Appendix Csr

Appendix A (1)

Idle’s Key Performance Index from year 2014- 2018

Year 2014 2015 2016 2017 2018Profit ($1,144,260) $2,361,539 $33,708,693 $87,989,681 $96,282158

Quality/10 5 5 6 6 6Productivit

y 5% 65% 92% 94% 95%

Reputation 17% 23% 25% 56% 88%Green Rating 0% 0% 0% 100% 100%

Figure 1: Profit level for year 2014-2018

2014 (Prior Year)

2015 (Year 1) 2016 (Year2) 2017 (Year3) 2018( Year4)($20,000,000)

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

($1,144,260) $2,361,539

$33,708,693

$87,989,681 $96,282,158

Profit

Profit

Figure 2: Key Performance Indicators for year 2014-2018

2014 (Prior Year)

2015 (Year 1) 2016 (Year2) 2017 (Year3) 2018( Year4)0

1

2

3

4

5

65 5

6 6 6

5%

65% 92% 94% 95%

17% 23% 25% 56%88%

0% 0% 0%

100%

100%

Quality/10Productivity (%)Reputation (%)Green Rating (%)

Appendix B (1)

Year 2 Thinking Space

Marketing

Pricing:

Our company has successfully gained attention from the consumers and encouraged them to try using our product by using Penetration Pricing Strategy which setting it at a low price last year. Hence, this year, we are going to increase the price due to the rising cost. We set the price at $1100 this year, to cover the cost of newly introduced product –the “Release Two” which offer better features than our previous year’s product (Idle Times 2016). Our strategy is to ensure the selling price is enough to cover the costs of resources, machinery and labor, and also we try to have excessive earnings to give extra benefits to the labors that are working with us with accordance to principle 4 of the UN Global Compact of the elimination of all forms of forced and compulsory labor.

Advertising:

Integrated marketing communication (IMC) which defined as coordinating various promotional elements and marketing activities that communicated with a firm’s customers (Belch & Belch, 2010, p9). We decided to fully spend amount of $200,000 on advertising method 1, and $500,000 budget allocated for advertising method 2. Therefore, the total spending for advertising on promoting the smartphones is $700,000this year.

We believe spending on advertising is an essential and very important step in order to communicate with the consumers in the market. In addition to the recent launch of our new product ‘Release Two’, we would like to spread the information to attract new potential customers. We believedthis could bring about significant increase in our profit and reputation.

Our new product has increased from quality rating from 5 to 6 this year.

New Order Generated:

Figure 3

Figure 3 had shown our attempt made on the price of product.

Appendix C (1)

Suppliers

Amount of raw materials ordered:

The amount of raw materials ordered for this year is 48,278 units because the new orders generated were increased to 48,075 units. Our company will continue to operate in a just-in-time manner, where our excess of 103 units of raw materials will cost us due to the holding inventory. However, the cost is very low because of the small amount of units would be left unattended and those units can be stored for future use. In order to build better reputation for our company, we need to fulfill the customers’ order as much as we can.

Choosing supplier:

Our management team has decided to continue ordering the raw materials from only onshore supplier. This year, we did not plan to buy raw materials from offshore suppliers because labor issues from the offshore suppliers are very serious. The offshore industry utilize child labor in the mining of Coltan which is the raw material needed by our smartphone industry (Idle News Watch 2016). Idle Times mentioned that the use of child labour is a critical issue for large companies within the industry because it can significantly affects reputation. Hence, in order to uphold the UN Global Compact of Principle 5, we decided to strictly against the action of child labor activities by not engaging in any kind of business activities with unethical organizations that are doing this. We also understand that, we could contribute in improving the social situation by taking the initiative to exercise the fundamental ILO conventions as rectified in our country, Australia. The child labor convention of ILO has been ractified since 2006 in Australia (United Nations Global Compact 2010). Hence, it is our company policy to against labor force. We would have to appoint an Equal Employment Opportunity Officer to scrutinize on labor force issues in our company.

Furthermore, we decided to purchase all raw materials from onshore suppliers to improve on our quality and also reputation. According to the United Nation Global Compact Annual Review

Price of Product ($)

Advertising Method 1 ($)

Advertising Method 2 ($)

New Orders Generated (Qty)

800 200,000 500,000 91,213900 200,000 500,000 74,9501000 200,000 500,000 60,0951100 200,000 500,000 48,0751200 200,000 500,000 36,144

Anniversary Edition, about 64% of company states that they do not take child labor (United Nations Global Compact 2010). However, this cannot be determined, as the G2, G3 countries might not influenced by the child labor issue, but they are outsourcing to countries which are having child labor to obtain a cheap cost of resources. Hence, we ensure our company is not doing the same unethical things. Therefore, for the onshore suppliers that we collaborate with, we ensure the communication of the guidelines and principles on child labor before our agreement have been made. According to the United Nations Global Compact Annual Review Anniversary Edition, only 25% of companies are monitoring their supply chain in terms of labor policies and practices (United Nations Global Compact 2010). We would like to make a difference on that and supervise our supply chain closely to ensure that no labor unfairness issues happens in our operation and it is also better for our company to improve our quality rather than saving cost by ordering from offshore suppliers which are involved in child labor.

