Type: 1St Stage
Lead Auditor: Adel Belal
Man Days: 1.0

Strength Point:
Area for Improvement: Observation: Minor NCR: Major NCR: Team Leader Recommandations: Audit Team:

• Adel Belal (Team Leader)

Auditees:

• Kamila siedlecka (QC manager)
• Iqbal.hossain (Compliance manager )

Findings

Clause No.	Requirements/Departement	Evidence	Result
4.3	Define QMS scope	QMS Scope Document (QMS-P02-F01, rev.6, 15/07/2024); Board minutes (18/07/2024)	OK
5.2	Establish and communicate policy	Quality Policy (QMS-P02-F02, rev.3, 12/07/2024), posted in HQ, signed by CEO, distributed via email	OK
6.1	Risks & opportunities management	Risk Register (QMS-P02-F03, 16/07/2024): supply chain, compliance (REACH, D.Lgs. 81/08), logistics, etc.	OK
6.2	Quality objectives	Objectives Matrix (QMS-P02-F04, 13/07/2024): <2% NC, >98% on-time export docs, 100% REACH labeling	OK
7.5	Documented information	Document Control Procedure (QMS-P02-F06, rev.4, 20/07/2024); Docs on IT SharePoint; legal docs included	OK
9.2	Internal audit	Internal Audit Plan (QMS-P02-F08, 01/08/2024); Last audit 20/09/2024 (Dhaka); NCR log (QMS-P02-F10)	OK
9.3	Management review	Management Review Minutes (QMS-P02-F11, 22/08/2024), attendance: CEO, QMS, HR, Production, Export	OK

Open Corrective Action Form

Type: Stage 2 Audit Report
Lead Auditor: Adel Belal
Man Days: 6.0

Strength Point:
Area for Improvement: Observation: Minor NCR: Major NCR: Team Leader Recommandations: Audit Team:

• Adel Belal (Team Leader)
• Ahmed Helmy (Team member )

Auditees:

• Kamila siedlecka (QC manager)
• Iqbal.hossain (Compliance manager )
• Anna staskiewicz (Regional manager )
• Magdalena Wisniewska (HR Director)
• Nguyen Thi Hanh (HR Officer)
• Fatema Begum (HR Specialist)
• Michalina Walczak (Production Manager)
• Nguyen Van Tuan (Production Supervisor)
• Md. Shafiqul Islam (Production Shift Leader)
• Pham Minh Chau (QC Inspector)
• Mohammad Imran Hossain (QC Coordinator)
• Krzysztof Rutkowski (IT Manager)
• Farhana Rahman (IT Support Officer)
• Pawel Szymanski (Procurement Manager)
• Tran Thi Hoa (Procurement Officer)
• Katarzyna Jankowska (Head of Design)
• Vo Thi Bich Ngoc (Senior Designer)
• Bartosz Wójcik (Warehouse Supervisor)
• Ngo Quang Hieu (Warehouse Coordinator)
• Sultana Akter (Warehouse Team Leader)
• Anna Grabowska (Sales & Marketing Director)
• Nguyen Van Phuc (Regional Sales Manager)
• Roksana Majewska (E-Commerce Manager)
• Tomasz Kowalczyk (Maintenance Manager)
• Le Van Minh (Maintenance Engineer)
• Md. Hasanuzzaman (Senior QA Specialist)

