2009 Fuji Xerox Sustainability Report

Disclaimer

The 2009 Sustainability Report covers the Fuji Xerox Australia financial year ending 31st March 2009 and is published annually. The striking work of one of employees, Nasir Farhadi, is depicted on our cover, reflecting our reliance on the natural environment and the themes of organisational sustainability and productivity.

The Report complies with GRI level B+ requirements and has been independently assured by Banarra Sustainability Assurance and Advice in accordance with the 2008 AA1000 assurance methodology. Ernst and Young audit our financial statements, which have been placed on public record.

Our Sustainability Report is made available in this concise print format and on our external website at www.fxasustainability.com. We invite our readers to share comments, suggestions and thoughts on this Report by participating in the online survey. Amanda Keogh, national environment and sustainability manager, welcomes any further comments on our activities by email to Amanda.Keogh@aus.fujixerox.com.

Foreword

Message from our Managing Director

'Sustainability in its broadest sense underpins our business. We aim to run Fuji Xerox Australia based on a set of principles that guide continuous improvement across economic, environmental and social criteria. Our responsibility to internal and external stakeholders spans these three pillars of sustainability. Whether they are employees, customers, business partners or the broader community, our stakeholders expect us to act as a good corporate citizen by finding the right balance between economic, environmental and social considerations.'

At Fuji Xerox Australia we scope sustainability broadly as the fundamental framework for our organisationís ongoing success. Our vision is to achieve sustainable outcomes for all stakeholders. The execution of that vision requires a holistic view of what our stakeholders expect of us across the economic, social and environmental pillars of sustainability and the organisational capability to deliver.

This responsibility to stakeholders is a key tenet underpinning our approach to sustainability. In fact we see our ongoing sustainability as an outcome of running our organisation in a responsible way. We have identified the seven areas where we are held to account by our stakeholders. Our Sustainability Report is structured according to these seven areas of accountability, describing the direction we are taking on the most significant issues concerning our stakeholders and how we performed in 08/09.

Business performance

08/09 has been a year of two halves for Fuji Xerox Australia. The global financial crisis and the associated economic downturn in Australia impacted our revenue in the second half and led us to adjust staffing levels in some areas of the business in line with changed market conditions. Our focus on creating customer value and controlling costs has helped sustain an eighth consecutive year of revenue growth in a difficult period. This reflects that the fundamentals of our business are sound and that the direction we are taking to support continued growth is the right one. Our services business has increased outsourcing activity as customers seek out efficiencies in document intensive business processes. Revenue from annuities and document supplies has also risen, although equipment sales have been affected. The challenges of a highly commoditised and competitive marketplace persist. In response, we are learning to better orient ourselves around changing customer needs by innovating new solutions, expanding value propositions and developing appropriate sales and marketing strategies and capabilities.

Corporate governance

Robust governance and management frameworks and adherence to legal requirements are fundamental for sustainability. We see our commitment to values and ethics as an equally essential element of how we do business. Significant work has been undertaken in 08/09 to refresh and reconnect with our core values and develop a new Code of Conduct for the company. We have also made progress with embedding sustainability. New initiatives like our sustainability champions program and re-launching our environmental and community programs have increased levels of staff engagement. We have also begun addressing all areas of accountability in our business planning process, which means that each division is developing a better understanding of its own contribution to not just economic, but also environmental and social outcomes. Our challenge is to improve our understanding of stakeholder concerns across the full spectrum of sustainability and build appropriate responses into our business planning.

Customer experience

Fuji Xerox Australia is on a progressive journey to broaden and deepen our customer focus so that we can create customer experiences that will produce higher levels of loyalty. While we failed to formally measure satisfaction levels in every market segment in 08/09, our commitment to creating value for our customers and optimising the customer experience has not waned. We are entering a period of reflection and review in which we will build on the customer satisfaction strategies, measurement systems and processes that already exist to develop customer advocacy across all market segments. The implementation of a regional customer support strategy in early 2009 warrants particular mention. The strategy involves the consolidation of all Asia Pacific customer support operations into three regional centres in Shanghai, Kuala Lumpur and Sydney. This has led to an expansion of our customer care centre and technical service centre as we begin to support other operating companies in the region. Our goal is to provide a benchmark and consistent customer support experience for all customers.

Providing a responsible solution

Fuji Xerox is known for its end of life product take-back and resource recovery program. This program is not just addressing an e-waste issue; our advances in component reuse reduce the carbon intensity of new product manufacture. That strategy will help the Fuji Xerox Group achieve a newly announced target - to reduce carbon emissions from the entire product lifecycle by 30% from 2005 levels by 2020. Improving the energy efficiency of our product range by a further 80% on 2005 levels will also help our customers achieve their own environmental targets. More broadly, our solutions business is intent on creating low-carbon ways of working with documents. The carbon, waste, paper and air quality benefits of establishing a lean, green print platform can already be demonstrated with an environmental footprint calculator due for release in 09/10. Closer to home, we made some significant improvements to our sustainability standards for sourcing paper. Our goal is to enable the efficient use of paper and to work only with responsible pulp and paper manufacturers.

Engaging employees

Fuji Xerox Australia is committed to improving employee engagement levels so that we have a strong employment brand and can attract and retain talented employees that contribute to our business objectives. Our 10% increase in engagement levels since 07/08 is evidence of the improvements we have made in management training, performance management and staff communication. The companyís focus on organisational development continues - we believe that capability is a long term competitive differentiator and that our success will depend upon how well and how fast we build the capabilities we need now and in the future.

Influencing sustainability outcomes

We apply sustainability both inside and outside Fuji Xerox Australia. In 08/09 our work with the Australian Information Industry Association to establish an extended producer responsibility regime has progressed, with the development of a federal waste policy underway. As we move towards a more centralised procurement model we have taken steps to integrate sustainability considerations more formally into our supplier relationships. 08/09 has also witnessed the reinvigoration of our community initiatives with the establishment of a community engagement committee and community champions in every office. Our goal is to enable staff participation and create positive outcomes for the communities in which we operate by helping the disadvantaged.

Minimising environmental impacts

We continue to minimise the environmental impact of our business operations, especially in the area of carbon management. In 08/09 we formalised a carbon strategy, reduced emissions by 19% through our Green Power™ commitment and placed renewed focus on achieving both cost and carbon efficiencies in our business by establishing a cross-divisional carbon taskforce. We also established new carbon and paper use targets based on absolute annual reductions of 1% year on year; this is both a simpler and more progressive approach than our previous targets, which were expressed relative to business growth. We also removed the weight of product gathered at end of life from our internal business waste measurement. This has necessitated the review of our previous business waste recycling achievements and reveals the challenges that lie ahead as we move towards our zero waste to landfill target.

In closing I would like to acknowledge the sterling achievements and dedication of my predecessor, Andy Lambert, who will take the role of corporate advisor to support this transition in leadership. I will be proud to continue his commitment to leading a sustainable organisation. 08/09 witnessed other changes in the leadership team including the retirement of our Corporate Affairs Director Ramsay Moodie, whose inspiring advocacy for industry product stewardship schemes leaves a remarkable legacy. We have recently appointed new General Managers in Corporate Affairs, Business Services and Customer Support and I personally look forward to working with them as we take the business forward.

As a stakeholder reading this Report, I hope that we have provided you with a ësustainable outcomeí in our dealings together. I invite your direct feedback in that regard, essential if we are to continuously improve on our sustainability journey.

Yours sincerely
Nick Kugenthiran
Managing Director

Summary sustainability performance

Through our materiality process we found that the following sustainability issues took precedence with our stakeholders. We continue to develop targets and key performance indicators for every area of accountability, which reflects that we are on a progressive journey to embed sustainability management, measurement and reporting across the organisation.

Material issue (and score)

Direction

08/09 objectives

How did we do?

09/10 objectives

Business performance (1)

To be the leader in providing the Australian market with document management services and solutions.

Maintain leadership in our marketplaces.

MET

$780M revenue, a 4.1% increase on 07/08.

Global services revenue grew 23.5%.

Equipment sales revenue declined 1.7%.

Document supplies revenue grew 4.3%.

Annuity revenues grew 4.3%.

5% growth in total revenue across FXA.

Customer satisfaction with equipment support and services (2)

Shift from satisfying customers to creating customer advocates.

Improve systems and processes for measuring and managing the customer experience.

Achieve overall office customer satisfaction index of 95% (40% very satisfied).

NOT MET

Office customer surveys were not regularly conducted due to staff transition.

Overall office customer satisfaction index declined to 90% (46% very satisfied).

Review Customer Satisfaction Assurance System, customer satisfaction meetings and customer survey methodologies.

Review office and production customer satisfaction and net promoter score targets.

Provide a closed-loop dialogue with customers regarding high-level survey outcomes, trends and action plans for improvement.†

Meet office services, design services, mail services and print services targets.

Monitor customer satisfaction drivers with production clients.

NOT MET

Production customer surveys were not conducted at all due to staff transition.

Formalisation of ëintensive care processí for production clients.

Meet office services, design services, mail services and print services customer satisfaction targets.

Implement Global Services transition and transformation initiative.

Office services fell 2% short of 92% overall satisfaction target and exceeded by 4% our 32% ëvery satisfiedí target. WIP

Print and mail services exceeded both targets, MET while design services fell short of both its customer satisfaction targets NOT MET.

Global Services have formalised Continual Service Improvement and Service Improvement Planning MET.

Staffing levels (3)

Ensure the organisation employs people with knowledge and skills to support business objectives.

na

1,846 employees.

na

Employee engagement (4)

Improve levels of employee engagement in line with Hewitt best employersí score.

Target 5% improvement in engagement levels in every division in 08/09.

MET Overall engagement levels increased from 49% to 59%.

Target 5% improvement in engagement levels in 09/10.

Run employee engagement focus groups and prepare action plans to address issues arising.

Carbon management (5) and Mitigating environmental impacts of product distribution (16)

Improve cost and carbon efficiency of business operations.

Work with key suppliers to provide low-carbon products and services.

