dispute the following numbered non-compliances: None

E: Signed: Md. Delwar Hossain Bhuiyan Title: Manager (Compliance, HR & Admin)
(If any entry in box D, please complete
a signature on this line)
Date: 05 August 2017

F: Any other site Comments:

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 16
Guidance on Root Cause

Explanation of the Root Cause Column

If a non-compliance is to be rectified by a corrective action which will also prevent the non-
compliance re-occurring, it is necessary to consider whether a system change is required.

Understanding the root cause of the non-compliance is essential if a site is to prevent the issue re-
occurring.

The root cause refers to the specific activity/ procedure or lack of activity /procedure which
caused the non-compliance to arise. Before a corrective action can rectify the situation it is
important to find out the real cause of the non-compliance and whether a system change is
necessary to ensure the issue will not arise again in the future.

Since this is a new addition, it is not a mandatory requirement to complete this column at this time.
We hope to encourage auditors and sites to think about Root Causes and where they are able to
agree, this column may be used to describe their discussion.

Some examples of finding a “root cause“

Example 1
Where excessive hours have been noted the real reason for these needs to be understood, whether due to
production planning, bottle necks in the operation, insufficient training of operators, delays in receiving
trims, etc.

Example 2
A non-compliance may be found where workers are not using PPE that has been provided to them. This
could be the result of insufficient training for workers to understand the need for its use; a lack of follow-up
by supervisors aligned to a proper set of factory rules or the fact that workers feel their productivity (and thus
potential earnings) is affected by use of items such as metal gloves.

Example 3
A site uses fines to control unacceptable behaviour of workers.

International standards (and often local laws) may require that workers should not be fined for disciplinary
reasons.

It may be difficult to stop fines immediately as the site rules may have been in place for some time, but to
prevent the non-compliance re- occurring it will be necessary to make a system change.

The symptom is fines, but the root cause is a management system which may break the law. To prevent the
problem re-occurring it will be necessary to make a system change for example the site could consider a
system which rewards for good behaviour

Only by understanding the underlying cause can effective corrective actions be taken to ensure
continuous compliance.

The site is encouraged to complete this section so as to indicate their understanding of the issues raised and
the actions to be taken.

Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 17
 For more information visit: Sedexglobal.com

Your feedback on your experience of the SMETA audit you have observed is extremely
valuable. It will help to make improvements to future versions.

You can leave feedback by following the appropriate link to our questionnaire:

Click here for Buyer (A) & Buyer/Supplier (A/B) members:

http://www.surveymonkey.com/s.aspx?sm=riPsbE0PQ52ehCo3lnq5Iw_3d_3d

Click here for Supplier (B) members:

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Audit company: TUV India Private Limited Report reference: TUV/NORD/17/05 Date: 05/08/2017 18