Appendix D (1)

Production and Operation

Machine Purchase:

Machine costs $200,000 and it can produce 8,736 smartphones per annum if it is 100% productivity. In our second year’s production and operation, we have decided to purchase 4 more machines which are total 7 machines and they are estimated to be able to produce maximum 53,832 smartphones in the second year. Due to the marketing and suppliers decision we made earlier, we are able to meet the demand of orders generated which is 48,075 without affecting the productivity andthe profit that continue to increase.

Production and Operation table had shown below:

Figure 4

Human resource

Current Total Workforce 39

Customer order generated 48,075

Suppliers Received 48,075

No. of machines 7

Units manufactured 48,075

Machine Operator hiring 10

Retrenchments 0

Machine Operator wage per hour $28

Overtime hours employee per week 0

Figure 5

Our team decided to hire 10 more machine operators to ensure that there are sufficient machine operators who can run the machine efficiently. Our current workforce now is 39 people and there is also no retrenchment as we were able to cope with the current workforce.

Appendix D (2)

Our machine operators’ wages have increased from $20 to $28 to meet the employees’ satisfaction. According to Stone (2010), employee satisfaction is an important element within business because it directly relates to the productivity of employees. Workers who experience high employee satisfaction are generally more productive than unsatisfied workers. Companies must understand what contributes to employee satisfaction and implement necessary steps to improve morale within their firms. For example, awarding employees using pay for remuneration will increase their satisfaction toward the company. Employees who receive competitive wages and fringe benefits are more likely to experience high employee satisfaction than low-paid workers without benefits. A worker can make productivity his main focus when not worrying about how to make money stretch to pay bills. Employees who feel as if they are not paid enough experience low morale and a decrease in productivity. Underpaid employees typically leave jobs in search of better opportunities. Companies can increase employee satisfaction by offering competitive wages and benefits according to industry standards to motivate them in order to work harder for the companies.

We are not offering overtime to our employee since being overworked, information overloads, excessive amounts of working hours and the pressures of tight deadlines are frequent causes of stress. If experienced over prolonged periods of time, it can lead to burnout (Stone 2010). We have to ensure that there are sufficient workers to run the business effectively for preventing working overtime as we respect the Article 24 of UN Universal Declaration of Human Rights 1948, which states “Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay” (United Nations 2015).

Furthermore, working overtime can lead to the costs increased. Employees are actually putting out more products and services through overtime, but mandatory overtime also means more in terms of staffing costs. When you have numerous employees making time and a half regularly, you are paying more money than you are used to, which is cutting into all of the extra profit you are receiving from the increase in product and service output (Lynda 2013).

Appendix E (1)

Finance

In second year, our team will continue to make the financial decision based on the pecking order theory as the cash at bank of $9.3 million on the first year was sufficient to cover all the expenses of the company’s operations. Therefore, the company does not borrow any money from external sources. According to Pecking Order Theory, businesses adhere to a hierarchy of financing sources and prefer internal financing when available, and debt is preferred over equity if external financing is required. Furthermore, firms that are able to generate high earning are expected not to take any loan to finance their companies as we have to pay these loans off yearly plus interest of 8%. Borrowing also can lead to bankruptcy or default when the company borrows excessively and is unable to repay.

CSR

Corporate Social Responsibility (CSR) is a business philosophy that stresses the importance of keeping the best interests of the wider society in mind.According to a 2013 study by Ipsos Australia, eight out of ten Australians believe that corporate social responsibility is important to their businesses.Additionally, 77 per cent of respondents thought that companies should be doing more to contribute to society.One of the strongest arguments for adopting CSR into our wider business strategy is the boost that it brings to our organisation's brand image and reputation. A good public image is a crucial marketing asset. In turn, this can lead to increased customer

loyalty and sales. In the second year, we have decided to adopt CSR into our company. We will adopt all the training that provided which is Health and Safety Training, Sustainability Training and Ethics Training.

Training is a learning process that increases knowledge and sharpens skills, enhancing employee performance. Health and Safety Training requires employers to provide adequate information, instruction, training and supervision to enable work to be carried out safely. According (Rickett 2013), health and safety training can ensure that employees know how to work safely and without risks to health. All staff should be given basic health and safety information about their workplace. In addition, in house or outside training on relevant health and safety matters should be made available to employees at the earliest opportunity.

Sustainability training helps improve staff and management’s knowledge of sustainability issues, as well as developing their skills for managing a company sustainably. In addition, sustainability business training can help businesses increase profits and efficiency while becoming more environmentally and socially responsible (Makower 2012).

