Signatory Name: Adairs Retail Group Pty Ltd

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Signatory Name: Adairs Retail Group Pty Ltd
   The question numbers in this report refer to the numbers in the report template. Not all questions are displayed in
   this report.

   Status: Completed

   The content in this APC Annual Report is hereby endorsed by the Chief Executive Officer, or equivalent officer of the
   organisation.
          Yes

5. Industry sector (please select 1 only):
          Brand Owner / Wholesaler / Retailer
          Packaging Manufacturer
          Waste Management
          Other - Commercial Organisation
          Community Group
          Industry Association
          Government
          Raw Material Supplier
          Other:

6. Industry type (please select 1 only):

          Food & Beverage
          Pharmaceutical / Personal Care / Medical
          Hardware
          Homewares
          Communications / Electronics
          Clothing / Footwear / Fashion
          Chemicals / Agriculture
          Fuel
          Large Retailer
          Tobacco
          Shipping Company
          Airline
          Other:

7. Please indicate your organisation's reporting period:
          Financial Year: 1 July 2012 – 30 June 2013
          Calendar Year: 1 January 2013 – 31 December 2013
Goal 1: Design

KPI 1: % of signatories with documented policies and procedures for evaluating and procuring packaging using the
SPGs or equivalent.

8. Does your company have documented policies and procedures for evaluating and procuring packaging using the
   SPGs or equivalent?

                      Yes                                             No

     Provide details of policies and procedures
     Policy Number: QESG 003/02 - Adairs Environmental Policy - Outlines Adairs commitment to minimising our actions
     impact on the environment, including our business partners, suppliers and team by reduce our packaging waste footpint
     and by encouraging all to reduce, recycle and reuse packaging.

     Policy Number: QESG 002/01 - Adairs Environmental, Social, Ethical and Quality Management Systems Governance -
     Policy regarding our strategy to implement environmental, social and ethical standards for selection suppliers and
     business partners. It also outlines our commitment to the APC and desired outcomes as well as reporting timelines to the
     Board of Directors.

     Policy Number: QESG 004/01 - Adairs Suppliers’ Social, Ethical and Quality Management Systems Governance -
     Outlines the level of accreditation that Adairs required of its suppliers.

9. Of the types of packaging existing at the beginning of the reporting period, what percentage had been reviewed
   using the Sustainable Packaging Guidelines (SPG) by the end of the reporting period?

                                    47   %

10. Have any new types of packaging been introduced during the reporting period?
                      Yes                                             No

11. If yes, of the new types of packaging introduced during the reporting period, what percentage have been
    reviewed using the Sustainable Packaging Guidelines (SPG) by the end of the reporting

                                  100    %

12. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 1

        Target: According to your Action Plan, what did you set       Actual: What did you achieve?
        out to do?

1.      Policy and procedures have been further updated.              1. Reporting at the corporate Board level is ongoing - a
        Board reports has assisted in team gaining further traction   step higher than the required CEO level reporting.
        to adopt SPG and implement further changes to the             Reporting to the board on APC initiatives is incorporated
        companies handling of packaging, documents and                into the board half-yearly.
        hazardous materials.
                                                                      2. Adairs have sourced new carton sizes for its online
                                                                      store. These cartons are used to send online orders to
                                                                      customers. This better fit of carton to product decreases
                                                                      the amount of waste in the customer’s waste stream. This
                                                                      also decreases the space the orders take up within
                                                                      transport trucks, making for more efficient use of transport
                                                                      space.

                                                                      3. Ipads and smart phones have now been rolled out to
                                                                      Area and Regional managers and key team members.
                                                                      This ability to see reports in a wider format has led to
                                                                      more reports being viewed online instead of being printed

                                                                      4. All our incoming containers are monitored now and we
                                                                      make sure that we do not have any plastic strapping over
                                                                      the cartons as per the policy implimented in last reporting
                                                                      season.
2.     Communication to store team.                                  Via a newsletter and an intranet system store team are
                                                                     notified and updated on any changes to recycling
                                                                     processes and policies and education/reminder
                                                                     communication can also be conducted. We are therefore
                                                                     able to get our message out to more team and increase
                                                                     awareness of the companies waste management
                                                                     requirements.

