SUMMARY REPORT

Q4/2013

2

Supplier Uptake Progress

Overview of Supplier On-boarding Status by Brands

Program Dell HP Philips Apple Nokia

TOTAL 48 11 7 15 12 3

Contract signed

(Move to

implementation)

41 9 6 14 9 3

Pending 0 0 0 0 0 0

EPA in

implementation 7 2 1 1 3 0

EPA in preparation

(newly onboard) 0 0 0 0 0 0

Geographic Location by Brands

Program Dell HP Philips Apple Nokia

TOTAL 48 11 7 15 12 3

Guangdong Area 37 11 6 8 9 3

Shanghai Area 10 0 1 6 3 0

Other 1 0 0 1 0 0

3

Total Factories on board (by Dec. 31) Geographic location, total factories (by Dec. 31)

Comment on Progress

Over the last three months, the program has continuously progressed with 41 suppliers implementing Work Plans and 7 suppliers conducting/preparing Entry Point Assessments. There are currently 48 suppliers in total in the program. The window for new entrants to join the full IDH program will close in Q1 ’14, however IDH has also launched the ‘Fast Track’ program which will be conducted in 12 months (vs 18 months) and this will extend the program into Q2 for new factories to join. Impact Review Meeting During Q4 IDH held a supplier event in Shenzhen focused on sharing best practices and identifying impact from the factories working in the program so far. The event was well supported with enthusiastic involvement from both factories and brands. Working with the stakeholders IDH was able to identify some positive examples of impact achieved at the factories. This has been summarized and shared with all program members and will be used to drive continued active participation in the program. Some factories will complete the IDH program during 2014, as the overall program now reaches the mid-way point. This is a new phase for the program. Brands will conduct mid-term reviews with all factories 9 months before completion to ensure that the overall work-plans are being followed and the program is on track. New Supplier on-boarding / Fast Track During Jan & Feb IDH will hold webinar events with potential new factory candidates to join the Fast Track program. These factories will enter the program before the end of Q2’14 and follow the condensed curriculum as well as the e-learning on specific performance topics.

11

7

15

12

3

Total=48

Dell HP Philips Apple Nokia

37

10

1 Total=48

South Shanghai Area Other

4

Key Focus Points: 1) To reach the target of 75 suppliers, the Fast Track has been launched and this program will begin

during Q1’14. 2) During the impact review in Dec the stakeholders found many examples of the benefits of best

practice sharing and this will continue to be a key part of the implementation phase. 3) Factory management commitment and active participation from workers is key in achieving

dynamic dialogue and impact. The output from the impact review sessions will be used by the brands to gain more momentum in senior management engagement at the factories.

