2013 LENOVO INTERNAL. ALL RIGHTS RESERVED. David Martin | IO Procurement & Sustainability Integrated Operations ● Procurement Sustainability

2013 LENOVO INTERNAL. ALL RIGHTS RESERVED.

David Martin | IO Procurement & Sustainability

Integrated Operations

● Procurement Sustainability

2013 LENOVO INTERNAL. ALL RIGHTS RESERVED.2

Table of Contents Executive Summary Strategy Program Segments

– Base Program

– Green House Gas / Water Emissions

– Conflict Minerals

Backup

IO Procurement Sustainability


1) Be environmentally conscious with our suppliers

– Know where suppliers have greatest risk, audit and approve ….. Per GEA QMX EMS-0017

2) Drive suppliers to be Socially Responsible citizens by Compliance to EICC

– Lenovo is EICC member since 2006, our program is competitive in IT industry

3) Support Lenovo’s efforts to be Green-House Gas Emissions / Water Usage friendly

– Lenovo does have competitive industry rankings in aggregate CSR and Carbon/Water

– Industry is transitioning from “transparency” to “reductions; we must do the same

4) Avoid contributing to conflict (Be “Conflict-Free”)

– Lenovo like most companies are just starting with tracing, auditing & certifying

– Available benchmark data is HP is well-head, Dell is started – but neither close

– Leadership positions heavily weighted on front-end efforts / less on back-end results

GP Sustainability – Executive Summary


GP FY 12/13 Sustainability Strategy

Meet Management System Reduction and Incident Rate Targets

Implement Audit Plan (Increase Supplier Coverage)

Integrate Sustainability Concepts into LME Strategy

Seek External Recognition Opportunities

Maintain High Level of Global Regulatory Compliance

Ensure Safe and Healthy Work Environment

Maintain OHSAS 18001 and ISO 14001 Certification

Procurement EICC Coverage – 95+% spend compliance coverage

Include (site) coverage of ODM (vs. company level)

Increase overall compliance by 10%

1

2

3

Green House Gas / Water – 90% spend reporting coverage / transparency

Conflict Minerals – Dodd-Frank compliance / 25% supply chain awareness

Medion / NEC / MIDH – collaboration (existing coverage by Lenovo program)

1

2

3

Enhance Current Grow in New Areas

Procurement

Program Focus

Objectives Results Needed FY1213 Actions

EICC Coverage

• Increased 90% 95+% Spend Coverage with Base Program (e.g. Contracts, Self-Assessments & Audits)

• > 80% of Lenovo Spend/Suppliers are EICC/GeSI members• Agmt. Coverage 100% / SAQ Coverage 97%+• Audit Coverage 100% / 23 in Grace Period

• Complete e-Tasc to EICC-On transitions (4 to go)

ODM Company vs. Site

• ODM Company Overall & Segment performance broken-out• Open to detail all ODM sites in report cards

• Include ODM by location scores in Exec scorecards• Include ODM locations w/o audits in ODM scorecard

Owner: Chia / Lai Tgt: May 15th.

EICC Compliance

• Improve compliance 1st Round 2nd Round Overall: 10% Improvement ODM: 16% Improvement (developed Overall, Tower, Supplier tracking scorecards & reporting)

• Finalize FY1314 objectives


GP FY 12/13 Sustainability Strategy

Meet Management System Reduction and Incident Rate Targets

Implement Audit Plan (Increase Supplier Coverage)

Integrate Sustainability Concepts into LME Strategy

Seek External Recognition Opportunities

Maintain High Level of Global Regulatory Compliance

Ensure Safe and Healthy Work Environment

Maintain OHSAS 18001 and ISO 14001 Certification

Procurement EICC Coverage – 95+% spend compliance coverage

Include (site) coverage of ODM (vs. company level)

Increase compliance by 10%

1

2

3

Green House Gas / Water – 90% spend reporting coverage / transparency

Conflict Minerals – Dodd-Frank compliance / 25% supply chain awareness

Medion / NEC / MIDH – collaboration (existing coverage by Lenovo program)

integration)

