Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 1 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No

NC / OBS Ref

To: Management Representative Diamond Fabrics Limited

In the light of Internal Audit of Social Accountability (SA8000) the following findings statement are reported for your kind action.

Audit No. 1.

2nd
a) Check the age proof of the persons working in the organization.[Age should be above 15 or 18 years]

Audit Date
Personal Files of the following Employees Abdul Qadeer S/O. Muhammad Ilyas (Cloth Checker) Card number 106690, Tahir Mehmood S/O. Abdul Rasheed (Weaver) card No. 111028, Muhammad Hanif S/O. Muhammad Latif (Sizer) Card # 156618 and Muhammad Abbass (Warper) Card # 106547 were checked NIC for these employees age proof and interviewed of above persons related to social compliance SA-8000.

17-18, AUG - 2010

YES

Child labour

Page 1 of 10

Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 2 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES

NC / OBS Ref

b) Check how subcontractor employees are also covered in s this aspect.

c) In case child labour is available check what is the action taken for remediation of child labour.[Schooling, financial support] d) No child labour shall be engaged. e) Young workers [age:15-18] can be engaged. They should be assigned jobs which are fit for young persons only. Young workers register is to be maintained. f) Young workers duty time and schooling shall not exceed 10 hours. Duty hours will not exceed 8 hours. No night shift is allowed. g) If there is any hazardous work-young workers should not be exposed to it. h) In the absence of age proof, the competent medical authority certificate of age can be accepted. s

Evaluation of Shahzad & Company and canteen contractor were carried out on 12-08-2010 and 06-08-2010 respectively refers Doc. No. DFL/SA/938/2, Hiring record of canteen contractors was also checked and found Ok. Child Labour not engaged

YES

Policy for Prohibition of Child Labour refer Doc. DFL/SA/8.2/1 N/A

Yes -

N/A

N/A As per Child Labour Procedure refer Doc. # DFL/SA/8.1/2

YES

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 3 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No
Forced and Compulsory Labour

Points to be verified

Evidence checked

Whether complying Yes /No YES YES YES YES YES YES YES

NC / OBS Ref

2.

a) Compulsory deposit of money to be employed in the job is not allowed. b) Ask employees whether their identity cards or certificates are held by the company as a condition for employment. c) The company should not deduct part of salary to force the continuation of the workers. d) Check with employees whether such deductions are done. e) Check whether security guards are used to force workers to remain in the job. f) Compulsory continuation in job (by not allowing the workers who want to leave the job) is not allowed. g) Check whether the employees have the freedom to resign and go away if they so desire. There should be no hindrance on them. h) Whether people of external origin (without proper papers)are held as employees? i) Whether bonded labour system is followed by engaging all members of a family under forcible conditions. j) Can workers refuse overtime?

Policy for Prohibition of forced Labour refer Doc. DFL/SA/8.2/1

Verification from Worker s Interviewed on floor during audit

Worker Interviewed on floor s during audit Worker Interviewed on floor s during audit No. Forced Labour Worker s Interviewed Worker Interviewed on floor s during audit Worker Interviewed on floor s during audit N/A N/A Worker Interviewed s Checked during round MSDS in Chemical Store -

YES YES YES

Health and Safety

a) Check the list of chemicals and their MSDS. b) Whether safety precautions as per the MSDS are followed?

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 4 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES

NC / OBS Ref

c) Whether adequate personal protective equipment are available?(mask, glove etc)

d) Is there an officer responsible for health and safety? e) Are exits marked clearly

f) Whether health and safety training has been given?

g) Whether employees are aware of the hazardous associated with their area of operation and how to protect themselves? h) Whether adequate personal are trained in fire fighting? i) Whether adequate personal are trained in first aid?

PPES Provided to all departments and also proper training was provided to employees how to use of these PPES i.e. Dust Mask Ear Plug, Helmet, Rubber Gloves, Leather Gloves, Goggles and Safety Shoes. H.S Representative Nominated Emergency Exits roots are properly marked with yellow lines and also clearly marked Emergency Door. Health & Safety Training provided by the Civil Defence Officer Sheikhupura in the month of June 2010. Training Session has been held from 22 to 25 June -10, Training record of the employees and pictorial evedance has been maintained of the H&S training Safety instruction displayed in departments. Fire party Members Trained First Aid Party Members Trained and training record has been maintained

YES YES

YES

YES YES YES

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 5 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES YES YES YES

NC / OBS Ref

j)

Whether emergency preparedness plan is available?

k) Whether accident register is maintained? l) Whether emergency evacuation points are identified?

m) Whether sufficient first aid boxes are available?

n) Whether mock drills have been conducted? o) Fire Cylinder easily access able

Fire Drill Record. Fire drill in Night Shift March-10, Accident / Incident Report Maintained Emergency door for exits are Identified First Aid Box provided and record maintained Refer Doc. # MR-8.3-14 Fire Drill record Not easy access of Fire Equipment in Weaving and Yarn Godown department N/A Clearly Marked in Local Language on all spots Yellow Lines Accommodation Provided

YES NO NC-7

p) Monthly Fire Equipment Status properly q) L.T. Panels have rubber matt. r) Whether emergency plan and the H&S manual are amended based on experiences? s) Whether pregnant women and feeding mothers are given jobs which are fit for their state? t) Whether proper drinking water is provided? u) Whether gang ways have been properly identified and free of clutter. v) Whether dormitories provided by the company are clean, safe and have adequate toilets?