5

Progress Status

No. By Brand

Status EPA Implementation Starting Point

Work Plan KPI Collection

Involving WMD SPs

1 D1

On Track Completed Jan-13 On Track NOT SUBMITTED

TUV, TIMELINE

2 D2

On Track Completed Jan-13 On Track April and May sent

TIME LINE

3 D3

On Track Completed Jan-13 On Track NOT SUBMITTED

CLSN, TIMELINE

4 D4

On Track Completed Jan-13 On Track Submitted by July 2013

TIMELINE

5 D5

On Track Completed Jan-13 On Track Submitted by July 2013

LESN, TIMELINE

6 D6

On Track Completed Mar-13 On Track Submitted by Sep 2013

TIMELINE

7 D7

New starter Completed Oct-13 On Track - TIMELINE

8 D9

On boarding

In progress - - - TBD

9 D10

On boarding

Scheduling - - - TBD

10 D11

On boarding

Scheduling - - - TBD

11 D12

On

boarding

In progress Jan 2014 - -

12 H1

On Track Completed Jan-13 On Track Submitted by July 2013

TUV

13 H2

On Track Completed Jan-13 On Track Submitted by July 2013

Timeline

14 H4

Resumed Completed Sep-13 On tract - CLSN

15 H5

On Track Completed Jun-12 On track - TUV

16 H8

New starter Completed Oct-13 - - TUV

17 H9

On boarding

In progress - - - TBD

18 H10

On boarding

TBD

19 P3

Re-joined Completed Aug-13 On Track - TAOS

20 P5

On Track Completed Jan-13 On Track Submitted by August 2013

Timeline

6

21 P6

On Track Completed Mar-13 On Track Submitted by August 2013

TUV

22 P7

On Track Completed Mar-13 On Track Submitted by July 2013

TUV

23 P8

On Track Completed Mar-13 On Track Submitted by July 2013

LESN

24 P14

New starter Completed Nov-13 - - TBD

25 P15

New starter Completed Oct-13 On Track - Timeline

26 P16

New starter Completed Oct-13 On Track - TAOS

27 P9

New starter Completed Sep-13 On Track - TUV

28 P10

New starter Completed Oct-13 On Track Scheduled in Nov

TUV

29 P11

New starter Completed Oct-12 On Track Scheduled in Nov

SUSA

30 P12

New starter Completed Oct-13 On Track Scheduled in Nov

TUV

31 P13

New starter Completed Oct-13 On Track Scheduled in Nov

SUSA

32 P17

New starter Completed Pending - - TBD

33 P18

New starter Completed March 2014

34 A1

On Track Completed Mar-13 On Track Submitted by August 2013

LESN

35 A2

On Track Completed Mar-13 On Track Submitted by August 2013

LESN

36 A3

On Track Completed Mar-13 On Track Submitted by August 2013

CLSN

37 A4

On Track Completed Mar-13 On Track Submitted by September 2013

LESN

38 A5

New starter Completed Aug-13 On Track Submitted by August 2013

TAOS

39 A6

New starter Completed Oct-13 On Track - Timeline

40 A7

New starter Completed Oct-13 On Track - Timeline

41 A9

New starter Completed Oct-13 On Track - Taos

7

42 A10

On boarding

Completed - - - TBD

43 A11

On boarding

Completed - - - TBD

44 A12

New starter Completed January 2014

45 A13

New starter Completed

46 N1

Phase I completed

Completed Completed Approve - TBD

47 N2

Phase I in progress

Completed Completed Approve - TBD

48 N3

Phase I in progress

Completed Completed Approve - TBD

8

Program Status Overview: Work Plan Completion VS Work Plan Timeline

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WP Timeline

WP Timeline

WP Timeline

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WP Timeline

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WP Timeline

WP Timeline

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P3

P4

P5

P6

P7

P8

P9

P1

0P

11

P1

2P

13

P1

4P

15

P1

6H

1H

2H

4H

5H

8H

9H

10D

1D

2D

3D

4D

5D

6D

7D

9D

10

D1

1D

12

A1

A2

A3

A4

A5

A6

A7

A9

A10

N1

HP

Del

lA

pp

leN

ok

ia

W-M Dialogue Non-Dialogue Check & Act WP Timeline

9

Trend Analysis

Data Tracked Back To Number of Suppliers

January 2012 11 June 2012 1

January 2013 1

March 2013 4

June 2013 16

September 2013 13

December 2013 7

Worker Turnover (%) Program trend overall is relatively flat, however the average increased in Dec, which is related to the seasonal increase, as seen in 2012. The underlying (seasonally adjusted) turnover rate is decreasing slightly overall

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

jan

-12

feb

-12

mrt

-12

apr-

12

mei

-12

jun

-12

jul-

12

aug-

12

sep

-12

okt

-12

no

v-1

2

de

c-1

2

jan

-13

feb

-13

mrt

-13

apr-

13

mei

-13

jun

-13

jul-

13

aug-

13

sep

-13

okt

-13

no

v-1

3

de

c-1

3

Program Program Linear (Program)

Rework Rate (%) Program trend is reducing overall, although rework rates increased during Q4 ’13, which was also seen during Q4’12.

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

jan

-12

feb

-12

mrt

-12

apr-

12

mei

-12

jun

-12

jul-

12

aug-

12

sep

-12

okt

-12

no

v-1

2

de

c-1

2

jan

-13

feb

-13

mrt

-13

apr-

13

mei

-13

jun

-13

jul-

13

aug-

13

sep

-13

okt

-13

no

v-1

3

de

c-1

3

Program Program Linear (Program)

10

Average Monthly Net Wages (RMB)

Program trend is increasing during Q4’13, which is linked to the increasing trend of working hours (as seen below).

Average Weekly Working Hour (Hours)

Program working hours are showing a marginally increasing trend. Working hours show a increase during Q4, which is the seasonal norm, before an anticipated reduction in Q1 (New year).