Findings

Clause No.	Requirements/Departement	Evidence	Result
4.1	Understanding the organization and its context	The company has main four brands RESERVED, CROPP, HOUSE,MOHITO and SINSAY. The company works in 39 countries. Total stores in Poland 1962 and abroad 856. The company uses PESTEL methods for risk assessment technique, due to the presence on different countries causes that company has to deal with many legal and other requirements such as the Egyptian decree for importers. Also the company has to deal with different cultures as well as different ages of customers as well as the community requirements for women rights where 80% of employees are women.	OK
4..2	Understanding the needs and expectations of interested parties	The process has defined its interested parties and their requiremnets such as the requiremnets of the GOEIC which each importer has to have ISO 9001 certificate. other interested parties as defined by the company suppliers, employees, top management and customers as well as the legal authorities in all operating countries. Sample of the requirements for employees are good work conditions, giving sense of stability and helpful tools. Samples of customer requirements are trendy garmets that are visually attractive , good quality garments and low prices. Samples of supplier requirements are good communication, high payment for work and beneficial supplier-client relationships. Samples of top management requirements are providing relevant and accurate information , high profit sales that gives opportunity for growth and development.	OK
4.3	Determining the scope of the QMS	The company has defined the scope of certification without any execlusion from the standad. The defeined scope is Manufacturing and Sales of Clothing, Footwear, Accessories, Bags, Belts, Leather Goods(including Genuine Leather, Artificial Leather, and Mixture of them), Sunglasses, Cosmetics, Detergents, Home Fragrances, Home Furniture, Home Textile including (Bedroom Articles(Mats, Quilts, Cushions, Rugs, Curtains, Duvets , Pillows, Hangers and Hooks)), Clocks , Watches and Toys.	OK
4.4	QMS and its processes	The process needed for providing the services are clearly defined , the associated KPIs with the processes have been also defined and anlysised on monthly bases. The QMS has been defined on the company quality management system manual dated March 2024 and the eleven docuements sent for review such as: 1-    LPP Sustainable Strategy 2020-2025 2-    LPP Sustainability report for 2022-2023 3-    Policy on Human Rights (LPP Group) 4-    LPP Code of Conduct 5-    LPP Code of Conduct - manual for suppliers 6-    Diversity Equality And Inclusion Policy 7-    LPP rules 8-    LPP rules for employees of retail stores 10-  LPP Decade of changes. Towards safe production in Bangladesh 11-  Rules of whistleblowing The quality management system processes defined with align with PDCA concept as: 1-    QualityManagement 2-    Product and ProcessDesignment 3-    ProcessControl and Supplier Management 4-    ProductionProcess 5-    FinalInspections 6-    Metrology 7-    Human Resources	OK
5.1	Leadership and commitment	Top management commitment has been observed during the audit , by attend the opening and closing meeting as well as the evidence of attend the management review	OK
5.2	Quality policy	1-    The has defined the DIVERSITY, EQUALITY AND INCLUSION POLICY and 2-    Policy on Human Rights (LPP Group) Both policies drive the orgnization management system.	OK
5.3	Organizational roles, responsibilities and authorities	The top management has defined the rols , responsabilities and authorities for each position in the orgnization. Example from responsibilities for QC expert team have been observed.	OK
6.1	Actions to address risks and opportunities	The company has established SWOT analysis to determined the risks and oppurtuities sample of such analysis are: 1-    30-year experience in the clothing sector 2-    Widerange-we operate on 39 markets. .3-    Improvethe management of inventory. 4-    High costsof performance marketing. 5-    Development of newmarkets(South Eastern-Europe, Western Europe). 6-    Maintainingcostdiscipline. 7-    Impactof the economicslowdownon the purchasingbehawior of clients. 8-    War in Ukraine. The compay has established since 2022 new department internal control and risk management department to control the risk management within the company. The company has defined the following risks startegy: 1-    OPERATING RISKS 2-    STRATEGIC RISKS 3-    REGULATORY AND COMPLIANCE RISKS 4-    FINANCIAL RISKS 5-    REPUTATIONAL RISKS 6-    CLIMATE RISKS For each risk the company has defined proper context. The company also has used the matrix assessment technique to evaluate the different risks.	OK
6.2	Quality objectives and planning to achieve them	The company has developed strategic objectives for 2024 as well as 2025. The objectives are established to enhance the commuinties not only for Poland but also where the company works. The samples of objectives for 2024 are: 1-    Update standards and prodecure according to requirement for the market 2-    Make audit for 150 factories 3-    80% results in BD consistent with PL after cross check 4-    Reduce 5% customer complains 50% of Reserved garments in Eco Aware collection The action plan for achiving such objectives has been reviewed.	OK
6.3	Planning of changes	The company has established a complete process to deal with challenges.	OK
7.1	Resources	There is enough allocated resources for the whole processes to be completed. The company foucs in the sustainable resources include the raw material. The company as well provide good working condiction by providing good work conditions/setteled situation giving sense of stability, ample opportunities for professional growth, motivation and fulfillment helpful tools and friendly relations in company, appling the code of conduct , human rights policy as well as sustanablity policy. The company has defined the required equipment for monitoring and measurement and apply a calibration plan for the measuring equipment.	OK