Provide customers with low-carbon solution and enable cost and carbon efficiency (see section 5).

Reduce carbon emissions 1% on 07/08 emissions.

MET 19% reduction in carbon emissions.

Reduce overall carbon emissions by 1% on 08/09 levels.

Reduce carbon emissions from logistics 10% on 08/09 levels.

Reduce carbon emissions from employee air travel by 10% on 08/09 levels.

Review Green Power procurement.

Implement more robust carbon data capture systems with logistics suppliers.

Procure 50% Green Power.

NOT MET 36% Green Power procured.

Develop a carbon strategy.

MET A carbon strategy was formalised focusing on operations, suppliers and customers.

Establish cross-divisional carbon task force.

MET A cross-divisional carbon taskforce was established and is working on opportunities for cost and carbon reduction in business operations.

Improve carbon management and measurement through the logistics supply chain.

MET A sustainability champion for logistics was appointed and is working on carbon measurement from logistics and opportunities for cost and carbon reduction in equipment distribution.

Quality and innovation (6)

Drive product and service innovations to create new market opportunities.

Re-invigorate quality and focus on our core value of continuous improvement.

Foster and recognise innovation in our business.

WIP Conducted an internal review of innovation.

Established a cross-divisional innovation council.

Identify a problem solving methodology and roll-out to divisions.

Complete management quality report.

Initiate research on semantics and sustainability reporting.

Maintain ISO 9001 certification.

MET Completed formal problem solving processes in some divisions.

Maintained ISO 9001 certification.

Organisational development (7)

Transition to culture of manager-led development.

Drive employee performance in line with business values and objectives.

Continue roll-out of performance management system (PACE).

MET Implementation of full year cycle of performance management system (PACE) ñ 75% staff participation;

Redefinition and repositioning of position descriptions (ongoing).

Roll coaching for capability development program out to sales managers (level 2).

Extend ësales manager as coachí program to other divisional managers.

Continue management training program.

Develop and launch management training program.

MET Successful pilot and roll-out of management training program.

Roll coaching for capability development program out to sales managers (level 1).

MET Coaching for capability development implemented with sales managers.

Responsible paper sourcing (8)

Source both recycled and virgin paper from certified sources.

Assess paper suppliersí sustainability credentials and establish a path for continuous improvement.

Develop resources and implement communication strategies so that FXA can act as a trusted advisor to clients on responsible paper sourcing.

Seek Program for the Endorsement of Forest Certification (PEFC) chain of custody certification.

MET PEFC chain of custody certification has been achieved.

Secure 100% paper supplier compliance with minimum standards in 09/10 and ask for improvements in the management of issues of primary stakeholder concern.

Conduct internal briefings on ëThe Paper Factsí and develop marketing resources to establish a consistent corporate position on paper and the environment.

Integrate stakeholder feedback into sustainability standards and assess compliance at the close of every financial year.

Review paper procurement process and integrate new sustainability standards with other business requirements.

Educate stakeholders about sustainable paper.

WIP An internal white paper that ëstraight-talksí about paperís environmental impacts has been developed and will be circulated to stakeholders as part of a broader communications strategy in 09/10.

Bring new Forest Stewardship Council (FSC) and PEFC paper stocks to market.

MET The following certified stocks were brought to market in 08/09:

Performer A4 & A3 (FSC Mixed Sources).

Colotech+ (PEFC).

Green Wrap A4 & A3 (PEFC Recycled).

Professional A4 & A3 (PEFC).

Review sustainability standards for paper sourcing and compliance assessment process.

MET More robust sustainability standards have been drafted for stakeholder review and we have strengthened our process for assessing compliance.

Test suppliersí compliance with sustainable paper standards.

WIP 7 out of 8 suppliers have submitted responses with some incomplete information provided.

Values, ethics (9) and legal compliance (20)

Educate staff so that ethical and legal breaches are minimised through the development and communication of a Code of Conduct.

Live our values in our business.

Develop a new code of conduct to better instil values and ethics.

MET A new Code of Conduct was developed.

Launch code and educate key staff on requirements.

Establish and communicate procedure for monitoring and reporting breaches of code.

Formalise a register of breaches against code.

Review whistleblower policy and improve access to and visibility of whistleblower mechanism.

Commence a third round of legal compliance training.

Increase and tailor legal compliance course content and re-introduce targeted face-to-face training for specific needs.

Revise all relevant HR policies and procedures to ensure appropriate links to values.

Measure alignment with values in each employeeís PACE performance management review.

Roll out revised values and integrate into performance management system.

MET A revised set of company values was rolled out to the business ëRefresh and reconnectí.

Values were integrated into performance management system.

Conduct legal compliance training regularly.

MET Legal compliance training was conducted.

Mitigating environmental impact of equipment (10)

Reduce carbon emissions from the entire product lifecycle by 30 percent from 2005 levels by 2020.

Our parent company is responsible for product development ñ further information on product innovations that enable energy efficiency can be found in their sustainability report at X.

Entire office product range is compliant with 2009 Energy Star standard and certified by Good Environment Choice Australia.

na

End of life resource recovery (11)

Optimise business and environmental outcomes from end of life resource recovery.

Achieve 280,000 parts remanufactured and 60 new remanufacture programs.

NOT MET 230,000 parts remanufactured and 56 new remanufacture programs.

217,000 parts remanufactured and 50 new remanufacture programs.

Identify and implement more cost and carbon efficient means of transporting end-of-life products back to our facilities.

Implement more robust product return measurement systems so we can calculate the proportion of products that are returned to us at end-of-life in comparison to the total distributed to the Australian market.

Seek improvements in the processing of our Basel Permit.

Explore tension between zero landfill goal and carbon reduction target.

MET Product stewardship committee continued to improve business and environmental outcomes from resource recovery.

Helping customers become more sustainable (12)

(see material issues 8, 10 and 11)

(see material issues 8, 10 and 11)

(see material issues 8, 10 and 11)

(see material issues 8, 10 and 11)

Remuneration and recognition (13)

Ensure the organisation has appropriate reward and recognition programs so that we can attract and retain talent to support business objectives.

na

1369 compliments to employees.

na

Sustainable supply chain management (14)

Work through the Xerox and Fuji Xerox Group to assure integrity of our product supply chain (see respective sustainability reports).

Assess paper suppliersí sustainability credentials and establish a path for continuous improvement (see section 5).

Work with key suppliers to provide low-carbon products and services (see section 8);

Ensure environmental, social and governance standards are applied to indirect procurement.

Share sustainability standards with our indirect sales network.

Develop sustainable supply chain approach in indirect procurement.

MET A national procurement manager was appointed.

A sustainability code for suppliers was developed and has been added to tender documents.

Build a supplier database to monitor supplier performance metrics, including those focused on environmental, social and governance issues.

Revise procurement policy and processes and integrate how we apply sustainability to the supply chain.

Develop a risk assessment framework to identify ëhigh riskí suppliers that require specific environmental, social and governance metrics for improvement.

Increase rigour of sustainability standards for dealers in 09/10 and build capability to improve performance.

Launch dealer sustainability program.

MET 25 out of a potential 39 dealer locations signed up to the first year of our sustainability program ñ 4 dealers failed to submit reports and were removed from the program.

Embedding sustainability (15)

Integrate sustainability more formally into governance, planning and management frameworks.

Engage staff and increase participation in social and environmental initiatives.

Align risk management approach with materiality process and refine both.

WIP Materiality process was refined in line with new AA1000 standard.

Some progress was made on risk management framework ñ a new General Manager will take that work forward.

Align risk management approach with materiality process and refine both.

Review stakeholder engagement framework.

Formally establish appropriate objectives under each area of accountability in the ISMD business planning process in 09/10 as a pilot for other divisions to follow.

Continue the champion program and resource programs for improvement in line with sustainability objectives.

Address seven areas of accountability in business planning.

WIP Every division was asked to address our seven areas of accountability during their annual business planning process with mixed levels of success.

Implement a sustainability champions program.

MET Launched an internal sustainability champions program, asking for nominees from every division to participate in projects that would improve aspects of social and environmental performance.

Re-launched environmental and community initiatives internally.

Occupational health and safety (17)

Improve our incident and injury reporting system to create confidence and clarity regarding lost-time and claims data.

Use this data and site reviews to identify and prioritise OHS risks of business operations and develop risk mitigation strategies.

Appoint external provider to supply accident management and rehabilitation services and OHS incident reports.

MET An external provider was appointed.

Establish a cross-divisional OHS steering committee to develop an OHS strategy and to recommend the investments required in systems and resources to deliver that strategy.

Improve systems supporting incident, injury ands claims reporting and implement a robust reporting process and data capture system so that an accurate LTIFR can be established.

Review response to OHS risks in situations where incidents, injuries and claims have increased.

Improve the processes for managing risks in the workplace by increasing the number of OHS site committees, conducting audits and training where required and ensuring OHS is on the agenda of site management review meetings.

Establish a Lost Time Injury Frequency Rate (LTIFR).

NOT MET While we addressed our management of workers compensation claims by appointing an external provider, some issues with their injury reporting have been identified which means we still cannot confidently report an LTIFR.

Management oversight of OHS incidents and injuries has been improved through quarterly OHS reviews at leadership meetings.

Conduct independent risk assessment of major workplaces.

NOT MET We postponed the OHS assessment of workplaces in favour of mitigating risks already identified.

We formalised a process for identifying and managing risk associated with contractors working on our sites.

Community engagement (18)

Increase staff participation in WorkPlace Giving from 10% to 19% by 2012.

Increase number of volunteer opportunities available to staff within working hours.

Improve internal communications and staff awareness of community programs.

Review community initiatives and establish areas for improvement.

MET Community engagement committee established and community champions appointed.

New performance targets established.

Re-launched community initiatives internally.

9% participation in WorkPlace Giving and $68,976 in matched donations.

Improved employee access to WorkPlace Giving.

Achieve 14% participation in WorkPlace Giving.

Conduct 10 ëCorporate Connectsí and 10 ëSeeing is Believingí volunteer events.

Expand ABCN activity.