1

2

3

Enhance Current Grow in New Areas

Procurement

Program Focus

Objectives Results Needed FY1213 Actions

GHG / Water

• Increased 80% 95+% Spend Coverage of supplier annual reporting/transparency

• Established Emission / 3rd Party Verification Baseline 2010: 1,143,000 MTCO2e 2011: 1,330,000 MTCO2e 32.8 Kg/CA 28.2 Kg/CA (14% decrease emissions/CA vs. 36% CA increase)


Conflict Minerals

• >62% of Spend Coverage is N/A for Dodd-Frank• >25% of Spend Coverage is Intel (industry leader in C.M.)Not “contract to mfg” / no influence on mfg.’g

• 10-15% of spend additional non-applicable


Medion / NEC MIDH

• 96% of NEC ….. Spend Covered by Lenovo Program• 57% of Medion ..... (and Medion also covered by BSCI)• 25% of MIDH …..



GP FY1314 Strategic Initiatives – Plan Considerations

Programs Weak / Opport. Goal Action / Focus Areas Cross-Program Actions

Base Program

Compliance>90% Compliance Overall & By Segment

1. Working Hours / Time-Off Focus2. Ethic - Fair Business, Advertising and

Competition Focus3. Closer Focus on Audit CAP’s

1. CPO Commications to suppliers

2. Detailed Supplier Tracking on Focus Areas (e.g. Working Hours, GHG Reduction, 3rd Party Verification, etc.)

3. SPE Penalty / Credit Expansion

M&A IntegrationFurther implementation, coverage analysis and reporting

1.MIDH implementation to 75% agmt/SAQ coverage, 25% audit coverage

2.NEC – Revalidate Coverage annually3.Medion – Standard Monthly Reporting4.CCE – Lenovo base program coverage

GHG

Reduction Hold Increase below 1.6% 1.Affirm Supplier Reductions Goals2.Drive 3rd Party Verification3.Share Reduction Methods / Lessons4.M&A Transparency

3rd Party Verification

Increase to 35% from 18%

Conflict minerals

Conflict Minerals Tracing

Dodd-Frank Compliance

1.Conduct 2 Due Diligence Tracing Cycles2.Develop Conflict Minerals Report3.Obtain Independent 3rd Party Audit4.OECD Due Diligence Compliance5.ECC/BW/Reporting by P/N

Enough Rankings Improve Score 15 Pts Verification of above efforts to close Gap


GP Sustainability – Base Programs

EICC Coverage

FY Agmts SAQ’s Audits

08/09 Started initial focus

09/10 96% 72% 25%

10/11 99% 91% 59%

11/12 100% 99% 91%

12/13 100% 95% 93%

Environmental – Categorize suppliers 1 / 2 / 3– Require GEA audits and semi-annual activity reporting where required

Standard Legal Obligations (PO’s / Agreements)– Comply with any laws– Comply with Lenovo Material’s Specs. / ROHS– Be ISO 9001 / ISO 14001 certified or demonstrate attaining

Material Declaration (IPC 1752)– Supplier compliance to Material’s Specs / ROHS– “Inst. for Printed Circuits", a global trade assoc.

Sustainability – Require T1 suppliers to sign EICC Agreement for formal contractual agreement to comply– Compliance to EICC and if not, notify Lenovo with action plans– Self-Assess annually with EICC tools at supplier expense (EICC-ON)– Self-Audit with EICC approved 3rd party at suppliers expense, provide Results & Actions– Supplier shall ensure their T1 suppliers are compliant, self-assess & self-audit similarly – need to validate– Penalties / Credits are implemented in SPE’s– April 2012 Release 4.0: Includes Conflict Minerals due diligence

