Annual Audit Report Highlights Facility Performance

Report No : F_IAR_23664 City : Dongguan
Audit Date : Sep 26, 2014 Country : China
Last Audit : Sep 10, 2013 (90%) Auditors : Primary: Rina Fu
Assessment Stage : Annual Secondary: None
Overall Facility Score : 89%
Service Provider: IntertekSchedule Type : Announced
OKEY-LA INTERNATIONAL LTD
GENERAL INFORMATION
85-100%
High
Performance
71-84%
Medium
Performance
51-70%
Low
Performance
0-50%
Very low
Performance
Assessment
area
Score
results
Number of
non-compliances
by rating
ZeroTolerance
Major
Moderate
Minor
Notscored
Overall 89% - - 3 4 -
Labor 100% - - - - -
Wages & Hours 74% - - 2 - -
Health & Safety 100% - - - - -
Management Systems 86% - - - 4 -
Environment 69% - - 1 - -
WORKPLACE PERFORMANCE INDEX AND SUMMARY Participating facilities: 14286
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Workplace Conditions Assessment Report
Measured Results —Improved Performance

Facility Legal Name: Dongguan City Okey-La
International Ltd
Audit Location: Building A, JiaWen Industry,
No 3 WeiMing Road, HengZeng
Street,
ZengTian Village, Changan
Town,
City: Dongguan
Country: China
Contact Name: Mr. Thomson Dong
Contact Title: General Manager
Industry: Electrical and Electronics
Facility Name: Okey-La International Ltd
A. FACILITY PROFILE
A1. FACILITY INFORMATION
Security systems in
place:
Yes Cameras were used to
monitor the access door.
Building Description: The facility used 1/3 part with 220 square meters on 2nd floor of one 6-storey building as
office, and used 1/2 part with 600 square meters on 3rd floor of one 3-storey building as
production workshop and warehouse. No kitchen or canteen or dormitory was provided to
employees.
Special building type: Yes Multi-story building shared with other facilities/enterprises under separate ownership
During the audit day, it was noted that another five facilities named Xie Da Metal Ornament
Factory, Kai Li Feng Limited Company, Chuang Xiong Metal Ornament Factory, Yu Sheng Mould
Factory, and Hui Huang Electronic Factory, which located in the same building with
independent business licenses, different products, different bosses and different management
systems from Okey-La International Ltd.. Through interviewing the onsite employees, all
interviewees said that they belonged to Okey-La International Ltd. and no employee mingling
with other facilities. As per facility management interview, they could not provide the leasing
contracts and business licenses of the other five facilities for review because they separately
leased the production building with Dongguan Jia Wen Limited Co.. During facility tour, it was
noted that facility names were also marked in the production workshops. Due to the above
mentioned, another five facilities were not included in the audit scope.
Facility Legal Status: Privately owned
Year facility began
operations:
2011
Located in special
economic zone:
No
Person responsible
for overall social
compliance issues:
Ms. Wu Ying Bi
Valid certificate
for social compliance
certification program:
None
Vendor Name: Mr. Christmas Limited
Nr. F_IAR_23664
Okey-La International Ltd

A4. SUBCONTRACTOR INFORMATION
No subcontractor information given
Languages spoken in the
facility:
Chinese
Management and employees
speak same language :
Yes
Female Employees: 15
Male Employees: 16
Mgmt Employees: 11
Production (Non-
Management) Employees:
20
Local Employees: 0
Foreign/Migrant Employees: 31
A3. EMPLOYEE INFORMATION
Range of total number of
employees at the facility:
0-100 employees
Union name: None
Employs juvenile
workers:
None
Employee nationalities/
provinces:
Most migrant employees
came from Guangdong and
Hunan province
Hires through
employment agent:
No All employees were
employed by the facility
directly.
A2. PRODUCTION INFORMATION
Chemicals or
hazardous
materials
on-site:
No As per facility tour, employee and
management interview, no chemical
or hazardous material was found in
the facility on the audit day.
Time record
system(s) used:
Others, please specify
Current production/
Services for client:
No
Products manufactured/
Services provided:
LED decoration lights
Production process/
Service elements:
Assembly, Inspection and
Packing
Production capacity a
week:
25,000 pieces
Total number of
machines:
2 assembly lines,no machine
was used in the facility
Main machine types: N/A
Shifts and
Operating hours:
All employees in the facility worked for 5 days per week in 1 shift. The normal working hour
was from 8:00 to 17:30 with 1.5 hours’ break from 12:00 to 13:30.
Nr. F_IAR_23664