3.     SPG review of Bedlinen and Cushions has been                  1. Bedlinen packaging as been refined with one new class
       undertaken.                                                   of product now added that only has material packaging
                                                                     instead of thick PVC. Reducing the overall average units
                                                                     of waste by 0.2%.

                                                                     2. Cushion review resulted in all loose fashion cushions
                                                                     now being packed in twos inside a carton with no plastic
                                                                     packaging used at all instead of each being individually
                                                                     wrapped in plastic

13. Describe any constraints or opportunities that affected performance under this KPI

     Limited constraints. Major changes have been made in previous reporting periods. Our ongoing focus on SPG means
     that more product has been packaged into fabric hence decreasing PVC waste. Communicating to store team in a
     broadcast format policy updates also means our message is reaching a wider audience.

Goal 2: Recycling

KPI 3: % signatories applying on-site recovery systems for used packaging.

14. Do you have on-site recovery systems for recycling used packaging?
          Yes at all facilities/ sites
          Yes at some, but not all facilities/ sites
          No

15. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 3

       Target: According to your Action Plan, what did you set       Actual: What did you achieve?
       out to do?

1.     Maintain and improve recycle initiatives including            1 Allowing ongoing recycling program at warehouse and
       (i) Collection of glass and recyclable plastics               office.
       (ii) Awareness program including posters
       (iii) Paper/cardboard recycling bins at each workstation      2. Maintaining awareness of the items that we can recycle
       (iv) Cardboard recycling at the end of each racking isle in   within the warehouse and office by ongoing
       DC                                                            communication with team via newsletters and posters

                                                                     3. Ensuring store team are using, where available,
                                                                     recycling facilities on site - either at stand alone stores or
                                                                     within shopping centres.
2.     Reducing printing and by product waste of printing.             1. Monitored printer usage at stores and office resulting in
                                                                       focus being placed on users who are consuming more
                                                                       paper than average usage expectations. Technology
                                                                       team notify Managers where usage is above average and
                                                                       work with the Manager to identify probable cause and
                                                                       possible solutions.

                                                                       2. Scan/swipe to print in head-office – has been
                                                                       maintained and has reduced the number of printed pages
                                                                       left behind on printers to zero. It is now no longer second
                                                                       nature to print every document and has become part of
                                                                       the Adairs culture. Double-sided printing is also now the
                                                                       norm within the office, and colour or single sided printing
                                                                       usage is questioned when seen.

                                                                       3. Recycling of cartridges now occurs organised, taking
                                                                       the cartridge out of the waste stream and allowing it to be
                                                                       reused by the manufacturer. In the last 12 months it is
                                                                       estimated 120 larger cartridges have been sent back to
                                                                       the manufacturer for recycling from the office.

                                                                       4. Where possible documents are no longer printed but
                                                                       sent to store in electronic format via the Intranet.

3.     Reuse acceptable products samples and returned items.           Adairs has expanded its previous policy of sending
                                                                       samples and returned items to the Salvation Army to
                                                                       include samples being able to be used by office team
                                                                       where not appropriate to send to Salvation Army - i.e.
                                                                       breakable homewares and decorative furniture items,
                                                                       instead of going to landfill can now be taken by office
                                                                       team.

16. Describe any constraints or opportunities that affected performance under this KPI

     Limited constrainsts. It is difficult in store where pace is limied to further expand our onsite recovery systems. Adairs is
     currently working with the shopping centre landlords to determine if cardboard recovery could be improved.
KPI 4: Signatories implement formal policy of buying packaging made from recycled products.

17. Does your company have a formal policy of buying packaging made from recycled packaging?
                     Yes                                            No

     Please explain why not
     Adairs acknowledges that it is important to move towards suppliers demonstrating use of recycled packaging. Adairs will
     continue to work with our suppliers over the next 12 months to recognise opportunities in this space over the next 12
     months. Meanwhile Adairs continues to focus on reducing the use of packaging materials to try for a greater overall win
     than using recylced packaging.

18. Is this policy actively used?
                     Yes                                            No

19. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 4

        Target: According to your Action Plan, what did you set    Actual: What did you achieve?
        out to do?

1.      Policy has been focused on overall reducing packaging      1. Adairs has investigated and taken the opportunity to
        materials.                                                 upgrade computers within stores. Old computers will be
                                                                   recycled by Lenovo instead of going to waste. It is
                                                                   estimated that this will save 80-100 CPUs from ending up
                                                                   as hard rubbish.