Expand Community Service Awards to include access to community service leave.

Environmental management of business operations (19)

Maintain ISO 14001 certification.

Reinvigorate environmental targets and re-engage staff in environmental programs.

Run business operations with resource efficiency.

Maintain certification of environmental management systems (EMS).

Certify three new sites.

WIP ISO 14001 certification has been maintained, however a non-conformance in how we monitor compliance with legal and other requirements was identified and promptly addressed.

EMS have been implemented at two new sites.

Implement EMS at last remaining site and prepare all three new sites for ISO 14001 certification in 10/11.

Develop and launch new EMS staff training and document corporate EMS training procedure.

Develop and launch an improved EMS accounting system that captures new measurement areas.

Cascade an integrated set of EMS, OHS and QMS accountabilities and capabilities into appropriate position descriptions.

All future office developments in line with Green Star™ 4-star requirements.

MET We completed the design and fit-out of three tenancies in Port Melbourne, North Ryde and Brisbane using the Green Star Office Interiors V1.1 tool, and targeting a 4 star non-certified rating.

Improve divisional accountability by cascading environmental responsibilities into appropriate position descriptions.

WIP Cross-divisional environmental accountabilities and required capabilities have been defined ñ implementation has been delayed while we develop the same for OHS and QMS.

Review environmental targets.

MET New carbon and paper targets were agreed ñ absolute reductions of 1% year on year are required.

Re-launch the EMS to staff.

MET The EMS has been re-branded ëSustainability on Siteí and a new internal communications program and revised awards program has been implemented.

Business Performance

Corporate Profile

Fuji Xerox is one of Australiaís leading document management technology and services companies marketing innovative technologies, products and services. Fuji Xerox has the experience and knowledge to design and implement document solutions for offices, print rooms, commercial printers or publishing environments, with expertise that includes print solutions, software, office supplies and managed services. The company, our management and our staff are driven to create sustainable value for our customers and that is reflected in our commitment to environmental responsibility and continuous improvement across all areas of the business.

Vision

Helping organisations to share knowledge and information to achieve sustainable outcomes for all stakeholders.

Mission

To be the leader in providing the Australian market with document management services and solutions.

Products and services

With knowledge key to an organisationís success, Fuji Xerox offers a range of innovative solutions and services to help its customers manage the efficient flow of information, while reducing costs and overhead expenses. The range includes a comprehensive array of technology and software based solutions that address needs from the office through to graphic arts and production print environments. Included in this are multifunction devices that can print, scan, copy and fax, document management software, digital full colour printing presses, a range of paper and supplies as well as specialised managed document services. The companyís high customer satisfaction ratings underpin its reputation as an industry leader in the provision of customer service and technical support.

Business performance

Direction

To be the leader in providing the Australian market with document management services and solutions.

08/09 objectives[1]

Maintain leadership in our marketplaces.

How did we do?

$780M revenue, a 4.1% increase on 07/08.

Global services revenue grew 23.5%.

Equipment sales revenue declined 1.7%.

Document supplies revenue grew 4.3%.

Annuity revenues grew 4.3%.

09/10 objectives

5% growth in total revenue across FXA[2].

The year ending 31st March 2009 was a relatively successful period for the Fuji Xerox Group in Australia, despite tighter economic conditions in the second half. Overall, we experienced 4.1% revenue growth against 07/08. However the sharp decline in the value of the AU Dollar ($AUD) compared to the Japanese Yen and US Dollar increased the inter-company cost of our products. Excluding this impact from currency, cost increases were held to 5.3% on the prior year. The Group continued to increase its total asset position to $870m, reflecting growth in finance receivables funded by the Group, along with further investments in technology.

Total revenues of $780m for 08/09 reflect the strong performance of the Fuji Xerox business in a tough economic climate. Fuji Xerox has maintained its market leadership position in our industry. However the business continues to face significant challenges in maintaining and growing market share in a highly price competitive marketplace. Increasing commoditisation of traditional product lines offered to customers together with larger customers moving to a tendering process has created a consequent pressure on profit margins. In response, we are learning to better orient ourselves around changing customer needs by innovating new solutions, expanding value propositions and developing appropriate sales and marketing strategies and capabilities.

Quality and Innovation

Direction

Drive product and service innovations to create new market opportunities.

Re-invigorate quality and focus on our core value of continuous improvement.

08/09 objectives

Foster and recognise innovation in our business.

How did we do?

Conducted an internal review of innovation.

Established a cross-divisional innovation council.

09/10 objectives

Initiate research on semantics and sustainability reporting.

Maintain ISO 9001 certification.

Completed formal problem solving processes in some divisions.

Maintained ISO 9001 certification.

Identify a problem solving methodology and roll-out to divisions.

Complete management quality report.

Business performance

Corporate profile

Fuji Xerox is one of Australiaís leading document management technology and services companies marketing innovative technologies, products and services. Fuji Xerox has the experience and knowledge to design and implement document solutions for offices, print rooms, commercial printers or publishing environments, with expertise that includes print solutions, software, office supplies and managed services. The company, our management and our staff are driven to create sustainable value for our customers and that is reflected in our commitment to environmental responsibility and continuous improvement across all areas of the business.

Vision

Helping organisations to share knowledge and information to achieve sustainable outcomes for all stakeholders.

Mission

To be the leader in providing the Australian market with document management services and solutions.

Products and services

With knowledge key to an organisationís success, Fuji Xerox offers a range of innovative solutions and services to help its customers manage the efficient flow of information, while reducing costs and overhead expenses. The range includes a comprehensive array of technology and software based solutions that address needs from the office through to graphic arts and production print environments. Included in this are multifunction devices that can print, scan, copy and fax, document management software, digital full colour printing presses, a range of paper and supplies as well as specialised managed document services. The companyís high customer satisfaction ratings underpin its reputation as an industry leader in the provision of customer service and technical support.

Business performance

Direction

To be the leader in providing the Australian market with document management services and solutions.

08/09 objectives[1]

Maintain leadership in our marketplaces.

How did we do?

$780M revenue, a 4.1% increase on 07/08.

Global services revenue grew 23.5%.

Equipment sales revenue declined 1.7%.

Document supplies revenue grew 4.3%.

Annuity revenues grew 4.3%.

09/10 objectives

5% growth in total revenue across FXA[2].

The year ending 31st March 2009 was a relatively successful period for the Fuji Xerox Group in Australia, despite tighter economic conditions in the second half. Overall, we experienced 4.1% revenue growth against 07/08. However the sharp decline in the value of the AU Dollar ($AUD) compared to the Japanese Yen and US Dollar increased the inter-company cost of our products. Excluding this impact from currency, cost increases were held to 5.3% on the prior year. The Group continued to increase its total asset position to $870m, reflecting growth in finance receivables funded by the Group, along with further investments in technology.

Total revenues of $780m for 08/09 reflect the strong performance of the Fuji Xerox business in a tough economic climate. Fuji Xerox has maintained its market leadership position in our industry. However the business continues to face significant challenges in maintaining and growing market share in a highly price competitive marketplace. Increasing commoditisation of traditional product lines offered to customers together with larger customers moving to a tendering process has created a consequent pressure on profit margins. In response, we are learning to better orient ourselves around changing customer needs by innovating new solutions, expanding value propositions and developing appropriate sales and marketing strategies and capabilities.

Further information on our business performance and payments to employees and government is provided online.

Quality and Innovation

Direction

Drive product and service innovations to create new market opportunities.

Re-invigorate quality and focus on our core value of continuous improvement.

08/09 objectives

Foster and recognise innovation in our business.

 

 

 

How did we do?

Conducted an internal review of innovation.

Established a cross-divisional innovation council.

 

 

09/10 objectives

Initiate research on semantics and sustainability reporting.

Maintain ISO 9001 certification.

Completed formal problem solving processes in some divisions.

Maintained ISO 9001 certification.

Identify a problem solving methodology and roll-out to divisions.

Complete management quality report.

Product and service innovations

Innovation keeps us at the forefront of our industry. Together the Xerox and Fuji Xerox Groups invested in excess of $2.46 billion AUD in research, development and engineering in 08/09. Ten research centres span Japan, America, Canada and Europe, including the renowned Xerox Palo Alto Research Centre (PARC). Fuji Xerox also has four epicenter™ facilities in Sydney, Shanghai, Singapore and Tokyo, which focus on collaborative discovery with our customers and industry. Research themes span reinventing technology and systems, rethinking how people work and redefining the document, which deliver innovations like electronic re-usable paper.

To strengthen the relevance of all research, there is an explicit focus on what is called ëcustomer-led innovationí. This applies especially to Fuji Xerox Australia. As a member of the Fuji Xerox and Xerox world globally, our innovation challenge is less to do with transformative technologies and more to do with implementing tailored solutions within customer environments that solve a specific business problem. In 08/09 we conducted an internal review of how innovation occurs in our business and how we could better engender and recognise it. This led to the recent establishment of an innovation council with a mandate to foster an innovation-led culture so that we can leverage sustainable business opportunities and build on the continuous improvement values of the company. The specific work of the council will focus on:

Product innovation

Innovation shapes the market in which we operate. In the office services market sector, printer, scanner and copier technologies have been increasingly merging over recent years, providing more sophisticated software applications, and creating a new market for document services. As the emphasis shifts away from technology on the print engine (ëfeeds and speedsí), this drives innovation around document processing workflow (scanning, storage, retrieval etc).

One significant example is the work of the Office Innovation Group in developing Image Gateway specifically for the Australian market. Image Gateway is a component based software platform, providing improved document process functionality at the multifunction device (MFD). Designed to help businesses get full value from the MFD, its capabilities range from server based cost management, document capture, faxing and providing a two-way access point to document management systems at the MFD touch panel. Additional functionality can be developed to suit specific business needs.

Quality and continuous improvement

We also apply innovation to our own internal business processes, which support both our people and our customers. If we can build systems and develop procedures that help our own people to be effective then our customers will also benefit. Our approach is to apply ISO 9001 quality principles to our business operations, which is in line with our commitment to the philosophy of ëkaizení and our core value of continuous improvement.