YES YES YES YES YES YES

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 6 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES NO

NC / OBS Ref

w) Has the company conducted risk analysis on the materials ,processes and equipments[Health and Safety] x) Is crche provided when legally required? y) During Internal Audit Colony visit

N/A Found two Tap of wash room broken and three tube lights rod missing Company Policy Worker Committee Established Company Policy SA8000 representatives from workers elected Wages & Salary record Company Policy No Discrimination N/A N/A N/A Updated Labour code As per Law

NC-8

4.

Freedom Of Association And Right To Collective Bargaining.

a) Whether unions are allowed in the company? b) How many unions are there? c) Are employees free to join unions(and that of their choice) d) Whether worker representatives are elected?

YES YES YES YES YES YES YES YES YES Page 6 of 10

5.

Discrimination

a) Whether equal pay for equal work is given? b) How promotion decisions are made (among worker category) c) Whether people of particular religion, region, and sex are discriminated against? d) Are pregnant women discriminated against? e) Are women dismissed when found pregnant? f) Are women subjected to sexual harassment?

6.

Disciplinary practices

a) Are standing orders available? b) Are they followed?

Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 7 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES YES YES YES YES YES YES YES YES NO

NC / OBS Ref

c) How is disciplinary action taken? d) Are fines levied as part of disciplinary action? e) Is physical punishment like beating, illegal confinement etc, carried out? f) What are the legal cases pending related to disciplinary action? g) Are employees provided a fair opportunity to explain their side prior to decision on disciplinary action? a) The company exceeds 8 hour duty per day per head b) What is the normal overtime level? c) Work week cannot exceed 48 hrs. d) Overtime shall not exceed 12 hours per week. e) Is one day weekly off given? f) How are working hours tracked?

As per company Policy No No NONE Yes, Company Policy NO, Working hours as per company Policy, 2 Hours per day Company Policy Company Policy Company Policy

7.

Working hours

Time record Machine has been installed but due to some limitations in the software, Attendance marked on sheet / registers manually and also computerized. g) What is the maximum number of consecutive hours worked? 3, 4 Hours

NC Ref-9

YES

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 8 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES YES YES YES Yes Yes YES YES YES YES YES YES YES

NC / OBS Ref

8.

Remuneration

a) Are minimum wages as per regulation paid? b) Are the minimum wages meeting the basic need wages[BNW- see guidance note for calculations] c) Are there pay slips with full wage details?[including explanation of deductions] d) Whether premium rates are paid for overtime e) Salary pay dates to employees f) Method of Payments

Salary / Wages record as per Govt. Policy Rs.7000/BNW Working Pay slip Overtime Record Worker Interviewed Cash Company Policies display on board in local language Near Maingate MR Authority Letter Elected Workers SA8000 representatives Health & Safety committee, Workers Welfare committee. Management Review Meeting

9.

Management Systems

a) Is there a defined and documented SA policy (in local language also)? b) Is it displayed prominently? c) Does it include a commitment to meet national laws related to labour welfare? d) Is there a senior officer appointed as SA 8000 MR? e) Are there worker representatives who can interact with management on SA 8000 matters? f) Are works committees established? g) Are top management reviews conducted formally regarding SA 8000 performance and arrive at divisions for improvement?

Page 8 of 10

Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 9 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES

NC / OBS Ref

h) Is worker training on SA aspects provided?

i) j)

Is SA performance monitored? Audited? Are undertakings obtained from suppliers and subcontractors on compliance to SA 8000 requirements

Training Session & also Pictorial Evedance for verification Internal Audit Supplier evaluation form

YES YES

k) Are suppliers checked for minimum SA requirement compliance prior to registration?

Supplier evaluation form

YES

l)

Are there home workers?

N/A

m) Whether all welfares/safety measures are provided to home workers? n) Whether home worker records are maintained by the company? o) Whether audits are conducted on home worker?

N/A

N/A

N/A

p) Root cause analysis is done on all concern and action is taken to avoid recurrence.

C/A, P/A Procedure

YES

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Document #:

DFL/MR/9.5/2 15-12-2009 0 Page 10 of 10

Internal Audit Checklist (SA 8000:2008)

Diamond Fabrics Limited

Effective Date: Revision: Page:

Sr. No

SA 8000 Clause No

Points to be verified

Evidence checked

Whether complying Yes /No YES

NC / OBS Ref

q) Is there regular communication with interested parties on SA 8000 performance? r) Whether company engages in dialogues with interacted parties on SA compliance. s) Whether company provides access to auditors to verify compliance.

Web site of Diamond Fabrics Limited has been developed for easy access of interested parties. Website address is as: http://dfl.sapphire.com.pk

YES

NOTE: O Means for Observation; NC Means for Nonconformity

Signature of Auditor # 1 Mr. Rab Nawaz

Signature of Auditor # 2

Mr. Muhammad Farooq

Signature of Auditor # 3

Mr. Tahir Nasim

Signature of Auditor # 4

Mr. Adeel Shahbaz

Management Representative

Page 10 of 10