ANNUAL REPORT 2013

Each link comprising Eternit’s business chain is monitored and valued to ensure the perpetuity of the business. Given its importance to sustainable development, the Company strives to ensure transparency in all of its activities. Its relationship with competitors is based on ethics and respect, in accordance with fair competition practices and antitrust regulations. No incidents of unfair competition, trust or monopoly practices were reported in 2013, and no significant fines or non-monetary sanctions were applied due to non-compliance with the law and regulations.

Consumer information GRI PR8 | PR9

The labels of all products sold by Eternit comply with the standards established by the Brazilian Association of Technical Standards (ABNT) and the Company’s Integrated Management System. Products made from chrysotile mineral come with instructions for their correct installation and their proper handling on the label. No product of the Company is legally required to provide disposal information on the label.

Required label information GRI PR3	Outsourced components	Contents (substances)	Safe use	Provision of the products
Type of product
Chrysotile asbestos	No	Yes	Yes	No
Fiber-cement roofing tiles and casts	No	Yes	Yes	No
Polyethylene water tanks	No	Yes	Yes	No
Construction solutions	No	No	Yes	No
Bathroom chinaware	Yes	No	Yes	No
Concrete roofing tiles	No	No	Yes	No
Metal kitchen and bathroom fixtures	Yes	No	No	No

Eternit was notified in 2013 for allegedly failing to meet the standards established by the Institute of Metrology, Quality and Technology (Inmetro), which determines that water tanks must have printed warnings on their correct use and maintenance. The Company’s presented a defense demonstrating the invalidity of the claim, but a decision is still pending. The other companies of the Group did not register any such incidents in the year. GRI PR4

In 2013, no complaints were received with regard to the breach of privacy or loss of customer data and no fines were levied for failing to comply with the law and with regulations governing the supply and use of products and services. GRI PR8 | PR9

Consumer safety GRI PR1 | PR2

To offer products that guarantee the safety and health of consumers, the different situations to which materials may be exposed are analyzed in simulations conducted in the laboratories of the manufacturing units. The Tégula plant in Atibaia has a test field where products are measured over time to anticipate any distortions or risk. The Integrated Management System of Eternit and Precon contemplates the entire life cycles of all products. Consequently, the risks related to health and safety during product use are assessed in all stages. At Tégula, this analysis is conducted in all stages but the use and service stage. In 2013, no incidents were registered of non-compliance with regulations related to the impacts caused by products and services on the health and safety of consumers.

Customer satisfaction GRI PR5

Since 2011, Eternit works in partnership with the Ibero-Brazilian Customer Relationship Institute (IBRC) to conduct an annual survey that assesses customer satisfaction. This online survey is sent to all active customers and covers items such as product quality, reseller service and end consumer. Meanwhile, the Net Promoter Score (NPS) allows for making inferences about the loyalty of construction material resales by indicating the customers who are promoters, passives and detractors with regard to Eternit and its products.

The overall results for 2013 revealed a 79% satisfaction rate, which is 4 percentage points higher than in 2012. The NPS score also improved, reaching 51, up from 43 in 2012. The survey is conducted among active customers of fiber-cement products. The survey was not segmented by product, which was the original idea, given that Companhia Sulamericana de Cerâmica started its operations.

Tégula conducts a survey of a sample of customers every month and of distributors/representatives every six months in order to monitor and improve its products and services. In 2013, the survey indicated a 90% satisfaction rate with customer service and a 90% satisfaction rate with delivery. Over 90% would recommend Tégula to others and the satisfaction rate with technical orientations stood at 85%.

The companies make specific phone numbers and e-mail addresses available for communicating with customers. Eternit’s toll-free number is 0800-0211709, and the email address is sac@eternit.com.br.

Tégula’s phone number is 0300-7891521 and the email is sac@tegula.com.br.

At SAMA, the survey is conducted every two years and in 2012 the customer satisfaction rate was 61.3% in the domestic market and 58.5% in the export market. In 2013, 8 commercial visits were carried out to domestic clients and 2 groups of clients visited the Cana Brava mine.

Suppliers GRI EC6

Eternit does not have an incentive policy to encourage the purchase of local goods and services, given that it must take into account criteria for which local commerce is not always prepared, such as delivery time, price and quantity. When possible, the Company prioritizes the contracting of local organizations and suppliers of both raw materials and services.

Expenses with local suppliers/ratio	2013	2012	2013	2012	2012 (%)	2013 (%)
	Total expenses with suppliers (R$)		Total expenses with local suppliers (R$)
Eternit	608,301,248.46	503,994,657.20	NA*	NA*	NA*	NA*
SAMA	220,882,733.51	214,228,145.40	67,880,750.79	60,664,076.93	30.7	28.3
Tégula	74,737,734.00	83,421,214.72	32,613,574.00	35,429,109.46	43.6	0.0
Total	903,921,715.97	801,644,017.32	100,494,324.79	96,093,186.39	74.4	28.3

* Data for 2013 and 2012 are not available, given that Eternit and Precon do not have a procurement policy that prioritizes purchases from local suppliers. The companies make purchases based on product availability, prices and delivery times that do not impact its projects and operations.

Human rights clauses are included in the contracts entered into with strategic suppliers from which shortages could compromise the Company’s production. This mechanism provides for defending human rights, combating corruption and bribery and all kinds of discrimination, as well as declarations of no use of practices involving child labor, slave labor or labor analogous to slavery. Suppliers that fail to meet these conditions are subject to civil and criminal liabilities and early termination of the agreement. At SAMA, 46% of agreements have this type of clause; at Eternit, 100% of strategic agreements have them. No incidents of non-compliance were registered in 2013. Tégula has yet to adopt the practice of including human rights clauses in its agreements. GRI HR2

At Eternit, 100% of material investment agreements include clauses to protect human rights. At SAMA and Tégula, no material investment agreements were signed that included human rights clauses in 2013. GRI HR1