QM

X E

MS

- 0

017


GP Sustainability – Base ProgramsWARRANTIES: Supplier warrants that: (i) it has the right to enter into this PO and it will comply, at its own expense, with any law (including environmental and anti-corruption laws) or other obligation that may affect its ability to perform under this PO; (ii) no claim, lien, or action exists or is threatened against Supplier that may affect Lenovo's rights under this PO; (iii) products and services specified in this PO do not infringe any privacy, intellectual property, moral or other right of a third party; (iv) products specified in this PO are of merchantable quality, are free from defects in materials and design, and otherwise will conform to the warranties, specifications and requirements in this PO including without limitation 41A7731 ("Baseline Environmental Requirements for Materials, Parts and Products for Lenovo Hardware Products") and 41A7733 ("Lenovo RoHS Engineering Specification"); (v) products specified in this PO are safe for their intended use; (vi) products specified in this PO do not contain harmful code, will not engage in electronic self-help, and are euro-ready to the extent that they may interact with monetary data (meaning they are capable of correctly processing monetary data in the euro denomination and euro currency formatting conventions, including the euro sign); (vii) the products are not made with ozone depleting substances (such as halons, chlorofluorocarbons, hydrochlorofluorocarbons, methyl chloroform and carbon tetrachloride); (viii) products are new and do not contain used or reconditioned parts; (ix) it will comply with all applicable data privacy laws and will otherwise protect information that may identify an individual ("Personal Data"), and will not use, disclose, or transfer across borders any Personal Data processed for Lenovo, except as necessary to perform under this PO, and will comply with Lenovo's requests to access, correct, or destroy such Personal Data; (x) it understands and will comply fully with all applicable laws, including export and import laws and Supplier will (among other things) secure all necessary clearances, licenses, and exemptions, and it will make all required filings and disclosures relating to the transfer of technology, software, or commodities; (xi) Supplier will not export, directly or indirectly, any technology, software or commodity of U.S. origin or having U.S. content to countries (or nationals of those countries wherever located) listed in U.S. Export Administration Regulations, as modified from time to time, unless authorized by appropriate government license or regulations; (xii) Supplier shall obtain and maintain all relevant licenses and Product certifications for Lenovo and its subsidiaries to sell and for Lenovo and its customers to use the products worldwide, and Supplier shall pay all fees required; (xiii) Supplier shall maintain comprehensive general liability insurance sufficient to cover all claims that might arise from Supplier's activities under this PO; (xiv) Supplier was awarded this business because it is an expert fully competent in all aspects of providing the products and services under this PO, and Supplier will not deny any obligation to Lenovo on grounds that Lenovo recommended reviewed, or assisted with any aspect of this PO, and Supplier acknowledges Lenovo's reliance upon Supplier's expertise; (xv) if Supplier describes the product or service in its own marketing materials, then Supplier warrants such descriptions are true, and Lenovo and its customers may rely on such claims in creating their own marketing materials for the products and services; (xvi) Supplier maintains and fully implements documented quality and environmental management systems that meets ISO 9000:2000 and ISO 14001 standards, respectively, and both systems are accredited from an approved registrar. Supplier's design, development, manufacture and support processes all comply with these ISO standards, and Supplier will maintain compliance as these standards evolve. Supplier will demonstrate compliance with these standards to Lenovo and third parties, and will provide copies of relevant paperwork, upon request (Lenovo's environmental policy is available on the internet); (xvii) Supplier shall verify that any encryption technologies are: (a) covered by a valid export license from the U.S. Department of Commerce Export Administration; handled only at locations and pursuant to control procedures approved by Lenovo; and (b) ship directly from the approved location only to approved and lawful destinations; (xviii) Supplier complies with all laws relating to security including the FAA emergency directive on security procedures dated August 9, 1996. Supplier represents that it shall not include any explosive, hazardous, incendiary and/or destructive materials in any products transported under this PO; and (xix) products do not include any open source code.

http://www.lenovo.com/global_procurement/us/en/index.html

http://www.lenovo.com/global_procurement/us/en/index.html


Environmental Metric – Late Environmental Audits 4QFY12/13 Confirmed that existing Cat II suppliers don’t require assessments/audits Cat III Supplier Audits are Green (includes disposal, refurb, scrap & Brokers)

Sourcing Executive

1Q 2Q 3Q 4Q

Liu Jie NA NA NA NA

Gerry Gross NA NA NA NA

AL Blythe NA NA NA NA

Steven Yin NA NA NA NA

Wentao Yang NA NA NA NA

J.Gannfors 0 0 0 NA

J.Zapko 0 0 0 0

Overall 0 0 0 0

SourcingExecutive

SupplierAudit Date

Next Audit

Comments

J.Zapko E-Parisaraa 5/12 5/15

Fortune Metals 10/12 10/15 China use only

Geep 01/12 2015Audit on ARS & Surplus buyer on 1/23/12 will be used to satisfy full audit. Draft report available by 4/12/13 to close for re-approval.