Our goal in this area is to reinvigorate staff skills around ISO 9001 principles and problem solving. Our quality management system (QMS) has been ISO 9001 certified since 1992. While the organisation has benefited from the discipline of these quality standards, there is an opportunity to create greater business value from quality accreditation. We have identified that many aspects of the companyís QMS accreditation are not linked to continuous improvement thinking. Our intention is to move quality beyond compliance to an activity that encourages creative problem-solving and improved experiences for our customers.

In line with this focus, we piloted an advanced methodology developed by the parent to facilitate a more ordered approach to problem solving. However the methodology provided was not suitable for all problems we encounter or the needs of all our people. Nonetheless, some problem-solving programs following this methodology have been successful, especially our equipment order fulfilment review (see section 4). We will explore problem-solving methodologies available to us in 09/10 with a view to selecting and implementing an approach that works for the organisation and identifying the business processes which require attention.

Corporate governance and compliance

Values and Ethics

Direction

Educate staff so that ethical and legal breaches are minimised through the development and communication of a Code of Conduct.

Live our values in our business.

08/09 objectives

Develop a new Code of Conduct to better instil values and ethics.

How did we do?

A new Code of Conduct was developed.

09/10 objectives

Launch Code and educate key staff on requirements.

Establish and communicate procedure for monitoring and reporting breaches of Code.

Formalise a register of breaches against Code.

Review whistleblower policy and improve access to and visibility of whistleblower mechanism.

Commence a third round of legal compliance training.

Increase and tailor legal compliance course content and re-introduce targeted face-to-face training for specific needs.

Revise all relevant HR policies and procedures to ensure appropriate links to values.

Measure alignment with values in each employeeís PACE performance management review.

Roll out revised values and integrate into performance management system.

A revised set of company values was rolled out to the business ëRefresh and reconnectí.

Values were integrated into performance management system.

Conduct legal compliance training regularly.

Legal compliance training was conducted.

Code of Conduct

During 08/09 we enhanced our business ethics policy to provide clear guidance on a consistent code of conduct to which all staff must adhere. Our company Code of Conduct underpins all aspects of our business operations and is the foundation stone in our commitment to corporate citizenship. It incorporates our values, which provide the principles to guide us in our day-to-day attitudes and behaviour and provide a framework to assist in decision-making. Individual contracts articulate the terms and conditions of individual employment and company HR policies provide clear direction on topics as diverse as leave, confidentiality and discrimination. The Code of Conduct provides a supplement to these processes and establishes a minimum set of standards that all employees are required to comply with. It guides our staff through how to avoid conflicts of interest and how to respect laws relating to privacy, consumer protection and competition. The Code of Conduct is promulgated to staff through a range of mechanisms:

Values ñ Reflect and Reconnect

Feedback from staff and management indicated that the previous seven values were not well understood or ëembeddedí in the business. Following focus group feedback from a variety of staff groups across the company, a simplified set of four values was defined and agreed by senior management in 07/08. The most important objective, apart from aligning with business objectives, was that they should be a meaningful, easily understood set of values to which all our staff can relate. The values are promulgated to staff through a range of mechanisms:

Legal and ethical incidents and complaints

Over the course of 07/08 and 08/09 we have more closely reviewed the conduct demonstrated by our sales channels against our expected standards to ensure that the behaviour of our sales representatives is aligned with our corporate values. This process has resulted in the identification of opportunities for improvement, particularly within Sydney. In 09/10 we will use our newly revised Code of Conduct to engage in further dialogue with our sales representatives and increase their understanding of the required standards. We expect to implement changes to work procedures accordingly. Material incidents are set out below:

There were no significant ethical concerns brought to our attention by way of our external whistleblower web link during the year. The majority of concerns expressed in the average one to two communications received per month related to concerns regarding the sales engagement process and after sale service and administration. All matters were responded to within 24 hours of receipt with a resolution to most customersí issues within three days. We have been disappointed by delays establishing a customer satisfaction web-link, which will resolve inappropriate use of the whistleblower mechanism. This will be addressed in 09/10 when we will:

Improving Customer Experience

Managing and measuring the customer experience

Direction

Shift from satisfying customers to creating customer advocates.

Improve systems and processes for measuring and managing the customer experience.

08/09 objectives

How did we do?

09/10 objectives

Review Customer Satisfaction Assurance System, customer satisfaction meetings and customer survey methodologies.

Review office and production customer satisfaction and net promoter score targets.

Provide a closed-loop dialogue with customers regarding high-level survey outcomes, trends and action plans for improvement.†

Meet office services, design services, mail services and print services targets.

Achieve overall office customer satisfaction index of 95% (40% very satisfied).

Office customer surveys were not regularly conducted due to staff transition.

Overall office customer satisfaction index declined to 90% (46% very satisfied).

Monitor customer satisfaction drivers with production clients.

Production customer surveys were not conducted at all due to staff transition.

Formalisation of ëintensive care processí for production clients.

Meet office services, design services, mail services and print services customer satisfaction targets.

Implement Global Services transition and transformation initiative.

Office services fell 2% short of 92% overall satisfaction target and exceeded by 4% our 32% ëvery satisfiedí target.

Print and mail services exceeded both targets, while design services fell short of both its customer satisfaction targets.

Global Services have formalised continual service improvement and service improvement planning initiatives.

Managing the customer experience continues to be a primary material sustainability issue and a core company value. Due to staff transition in this area our Global Services customers were the only group regularly surveyed in 08/09. Some production customer surveys were conducted but only one office customer survey was carried out towards the end of the year under review. While we failed to formally measure satisfaction levels in every market segment throughout 08/09, our commitment to creating value for our customers and optimising the customer experience has not waned. This is evident from the significant progress made in addressing customer satisfaction drivers such as our equipment order fulfilment process and customer training and support. We will continue to work in a systemic way on the business systems and processes that will optimise the customer experience. 09/10 will also witness a reinvigorated focus on the management and measurement of the customer experience as new talent in this area reviews survey methodologies, underpinning technologies and communication mechanisms so that we can better listen and respond to our customers.

Fuji Xerox Australia has a number of systems and processes for measuring the customer experience

Office customer satisfaction

In 08/09 there has been a disappointing decline in ëoverall satisfactioní but a positive shift in responses to ëvery satisfiedí. This means we failed to achieve our ëoverall satisfactioní target but exceeded our ëvery satisfiedí target. Further information on our improved ënet promoter scoreí is provided online.

Our analysis indicates that the reasons for this are:

Production customer satisfaction

In previous years we have used 90-day post-installation customer surveys and face-to-face interviews with senior contacts to monitor our production customer experience. We are disappointed that neither of these engagement mechanisms were implemented in 08/09. However we did formally introduce an 'intensive care process', which is initiated by account managers after their customers have purchased large pieces of equipment. Adoption of the process is still in early stages.

Global Services customer satisfaction

Each year we establish targets for customer satisfaction across every line of service that we provide. Performance against these targets is a core business tool used to identify opportunities for immediate improvement. We would like to improve the rate of response to our surveys to ensure they are representative. To that end we are encouraging site-based customer service managers to take greater levels of ownership for response rates and to interpret the significance of the data for their respective operations.

Office services customer satisfaction

In 08/09 we fell 2% short of our 92% overall satisfaction index (OSI) target and we exceeded by 4% our 32% ëvery satisfiedí target

Print production services customer satisfaction

In 08/09 we exceeded by 1% our 95% OSI target and we exceeded by 9% our 56% ëvery satisfiedí target.

Design services customer satisfaction

In 08/09 we fell 2% short of our 95% OSI target and we fell 5% short of our 56% ëvery satisfiedí target.

Mail services customer satisfaction

In 08/09 we exceeded by 3% our 95% OSI target and we exceeded by 14% our 56% ëvery satisfiedí target.

Providing customers with a responsible solution

Helping customers become more sustainable

In Australia, we find that our customers want to work with a responsible organisation that will help them achieve their own environmental goals. Gaining Good Environment Choice Australia™ certification for our entire office product range provides assurance that the Fuji Xerox solution meets global environmental standards. Our solution can also help customers:

This Report section provides an account of how we address those environmental drivers with our customers.

Customer Profile

ENERGEX is a major electricity supplier in South East Queensland and a top 100 Australian company. Fuji Xerox Australia has supplied document management hardware and software solutions since 2004 and Global Services has provided consulting services to ENERGEX over the last five years to improve the companyís business processes. This includes helping the organisation become more cost efficient and environmentally sustainable by measuring energy usage and the carbon footprint of its document management infrastructure via the Fuji Xerox Australia carbon calculator. As a result ENERGEX has been able to increase print efficiency, reduce paper wastage and reduce the carbon footprint of multifunction printing devices by 10% in the last five years.

ëENERGEX is proud to partner with a company like Fuji Xerox Australia which not only embeds sustainability within their own business, but also promotes this vision among customers to help them achieve more sustainable outcomes. Our partnership with Fuji Xerox Australia has enable ENERGEX to change internal attitudes and behaviours in regards to sustainability. As a result weíve increased productivity, taken better control of costs and reduce our environmental impact.í

Sharyn Scriven, Group Manager Procurement, ENERGEX.

Energy efficient equipment

The energy efficiency of our equipment is a common customer concern. In 08/09 our parent worked to ensure that our entire office product range is compliant with the 2009 Energy Star standard. In 2005 we achieved a 55% reduction in the average energy consumption of our equipment based on 1997 levels. Our new target is to achieve a further 80% reduction on 2005 levels by 2020.

Awards for energy performance

08/09 witnessed a 10th consecutive energy conservation prize for Fuji Xerox products at the 19th Energy Conservation Center Awards in Japan. This achievement reflects the company's continuous commitment to developing energy saving products across a wide range of product categories ñ 10 models and a total of 24 products were recognised. In addition, Fuji Xerox was awarded the prestigious Chairmanís Prize for Eco-Efficiency. This high level award recognised the achievements of the company in developing and promoting eco-efficiency, a measure of the value of products and services against their environmental impacts. Fuji Xerox is the third company to have received this award.