The purpose of Ethics Training in workplace is to enable employees to identify and deal with ethical problems developing their moral intuitions, which are implicit in everyday choices and actions. Training in Ethics will help the members of an organization judge the moral legitimacy

Appendix E (2)

of their decisions, enabling them to apply moral principles and values in business decision-making.At the same time, ethics training fosters the employees' agreement and compliance with the organisation's ethical vision representing a mutually-acceptable balance between different stakeholders (Makower 2012). Therefore, implementing ethics training does not only mean informing employees about choices made by the management of the company, but also putting each individual corporate member in a position to understand, interiorise and contribute to the corporate mission achievement through a conscious orientation of their own choices and everyday behaviour.This decision made is aligned and uphold the UN’s Global Compact Labour Standards Principle 6, which stating that “companies should eliminate discrimination in respect of employment and occupation” (United Nation 2015)

After the CSR was adopted by our management team, we can see that not only the profit increased, but also the productivity has boosted from 65% to 92% and the reputation has slightly increased from 23% to 24% due to the positively outcomes by CSR.

Appendix F (1)

Thinking space year 3

Marketing

Pricing:

This year, our management team has decided to lower the price of our smartphones to $1000. Our product ‘Release Two’ have been selling very well for the early adopters with the price of $1100 since it launched last year. Our company decided to lower the price this year to attract potential customers that have yet to try out our products. On the other hand, the decision on lowering the price to $1000 is also due to the increased in interest rates by the Reserve Bank of Australia (Idle Times 2017). An increase in interest rates reduces aggregate demand for a given level of income it will reduce investment spending (Dornbusch et al p243). The management team reduced the smartphone’s price slightly lower than before is believed to have some impact on encouraging consumer spending on our smartphones. As a result, our new customer orders reach the amount of 146,333 units, which is an enormous quantity compared to last year which is only 48,075 units. This is part of the reason the company achieved a profit of $87,989,681 this year. With this profit, we are able to fulfill our responsibilities to the shareholders, and also have excess money to do more on our environmental responsibilities.

Advertising:

Advertising method 1: 200,000/200,000



Integrated marketing communication which defined as the coordinating various promotional elements and marketing activities that are communicate with a firm’s customers (Belch & Belch, 2010, p9). We decided to fully spend of $200,000 on advertising method 1, full amount of $500,000 budget allocated for advertising method 2, and $295,000 on advertising method 3. Therefore, the total spending for advertising on promoting the smartphones is $995,000 this year.

The management team has placed a large amount of investment into advertising is due to we believe that spending on advertising is an essential and very important step in order to communicate with the consumers in the market and it can help in creating public’s awareness about the environmental responsibilities that our company done. The advertisement is a major influence on the reputation on our company. In addition with the environmental responsibility our company is undertaking which reached a green rating of 100%, it is reasonable for the company to be exposed more into the community when there is a growing concern on environment. Our reputation from 25% last year had increased to 56% this year.

Appendix G (1)

Suppliers


The amount of raw materials ordered for this year is 146,978 units because the new orders generated were increased to 146,333 units. Our company will continue to operate in a just-in-time manner, where our excess of 645 units of raw materials will cost us due to the holding inventory. However, the cost is very low because of the small amount of units would be left unattended and those units can be stored for future use. In order to build better reputation for our company, we need to fulfill the customers’ order as much as we can.

Choosing supplier:

In the third year which is year 2017, we decided to order the raw materials from onshore supplier and also offshore G1 suppliers as onshore suppliers have reached the maximum amount of 100,000, so the other 46,978 units have to be purchased from G1 supplier. According to Idle News Watch 2017, the consumer sentiment has recovered and we believe thatit will cause economic growth in domestic market and increase in consumer spending in year 2017. We decided to use domestic raw materials to manufacture our products as it will enhance our local customer’s preference toward the products. Furthermore, according to the World Bank (2014),

Singapore has become the most business friendly economy in the world and it is included in the G1 offshore supplier.

Rather than onshore suppliers and G1 suppliers, those offshore suppliers in developing countries for example G2, G3 and G4 are able to offer lower prices for the raw materials. However, most of themare found utilize child labor in the mining of Coltan which is the raw material needed by our smartphone industry. Hence, in order to uphold the UN Global Compact of Principle 5, we decided to strictly against the action of child labor activities by not engaging in any kind of business activities with unethical organizations and countries that are doing this.

Appendix H (1)

Production and Operations

Machine Purchase:

Machine costs $200,000 and it can produce 8,760 smartphones per annum if it is 100% productivity. In our third year’s production and operation, our order generated have increased from 48,075 to 146,333. We have decided to purchase machine based on the order received, so we decided to purchase 12 more machines which are total 19 machines to increase the productivity as we have to ensure that our supply will be able to meet all the demand. The maximum throughput for all machines are 158,661 smartphones this year.

Below is the Productions and Operation table:



No. of machines 19


Figure 6

Human Resources



Retrenchments 0

Machine Operator wage per hour $35


Figure 7

Our team decided to hire 45 more machine operators due to the huge increasing amount of the order generated to ensure that there are sufficient machine operators who can run the machine efficiently. Our current workforce now is 110 people and there is also no retrenchment in this year as we were able to cope with the current workforce.