                                                                   2. As well as Ipads being used by Regional and Area
                                                                   Manager, large format smart phones have also been
                                                                   rolled out replacing smaller screened phones, allowing
                                                                   team to read reports on devices instead of printing them.

20. Describe any constraints or opportunities that affected performance under this KPI

     Adairs recognises that there are many opportunities to reduce the packaging materials used in certain product categories
     by eliminating the need of using certain packaging; which is a bigger win than using recyclable materials. For year 2012
     and 2013 we are focussing on reducing those packaging materials; as well as encouraging our suppliers to have good
     environment practices in manufacturing; and then in 2015 we will put in place policy to buy recyclable packaging, where
     possible, on the remaining packaging materials. This is included in our Business Action Plans.
Goal 3: Product Stewardship

KPI 6: % signatories with formal processes to work collaboratively on packaging design and / or recycling.

21. Does your company have formal processes in place for collaborating with other companies or organisations on
    improved packaging designs and/or recycling which aims to reduce or eliminate waste?

                     Yes                                           No

     Provide details of policies and procedures (including names of policies/ procedures)
     Policy Number: QESG 003/02 - Adairs Environmental Policy - Outlines Adairs commitment to minimising our actions
     impact on the environment, including our business partners, suppliers and team by reduce our packaging waste footpint
     and by encouraging all to reduce, recycle and reuse packaging.

22. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 6

        Target: According to your Action Plan, what did you set   Actual: What did you achieve?
        out to do?

1.      Work with suppliers’ and other business partners to       1.Adairs was able to eliminate the plastic packaging used
        improve packaging design and recyclability.               in transporting the majority of fashion cushion ranges.
                                                                  Fashion cushions are now transported in recyclable
                                                                  cardboard boxes in units greater than one. Fashion
                                                                  cushions made up 5% of total units sold in 2013 making
                                                                  this line a significant contributor to the Adairs waste
                                                                  stream in store, where the majority of the packaging
                                                                  would of ended up.

                                                                  2. Adairs has introduced a new class of product for teens,
                                                                  that is packaged in fabric material reusable drawstring
                                                                  bags, instead of thick PVC with metal studs. Reducing the
                                                                  number of PVC packaging in the general waste stream by
                                                                  11,000+ units in 2013.

                                                                  3. The use of bags instead of large cardboard boxes is
                                                                  still being rolled out within the business from our major
                                                                  partner South Australia Wool. Usage of reusagble bags to
                                                                  dispatch online orders will reduce the volume of waste
                                                                  customers need to dispose of.

                                                                  4. Adairs top 15 suppliers are now OekoTex complient,
                                                                  there are a further 5 suppliers being worked with to reach
                                                                  this goal of being confirming as reaching international
                                                                  standards of reducing thier enviromental foot print.

23. Describe any constraints or opportunities that affected performance under this KPI

     There have been some fantastic opportunities here as packaging is being reviewed to reduce the packaging needed to
     transport the goods to the shop floor. With one new range now only coming in reusable drawstring bags instead of
     PVC/metal packaging and another having removed the need for plastic wrap we have had some significant wins.
KPI 7: % signatories showing other Product Stewardship outcomes.

24. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 7

      Target: According to your Action Plan, what did you set   Actual: What did you achieve?
      out to do?

1.    Reduce Plastic bags used in Cushion packaging             Adairs were further able to build on the solid result of the
                                                                year prior to reduce plastic use in cushion transport to
                                                                include imported cushions, where the cover is imported in
                                                                bulk to a local third party and then filled, reducing
                                                                transport volume and plastic use even further that before
                                                                to cover nearly 200,000 units sold across the business
                                                                over the reporting period.

2.    Refine packaging to reduce plastic bag required by        We were able to alter the packaging on pillows to include
      customer on pillow range.                                 handles; reducing customer’s requirement for a plastic
                                                                carry bag for the range.

3.    Introduction of LED lighting into new stores and retro    1. All new Adairs stores are being fitted with LED energy
      fitting LEDs into some existing stores.                   saving lighting. Our larger homemaker stores stand to
                                                                save 50,000Kwh annually and smaller stores 25,000Kwh.

                                                                2. Some stores will be retro fitted with LED lighting as
                                                                they come up for refits or where the opportunity exists to
                                                                retro fit the lighting.