,7.2	Competence	The company has defined a budget for training and other actions needed to enhance and maitain the employees competency. The company also has improve the orgnization culture to enhance the work environment to ensure the statisfaction of internal customers (employees).	OK
7.3	Awareness	The awareness and training are found to be a culture on the orgnization development.	OK
7.4	Communication	The company has established may reporting system to measure and communicate its perfroamnce with the internal customer as well as the commuinties where the company work in. the reporting system include the annule growth report for 2023 (3961) and the target for 2024 (5000+), also the report include the percentage of employees gendar 80% women to 20% men, also the area of spaces 215,000 m2 for 5 warehouses and distbution centers 175,000 m2.	OK
7.5	Documented information	All the data and documented information controlled through the IT	OK
8.1	Operational planning and control	The company business model are as follow: ·         Designing : the company has 3 dsign offices in Poland and 1 in Espain. LPP has more than 300 designers works in 5 differerent brands. The designers take part in fashion fairs in fashion capitals around the world, and on daily basis , follow street fashion and social media to creat original collections. ·         Manufacturing: over 1200 suppliers from Asia aofnd Europe. Approx. 7% of collections of all LPP brands manufactured in close proximity and approx.. 93% in Asia. The company own no manufacturing plants. ·         Sales: the LPP collections from different brands are available in traditional stores and online in 39 countries on 3 continents. The online sales conducted in 34 countries.LPP sales aprox 430,000,000 of closing items and accessories annually. ·         Dispatch and logistics: LPP has very large area of warehouses 459,000 m2. The distbution center found in Poland and abroad such as Romania. LPP has over 44m e-commarce orders executed in the financial year. The company understand the importance of quality of logistics to customer , so LPP develop its destitution network.	OK
8.2	Determination of requirements for products and services	Most of company sales conducted through the e-commerce. The E-commarce has 40 cooperating model agencies, 55 professional photographic studeios and photographic posts, more than 120 team of people responsiable for content production and 54,000 photographed products per year. The E-commerce report shows increase the volume of the online sales, as well as the customer statisfaction with the products.	OK
8.3	Design and development of products and services	The design or project as called in LPP starts with analysis of previuos seasons and determination of demand, inspirational meeting preparation of project , project sent to suppliers , evaluation of designes prepared by suppliers, meeting to decide on orders and sending comments to suppliers. The QC department is invoved in the design stage (or project). For example in shoes , the shoe specialist advises the designer which technology to choose and what reinforcing elements to use (for example heal stiffener or the special tape inside). At the next stagethe specialist does the fitting, checks the workmanship and makes comments on the documentation (size charts). The collection of LPP brands are created by designers and buyers in cooperation with visual merchandising teams. LPP benefit from international experience. In Reserved brand , designers and buyers create collections tailoraed to the expections of customers from different countiers and regions. LPP uses the world's largest trend platform – Worth Global Style Network (WGSN) – on everday basis.GDANSK HQs the largest design center of LPP group. The HQ is creating the design for Reserved, Cropp and Sinsay brands.	OK
8.4	Control of externally provided processes, products and services	Since LPP has no manfucturing plant, there­fore, the sewing of designed collections is out­sourced to external companies. In 2023/23, none of individual suppliers manufac­tured goods of a value exceeding 5% of total pur­chases. The majority of orders were executed in Bangladesh 37.9%, China 28.8%, Myanmar 14.9%, Turkey 6.0%, India 4.3%, Pakistan 4.2% and Cambodia 3.1%. In 2023/23, Polish plants manufactured 0.5% ofprtoducts ordered. LPP expect suppliers to follow the de­tailed guidelines contained in the docu­ment entitled: "LPP Quality Guidebook". The guidebook lays down product quality standards, concentrations of chemicals used in production and a list of banned substances according to the EU-wide REACH7 regulation.	OK
8.5	Production and service provision	LPP has 5 brands. Reserved is a brand whose collections reflect the latest trends, combining classic designs with original and hot fashion propositions. It draws inspiration from the multiculturalism of the great metropolises of Europe and America, but also from the everyday urban realities of Tokyo or Seoul. Reserved implements the goals of the new sustainable development strategy ’’For People, For Our Planet”, in which LPP undertook to reduce its impact on the environment for the benefit of the planet and future generations. The brand is gradually increasing the share of environmentally friendly mod­els from the Eco Aware line - in 2022 it was already 38%. Eco Aware prod­ucts are made of more environmentally friendly products materials, in more sustainable processes. By 2025, over 50% of Reserved collection will be labeled with the Eco Aware label, and 100% of the stores of the brand will be included in the Eco Aware Stores program. -       Cropp is a streetwear fashion brand that