Appendix H (2)

Our machine operators’ wages have increased from $28 to $35 to ensure that it meets the employees’ satisfaction. According to Stone (2010), employee satisfaction is an important element within business because it directly relates to the productivity of employees. Workers who experience high employee satisfaction are generally more productive than unsatisfied workers. We are also not offering overtime to our employee since we already have sufficient workers to deal with the production. Being overworked, information overloads, excessive amounts of working hours and the pressures of tight deadlines are frequent causes of stress. If experienced over prolonged periods of time, it can lead to burnout (Stone 2010)

Finance

In year 2017, our team will continue to make the financial decision based on the pecking order theory as the cash at bank of $40.7 million in previous year was sufficient to cover all the expenses of the company’s operations. Therefore, we will stick to the internal sources as

according to the Pecking Order Theory, businesses adhere to a hierarchy of financing sources and prefer internal financing when available, and debt is preferred over equity if external financing is required. Furthermore, since we are able to generate high profit, we are expected not to take any loan to finance our companies asan operational objective of a finance department might include decreasing or eliminating interest payments as the interest rate will increase the total expenses and lower down our profits. Borrowing also can lead to bankruptcy or default when the company borrows excessively and is unable to repay.

Appendix I (1)

CSR

Corporate Social Responsibility (CSR) is a business philosophy that stresses the importance of keeping the best interests of the wider society in mind. The reason for adopting CSR into our wider business strategy is that it could boost our organisation's brand image and reputation. Due to the growing concern in environmental issues this year, we start opening up new CSR activities on sustainability practice. Hence, both training and sustainability practices will now be emphasized by our CSR department.

Training Options:

We provide training for our employees to sharpen their skills to help them in doing their current work tasks more efficiently.

1. Health and safety training

Health and Safety Training is provided to ensure our employers have the adequate information, instruction, training and supervision to carry out their work in a more safety manner. According (Rickett 2013), health and safety training can ensure that employees know how to work safely and without damaging their health or risking their lives. We believed all staff should be given basic health and safety information in the workplace. Hence, every relevant health and safety matters will be made available to our employees.

2. Sustainability training

Sustainability training to be given to help improve our staff and management’s knowledge on company sustainability issues, as well as developing their skills for managing a company sustainably. In addition, sustainability business training can help businesses increase profits in the long run due to the efficiency taking place while becoming more environmentally and socially responsible (Makower 2012). For business, a workforce trained in sustainability practice is essential to reduce waste, facilitate greater resource efficiency, achieve long term cost saving and promote greater environmental awareness in the community (Idle Times 2015). To adapt with the green shift from the community, the management team have decided to also take part in green concern. Hence, sustainability training is very important to prepare our employees to work together towards our intention.

3. Ethics training

Ethics Training is given to help the members of an organization in judging the moral legitimacy of their decisions, enabling them to apply moral principles and values in business decision-making.At the same time, ethics training fosters the employees' agreement and compliance with the organisation's ethical vision representing a mutually-acceptable balance between different

Appendix I (2)

stakeholders (Makower 2012). Therefore, implementing ethics training does not only mean informing employees about choices made by the management of the company, but also putting each individual corporate member in a position to understand, interiorise and contribute to the corporate mission achievement through a conscious orientation of their own choices and everyday behaviour.

Sustainability Practice:

A workforce trained in sustainable practices is essential to reduce waste, facilitate greater resource efficiency, achieve long term cost savings and promote greater environmental awareness in the community (Idle Times 2015). Besides giving sustainability training, we have also set practices and policies for the objective of taking our environmental responsibility as a business, and also aim for sustainability to bring about long term benefits to the environment.

1. E-waste Management

This year, due to the growing concern from the community on the business responsibility to environmental issues, the management team have decided to take on e-waste management into the business practice. A well-managed e-waste can conserve our natural resources and avoids air and water pollution, as well as greenhouse gas emissions that are caused by manufacturing virgin materials (EPA n.d.). The management team decided to manage waste through recycle and reuse.

1.1 Recycle

The management team decided to recycle 70% of the waste produced by the factories. The idea of recycle is to place the e-waste into new purpose as much as possible. According to Idle Times 2015, the most sustainable practice is recycling e-waste, but it is more expensive that causes many start-up companies to ignore this method. However, this method has the best impact to bring improvement in the environmental issues. For every million cell phones we recycle, 35 thousand pounds of copper, 772 pounds of silver, 75 pounds of gold, and 33 pounds of palladium can be recovered (EPA n.d.).

1.2 Reuse

30% of waste from our factories will be reuse. E-waste or components from our smartphones production shouldbe reuse as much as possible before replacing them. The hardware or software waste could be upgraded and reuseinstead of buying a new one. The circuit board in a smartphone can contain copper, gold, zinc, beryllium, and tantalum, the coatings are typically made up of lead and phone makers are now increasingly using lithium batteries (Vidal 2013).

Appendix I (3)

However less than 10% of mobile phones are dismantled and reused (Vidal 2013). Hence, we decided to take the initiative to reuse 30% of our factory waste.

1.3 Sell

We did not plan to sell any of our waste. The waste will be either recycle or reuse. According to the European Environment Agency, between 250,000 tonnes and 1.3m tonnes of used electrical products are estimated shipped out of the EU every year, mostly to poor countries like West Africa and Asia (Vidal 2013). These waste may subsequently be processed in dangerous and inefficient conditions, harming the health of local people and damaging the environment (Vidal 2013).