End of life resource recovery

Direction

Optimise business and environmental outcomes from end of life resource recovery.

08/09 objectives

Achieve 280,000 parts remanufactured and 60 new remanufacture programs.

How did we do?

230,000 parts remanufactured and 56 new remanufacture programs.

09/10 objectives

217,000 parts remanufactured and 50 new remanufacture programs.

Identify and implement more cost and carbon efficient means of transporting end-of-life products back to our facilities.

Implement more robust product return measurement systems so we can calculate the proportion of products that are returned to us at end-of-life in comparison to the total distributed to the Australian market.

Seek improvements in the processing of our Basel Permit.

Explore tension between zero landfill goal and carbon reduction target.

Product stewardship committee continued to improve business and environmental outcomes from resource recovery.

The Fuji Xerox and Xerox Groups have a long-standing commitment to accept responsibility for products throughout their life cycle, shared by Fuji Xerox Australia. In Asia Pacific, Fuji Xerox Company Limited has four purpose-built state of the art remanufacturing, reuse and recycling facilities to achieve over 99% resource recovery from our products at end-of-life. Improving levels of component reuse is key to low-carbon manufacture, an important element of our regional environment strategy for product development.

The above diagram depicts the movement of our equipment from our parent through our Australian operations to our customers. It also illustrates how we take back products, parts and toner cartridges returned by our customers for remanufacturing and recycling either at our Zetland-based Eco-Manufacturing site in Sydney or at the Asia Pacific Integrated Recycling Centre in Thailand. The Eco-Manufacturing Centre processes used parts, packaging and waste collected from Australian customers, while end-of-life equipment and toner cartridges are sent to the Asia Pacific Recycling Centre. Further information on the work of our product stewardship committee and how we advocate for extended producer responsibility is available online.

Eco-Manufacturing Centre

The Fuji Xerox Australia Eco-Manufacturing Centre is the Fuji Xerox Asia Pacific hub for the remanufacture of complex sub-assemblies. It is a multi-award-winning state-of-the-art engineering facility for the remanufacture of parts removed from equipment during service. Since it opened in 2000 the core activities of the Zetland-based Centre in Sydney have shifted to more complex remanufacture programs, reflecting its unique expertise. The more labour intensive aspects of the Centreís operations, such as toner cartridge remanufacture, have moved to our Asia Pacific Integrated Recycling Centre in Thailand.

The Eco-Manufacturing Centre is in a period of transition. Local management is currently working with our parent to confirm a medium range strategy for the Centre. Ultimately, this could potentially increase the opportunities for our local remanufacturing expertise to influence the global approach to end-of-life resource recovery and share the benefits of those advances more broadly. For now, the Eco-Manufacturing Centre is in a period of transition whereby current remanufacture and recycling activity will be maintained while its future purpose is more clearly defined.

During the year under review, we remanufactured 230,000 parts and sub-assemblies through this operation, which was below our target of 280,000 items. This is due to a number of factors:

The Centreís 09/10 goal is to remanufacture 217,000 items, reflecting changed conditions.

Waste Toner Utilisation

Our Eco-Manufacturing Centre focused on the issue of waste toner during the 08/09 sustainability champion program. The goal was to turn waste toner from a liability to an asset as part of our commitment to sustainability and product stewardship. Currently waste toner is stock-piled and used as an alternate fuel source in cement production. Our staff was keen to identify a more beneficial use that would utilize the polymeric characteristics of the material. The exact make-up and calorific value of the waste toner has been identified and the material has been pelletised and sent to a number of potential customers. The project will continue in 09/10.

Asia Pacific Integrated Recycling Centre

The Asia Pacific Integrated Recycling Centre based in Thailand was developed by Fuji Xerox Company Limited to process up to 30,000 units of equipment and 500,000 toner cartridges per annum. In 08/09 the Centre employed 340 locals, processed 5,777 tonnes of equipment and cartridges and remanufactured and re-exported 283,626 cartridges. We joined this program in early 2005 after obtaining the necessary export licenses from the Australian Government in December 2004. In 08/09, we exported 1412 tonnes of equipment, parts, cartridges and packaging to this facility for recycling or remanufacture as shown in our material utilisation trends. We have been disappointed by delays experienced with the Thai government in granting our Basel Permit. As our parent manages this relationship we have escalated this issue to them. This issue has led to an increase in the amount of local e-waste recycling in 08/09.

Optimisng end of life product return

Our goal is to measure the rate of total product return from our customers to our remanufacture and recycling facilities as a percentage of new products supplied to the market. In 08/09 we have made significant progress towards adjusting our systems and procedures to accommodate this. A volumetrics exercise has been conducted to identify and incorporate the weight of all product types in our systems - this means that we will know the weight of total product distributed in 09/10. Work is still required to improve procedures and measurement systems to ensure returned product is appropriately recorded. Until then we will provide trend data on the weight of returned equipment, parts and cartridges and how those materials are utilised or responsibly disposed of at our dedicated facilities or through recycling providers.

In 08/09 the total amount of end of life products gathered from our customers increased from 3474 tonnes in 07/08 to 4052 tonnes. The proportion of materials recycling in Australia has also increased relative to remanufacturing. Bureaucratic delays in the granting of our Basel Permit have led us to pursue on-shore recycling options while we work through our parent to expedite approvals to export these materials with the Thai government. The proportion by weight of local remanufacture at the Eco-Manufacturing Centre has also declined. This is due to two factors ñ decline both in the number and weight of parts and sub-assemblies remanufactured as we discontinue the remanufacture of older, heavier production equipment components and replace them with lighter office equipment components. These figures also reflect the Centreís current period of transition while its future direction is being defined.

Responsible Paper Sourcing

Direction

Source both recycled and virgin paper from certified sources.

Assess paper suppliersí sustainability credentials and establish a path for continuous improvement.

Develop resources and implement communication strategies so that we can act as a trusted advisor to clients on responsible paper sourcing.

08/09 objectives

Seek Program for the Endorsement of Forest Certification (PEFC) chain of custody certification.

How did we do?

PEFC chain of custody certification has been achieved.

09/10 objectives

Secure 100% paper supplier compliance with minimum standards in 09/10 and ask for improvements in the management of issues of primary stakeholder concern.

Conduct internal briefings on ëThe Paper Factsí and develop marketing resources to establish a consistent corporate position on paper and the environment.

Integrate stakeholder feedback into sustainability standards and assess compliance at the close of every financial year.

Review paper procurement process and integrate new sustainability standards with other business requirements.

Educate stakeholders about sustainable paper.

An internal white paper that ëstraight-talksí about paperís environmental impacts has been developed and will be circulated to stakeholders as part of a braoder communications strategy in 09/10.

Bring new Forest Stewardship Council (FSC) and PEFC paper stocks to market.

The following certified stocks were brought to market in 08/09:

Performer A4 & A3 (FSC Mixed Sources).

Colotech+ (PEFC).

Green Wrap A4 & A3 (PEFC Recycled).

Professional A4 & A3 (PEFC).

Test suppliersí compliance with sustainable paper standards.

7 out of 8 suppliers have submitted responses with some incomplete information provided.

Review sustainability standards for paper sourcing and compliance assessment process.

More robust sustainability standards have been drafted for stakeholder review and we have strengthened our process for assessing compliance.

Fuji Xerox Australia is committed to enabling the efficient use of paper and to working only with responsible paper manufacturers and suppliers. Paper use is a tangible form of consumption and waste in the office environment more so than other less visible activities, which can sometimes have a larger footprint. Efficiency programs are often a customer focus for both cost and environmental reasons. While we acknowledge this creates some challenges for an historic business model based on encouraging customers to print, our new service lines and equipment enhancements are designed to enable efficient printing and business process improvements. This reflects that our industry and our business is growing towards providing ëdocument servicesí, while we will continue to satisfy customer needs by providing a comprehensive, high-quality and sustainably sourced range of papers.

Paper production has a range of environmental impacts, both positive and negative that are not well understood by those outside the industry. Our customers are often confused on this issue, under pressure to make sustainable procurement decisions and need help to do so. Key environmental issues of concern are fibre sourcing, water and energy use and emissions to water, land and air as well as greenhouse gas emissions and recycled content of paper. Suppliers may attempt to focus on one attribute or another where they may have an advantage over a competitor, however it is important to consider these claims from the perspective of total environmental performance. The paper industry has improved its environmental performance across the range of indicators described above. Although that cannot be consistently said of every producer, we work with only those producers that meet our standards in each of those areas.

The Fuji Xerox Australia goal is to source all papers from sustainably managed plantation trees or recycled pulp and to transparently communicate paperís environmental impacts to our stakeholders. Our position is to act as a trusted advisor to our customers on this topic and enable them to source paper responsibly and use it efficiently. That means our efforts in 08/09 have focused on sustainable paper sourcing and creating a consistent corporate position on paper and the environment.

Assessment of compliance with standards

Following feedback from the assurance of our last sustainability report, we have reviewed our standards for sustainable paper sourcing and our compliance assessment process. Since the close of the financial year a draft of our new sustainability standards has been circulated to our suppliers and industry experts from non-government organisations. If areas of non-compliance are found, our approach is to work with progressive suppliers to ensure standards are met. However if adequate progress is not made in a specified timeframe the supplier relationship will cease.

Since the close of the year under review we have asked our suppliers to respond to our revised standards. 7 out of 8 have responded with some incomplete information provided. We will follow up so that we more fully assess compliance with our draft sustainability standards. We have already identified some issues in the progress one supplier is making towards FSC certification and will raise these issues with them and monitor the situation closely.

Once stakeholder review is complete the standards will be finalised and integrated with our overall paper procurement process, also subject for review in 09/10. This will further streamline how we assess compliance and ensure that only paper that meets our standards is sourced. Further information on how we educate stakeholders about paperís environmental impacts and the certified paper stocks we sell is available online.

Engaging employees

Employee Engagement

Direction:

Improve levels of employee engagement in line with Hewitt best employersí score.