Hong Kong Kingstay 10/12 10/15

Oxil Manufatura Reversa 3/11 3/14

Shanghai Xin Jinqiao 6/12 6/15 China use only.

SZ Hazardous Waste Station 2/12 5/15 China use only.

TCG Mexico 2/13 TBDTemporarily discontinued after expired audit. Follow up audit completed on 02/27/13. Pending for approval.

TES-AMM Shanghai 10/11 10/14 China use only

TES-AMM Singapore 3/11 10/13

Veolia 5/12 5/15

Geep 9/10 9/13

Tech Turn 7/11 7/14

EARN 6/12 7/14 All entities has been physically audited and acceptable. Working to close off open items.

AE/CCR 6/10 6/13

Note: Metric DescriptionDefinition – Report of Category 2/3 Suppliers & late review/audit date.Calculation – # aged greater than 1 yr.

By Executive Green = 0 Red > 0Overall Green ≤ 1 Red > 1


Sustainability Metrics – Feb. 2013 • 64/64 suppliers completed 2012 EICC carbon & water reporting (Pls refer to page 19 for latest status)• EICC-ON system renewal from 2013 for all suppliers • All suppliers need transition to EICC-ON for SAQ's mgmt.

Sustain Action

# Suppliers

# Reported%

Complete

EICC-OnTransition

97 92 95%

GHG/Water Reporting

64(DP#:60 GP#:4)

64(DP#:60 GP#:4)

100%

Supplier Audit Results

1st

Audit2nd

Audit

Average All Suppliers

83% 93%

EICC Agreements EICC-On USE/Self-Assessments Questionnaires Audits

Sourcing Exec.

EICCA Coverage

Need # suppliers to achieve target

EICC Assessment

Tool


Aged SAQ

SAQ’s to Age in 6 Mon

Audit Coverage


Aged Audits

Aged CAP

Audits to Aged in 6 Mon

Overall 100.0% 0 95% 0 0 0 93% 0 3 0 5

Supplier Spend Coverage

2011 2012

Base Program 90% 97%

GHG/Water 80% 95%

Program Goals

EICC Executed Agmt. Coverage -98% Current SAQ -95% Current Audit-80 %

Aged SAQs/Aged Audits/Aged CAP’s<5EICC Spend Coverage – 95% GHG/Water Reporting Spend Coverage – 90% Audit Results: >90% or +5% Improvement each audit EICC-On: 100% by Oct ’12

Notes: EICC-On use will start to track from Oct. 2012. The indicator will code as Red if no t hit the target by then.Timeline:25% by end of Aug, 75% by end of Sept., 100% by end of Nov.

Sourcing Exec

Agmt Cov.

SAQ Cov.

Audit Cov

AgedAudit

AgedCAP

GHG/Water

Ann 100% 50% 50% 0 0 100%

Jerry G. 100% 100% 100% 0 0 100%

Jie Liu 100% 100% 100% 1 0 100%

John G. 100% 100% 91% 0 0 100%

Steven Y. 100% 100% 100% 1 0 100%

Wentao 100% 73% 70% 1 0 100%

John Z. 100% N/A N/A N/A N/A 100%

Tower Missed Objectives / Needed Action

Production Suppliers:

EICC Status Master_022813

77% Spend are EICC Members


EICC Compliance: Overall PerformanceSections 1st Round 2nd Round Trend Top Issues / Comments

General 84% 95% Process to ensure next-tier supplier implement the code

Labor 86% 89% Working hour/Time off

Ethic 81% 79% Fair Business, Advertising and Competition

Labor & Ethic Mgmt System 74% 95%Worker’s unawareness of theenvironmental and health & safety performance objectives