1.4 Landfill

No e-waste will be disposed into landfill.

2. Hazardous E-waste Management

2.1 Incineration

We do not allocate our hazardous e-waste to undertake incineration. Incineration is not sustainable. A large amount of money would be needed to undertake incineration as it functions using complicated machinery. In addition, the time it takes to pay back the massive investment is very long and distorts waste management. Every time burning occurs, it goes back to the beginning of linear society (extraction- manufacture-consumption-waste) (Connettn.d.). It indirectly promotes the continuation of waste generation (Zafarn.d.). Although this is arguably, however, the management team choose not to undertake this method by following the UN Global Compact principle 7 of using precautionary approach to environmental challenge (United Nations Global Compact 2015).

2.2 Physical and Chemical Treatment

We manage our hazardous e-waste through physical and chemical treatment. This method may be a little more expensive than incineration, however, it does bring about sustainability effects. Installations for the physical and chemical treatment of hazardous waste will usually be found at an individual locations or central facilities for a more flexible capacity (Basel Convention 1999). The processes need high trained staff to have the skill, expertise and judgment in operating it safely and effectively (Basel Convention 1999). The management team have already equipped the employees in all relevant areas to ensure their safety in the process of running the technology.

2.3 Landfill

No hazardous e-waste will be disposed into landfill.

Appendix I (4)

3. Energy Source

The management team decided to use 100% of green power in the production process. Green power produces 7c per kW than fossil fuels which only produce 0.83c per kW. Green power may be expensive, however it does not matter as sustainability is what matters that it would bring greater benefit in long term operation. For example, The GE citizenship was trying to look on area where they can reduce carbon dioxide emission, and their final decision was to cut down the usage of electricity. Besides just undertaking their environmental responsibilities, they also gained an increase in profits (Knight 2015).

4. Equipment

The management team also uses energy efficient equipment – Solar panels. Solar panels are installed within the factories for the usage of energy from the production process. These solar

panels costs 2 million dollars, but it would reduce the factories energy usage by up to 30%. We employed the solar panels due to our commitment with the Principle 9 which states businesses should encourage the development and diffusion of environmental friendly technologies (United Nations Global Compact 2015).

5. Offsetting emissions

The management team decided to place 100% for the offset emission. Carbon offsetting is the use of carbon credits to enable businesses to compensate for the emission, meet the carbon reduction goals and support the move to a low carbon economy (Carbon Neutral n.d.). Carbon offsetting is practiced by buying carbon credits sold in metric tonnes of carbon dioxide equivalent through reputable third parties such as international brokers, online retailers and trading platforms (Threads n.d.). The management team will contribute essential finance to renewable energy and environmental projects around the world. We support the big environmental projects out there by buying the offsets from them to provide extra funds for the projects to work. Without the offsetting emission, the reduction in carbon dioxide equivalents would not have happened otherwise (Threads n.d.). Hence, this decision on offsetting emission is based on principle 9 where businesses should encourage the development and diffusion of environmentally friendly technologies (United Nations Global Compact 2015). The management team will fully support the big environmental projects through a 100% offsetting emission.

Appendix J (1)

Year 4 Thinking Space

Marketing

Pricing:

The management team sets pricing at $1000 which is same amount as last year. This price is chosen because IDLE do not consider increasing price before coming up with a product which has a lower price range. The management team has to ensure that our products can be accessible from every level of the community to help in preserving the bad situation of inequality that the poor people are experiencing. The price of $1000 is the best low price we could charge to uphold the cost of our good quality product and at the same time fulfil the financial expectation of the company.

Advertising:

The management team have decided to spend $200,000 on method 1, $500,000 on method 2, and $295,000 for method 3. The total spending for advertising on promoting the smartphones this year is $995,000. Management team spent fully on advertising method 1 and 2 is because of the believe that advertising could help in bringing out the information on the contribution we did in the area of CSR when the consumers are highly concern on that. However, this year, due to the increase in involvement in the CSR activities, IDLE could not afford to spend too much on advertising. Hence, the management team spend only half of the budget in marketing method 3.

Spending

Marketing Method 1: $200,000/$200,000



As a result of the spending on advertising, 111525 of our smartphones sales are generated through advertising. Due to our huge spending on advertising in the past, there are 325290 adoption on our smartphones through the word of mouth.

Appendix K (1)

Supplier


The amount of raw materials that we ordered for this year is 195,883 units because the new orders generated were increased to 195,003 units. Our company will continue to operate in a just-in-time manner, where our excess of 880 units of raw materials will cost us due to the holding inventory. However, the cost is very low because of the small amount of units would be left unattended and those units can be stored for future use. In order to build better reputation for our company, we need to fulfill the customers’ order as much as we can.

Choosing supplier:

In year 2018, according to IDLE News Watch 2018, onshore suppliers had collapsed due to poor cost control and weak corporate governance system. However, we are still able to receive the raw materials from onshore supplier which we ordered before it collapsed. As a result, wedecided to proceed using additional raw materials that we ordered from onshore supplier which is 100,000 units and some offshore raw materials from G1 suppliers which have good corporate governance. The amount of raw materials that we ordered from G1 supplier is 95,883 units.According to the World Bank (2014), Singapore has become the most business friendly economy in the world. Singapore is one of the G1 offshore countries. Ordering our raw materials from a business friendly country such as Singapore will help to improve our company’s reputation.