07/08 Objectives

Target 5% improvement in engagement levels in every division in 08/09[5].

How did we do?

Overall engagement levels increased from 49% to 59%.

08/09 Objectives

Target 5% improvement in engagement levels in 09/10.

Run employee engagement focus groups and prepare action plans to address issues arising.

Fuji Xerox Australia is committed to improve employee engagement levels so that we have a strong employment brand and can attract and retain talented staff driven to achieve our business objectives. In February 2009 we conducted our second employee engagement survey with a significantly improved participation rate of 68% compared to 55% in the previous year. The key measures from the survey indicated that 59% of employees are fully engaged with 25% nearly engaged. This compares positively with the previous survey results (49% fully engaged and 25% nearly engaged). We are very satisfied with this result in the context of a challenging business environment and the deferral of the annual salary review process until September 2009 for our non-unionised employees. Our next survey will be conducted in March 2010 with a 5% improvement target in 09/10. Further information on our employee engagement drivers and how we respond is provided online.

Organisational development

Direction:

Transition to culture of manager-led development.

Drive employee performance in line with business values and objectives.

08/09 Objectives

Continue roll-out of performance management system (PACE).

How did we do?

Implementation of PACE with 75% staff participation.

Redefinition and repositioning of position descriptions (ongoing).

09/10 Objectives

Roll-out coaching for capability development program to sales managers (level 2).

Extend ësales manager as coachí program to other divisional managers.

Continue management training program.

Develop and launch management training program.

Successful pilot and roll-out of management training program.

Roll coaching for capability development program out to sales managers (level 1).

Coaching for capability development implemented with sales managers.

We believe that capability is a long term competitive differentiator and that our success will depend upon how well and how fast we build the capabilities we need now and in the future. Developing capability means enhancing employee effectiveness in their current role and improving their readiness for their next role. We believe that building the capability of our employees to address their responsibilities and accountabilities at Fuji Xerox Australia will contribute to their career development by enabling greater levels of success in their employment with us and with future employers. We also endeavour to provide employees with the flexibility to move between divisions and encourage our people to take on different roles when they are ready for a new challenge. Further information on our approach to manager-led development and formal training is provided online.

Staffing levels

We employed a total of 1,846 people at the close of the year under review. Our growth in numbers from 1,822 in 07/08 is mainly associated with hiring employees to fulfil contracted customer obligations as our Global Services business grows. Charts showing the make-up of our workforce based on employment category, gender and region are provided online.

During the reporting period, 329 permanent employees left employment, resulting in an increased turnover rate of 18.6%, which is above the Australian Information Industry Association industry average of 17.6% for the same period. Towards the end of the year under review, changes in the economic environment led to declining business activity, a decrease in voluntary employee turnover and in increase in redundancies. We are very mindful of the impact turnover has on the retention of skills and knowledge critical to the business.

The economic environment has seen an immediate decrease in recruitment activity and associated costs. We have implemented a limited recruitment policy, whereby all new hires require Managing Director approval on a case-by-case basis. We continue to analyse why people leave our employment. Our analysis shows that the greatest area of attrition comes from the under 25-age group. The principal reason given for leaving in this group is career and personal reasons. This higher turnover in the under 25-age group is reflected in part in the turnover in the first year of service. Changes have been made to the on boarding process for new employees to reduce turnover in this group. The increased attrition rate in the over 65-age group appears high but is a product of retirements from a small population.

When the economic cycle corrects, the competition for talent is likely to resume. We believe the retention of key talent now is crucial as an investment for when employment market pressures return in the future. Our work to improve employee engagement levels is key to staff retention, as is the relationship between employees and line managers, which is a key focus of our new management training.

Remuneration, reward and recognition

Competitive remuneration provides us with access to suitable talent so we aim to offer salary packages that are in line with the market. The year under review provided us with an unusual challenge. Due to the economic environment and cost pressures experienced by the business we deferred the annual remuneration review for salaried and professional employees usually undertaken in April. In September 2009 we will re-assess the timing of the next remuneration review. We are planning to review the economic environment, our business performance, and the current market trends at that stage and will undertake the appropriate steps. We continue to simplify our approach to remuneration so it is easier for our employees to understand the components of their remuneration. In 08/09 we explored why men and women in the same employment position had different salaries. We found that the salary differences could not be narrowed down to one specific factor but were due to a combination of factors including tenure, qualifications, experience, specific job function and location. Further information on our approach to non-financial recognition and employee benefits is provided online.

Occupational Health and Safety

Direction

Improve our incident and injury reporting system to create confidence and clarity regarding lost-time and claims data.

Use this data and site reviews to identify and prioritise OHS risks of business operations and develop risk mitigation strategies.

07/08 objectives

Appoint external provider to supply accident management and rehabilitation services and OHS incident reports.

How did we do?

An external provider was appointed.

09/10 objectives

Establish a cross-divisional OHS steering committee to develop an OHS strategy and to recommend the investments required in systems and resources to deliver that strategy.

Improve systems supporting incident, injury ands claims reporting and implement a robust reporting process and data capture system so that an accurate LTIFR can be established.

Review response to OHS risks in situations where incidents, injuries and claims have increased.

Improve the processes for managing risks in the workplace by increasing the number of OHS site committees, conducting audits and training where required and ensuring OHS is on the agenda of site management review meetings.

Establish a Lost Time Injury Frequency Rate (LTIFR).

While we addressed our management of workers compensation claims by appointing an external provider, some issues with their injury reporting have been identified which means we still cannot confidently report an LTIFR.

Management oversight of OHS incidents and injuries has been improved through quarterly OHS reviews at leadership meetings.

Conduct independent risk assessment of major workplaces.

We postponed the OHS assessment of workplaces in favour of mitigating risks already identified.

We formalised a process for identifying and managing risk associated with contractors working on our sites.

At Fuji Xerox Australia, we promote safety awareness to minimise risk, and we provide a framework for managing incidents and emergencies. We also ensure the rehabilitation of workers in the event of an injury occurring. Our OHS management framework includes a range of policies, procedures, staff training and an incident reporting system. These resources and other materials, such as our OHS policy, are accessible by all employees on the companyís intranet site. A network of OHS coordinators provides onsite support and key sites have an OHS committee. Reported incidents and injuries are analysed during site management and ëtool-boxí meetings, OHS committee meetings with regular reviews conducted at least quarterly during executive board meetings.

OHS performance

FXA encourages the reporting of all incidents, injuries or near misses regardless of their severity. While we improved our management of workers compensation claims by appointing an external provider, some issues with their injury and claims reporting have been identified. Reports have been received late and incomplete. We have also found that the initial scope agreed with the provider did not fully address our needs. In 09/10 we will improve our reporting capabilities through a robust reporting process and data capture system. Once this has been completed we will in a better position to report lost-time injuries and establish a lost-time injury frequency rate.

This year we had an increase in numbers of claims made from workplace injuries. The increase was mainly associated with manual handling injuries suffered by our warehouse staff and our service engineers on customer-site. It could also be explained by more effective communication of the process for reporting incidents and injuries and making claims, which has increased the number of OHS events put through our formal processes.

Aside from claims, we also measure the nature of incidents and injuries experienced by our staff. Since the introduction of an out-sourced ëinjury management programí we have a better understanding of the nature of incidents and injuries being reported. Of the 141 occurrences reported since 1 October 2008, 72% resulted in a work-related injury and the remaining 28% were incident reports only where no injury resulted incident reports also include any personal/non work related reports). Of the 101 injury reports received:

As with our claims, the main areas of concern are injuries related to manual handling activities such as back injuries, and muscular stress while lifting. In 09/10 we plan to conduct refresher awareness courses on manual handling techniques and forklift safety for all warehouse staff. We will also review the reasons for incidents and injuries with our service engineers working on customer-site and plan an appropriate response in 09/10.

Influencing sustainability outcomes

Engaging business partners in sustainability

Direction:

Work through the Xerox and Fuji Xerox Group to assure integrity of our product supply chain (see respective sustainability reports).

Assess paper suppliersí sustainability credentials and establish a path for continuous improvement (see section 5).

Work with key suppliers to provide low-carbon products and services (see section 8);

Ensure environmental, social and governance standards are applied to indirect procurement.

Share sustainability standards with our indirect sales network.

08/09 objectives

Develop sustainable supply chain approach in indirect procurement.

How did we do?

A National Procurement Manager was appointed.

A sustainability code for suppliers was developed and has been added to tender documents.

09/10 objectives

Build a supplier database to monitor supplier performance metrics, including those focused on environmental, social and governance issues.

Revise procurement policy and processes and integrate how we apply sustainability to the supply chain.

Develop a risk assessment framework to identify ëhigh riskí suppliers that require specific environmental, social and governance metrics for improvement.

Increase rigour of sustainability standards for dealers in 09/10 and build capability to improve performance.

Launch dealer sustainability program.

25 out of a potential 39 dealer locations signed up to the first year of our sustainability program ñ 4 dealers failed to submit reports and were removed from the program.

Direct and indirect procurement

The Fuji Xerox Australia approach to sustainable supply chain management is informed by the principles of the UN Global Compact, to which our parent is a signatory. We classify our procurement activity as either ëdirectí or ëindirectí.

Indirect procurement

In the last year we have leveraged from the work undertaken in 07/08 by introducing a National Procurement Manager to the business, whose role is to:

  • Provide added focus and support in relationships with all suppliers.
  • Provide structured procurement policy and processes when engaging the market.
  • Manage spend analysis and identify rogue spending.
  • Promote vendor management through development of staff.
  • Champion sustainability into the supplier community.
  • In 08/09 draft procurement policy and processes were developed and tools and templates utilised in significant procurement events. We will build on this work in 09/10 by finalising the procurement policy and processes, which address how we apply sustainability to indirect procurement. Our approach is to use a ëgatewayí sustainability code for all suppliers and develop specific environmental, social and governance requirements for ëhigh riskí suppliers. While the code was developed and implemented with all new supplier agreements in 08/09, we still need to develop a risk assessment framework for suppliers in 09/10. Nonetheless some supplier agreements already address criteria such as carbon measurement with logistics suppliers. In the year under review no supplier relationships were terminated because of failure to meet environmental sustainability criteria. Throughout 09/10 we will consolidate supplier data into a new database, which will help us monitor and report on supplier performance more clearly. In the longer term we recognise the need to develop better engagement mechanisms with this stakeholder group.