Health & Safety 83% 92% Emergency Preparedness/Industrial Hygiene

Environment 85% 91% Hazardous substances handling

EHS Mgmt System 77% 97%Worker’s unawareness of theenvironmental and health & safety performance objectives

Overall performance 83% 93%

Priority items 14 0 13 out 14 priority items are related to Labor issue

Average Major Findings/Audit 15 5

Average Minor Findings/Audit 7 5

EICC Coverage • Improve Compliance


EICC Compliance - ODM details (weighted scores)EICC Coverage • Improve Compliance

Weighted Score Priority issue Major Minor Risk

ODM Site Round 1 Round 2 Round 1 Round 2 Round 1 Round 2 Round 1 Round 2 Round 1 Round 2

Bitland Shenzhen 109 104 0 0 14 17 13 14 1 0

Compal Kunshan 79 186 0 0 14 4 15 7 22 0

ECS Shenzhen 124 136 0 0 8 9 10 15 17 1Flextronics Zhuhai 156 181 0 0 8 1 1 2 1 0

Mitac Shunde 151 0 6 12 3

MSI Shenzhen 147 0 8 9 0

Quanta Shanghai 105 176 0 12 6 20 6 7 0

TPV Fuqing 174 153 0 0 4 9 2 2 2 0

Wistron Kunshan 168 0 4 4 5

Average 135 156 0 0 9 8 10 8 6 0


Request suppliers to participate in EICC Carbon/Water Reporting System

– Scope 1 / 2 / 3 Emissions (Self-Generate/Buy/Supply Chain), carbon offsets, reduction goals

– Water usage, recycling, treatment, discharge, reduction

– Can be done via Carbon Disclosure Project (CDP – see below) or EICC template

Industry generally focus on voluntary transparency and reduction goals

Lenovo focus is to:

– Increase reporting / Collaborate for reduction goals / track progress

– Have robust program in place to react to industry changes

2011 Carbon Disclosure Project (reporting in 2012)

– Samsung: 96, Lenovo: 85, HP: 92, Dell: 81, Acer: not public, Apple: Declined to participate, Intel: 88A, AMD – 68, Qualcomm: 59, Nokia: 98, AT&T: 95, Verizon: 66, RIM: 61

GP Sustainability – GHG / H20

FY GHG & H20

10/11 63%

11/12 78%

12/13 95%+

Carbon Disclosure Project

– An independent not-for-profit organization working to drive greenhouse gas emissions reduction and sustainable water use by business and cities

– Provide a global system for companies and cities to measure, disclose, manage and share environmental information.


GP – GHG Emissions & Water UsageMetrics 2010 2011

Total MTCO2e1,143,000

** Based on 80% Spend Coverage

1,338,000** Based on 95% Spend

Coverage

1.7% Increase

MTCO2e / CA32.8 Kg/CA (34.8 CA’s)

28.2 Kg CA (47.2 CA’s)

14% Decrease(36% CA increase)

MTCO2e / Rev0.053 KG/$

($21.6B)0.045 KG/$

(29.6B)15% Decrease

(37% Rev increase)

3rd Party Verification --- 60% (% spend)

Suppliers w/ Goals --- 84% (% spend)

Note: Reporting is annual and CY12 Is reported in Jul 20133 MTCO2e - Metric Tons of Carbon Equivalents

Programs Weak / Opport. Goal Action / Focus Areas

GHG

Reduction Hold Increase below 1.7%1.Affirm Supplier Reductions Goals2.Re-check and affirm 3rd Party Verification 3.SPE Penalty / Credit Expansion4.Share Reduction Methods / Lessons5.Maintain 95% Spend Coverage6.Establish Water Base Line7.Further Engage IPE

3rd Party Verification Increase to 35% from 28%


GP Sustainability: Conflict Minerals Project PlanProject Name GP Conflict Minerals