We did not order the raw materials from G2, G3,G4 suppliers are due to most of the countries from G2, G3 and G4 themare found utilize child labor in the mining of Coltan which is the raw material needed by our smartphone industry. Hence, in order to uphold the UN Global Compact of Principle 5, we decided to strictly against the action of child labor activities by not engaging in any kind of business activities with unethical organizations and countries that are doing this.

Production and Operations

Machine Purchase:

Machine costs $200,000 and it can produce 8,760 smartphones per annum if it is 100% productivity. In year 2018, our orders generated this year are 195,003 units. We have decided to purchase machine based on the order received, so we decided to purchase 8 more machines which are total 27 machines to increase the productivity as we have to ensure that our supply will be able to meet all the demand. The maximum throughput for all machine are 227,829 smartphones this year.

Appendix K (2)

Production and operation table shown below:



No. of machines 27


Figure 8

Human Resources



Retrenchment 0

Machine Operator wage per hour 40


Figure 9

In year 2018, our team decided to hire 5 more machine operators to ensure that there are sufficient machine operators who can run the machine efficiently. Our current workforce now is 151 people and there is also no retrenchment in this year as we were able to cope with the current workforce.

Our machine operators’ wages have increased from $35 to $40 to ensure that it meets the employees’ satisfaction. According to Stone (2010), employee satisfaction is an important element within business because it directly relates to the productivity of employees. Workers who experience high employee satisfaction are generally more productive than unsatisfied

Appendix K (3)

workers. We are also not offering overtime to our employee since we already have sufficient workers to deal with the production. Being overworked, information overloads, excessive amounts of working hours and the pressures of tight deadlines are frequent causes of stress. If experienced over prolonged periods of time, it can lead to burnout (Stone 2010)

Finance

In year 2018, our team will continue to make the financial decision based on the pecking order theory as the cash at bank of $95 million in previous year was sufficient to cover all the expenses of the company’s operations. Therefore, we will stick to the internal sources rather than borrowing.

CSR

Training Options:

Training is continued to be provided for our employees to sharpen their skills to help them in doing their current work tasks more efficiently.

Types of training

Health and Safety Training √

Sustainability Training √

Ethics Training √

All three trainings will be made available for the employees as usual. We noticed the improvement on productivity in our production process from 65% in our first year of operation until the achievement of 94% last year. We would like to continue giving values to the employees to maintain the great achievement on the level of efficiency we made in the past.

Sustainability Practice:

Sustainability practice has become IDLE’s business goal. Therefore, the management team takes every possible steps that would make the company operation sustainable.

Appendix K (4)

1. E-waste Management

The growing concern from the community on the business responsibility to environmental issues last year lead the management team to open up e-waste management into the business practice. Since then, sustainability has become the company goal. Hence, the management will continue taking up this practice.

E-waste Management

Recycle 70%

Reuse 30%

Sell 0

Landfill

Just like last year, IDLE is not disposing any e-waste into the landfill. Disposing into landfill will bring harm to the environment. The management team strictly against un-environmental friendly action occur in the operation of the company.

2. Hazardous E-waste Management

2.1 Incineration

Idle will not allocate any hazardous e-waste to undertake incineration as it is not sustainable. Apart of large capital needed to exercise incineration will lead IDLE to have higher cost, the time it takes to pay back the massive investment is very long and the effect is just very small. Incineration takes up burning process, which could solve the problem but also cause continuation of the problem. Hence, the management team choose not to undertake this method by following the UN Global Compact principle 7 of using precautionary approach to environmental challenge (United Nations Global Compact 2015).

2.2 Physical and Chemical Treatment

The management team continue to take the hazardous e-waste through physical and chemical treatment. This method is more expensive than incineration, but it does bring about sustainability effect. This processes needed high trained staff to have the skill, expertise and judgment in operating it safely and effectively (Basel Convention 1999). The management team have already equipped the employees in all relevant areas to ensure their safety in the process of running the technology.

Appendix K (5)

2.3 Landfill

No hazardous e-waste is being disposed into landfill. Disposing into landfill will bring harm to the environment. The management team strictly against un-environmental friendly action occur in the operation of the company.

3. Energy Source

100% of green power is being used in the production process. Green power produces 7c per kW than fossil fuels which only produce 0.83c per kW. Although it is expensive, but the sustainability it brings about is what really matters for a greater benefit in our long term operation

4. Equipment

The management team also uses energy efficient equipment – Solar panels. Solar panels are installed last year within the factories for the usage of energy from the production process. These solar panels costs 2 million dollars, but it would reduce the factories energy usage by up to 30%. We employed the solar panels due to our commitment with the Principle 9 which states businesses should encourage the development and diffusion of environmental friendly technologies (United Nations Global Compact 2015). Our company has continued using the solar panels this year.