    Dealers

    In addition to our direct sales force, Fuji Xerox Australia has 28 dealers and 23 master agencies across Australia. Together they deliver 44% of our equipment sales revenue. Our agents work closely with branch management in metropolitan Sydney, Melbourne, Adelaide, Perth and Canberra. Our dealers are more independent of the organisation, as they purchase equipment from us and resell it to their customers.

    We see our dealers as a significant extension of our presence in non-metropolitan areas, especially rural Australia. It is important that we share Fuji Xerox standards with this group and that covers ethical and legal principles for how we conduct business, customer service standards as well as environmental responsibility.

    In the year under review we developed and launched a dealer sustainability program to support those goals. 25 out of a potential 39 dealer locations signed up to the first year of our sustainability program ñ 4 dealerships failed to submit reports and were removed from the program.

    This program is designed to provide a framework for our dealers to continuously improve environmental performance, especially the responsible disposal of end-of-life equipment, parts and cartridges and to promote their achievements with their customers. We have provided support to our dealer network by sharing environmental management tools with them and make them aware of the resources available to them through Fuji Xerox, local council and recycling providers. One challenge we face is the environmental and financial efficiency of transporting dealer equipment from remote sites to our recycling facilities ñ this has led to the consolidation of dealer delivery services in 08/09. In 09/10 we will increase the requirements of the program and provide further support to help dealers improve environmental performance.

    As winners of the inaugural dealer sustainability program in 08/09, the team at Fuji Xerox Business Centre Batemanís Bay is committed to applying sustainability with staff, customers and suppliers.

    A number of key improvements were made in 08/09 including:

    "The key to the sustainability challenge ahead lies with our ability as a company to influence the sustainability outcomes for our customers, both environmentally and financially. This is where our ëFuji Xerox Smart Digital Officeí initiative comes in, which aims to help our customers streamline their document management processes. This not only allows our customers to reduce their carbon footprint but also save money, a winning proposition and one which we believe give Fuji Xerox an edge over the competition. It is only by engaging our customers in this journey that we can truly reach our sustainability goals."

    Staff engagement in community programs

    Direction

    Increase staff participation in WorkPlace Giving from 10% to 19% by 2012.

    Increase number of volunteer opportunities available to staff within working hours.

    Improve internal communications and staff awareness of community programs.

    08/09 objectives

    Review community initiatives and establish areas for improvement.

    How did we do?

    Community engagement committee established and community champions appointed.

    New performance targets established.

    Re-launched community initiatives internally.

    9% participation in WorkPlace Giving and $68,976 in matched donations.

    Improved employee access to WorkPlace Giving.

    09/10 objectives

    Achieve 14% participation in WorkPlace Giving.

    Conduct 10 ëCorporate Connectsí and 10 ëSeeing is Believingí volunteer events.

    Expand ABCN activity.

    Expand Community Service Awards to include access to community service leave.

    Fuji Xerox Australia is committed to making a positive social contribution. While our operations donít have an easily identified impact on local communities, we are aware of our potential social impacts on customers, employees and the broader community.

    The goal of our community programs is to enable staff participation and create positive outcomes for the communities in which we operate by helping the disadvantaged. Encouraging employees to volunteer within company time and providing matched donations helps to engage and retain staff, a key business objective. These programs also give staff a rewarding team-building experience and expose them to local sustainability issues in a positive way. There are benefits for the community, for the business and for our employees. Our key current initiatives include our long-standing relationship with United Way, our recent engagement with the Australian Business and Community Network and the Fuji Xerox Community Service Awards. There is also a broad range of state-based activities that originate at a grass-roots level.

    In 08/09 we reflected on how we could best connect our vision, mission and values with our community initiatives and saw many parallels with the theme of education. We believe that by focusing on this one area of community need, we will address social sustainability issues in a more systemic and impacting way and help build local communities with adept people that can contribute to the growth of our business and society as a whole. 08/09 has witnessed significant reinvigoration of our community programs. A community engagement committee was established under the leadership of our General Manager for Global Services, community champions have been appointed representing every location and we have new targets for our performance in this area.

    Minimising our environmental impact

    Environmental strategy and management

    Direction

    Maintain ISO 14001 certification.

    Reinvigorate environmental targets and re-engage staff in environmental programs.

    Run business operations with resource efficiency.

    08/09 objectives

    Maintain certification of environmental management systems (EMS).

    Certify three new sites.

    How did we do?

    ISO 14001 certification has been maintained, however a non-conformance in how we monitor compliance with legal and other requirements was identified and promptly addressed.

    EMS have been implemented at two new sites.

    09/10 objectives

    Implement EMS at last remaining site and prepare all three new sites for ISO 14001 certification in 10/11.

    Develop and launch new EMS staff training and document corporate EMS training procedure.

    Develop and launch an improved EMS accounting system that captures new measurement areas.

    Cascade an integrated set of EMS, OHS and QMS accountabilities and capabilities into appropriate position descriptions.

    Re-launch the EMS to staff.

    The EMS has been re-branded ëSustainability on Siteí and a new internal communications program and revised awards program has been implemented.

    Review environmental targets.

    New carbon and paper targets were agreed ñ absolute reductions of 1% year on year are required.

    All future office developments in line with Green Star™ 4-star requirements.

    We completed the design and fit-out of three tenancies in Port Melbourne, North Ryde and Brisbane using the Green Star Office Interiors V1.1 tool,† targeting a 4 star non-certified rating.

    Improve divisional accountability by cascading environmental responsibilities into appropriate position descriptions.

    Cross-divisional environmental accountabilities and required capabilities have been defined ñ implementation has been delayed while we develop the same for OHS and QMS.

    Environmental performance

    Our environmental targets are informed by our policy, by assessing our impacts and with guidance from our parent company. This year we have replaced our revenue-based carbon and paper targets with absolute targets for year on year reductions of 1%. This simplified approach makes it easier to devolve targets to sites and monitor performance. This year we exceeded the 1% carbon reduction target set by our parent, mainly through our commitment to purchase Green Power™. We had targeted 50% Green Power but only achieved 36%. Our ambitious target of 100% Green Power by 10/11 target will be reviewed in 09/10. We also failed to reduce our waste in line with an aggressive zero landfill target set by our parent. While we are committed to work towards zero landfill we acknowledge the challenges we will have in actually meeting that target in future years. We are pleased that we met our 1% reduction in paper use target and we also substantially reduced our total water use by 37%.

    We have been disappointed by one regulatory breach in 08/09. The cargo risk management unit of the Department of Agriculture, Fisheries and Forestry brought to our attention an incorrect packing declaration in relation to wooden pallets that had bark attached, although they had been described otherwise. This was in contravention of Australian Quarantine and Inspection Services requirements. We were advised that increased monitoring of our shipments would take place in the short term, and in response we instructed our overseas parent to comply with Australian regulations. We expect complete conformance will be maintained moving forward. No other complaints were received from regulatory authorities.

    Carbon management

    Direction

    Improve cost and carbon efficiency of business operations.

    Work with key suppliers to provide low-carbon products and services.

    Provide customers with low-carbon solution and enable cost and carbon efficiency (see section 5).

    08/09 objectives

    Reduce carbon emissions 1% on 07/08 emissions.

    How did we do?

    19% reduction in carbon emissions.

    09/10 objectives

    Reduce overall carbon emissions by 1% on 08/09 levels.

    Reduce carbon emissions from logistics 10% on 08/09 levels.

    Reduce carbon emissions from employee air travel by 10% on 08/09 levels.

    Review Green Power procurement.

    Implement more robust carbon data capture systems with logistics suppliers.

    Procure 50% Green Power.

    36% Green Power procured.

    Develop a carbon strategy.

    A carbon strategy was formalised focusing on operations, suppliers and customers.

    Establish cross-divisional carbon task force.

    A cross-divisional carbon taskforce was established and is working on opportunities for cost and carbon reduction in business operations.

    Improve carbon management and measurement through the logistics supply chain.

    A sustainability champion for logistics was appointed and is working on carbon measurement from logistics and opportunities for cost and carbon reduction in equipment distribution.

    Carbon strategy

    The climate change imperative demands that organisations assess their carbon footprint, establish targets for reduction, implement robust carbon management programs and disclose emissions. Although our footprint does not fall within the threshold of the National GreenHouse Energy Reporting Scheme, we are committed to reduce our carbon emissions.

    Fuji Xerox Company Limited reports the carbon emissions from every operating company, (including emissions from regional manufacturing and distribution) in their Sustainability Report. Fuji Xerox Australia has managed its carbon footprint since 2005 and formalised a carbon strategy in 08/09. Our strategy is focused on reducing carbon intensity of our business operations and working with suppliers and customers to do the same. We implement this strategy through:

    Managing emissions from business operations

    Reducing energy use remains a key challenge. The growth of our business process outsourcing solutions means that the number and energy consumption of data centres will increase ñ we will monitor energy efficiency developments in this area to ensure our footprint is minimised. Because we lease all but one of our 20 sites our strategies to reduce energy consumption are largely associated with IT efficiency measures and building facilities upgrades. We manage carbon emissions from business operations through a cross-divisional task-force including EMS, facilities and IT staff.

    We have committed to purchase certified Green Power™ for all our sites by 10/11, through 25% annual increments. Although we have steadily increased the proportion of Green Power we use year-on-year we have been disappointed by our failure to meet targets. This has been due to protracted billing / administration issues with our electricity suppliers, competing business priorities and rising cost pressures. We will renegotiate our company-wide energy contract in 09/10 and review our Green Power™ commitment with regard to recognition for voluntary measures in the proposed federal Carbon Pollution Reduction Scheme.