makes it easier for the customers to create their own style offering women’s and men’s collections, complement­ed by a wide range of accessories and shoes. Cropp also focuses on ecology. Every year the Eco Aware line is being expanded by clothes designed in accordance with the idea of sustainable development. In stores in Poland, plastic shopping bags were replaced with paper ones and online orders are packed in 100% recycled foil -       House is a brand for young people who want to show, through their outfits, who they are and how they feel. The brand offers collections combining the latest trends with a casual style. It also inspires to be brave, play with one’s look and create one's own image. The brand uses professional tools to analyze fashion trends and participates in fabric fairs. It also cares about environmentally friendly quality, to create a more sustainable fashion future for its customers -   Mohito is addressed to women who love fashion and appreciate original urban elegance. From year to year, the brand increases its share of Eco Aware products in its collections. When creating an ecological line of clothes and accessories, the brand uses raw materials from sustainable and more environmentally friendly sources. -       Sinsay responds to many customer needs by offering the latest trends at attractive prices. The variety of the brand’s collections allows freedom creating fashionable styles for every occasion. Sinsay’s offer is complemented by interior design elements and a line of cos­metics for makeup and care.	OK
8.6	Release of products and services	Each product of the brands has its own quality requirements. ·         All children's products are subject to metal detector tests to avoid any leftover bits from sewing needles. ·         Zips in garments are subject to durability tests. Tests are also carried out on buttons, fasteners and protruding applications/decorative ele­ments. ·         LPP continuously analyse the reasons for gar­ment returns in terms of quality defects. The expected quality levels for all LPP brands are set according to an Accep­tance Quality Limit (AQL) standard. Before placing an order, LPP buyers ask suppliers to provide material and product samples in order to assess the quality of fabrics and workmanship of the clothing ordered. LPP quality control department checks the quality standards of products before they are marketed. LPP has expanded the range of physical tests of materials that can be carried out at our Distribution Centre in Poland. LPP has conducted 13,307 the number of quality checks carried out In the 2022/22 reporting year. In 2022, LPP updated the detailed quality guidelines of the "LPP Quality Guidebook”. The modified guidelines include, among other things, requirements for footwear and expanded requirements for functional fabrics. For example, every footwear sup­plier is required to have the sole binder, elasticity and sole abrasion tested by an official TUV SUD, UL or HQTS laboratory. Example of test reports for different products: ·         Report # 2667/2023, 2666/2023 from GOEIC to chceck Residual such as heavy metals the test was conducted IAW E.S 7266/2011 , Primary aromatic amine derived from Azodye and Carcinogenic dyes, these tests for 0004O-59X men' Shirt and 1796P-99X ladies Shirt ·         Inspection report for reduced sample dated 19/5/2024 for order # 10120546 from supplier Ningbo Haishu Giga Imp&Exp [CN]. The inspection include : o    PACKING o    INSPECTED CARTONS NUMBERS o    ACCESSORIES o    BROKEN STITCH o    SKIP STITCH o    UNCUT THREADS o    Measurement - CK-TOP001B 36 c/e top o    GSM CHECK Inspection decision was class A.	OK
8.7	Control of nonconforming outputs	LPP inform customers about detected product defects via the ..Statements for customers” website. In 2022/22, LPP recorded 1 defect - a "plastic smell” of the silicone lid of a ceramic cup. The product was withdrawn from sale and the items returned by customers were disposed of. No other defects, in particular defects that could have a negative impact on customers' health are identified.	OK
9.1	Monitoring, measurement, analysis and evaluation	LPP has defeined the complete processes to be implemeneted in all partners factories. The processes measured are: 1.     Raw fiber 2.     Yarn 3.     Raw fabric 4.     Fabric processing 5.     Processed fabric 6.     Pattern cutting 7.     Value addition 8.     Swing 9.     Finished product 10.  Checking and rework 11.  Ironing and packing 12.  Dispatch and delivery The customer satisfaction is measured based on AI tools. The Q4 23/24 report show that MOHITO has 34% , SINSAY has 31% and RESERVED has 29% of LPP share sales. The considerable level of returns means >30%. And for complaints it is more than 3%.	OK
9.2	Internal audit	The quality assurance has quarterly audit over the all LPP departments and suppliers. Last audit report 20/9/2024on Dhaka office, the audit was satisfactory with 85% pass points grad B	OK
9.3	Management review	Last management review on last qualrter. the Management Board of LPP decided to establish a central procurement function for indirect procurement (general, non-production procurement) at the com­pany.	OK
10.1	General	Top management is committed to enhance the company products and services for their partners and employees. The improvement towards the sustainability observed to be the main company goals which support the glob policy for 1.5Co.	OK
10.2	Nonconformity and corrective action	All NCRs from audit or for return goods have been checked and analyized with propoer corrective action to match LPP policy and customer needs and expections.	OK
10.3	Continual improvement	The company has established a tool of improvement through the policy, objectives, IA, management review and corrective action	OK

Open Corrective Action Form

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