5. Offsetting emissions

100% offset emission has been allocated by the management team to the gas emission on the production process. Carbon offsetting is the use of carbon credits to enable businesses to compensate for the emission, meet the carbon reduction goals and support the move to a low carbon economy (Carbon Neutral n.d.). The management team is contributing in financing the renewable energy and environmental projects around the world. IDLE supports the big environmental projects out there by buying the offsets from them to provide extra funds for the projects to work. Without the offsetting emission, the reduction in carbon dioxide equivalents would not have happened otherwise (Threads n.d.). Hence, this decision on offsetting emission is based on principle 9 where businesses should encourage the development and diffusion of environmentally friendly technologies (United Nations Global Compact 2015). The management team will fully support the big environmental projects through a 100% offsetting emission.

Appendix L (1)

Community Initiatives

In year 2018, our company started investing in community initiatives such as donation and social responsible investment.Our goal is to highlight community responsibility and strengthening our brand image.

1. Donation

This year, Idle is starting to have high achievement in the profits because of the good reputation and image projected to the community that helps in increasing the sales. This year, there is a natural disasters concerned by the world which is the event of flood that has damaged some of the industry suppliers locations causes the affected offshore communities struggling to rebuild (IdleTimes 2018). Idle has gained a lot of support from the community throughout the years, from getting losses to the excellent result last year. Therefore, the management team will take part of the financial rewards the company gained to put into donation to the victims of the flood. Idle is donating $10,000,000 of company earnings to the flood victims at offshore. The management team believes that the first step and first equipment needed for heals from the massive destroyed by flood is through money.

2. Socially Responsible Investment

Idle’s reputation has increased dramatically from 23 per cent to 88 per cent. Thanks to the social contract given by the society on Idle’s business operation. Idle will continue in taking initiatives on CSR areas to remain the good relation with the community. Idle’s headquarter is located in New South Wales, Australia, where more than 66 per cent of aboriginals population can be found among the Australians (Korff 2014). Although many act have passed for the intention of protecting the indigenous rights in Australia (South Australia Health, n.d.), however, the racism is still clearly reflected in anthropology, politics, bureaucracy and media (Pilger 2015). Adding on, Federal government cut $534m this year in Indigenous social programs, including $160m from the Indigenous health budget and $13.4m from Indigenous legal aid (Pilger 2015). The stop of providing basic service to the indigenous group has raised the anger and causes strike to happen (Pilger 2015). There is no reason for Idle to remain silence in any inequality issues happening when Idle is upholding UN Global Compact Principles and UN Declaration of Human Rights. Hence, this year, Idle is taking action in writing a policy of increasing the employment of indigenous people into the company. The ratio is set to be one indigenous person to three Australians. This could help the indigenous people to get a work with higher pay instead of working as a farmer that have less earnings. Idle will also continue providing the social programs and health budgets for the indigenous employees as what

Appendix L (2)

the ordinary Australian’s employees would get, so that human rights are exercised within the company. In total, Idle will spend specifically $10,000,000 in this area for social investment.

Appendix M (1)

Idle’s compliance to the UN Global Compact Principles

10 Principles SummaryHuman Rights

Principle 1:Support and respect the protection of internationally proclaimed human rights.

Our company provides mechanisms to protect employees who report potential human rights concerns within the institution or with business partners, developing and encourage a transparent and rights-aware approach in both educational mission and operational practices.

Principle 2:Make sure that business is not complicit in human rights abuses.

Make sure we take our supply of raw materials from suppliers that did not abuse human rights.

LaborPrinciple 3:Uphold the freedom of association and the effective recognition of the right to collective bargaining;

Freedom of association implies a respect for the right of all employers and all workers to freely and voluntarily establish and join organizations of their own choice.

Principle 4: Support elimination of all forms of forced and compulsory labor;

We did not force our employee to work overtime.

Principle 5: Support effective abolition of child labor; and We did not use any child labor to run our production.

Principle 6: Elimination of discrimination in respect of employment and occupation.

Our company does not allow any discrimination among the workers in the workplace happens. Equal working opportunity for both men and women.

EnvironmentPrinciple 7: Businesses are asked to support a precautionary approach to environmental challenges;

We provide information to stakeholders about potential environmental risks of products and services.

Principle 8: Undertake initiatives to promote greater environmental responsibility.

We join industry-wide efforts to share knowledge and deal with issues, in particular production processes and products around which a high level of uncertainty and sensitivity exist.

Principle 9: Encourage the development and diffusion of environmentally friendly technologies.

Establish institutional policy on the use of environmentally technologies.

Anti-corruptionPrinciple 10: Businesses should work against corruption in all its forms, including extortion and bribery

Our company has set clear standards and policies, and has put in place training to ensure employee compliance on these topics,Certain employees are assigned more in-depth ethics and compliance training courses, including those covering anti-corruption.