    Managing emissions from logistics suppliers

    In 08/09 we appointed a sustainability champion for our Supply Chain Operations division, with responsibility for managing and measuring emissions from the international and inter-state distribution and reverse logistics of our products. We have not made the progress we had hoped for in carbon measurement with logistics suppliers, however significant progress has been made in other areas. In the year under review:

    There are high levels of commitment to cost and carbon reduction in Supply Chain Operations. 09/10 projects will include:

    Appendices

    FUJI XEROX PRINTERS

    Fuji Xerox Printers (FXP) is a branch of Fuji Xerox Asia Pacific Pte Ltd and distributes colour and monochrome printers and multifunction devices across the Asia Pacific region. FXP currently employs 85 people within Australia, having experienced rapid growth since inception in 2003. FXP sold almost 30,000 printers during 08/09 and continues to be recognised in the industry as the fastest growing printer company in the region.

    08/09 witnessed an increase in consumer demand for sustainable products, services and technologies. FXP is committed to meeting responsible porocurement requirements by offering an innovative product range, by fostering a culture within the company of sustainable business practice, and by working with our partners to reduce the broader carbon footprint of our organisation.

    An example of innovative and sustainable product technology is the continued development and sale of solid ink printers. This technology minimizes the use of consumables dramatically and eliminates print cartridges altogether, reducing the amount of consumables waste generated by 90% over the life of the product. Fewer consumables translate into lower operating costs, increased reliability and ease of use, and of course, conservation of resources.

    We are an ISO140001 accredited company and have actively worked to reduce our greenhouse gas emissions throughout the year. We have reduced carbon emissions by 24% on 2003 levels. We have recycled 87% of waste output in 08/09, and planted more than 2,000 trees in the local community to support regeneration of native environments.

    FXP has contributed to the World Vision program throughout the year, with corporate sponsorship of children from Vietnam, Thailand, Haiti, Zambia and Nicaragua. Many staff communicate regularly with these children, and their progress is followed closely as the children grow and develop under the program. We also fund raise for organisations such as the Australian Cancer Council, the National Breast Cancer Foundation and the Childrenís Medical Research Institute.

    We aim to continuously improve our environmental programs to respond to sustainability challenges. We have developed policies and procedures that mandate FXP to operate in a way that minimizes our environmental footprint, with the eventual goal of reaching net-neutral impact. We will maintain our focus on reducing electricity and fuel consumption, promoting recycled paper use and engineering a modal shift in our supply chain towards sea freight wherever possible. Additional focus will be given to toner and packaging recycling in 09/10.

    We believe that long-term business growth is underscored by a commitment to sustainability. Although our environmental performance and community engagement activities are a source of pride, we are also aware that continuous improvement is required to maintain our standing as a good corporate citizen. We will continue to strive for this improvement over the coming year.

    Peter Diprose
    Environment Manager
    Fuji Xerox Printers
    June, 2009

    Independent Assurance statement

    To Fuji Xerox Australiaís stakeholders,

    Banarra Sustainability Assurance and Advice (Banarra) was commissioned by Fuji Xerox Australia (FXA) to assure its Sustainability Report 2009 (the Report) against the AA1000 Assurance Standard (AA1000AS) 2008. Banarra was also commissioned to validate the Report against the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines. This is Banarraís fourth reporting cycle with FXA, so we have built on our previous understanding of the organisation and its progress.

    Assurance scope

    A high level of assurance was provided. The assurance scope is a Type 1 engagement under AA1000AS (2008). As a Type 1 engagement, the scope covers the nature and extent to which FXA adheres to AA1000APS (2008) principles of Inclusivity, Materiality and Responsiveness and how it communicates this adherence in the Report. The assurance scope includes the print and web content of the Report. It does not include verification of any performance information or data in the Report. It also excludes assurance of any information from Fuji Xerox Group, Fuji Xerox Thailand and Fuji Xerox Printers.

    Banarra Assurance Methodology

    Our methodology included:

    Findings and Recommendations

    Inclusivity - has FXA a stakeholder participation process?

    FXA has a stakeholder participation process that includes a Stakeholder Engagement Framework, regular engagement with identified stakeholder groups and stakeholder involvement in some areas of sustainability performance decision-making. Whilst FXA engages with all its identified stakeholder groups, the views of two stakeholder groups, customers and suppliers, are not systematically captured and reviewed in a way that allows for an accountable and strategic response.

    Banarra identified that members of FXAís executive and management have good understanding of sustainability and stakeholder engagement, including an informal commitment to be accountable to its stakeholders. However, FXA would benefit from development of a formal commitment in this area.

    Materiality ñ has FXA identified its most important sustainability issues?

    FXA has a materiality process that identifies its most important sustainability issues. All of the material issues that FXA identified using this process are included in the Report. In addition, Banarraís independent materiality review did not identify any further material issues or issues of high stakeholder interest for inclusion in the Report.

    Whilst FXAís materiality process is comprehensive and includes consideration of stakeholder views regarding each of the identified issues, it does not include a method to identify emerging issues. As such, it is recommended that such a method is developed.

    Responsiveness ñ has FXA responded to these issues?

    FXA has developed planning processes to respond to its material issues. FXA divisions are requested to include planned responses to material issues relevant to their business area in their mid range planning process. In the reporting year all bar two divisions included some level of sustainability response in their plan although it was observed that the quality and completeness of this varies between divisions.

    FXA has implemented programs and systems that respond to all of its material issues. Banarraís review found that most of these responses were comprehensive and appropriate. In particular we found that FXA has made significant and impressive progress in the responses to several material issues, including the multi-stakeholder development of the paper procurement standard, improvements to the community program and implementation of the logistics carbon footprint project.

    However, we identified two material issues where we believe FXAís response should be improved:

    We are pleased that FXA has made further progress on development of objectives for non-environmental material issues. We recommend that FXA take this further and develop an objective relating to the material issue of assisting customers with their sustainability. We believe FXA has adequate resources to meet most of the commitments articulated in the Report. However, we do not believe that FXA has adequate resources to meet its zero waste to landfill target by 2011 or its 100% GreenPower target by 2011. We are pleased that the organisation has committed to reviewing these objectives.

    We believe FXA has appropriately communicated the nature and extent of its adherence to the AA1000APS (2008) Principles in the Report.

    Global Reporting Initiative

    We concur with FXAís own assessment that they have achieved GRI application level B+.

    Responsibilities & Independence

    FXA was responsible for preparation of all the Report content. In addition, FXA was responsible for stakeholder identification and engagement as well as material issue identification and response. Banarraís responsibility was to provide an independent assurance opinion of the Report using AA1000AS. This opinion is provided to FXA Management and any reliance third parties may place on this statement is entirely at their own risk. Banarra has provided FXA a management report containing more details on the findings and recommendations outlined in this statement.

    Banarra was paid by FXA to conduct this assignment. Other than this payment, the assurance team declares itself independent in relation to FXA and its stakeholders. There is a detailed statement on our independence, impartiality and competencies at www.banarra.com.

    Richard Boele
    Certified Lead Sustainability Assurance Practitioner IRCA No. 1188527

    Rebecca Edwards
    Principal Environmental Auditor, IEMA

    Banarra Sustainability Assurance and Advice
    Sydney, Australia
    27 July 2009

    2009 Table of correspondence with the Global Reporting Initiative G3 guidelines

    Table of correspondence with the Global Reporting Initiative G3 guidelines

    Strategy and Analysis
    1. Statement from our Managing Director
    2. Description of key impacts, risks and opportunities
    Organisational profile
    1. Name of the organisation
    2. Primary products and services
    3. Operational structure
    4. Location of headquarters
    5. Countries where we operate
    6. Ownership and legal form
    7. Markets served
    8. Scale of the reporting organisation
    9. Significant changes
    10. Awards received
    Report parameters
    1. Reporting period
    2. Date of most recent previous report
    3. Reporting cycle
    4. Contact point
    5. Process for defining report content
    6. Boundary of the report
    7. Statement of specific limitations
    8. Basis for reporting on joint ventures, subsidiaries etc
    9. Data measurement techniques
    10. Re-statements
    11. Significant changes from previous reports
    12. Table identifying the location of standard disclosures
    13. Policy and current practice regarding external assurance
    Governance
    1. Governance structure
    2. Various
    3. Statements of mission and values
    4. Various
    5. Reference to precautionary principle
    6. Charters and principles to which we subscribe
    7. Memberships of associations / advocacy organisations
    8. Stakeholder groups
    9. Basis for identification of stakeholders
    10. Approaches to stakeholder engagement
    11. Concerns raised through stakeholder engagement
    Economic
    1. Disclosure on management approach
    2. Economic value generated
    Environmental
    1. Disclosure on management approach
    2. Percentage of materials used that are recycled input materials (partial)
    3. Direct energy consumption
    4. Indirect energy consumption
    5. Initiatives to provide energy efficient products and energy reductions achieved
    6. Total water usage
    7. Greenhouse gas (GHG) emissions by weight
    8. Indirect GHG emissions by weight
    9. Initiatives to reduce GHG emissions and reductions achieved
    10. Total weight of waste and disposal method
    11. Significant spills
    12. Weight of transported waste deemed hazardous under Basel Convention
    13. Initiatives to mitigate environmental impacts
    14. Significant fines or monetary sanctions
    15. Significant environmental impacts of transporting products
    Social
    1. Labour practices and decent work
    2. Disclosure on management approach
    3. Total workforce
    4. Total number and rate of employee turnover
    5. Benefits
    6. Average hours of training p.a. per employee by employee category
    7. Percentage of staff receiving regular performance reviews
    Human rights
    1. Disclosure on management approach
    2. Percentage of suppliers that have undergone screening
    Society
    1. Disclosure on management approach
    2. Percentage of employees trained in anti-corruption
    3. Actions taken in response to incidents of corruption
    4. Public policy positions
    Product responsibility
    1. Disclosure on management approach
    2. Practices related to customer satisfaction
    3. Programs for adherence to laws, standards and voluntary codes
    4. Incidents of non-compliance with marketing regulations and voluntary codes