A5. GENERAL INFORMATION
This annual audit was conducted by Intertek Testing Services Shenzhen Ltd. One auditor assessed / verified the facility’s
operations according to the requirement of client against and local laws. At 9:35 on the audit day, auditor entered the
facility and then held an opening meeting according to audit requirement. The facility management Mr. Chen Zi Wu/ Office
Director and Ms. Zheng Bing Chan/ Personnel Clerk were present in the meeting. They stated that they would be co-
operative with this audit. The facility management showed a positive attitude to this audit during the whole process. All
documentation requested for review was provided timely. A closing meeting was held with management Mr. Chen Zi Wu/
Office Director and Ms. Zheng Bing Chan/ Personnel Clerk. All findings were addressed. Mr. Chen Zi Wu/ Office Director
said they would have an internal meeting to follow up and necessary changes would be made in accordance. A CIR report
was left to management Mr. Chen Zi Wu/ Office Director before auditor left the facility.
Emergency Preparedness Summary
Sufficient fire protection facilities such as fire extinguishers, fire hydrant, fire alarm and smoke detectors were available
and easily accessible in production workshop and warehouse. There were two safety exits in the production workshop
and all safety exit doors were clearly marked. All evacuation passages in the facility were unblocked. Evacuation plans
with sufficient information were posted throughout the facility. Regular fire drill was conducted in the facility. Fire safety
training was provided to all employees during orientation and annual training.
Nr. F_IAR_23664

A6. AUDIT PROCESS
Payroll and attendance records sampling
Period From To Peak Season Records Reviewed
Current Period 01-07-2014 31-07-2014 No 4
Period 1 01-05-2014 31-05-2014 No 3
Period 2 01-12-2013 31-12-2013 No 3
Total 10
Employee interview sampling
Individual 4 individuals
Group Nil
Total interviewed 4 employees
Audit pay period provided for review
Records From To
12 Months Payroll 01-08-2013 31-07-2014
12 Months Attendance 01-08-2013 26-09-2014
Special Comments N/A
Personnel records Production records
Non-Production records Employment contracts
Legal Permits Social insurance documentation
Employee leave register
Other records reviewed
Other : Resign record
Nr. F_IAR_23664

B. KEY PERFORMANCE METRICS
B1. COMPARISON BENCHMARK
Current performance — Global average, China average, Electrical and Electronics average
Labor Wages & Hours Health & Safety Management Systems Environment
Advancers DeclinerConstant
Section Name
Current
(26-Sep-2014)
Last
(Not Applicable)
First
(10-Sep-2013)
Change
(Current-Last)
Change
(Current-First)
Labor 100 Not Applicable 100 Not Applicable 0 %
Wages & Hours 74 Not Applicable 85 Not Applicable -12 %
Health & Safety 100 Not Applicable 86 Not Applicable 16 %
Management Systems 86 Not Applicable 100 Not Applicable -14 %
Environment 69 Not Applicable 69 Not Applicable 0 %
Overall Score 89 Not Applicable 90 Not Applicable -1 %
B2. PERFORMANCE TREND ANALYSIS
(26-Sep-2014) (Not Applicable) (10-Sep-2013)
PERFORMANCE RATING
Very Low (0% – 50%) Low (51% – 70%) High (85% – 100%)Medium (71% – 84%)
Nr. F_IAR_23664

International Standard: 60 China average: 52 Highest hours this facility: 58 Last Audit average: 56
Normal Work Hours Overtime Work Hours
B3. WORKING HOURS AND WAGES
58
Average total hours worked weekly
Average wages paid in local currency (RMB)
Special wage circumstances:
Wages and hours summary: Finger scan system was used to record the working hours of employees. All employees in the facility
worked in one shift. Normal working hour was from 8:00 to 17:30 with 1.5 hours lunch break from
12:00 to 13:30. The minimum wages paid by the facility was RMB 8.62 per hour, the overtime wages
was paid as 150%, 200% and 300% of the normal wages for the overtime hours respectively on
normal working days, rest days and statutory holidays. Based on the attendance records, no
employee worked on statutory holidays. 4 randomly selected employees'' monthly overtime hours
were 78 hours in July 2014, 3 randomly selected employees'' monthly overtime hours were 82 hours
in May 2014, 3 randomly selected employees'' monthly overtime hours were 76 hours in December
2013.
Nr. F_IAR_23664