Overall Status: TBD

Status Date April-13

1.Scope

Comply with Dodd-Frank, NGO & Customer Expectations

Key Milestones – Tracing Efforts

No. Description Plan Status

1 Participation in EICC WG’s --- Complete

2 Develop Lenovo Policy --- Complete

3 Risk Analysis – Basic 3T/G Use --- Complete

4 Risk Analysis – Applicability Analysis --- Complete

5 EICC 2.02 Due Diligence Tools May

7 Due Diligence Kick-Off: Cycle #1 June

8 Supplier Response July

9 Response Analysis, Scorecard, Next Steps Aug

11 Due Diligence Kick-Off: Cycle #2 Nov

12 Supplier Response Jan

Dependencies / Deliverables

No. Group Description Status/Comments

1 EICC Release V2.02 Due Diligence Template, Training Materials, FAQ’s

Tgt. Release May. 2013

2 GSC Team OECD Compliance Decision Review Model with Team

3 GP Conflict Minerals Report Content Open

Major Issues/Concerns

No. Description Status/Comments

1 Industry interpretation of Rules / COC Lawsuit Evolving

2 Private Sector Audit Expectations of Design & Description

Bureau Veritas Discussion - June

Key Milestones – Conflict Minerals Report

No. Description Plan Status

1 Develop CMR Content Framework 1Q

2 Preliminary meeting w Independent Auditor 1Q

3

4

5

7


Proposed elements in the Lenovo Conflict Minerals Report

Documented Policy, Process & BMS

– EICC Compliance Program / OECD Due Diligence Compliance

CPO Letter & Kickoff to Suppliers

Reasonable Country of Origin Investigation Efforts

– 3T/G General Information and Key Usage / Applicability Analysis

Facilities Used to Process Minerals / Products Not Yet Determined to be Conflict-Free

Due Diligence Efforts

– EICC Due diligence Template / Supplier Responses / Scorecard Tracking

Supporting Documentation

– Supplier Conference Messaging / Minerals Policy on the Internet

Private Sector audit of or Program Design & Description

GP Sustainability: Conflict Minerals ReportConflict Minerals Conflict Minerals – Dodd-Frank


Backup


GP ODM’s: Need to drive compliance at Site Level (vs. Company level)Supplier Name Location Commodity Model Commmodity

Compal Kunshan T NB ODMCompal Chengdu T NB ODMCompal Kunshan DT AIO ODM DT AIO ODM Compal Kunshan NB Edge ODM NB Edge ODM

CompalKunshan

NB IPG ODM+EdgeNB IPG ODM+Edge

Compal Kunshan NB ODM Shell NB ODM ShellCompal Kunshan DT/WS/SVR DT/WS/SVRCompal Kunshan Medion NBWistron Kunshan T NB ODMWistron Chengdu T NB ODMWistron Kunshan NB ODM Shell NB ODM ShellWistron Zhongshan DT IPG ODM DT IPG ODM

WistronKunshan


WistronChengdu


Wistron Zhongshan DT/WS/SVR DT/WS/SVRWistron Zhongshan DT AIO ODM DT AIO ODM Wistron Kunshan MIDH TabletWistron Kunshan Medion NBQuanta Shanghai T NB ODMQuanta Chongqing T NB ODMQuanta Shanghai DT IPG ODM DT IPG ODMQuanta Shanghai NB IPG ODM NB IPG ODMQuanta Shanghai NB Edge ODM NB Edge ODMQuanta Shanghai DT TPG ODM DT TPG ODMQuanta Shanghai NB ODM Shell NB ODM ShellQuanta Shanghai DT/WS/SVR DT/WS/SVRQuanta Shanghai Medion NB

Flextronics Zhuhai DT Mech. DT Mech.Flextronics Suzhou NB ODM Shell NB ODM ShellFlextronics Hungary DT ODM CMFlextronics Brazil DT ODM CM

Supplier Name Location Commodity Model CommmodityFoxconn Wuhan ECAT/DT Mech. ECAT/DT Mech.Foxconn Chongqing Communications CommunicationsFoxconn Taiyuan Thermal/Mech. Thermal/Mech.