1.300

1.800

2.300

2.800

3.300

3.800

4.300

4.800

5.300

jan

-12

feb

-12

mrt

-12

apr-

12

mei

-12

jun

-12

jul-

12

aug-

12

sep

-12

okt

-12

no

v-1

2

de

c-1

2

jan

-13

feb

-13

mrt

-13

apr-

13

mei

-13

jun

-13

jul-

13

aug-

13

sep

-13

okt

-13

no

v-1

3

de

c-1

3

Program Program Linear (Program)

0

10

20

30

40

50

60

70

jan

-12

feb

-12

mrt

-12

apr-

12

mei

-12

jun

-12

jul-

12

aug-

12

sep

-12

okt

-12

no

v-1

2

de

c-1

2

jan

-13

feb

-13

mrt

-13

apr-

13

mei

-13

jun

-13

jul-

13

aug-

13

sep

-13

okt

-13

no

v-1

3

de

c-1

3

Program Program Linear (Program)

11

KEY PERFORMANCE INDICATORS – Comparative Analysis

*Compared to last quarter data in bracket Program

Factory Name Average Leader

Worker-Management Dialogue

WMD Benchmarks (Non-rep comm systems) in EPA 6.08 9.20

WMD Benchmarks (Rep systems) in EPA 4.29 6.50

Worker Satisfaction

Worker Satisfaction Indicator from EPA 6.39 8.27

Working Condition

# of work-related injuries 1.28 0.00

# of days lost due to work-related injuries 9.37 0.00

Average weekly working hours in the calendar month 56.05 39.50

Average # of rest days 4.66 9.00

Total monthly working hours in the calendar month 402753.33 N/A

% of workers working more than 60h in the week 22.91 0.00

Average monthly net wage (RMB) 2952.63 4668.00

Average monthly gross wage (RMB) 3130.07 4957.50

Ratio of OT Premium to Gross Wages 36.39 N/A

1st quartile of monthly net wage (RMB) 2701.19 5778.50

2nd quartile of monthly net wage (RMB) 2880.90 4769.16

1st quartile of monthly gross wage (RMB) 2823.56 5815.00

2nd quartile of monthly gross wage (RMB) 3077.11 5030.50

Environmental Condition

Kilowatts used per product unit 2.56 0.00

Business Impact

Unit Produced Per Hour (UPPH) 68296.04 887661.62

Rework Rate (%) 1.52 0.04

Turnover (%) 14.24 11.07

12

Worker Satisfaction Index Comparison by Suppliers

Factory Overall Scale (1-10)

Working Relationships

(0-100)

Wage Fairness &

Transparency (0-100)

Working Hours

(0-100)

Facilities (0-100)

Health & Safety

(0-100)

Career & Personal

Development

(0-100)