100%C1. Labor
C. PERFORMANCE DETAILS
Current (26-Sep-2014) Last (10-Sep-2013)
PERFORMANCE RATING
Nr. F_IAR_23664

74%C2. Wages & Hours
Sub Section: Working Hours
Status Findings % Global freq of
compliance
Moderate 120.00 : Total overtime hours exceeds allowable limits under applicable law or
agreement.
Auditor's comment Overtime hours exceeded the legal requirement. Through document review,
auditor found that the monthly overtime hours of 4 out of 4 randomly selected employees were 78
hours in July 2014 (recent month), 3 out of 3 randomly selected employees were 82 hours in May
2014 (random month) and 3 out of 3 randomly selected employees were 76 hours in December
2013 (random month).
People’s Republic of China Labor Law Article 41
The employing unit may extend working hours due to the requirements of its production
or business after consultation with the trade union and laborers, but the extended
working hour for a day shall generally not exceed one hour; if such extension is called for
due to special reasons, the extended hours shall not exceed three hours a day under the
condition that the health of laborers is guaranteed. However, the total extension in
month shall not exceed 36 hours.
55%
PERFORMANCE RATING
Nr. F_IAR_23664

Sub Section: Wages and Benefits
compliance
Moderate 148.00 : The facility does not provide social security, pensions, healthcare and/ or other
insurance to employees as per legal requirement.
Auditor's comment Insufficient social insurance participated. Through document review, auditor
found that all 31 employees had participated in employment injury insurance and basic medical
insurance (covering maternity insurance), only 8 employees had participated in basic endowment
insurance and unemployment insurance.
Social Insurance Law of the People’s Republic of China Article 53
Employees shall participate in child-bearing insurance, and the child-bearing insurance
premiums shall be paid by employers rather than employees in accordance with the
relevant provisions of the state.
Employees shall participate in the basic illness or injury insurance for employees, and
the basic illness or injury insurance premiums shall be jointly paid by employers and
employees in accordance with the relevant provisions of the state.
Employees shall participate in the basic retirement insurance, and the basic retirement
insurance premiums shall be jointly paid by employers and employees.
Employees shall participate in the disability caused by work-related injury or
occupational disease insurance, and the disability caused by work-related injury or
occupational disease insurance premiums shall be paid by their employers rather than
the employees.
Employees shall participate in unemployment insurance, and the unemployment
insurance premiums shall be jointly paid by employers and employees in accordance
with the relevant provisions of the state.
People’s Republic of China Labor Law Article 72
The sources of social insurance funds shall be determined according to the categories of
insurance, and an overall pooling of insurance funds form the society shall be introduced
step by step. The employing unit and laborers must participate in social insurance and
pay social insurance premiums in accordance with the law. Social Insurance Law of the
People’s Republic of China
64%
PERFORMANCE RATING
Nr. F_IAR_23664

100%C3. Health & Safety
Sub Section: Safety Hazards
compliance
Corrected 238.00 : Previous Non-Compliance : Construction projects do not have the proper fire
service inspection certificate
72%
86%C4. Management Systems
Sub Section: Management Systems
compliance
Minor 294.04 : The facility has comprehensive working hour and wages management processes
and procedures in a written manual that support adherence to social compliance
requirements but they are not all being properly implemented
Auditor's comment It was noted that the facility had established the procedure. However, findings
about social insurance and working hours were found during this audit, please refer to related
section for details.
84%
PERFORMANCE RATING
Nr. F_IAR_23664

Sub Section: Management Systems
compliance
Minor 297.00 : The facility has not implemented any internal accountability standards and
procedures for migrant employees (domestically and/ or internationally) at the facility
and within suppliers/ sub-contractors that evaluate and address the risks of human
trafficking and slavery.
Auditor's comment No proceudure was provided for review. Through document review, auditor
found that the facility could not provide such procedure for review.
73%
Minor 300.00 : There are no written records (correspondence, report, meeting minutes, etc) of
a regular management review of the social compliance system
Auditor's comment No meeting minute was provided for review. Through document review,
auditor found that the facility had established management review procedure, however, the facility
could not provide the meeting minute for review.
58%
Minor 303.00 : The facility provides appropriate training for managers on how to implement its
social compliance policies and procedures, however, incomplete training records or no
training records are maintained.
Auditor's comment No training record was provided for review. Through document review and
management interview, auditor found that the facility had provided training for managers,
however, no such training record was provided for review.
68%
PERFORMANCE RATING
Nr. F_IAR_23664