Foxconn-Innolux Nanhai Monitor MonitorFoxconn-FIH Langfang MIDH Tablet

Foxconn-IGDBG Hengyang MIDH TabletFoxconn Hengyang Medion NBFoxconn Langfang Medion NBPegatron Shanghai T NB ODMPegatron Shanghia MIDH TabletPegatron Shanghai Medion NBBitland Shenzhen T NB ODMBitland Hefei T NB ODM

BitlandShenzhen(Not Major) DT/WS/SVR DT/WS/SVR

TIN Shanghai DT IPG ODM DT IPG ODMTIN Shanghai DT/WS/SVR DT/WS/SVR

ECSShenzhen(Not Major) DT/WS/SVR DT/WS/SVR

ECS Shenzhen Medion AIOMSI Kunshan Medion NBMSI Shenzhen Medion AIO/PCTPV Xiamen MIDH TVTPV Fuqing Medion AIOMitac Foshan DT/WS/SVR DT/WS/SVR

Huaqin Shanghai MIDH PhoneLongcheer Shanghai MIDH Phone

Simcom Shanghai MIDH PhoneCCI Taiwan/Nanjing MIDH Phone

Raken Kunshan MIDH TVBOEVT Wujiang Medion Monitor

Vestel Elektronik San.VE TIC.A.S. Manisa(Turkey) Medion TV

Losang Enmar Shenzhen Medion TVTianle Digital Electric Zhejiang Medion TV

ODM Company vs. Site • Include (site) coverage of ODM’s (vs. company level)


Lenovo Coverage of NEC Suppliers: FY2011(Apr‘11~Mar’12) Purchase Record

2012.11.15NEC Personal Computers.Purchasing Div

No Vendor Amount Mix # Mix1 Intel Japan KK (through Lenovo Singapore) 50,238 23% 23%2 QUANTA COMPUTER INC 49,180 23% 46%3 Compal Electronics Inc. 39,431 18% 64%4 Micro-Star Int l Co.Ltd 28,469 13% 77%5 Samsung Japan (through Agent) 7,938 4% 81%6 Western Digital Technology,Inc. 7,937 4% 85%7 LG Display Japan (through Agent) 6,199 3% 87%8 Panasonic 4,257 2% 89%9 Toshiba 3,937 2% 91%

10 Hitach LG Data Storage 2,734 1% 92%11 Sanyo (through Agent) 2,101 1% 93%12 NEC Display Solutions 1,895 1% 94%13 SK Hynix Japan 1,806 1% 95%14 Seagate Japan 1,227 1% 96%

(Million Japanese Yen)

Medion / NEC MIDH

• Lenovo existing program coverage


2011MSI Shenzhen 22.6%Wistron Kunshan 17.8%Pegatron Kunshan 9.7%Quanta 0.0%ECS 0.0%TPV 0.0%BOE Wujiang 3.1%MITAC(Kunshan) 2.4%MITAC NB 1.2%Tianle 0.0%VESTEL Turkey 6.7%Enmar Shenzhen 5.0%Good Man Taiwan 3.2%Ability/Viewquest 2.7%FoxconnCompal

Overlapped Coverage: 56.8%

Vendor Commodity PercentFoxconn ODM 7.36%Samsung Memory 5.66%COMPAL ODM 4.19%京东方 /BOE Panel 3.51%Hynix Memory 2.27%PANASONIC Battery 0.49%AUO Panel 0.40%奇美 /CMI Panel 0.28%记忆 /Ramaxel Memory 0.21%Micron Memory 0.15%Elpida Memory 0.14%LITEON ODM 0.11%AVC Thermal 0.07%Intel Cpu/Chipset 0.06%群光 /Chicony Power Supply 0.06%航嘉 /Huntkey Power Supply 0.05%USI ECAT 0.03%裕同 /Yuto Shipgroup 0.01%MICROSOFT software 0.01%博琛 /Bochen Shipgroup 0.01%TPV Monitor 0.01%TOSHIBA HDD 0.00%