4.    Direct to Customer delivery service                       Customer orders can now be delivered directly to
                                                                customers, reducing transport emissions generated from
                                                                transporting goods between stores and from customer
                                                                pick up. This removes one whole transport loop out of the
                                                                process of fulfilling a customer order. No longer does the
                                                                customer have to come to store and then back home, as
                                                                goods are delivered direct from our Warehouse to them.

5.    Review of carton sizes for online orders                  Adairs has undertaken a review of packaging used in the
                                                                online area and has managed to better match
                                                                product/orders to carton size, removeing in the process
                                                                one type of carton altogether. This reduces the waste
                                                                stream for customers and also allows for more efficient
                                                                transport of orders, as less ‘air’ is being transported more
                                                                orders can be packed into the same area.

6.    Hazardous materials removed                               A full audit of stores cleaning products and chemicals has
                                                                been conducted and a new purchasing policy has been
                                                                put in place by our OH&S department to ensure that no
                                                                hazardous chemicals come on site to any store.

7.    Reuse of marketing posters                                Marketing posters are now more generic in their message
                                                                and stores are required to keep these posters; they are
                                                                re-used for other similar campaigns. This has enable
                                                                Adairs to reduce the number of posters printed in the last
                                                                reporting period by approximately 2,000 units.
25. Since the beginning of the reporting period, has your company had any other outcomes related to product
    stewardship?

                      Yes                                             No

     If yes, please give examples of other product stewardship outcomes
     Further to a whole class of product now being packaged in reusable drawstring bags another 14 other distinct product
     ranges have also had packaging designed to be drawstring style.

26. Describe any constraints or opportunities that affected performance under this KPI

     Expanding on last year’s comments on the submitted APC report regarding 'Additional opportunities may also be
     available from a scan of more lateral stakeholders -logistics, customers...' the creation of a delivery option to customers
     of their orders placed in store presented a further opportunity to reduce transport emissions.
     Further opportunity exists to develop a non-plastic alternative for customers to use for their purchases.

KPI 8: Reductions in packaging items in the litter stream.

27. Please indicate your progress this year towards achieving your annual targets and milestones for KPI 8

        Target: According to your Action Plan, what did you set       Actual: What did you achieve?
        out to do?

1.      Visual review undertaken of Adairs warehouse and office       1. Whilst large bay and container doors are open it was
        site                                                          noted that smaller pieces of paper and light plastic were
                                                                      being blown outside.Warehouse now undertake a floor
                                                                      clean up once a week to remove this litter.

                                                                      2. Overflow of ashtray at rear door of warehouse identified
                                                                      and larger ashtray installed.

2.      Laundry detergent changed                                     Adairs has changed to using its own brand of laundry
                                                                      wash in its onsite washing machine. The Adairs range of
                                                                      detergent is phosphate free.

28. Describe any constraints or opportunities that affected performance under this KPI

     Some major changes had occurred in the previous reporting period in relation how we communicate marketing events
     with our customers, resulting in some fantastic wins for reducing items likely to end up in the general litter stream.
     Opportunity exists for the participation in the recognised Business clean up day.
Your Experiences

This section lets you share with us any achievements, good news stories and areas of difficulties in making progress against
your plan and the Covenant goals and KPIs.

29. Key achievements or good news stories
    Moving all cushions to be not be packaged in any plastic once filled has greatly reduced the nubmer of plastic bags being
    used withing the business.

    The introduction of delivery of a customer’s special order direct to customers has removed a whole loop of transport from
    the process.

    Packaging review of cartons for the online fulfilment business resulted in better designed packaging for the product being
    dispatched. It also means less air being transported and overall less transport emissions should result. Also one whole
    carton size was removed.

    Reusing a number of marketing posters across more than the one campaign, reducing posters printed by approximately
    2,000 units over the last 12 months.

    The top 15 suppliers are now OekoTex complient, there are a further 5 suppliers being worked with to reach this goal of
    being confirming as reaching international standards of reducing thier enviromental foot print.

    Moving to large format smart phones has increase teams ability to view reports online instead of printing them.

30. Areas of difficulties in making progress against your plan, Covenant goals or KPIs
    Changing roles of team members across departments and team members leaving has made it harder for us to get some
    traction on specific product changes. As team are not as familiar with the new product they are dealing with it takes them
    more time to understand and identify opportunities for change.
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