Appendix N (1)

Corporate Governance Principles and Recommendations

Principles IDLE’s Preparation

Principle 1: Lay solid foundations for management and oversight

The roles and responsibilities of the board and management will be disclosed. Performance will be monitored and evaluated individually on every half year by the manager of each department and also through peer assessment. Performance evaluation will be made open for objection or debate. Our director will be elected after getting agreements from every of the representatives from each department. There will be written agreement with director and senior executive on the terms of their appointment. Idle is also targeting an amount up to 40% of female in total on the board and committee

Principle 2: Structure the board to add value

Idle have 3 boards of directors which have already met the minimum terms of this principle. However, Idle will be targeting to obtain 10 boards of directors in the next five years. The board of directors will have to meet 20 times or more annually, with a full attendance achieved. Idle has the right to cancel a contract of the participants whom attend the meeting for less than 70 percent of the meetings. Idle have a mix of skills and diversity on the board. Our current board of directors consists of TeoZheng Ting expert in finance knowledge and Beh Win Nie expert in the area of economics. Company is looking forward to get other potential people to work with in the area of management, marketing, accounting, and also the technology.

Principle 3: Act ethically and responsibly

The management team proposed code of conduct in general:

There shall not be any form of discrimination found within the company.

Unfair treatment such as bias towards the employees will be investigated.

Employees working hours 9am-6pm. Over time will take place only during emergency

production and employees and supervisor will be rewarded with an extra reasonable pay.

Ethics is essential to practice by every members of the organization. Bribery and taking advantage of the power given by the organization is strictly not allowed.

Training will be provided for the employees for work that need skills or extra care.

Any policies made need to be agreed by all employees before being enforced.

Principle 4: Safeguard integrity in corporate reporting

Idle ensures it safeguard of integrity in financial reporting. The CEO and CFO will declare on each reporting periods that the financial statements are comply with the accounting standards. A true and fair view of the financial position and performance of Idle will also be given by our CEO, Dr. M. Besides that, Idle has prepared to take external auditor to sit in at the AGM when the board is answering questions from the shareholders.

Principle 5: Make timely and balanced disclosure

Idle is developing a written policy to promise to comply with its continuous disclosure obligations under the listing rules.

Principle 6: Respect the rights of security holders

Idle is preparing to adopt its own website as a platform to provide information about itself and its governance for the knowledge of investors. Idle will create more interactive activities or program to allow effective 2 way communication with investors to take place. Idle also disclose the policies and processes in its manufacturing operations to the shareholders. Idle in the future will provide monthly newsletter of the company for communicating to its stakeholders including shareholders.

Principle 7: Recognise and manage risk

Idle is preparing for a separate risk committee. This committee is specially to help in evaluation on every risks of the company. This group of committee acts like the internal audit, they assess every single decision that could put the company in risks and came out with solutions. This could ensure the company to be able to stand still when any unexpected crisis happened. Idle will also sets policy consistent with the corporate guidelines where the number of times the meeting held and the individual attendance will be recorded.

Principle 8: Remunerate fairly and responsibly

Idle will also develop a remuneration committee, where their responsibility is to assess the fairness of the wage given to every employees in the organization. Company should not give wages less than the work done by the employees, where the committee will decide the way to measure it. The number of times meeting held and individual attendance will be recorded for the meeting of this committee. After they have decided on the standard and measurement, it will be deemed to disclose within the company.

Appendix O (1)

Idle’s social goals

Stakeholders short term (1-4years) Medium term(5-6years) Long term (7-10years)

Shareholders

Increase the value of market share

Profitable Be prepared for

public listing

Fairness and transparency disclosure of business and financial information

Increase in profit

Building a lifestyle plan

To be one of the biggest smartphone company in the world

Sustainable growth

Employees

Reasonable wages Reasonable workload Always be productive Sustainability job

skills Always beware of the

issues of human rights, labor standard, environmental and anticorruption

Provide training to them to ensure they are always professional

Provide variety functions and prices smartphones

Increase employees’ wages base on the performance

Awarding employees by providing them travelling package once a year

Provide employees extra courses in order to upgrade themselves

Customers Branding awareness Customer satisfaction

Provide online shopping and services in order to give our customers the ability to share information and reviews with other shoppers who have firsthand experience

Provide user manual

Start up a FOC course to provide senior citizens chances to learn how to use smartphone

Community

Helping the major social problems in its headquater (Inequality of indigenous people) and Brazil (poverty)

Donation to the needy (The flood in some offshore countries)

Involve in bigger size business charity Carry out

independent social projects for public participation

Suppliers Good relationship Establish understanding Obtain trust and

with good corporate governance suppliers

Prevent taking supply from suppliers who is against Universal Declaration of Human Right and UN Global Compact

policies for suppliers to refer

Develop and enforce suppliers code of conduct

reputable suppliers to be co-operate in long term.

Sharing of people, knowledge and skills to take place between Idle and suppliers.

Environment Decision made consistent with the UN global compact principle 7,8 and 9.

Wastes are disposed in the most environmental way (recycle and reuse) and go through chemical and physical treatment.

Continuation on the adoption of UN global compact principles 7,8, and 9

Continuation of the good waste management

Develop a workplace environmental care practice to raise awareness of the employees towards the environment.

Run big scale environmental campaign for the participation of Idle’s stakeholders within the organization and outside the organization

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Documents

Appendix Csr