SIERRA WIRELESS Chipset 0.00%

Subtotal(Spending Coverage) 25.08%

Lenovo Coverage of Medion / MIDH Suppliers

Medion / NEC MIDH

• Lenovo existing program coverage

MedionMIDH


GP Conflict Minerals ApplicabilityCommodity Applicability Comments Why

ODM Y ODM purchase parts/components for Lenovo (from Lenovo vendor pool) like:IC or produced by ODM

HDD/SSD/ODD N Industry Standard/Non Lenovo Design

Memory N Industry Standard / Non Lenovo Design

Adapter/PSU YVendor produce products as per Lenovo design; Lenovo designate the materials but can’t see 3TG materials apparently in some types of spec., however it must contain the PCBA.

Thermal (Fan) YVendor produce products as per Lenovo design;Lenovo designate the materials but can’t see 3TG materials apparently in some types of spec., however Fan must contain the 3TG(like: Tin)

Battery YVendor produce products as per Lenovo design; NB battery contain PCBA and cell may contain Tin. As for button cell battery in motherboard, that is the industry standard even if cell may contain tin.

Power Cord TBDDesigned by Lenovo and can’t see 3TG materials in spec., however we’d better do deep investigation through EICC due diligence report

LCD / Visual Y Vendor produce products as per Lenovo design; Contain PCBA, signal contact have gold plated.

Port Replicators Y Port Replicators designed by Lenovo and contain the 3TG;Need to be involved

Printers TBDAs per GCM’s response, we just put label to the printer and don’t involve design&production, however we’d better do deep investigation through EICC due diligence report.

Options (Speaker,Headset, Earphone,UFD, Keylock) TBDAs per GCM’s response, we just put label to the printer and don’t involve design&production, however we’d better do deep investigation through EICC due diligence report.

Motherboard (ECAT/Planner) Y Designed by Lenovo and Vendor together after check with GCMs

Mechanicals (Chassis,linkage,roll-cage,tray,hinge,screw ) N No 3T/G Content

PCB board Y PCB contain tin, PCB supplier need to be involved but Lenovo rarely purchase PCB directly.


GP Conflict Minerals ApplicabilityCommodity Applicability Comments Why

ODM Y ODM purchase parts/components for Lenovo (from Lenovo vendor pool) like:IC or produced by ODM

HDD/SSD/ODD N Industry Standard/Non Lenovo Design

Memory N Industry Standard / Non Lenovo Design

Adapter/PSU YVendor produce products as per Lenovo design; Lenovo designate the materials but can’t see 3TG materials apparently in some types of spec., however it must contain the PCBA.

Thermal (Fan) YVendor produce products as per Lenovo design;Lenovo designate the materials but can’t see 3TG materials apparently in some types of spec., however Fan must contain the 3TG(like: Tin)

Battery YVendor produce products as per Lenovo design; NB battery contain PCBA and cell may contain Tin. As for button cell battery in motherboard, that is the industry standard even if cell may contain tin.

Power Cord TBDDesigned by Lenovo and can’t see 3TG materials in spec., however we’d better do deep investigation through EICC due diligence report

LCD / Visual Y Vendor produce products as per Lenovo design; Contain PCBA, signal contact have gold plated.

Port Replicators Y Port Replicators designed by Lenovo and contain the 3TG;Need to be involved

Printers TBDAs per GCM’s response, we just put label to the printer and don’t involve design&production, however we’d better do deep investigation through EICC due diligence report.

Options (Speaker,Headset, Earphone,UFD, Keylock) TBDAs per GCM’s response, we just put label to the printer and don’t involve design&production, however we’d better do deep investigation through EICC due diligence report.

Motherboard (ECAT/Planner) Y Designed by Lenovo and Vendor together after check with GCMs

Mechanicals (Chassis,linkage,roll-cage,tray,hinge,screw ) N No 3T/G Content

PCB board Y PCB contain tin, PCB supplier need to be involved but Lenovo rarely purchase PCB directly.

Documents

2013 LENOVO INTERNAL. ALL RIGHTS RESERVED. David Martin | IO Procurement & Sustainability Integrated Operations ● Procurement Sustainability