69%C5. Environment
Sub Section: Environment
compliance
Moderate 322.00 : The facility does not have all required environmental permits, licensees and / or
registrations
Auditor's comment 1) In accordance with the PRC Environmental Impact Assessment Law Article
16, No environmental impact assessment for construction project. During facility tour, auditor
found that products in the facility are LED lights, and the main processes are assembly, inspection
and packing. However, the facility could not provide environmental impact registration form or
impact report or impact report form for construction project for review. 2) In accordance with The
PRC Environmental Impact Assessment Law article 22, No environmental impact assessment
approval for construction project. During document review, the facility could not provide the
environmental impact assessment approval for construction project for review.
The Measures for Administration of Environmental Protection Acceptance Check
upon Completion of Construction Project article 17
For construction units accord with the acceptance check conditions prescribed in Article
16, competent departments of environmental protection administration shall approve
the application report of environmental protection acceptance check, application form of
environmental protection acceptance check or registration card of environmental
protection acceptance check. For construction projects with a registration card of
environmental protection acceptance check upon completion of project completed,
competent departments of environmental protection administration shall, after checking,
give the opinions on the registration card of environmental protection acceptance check
and make approval decisions. Construction projects without official approval on the
application report, application form or registration card of environmental protection
acceptance check upon completion of projects shall not be put into production or use.
71%
PERFORMANCE RATING
Nr. F_IAR_23664

% Global Frequency of Compliance: Represents the implementation percentage performance of all suppliers participating
in the WCA Community globally for each issue
Identification numbers: Represents the finding ID associated with each checklist question
RECOMMENDATION FOR IMPROVEMENT PLAN TIMELINE
Minor Take action within 0 ~ 6 months to make
necessary improvements.
Major : Take action within 0 ~ 1 month to make
Moderate: Take action within 0 ~ 3 months to make
Zero Tolerance: Take immediate action to make
PERFORMANCE RATING
Nr. F_IAR_23664

This report is for the exclusive use of the client of Intertek named in this report (“Client”) and is provided pursuant to an
agreement for services between Intertek and Client (“Client agreement”). No other person may rely on the terms of this
report. This report provides a summary of the findings and other applicable information found/gathered during the audit
conducted at the specified facilities on the specified date only. Therefore, this report does not cover, and Intertek accepts
no responsibility for, other locations that may be used in the supply chain of the relevant product or service. Further, as the
audit process used by Intertek is a sampling exercise only, Intertek accepts no responsibility for any non-compliant issues
that may be revealed relating to the operations of the identified facility at any other date. Intertek's responsibility and
liability are also limited in accordance to the terms and conditions of the Client Agreement. Intertek assumes no liability to
any party, for any loss, expense or damage occasioned by the use of this information other than to the Client and in
accordance with the Client Agreement and these disclaimers. In case there is any conflict between the disclaimers stated
herein and the applicable terms and conditions of Intertek incorporated into the Client Agreement, then these disclaimers
shall prevail.
DISCLAIMER
D. STRENGTHS AND CHALLENGES
Challenges: Facility performance ranks in the bottom percentile of the population Rating
Global Freq. of
Compliance%
The facility has comprehensive working hour and wages management processes and procedures in a
written manual that support adherence to social compliance requirements but they are not all being
properly implemented
Minor
84%
The facility has not implemented any internal accountability standards and procedures for migrant
employees (domestically and/ or internationally) at the facility and within suppliers/ sub-contractors that
evaluate and address the risks of human trafficking and slavery.
Minor
73%
The facility does not have all required environmental permits, licensees and / or registrations
Moderate
71%
The facility provides appropriate training for managers on how to implement its social compliance policies
and procedures, however, incomplete training records or no training records are maintained.
Minor
68%
The facility does not provide social security, pensions, healthcare and/ or other insurance to employees as
per legal requirement.
Moderate
64%
Facility Strengths: Facility performance ranks in the top percentile of the population
and/or has implemented a best practice process
tiRating
ng
Global Freq. of
Compliance%
Nr. F_IAR_23664

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