Below Average 6.39 68.04 62.49 40.51 56.49 64.97 62.55

Above Average

1 5.71 62.87 54.49 31.70 51.42 57.82 55.00

2 8.00 78.62 77.24 77.25 72.29 85.56 70.55

3 7.55 77.88 77.76 58.23 69.59 82.46 72.09

4 6.22 66.65 60.48 28.14 60.33 74.90 57.80

5 6.53 65.69 72.33 48.45 66.57 60.71 53.91

6 6.70 69.84 70.50 45.38 61.80 71.74 59.78

7 6.21 62.70 57.77 59.64 56.87 59.87 52.70

8 8.27 83.73 83.05 67.11 80.70 90.84 77.97

9 5.40 64.40 54.23 29.25 49.32 45.56 52.46

10 5.68 63.08 57.64 33.67 56.27 61.18 45.23

11 6.33 68.08 67.81 37.09 58.94 60.23 64.09

12 6.34 64.53 63.67 59.93 56.09 56.22 57.55

13 6.04 66.39 65.29 10.26 64.51 67.88 61.66

14 5.67 63.18 63.92 23.40 46.57 59.08 55.00

15 6.20 67.32 65.92 28.97 61.34 64.49 58.33

16 6.30 67.59 60.22 24.95 65.44 69.91 65.27

17 7.04 70.20 71.44 59.06 60.51 77.69 63.41

18 6.70 66.59 70.02 41.89 62.65 73.20 64.38

19 5.26 65.26 48.72 17.89 46.52 41.99 63.03

20 6.70 68.47 73.58 46.17 59.81 70.08 62.33

21 6.87 66.22 67.52 64.75 61.85 67.76 63.16

22 6.46 65.07 58.09 53.19 51.23 66.93 64.24

23 6.74 70.67 67.11 37.74 62.04 79.21 67.74

24 5.68 64.67 54.55 36.55 44.07 50.78 59.04

25 6.23 67.80 47.05 36.86 41.49 48.44 61.14

26 7.01 67.91 53.38 31.08 64.38 49.62 65.56

27 6.72 68.65 63.94 46.79 55.53 70.14 73.02

28 6.06 69.91 40.65 30.08 50.97 62.97 66.55

29 6.23 65.60 61.50 39.47 45.74 63.68 64.33

30 6.83 67.39 59.71 60.31 65.09 65.19 62.99

31 6.70 62.74 60.70 54.30 46.64 67.19 58.02

32 6.88 65.16 64.75 44.92 59.79 70.75 65.50

13

33 7.48 77.96 77.20 57.74 67.57 74.78 77.62

34 7.73 79.48 72.83 64.80 71.12 81.50 80.41

35 6.55 73.89 68.63 35.74 62.27 71.03 66.51

36 6.02 63.84 57.56 51.99 36.45 63.11 58.58

37 5.55 65.37 54.09 31.48 49.82 45.31 57.72

38 5.53 63.01 51.36 27.24 41.54 61.92 58.28

39 7.36 75.86 70.79 50.43 71.64 82.54 76.43

40 6.27 65.91 57.50 60.08 51.85 64.18 52.05

41 5.31 63.01 52.56 15.47 31.41 64.07 59.73

42 5.44 62.73 64.17 13.78 43.65 58.04 53.11

43 7.38 73.00 62.22 67.87 74.07 77.78 69.63

44 5.95 66.70 59.74 33.33 45.87 63.46 59.31

45 6.12 67.38 66.58 27.74 60.36 57.91 61.76

46 5.37 69.36 51.46 25.73 39.59 43.85 62.85

47 6.03 68.92 59.97 18.41 59.75 61.81 66.24

48 5.71 65.76 56.34 18.29 56.02 60.68 56.66

49 5.83 67.00 64.12 20.41 48.46 57.35 64.07

Worker Management Dialogue Maturity Index Comparison by Suppliers

Supplier/Factory Name

Non-rep comm systems overall

(1~10)

Rep systems

System & roles (0~20)

Representation & participation (0~20)

Resources (0~20)

Overall (1~10)

Above Average 6.08 16% 32% 16% 4.29

Below Average

1 4.80 15% 50% 15% 5.25

2 5.60 25% 30% 25% 6.00

3 5.60 15% 45% 15% 4.75

4 6.00 10% 15% 10% 3.00

5 6.40 15% 15% 15% 4.25

6 5.20 15% 35% 15% 4.00

7 6.40 15% 35% 15% 4.50

8 6.80 15% 40% 15% 4.75

9 5.60 10% 20% 10% 2.75

10 6.80 15% 35% 15% 4.00

11 4.00 25% 55% 25% 5.75

12 6.80 20% 50% 20% 6.50

13 6.00 10% 25% 10% 3.75

14

14 6.40 15% 60% 15% 5.25

15 4.40 20% 45% 20% 6.25

16 4.00 15% 30% 15% 3.50

17 4.40 20% 20% 20% 3.25

18 5.20 15% 30% 15% 4.50

19 5.60 15% 40% 15% 4.50

20 4.40 15% 40% 15% 4.75

21 6.40 20% 45% 20% 6.00

22 5.20 15% 40% 15% 4.75

23 8.80 15% 30% 15% 3.75

24 5.20 10% 20% 10% 2.50

25 4.80 15% 15% 15% 2.75

26 7.20 20% 50% 20% 5.75

27 4.80 15% 40% 15% 4.25

28 8.40 25% 40% 25% 5.50

29 8.40 15% 20% 15% 3.25

30 6.40 10% 20% 10% 2.75

31 6.00 10% 15% 10% 3.25

32 6.40 10% 20% 10% 3.00

33 4.80 10% 20% 10% 3.00

34 8.00 20% 50% 20% 5.50

35 5.60 15% 30% 15% 4.25

36 5.60 20% 15% 20% 3.50

37 6.40 25% 35% 25% 6.00

38 4.80 15% 50% 15% 5.00

39 5.20 10% 25% 10% 3.75

40 8.40 15% 20% 15% 3.75

41 9.20 20% 30% 20% 4.75

42 7.60 10% 20% 10% 2.75

43 7.60 20% 15% 20% 3.50