UMW HOLDINGS BERHAD (90278-P)ir.chartnexus.com/umw/website_HTML/attachments/... · 2018-04-24 · value for all our stakeholders. We have come a long way in the last one hundred years

UMW HOLDINGS BERHAD(90278-P)

/ E C O N O M I C /

/ E N V I R O N M E N T /

/ S O C I A L /

F O R U M W , S U S T A I N A B I L I T Y L I E S

A T T H E H E A R T O F E V E R Y T H I N G

W E D O . A S A N O R G A N I S A T I O N

W I T H A H E R I T A G E S T R E T C H I N G

B A C K M O R E T H A N 1 0 0 Y E A R S ,

W E R E M A I N I N D E B T E D T O O U R

N A T U R A L E N V I R O N M E N T A N D T O

T H E C O M M U N I T I E S I N W H I C H W E

O P E R A T E , F O R S U P P O R T I N G O U R

C O N T I N U E D S U C C E S S .

A S A R E S P O N S I B L E C O R P O R A T E

C I T I Z E N , W E S T R I V E T O P R E S E R V E

T H E P R E S E N T A N D B U I L D G R E A T E R

V A L U E F O R T H E F U T U R E T H A T W E

A L L S H A R E .

/ E C O N O M I C /

/ E N V I R O N M E N T /

/ S O C I A L /

E C O N O M I C

E N V I R O N M E N T

S O C I A L

4

Realigning our Focus

The cover of our Annual Report and Sustainability Report delivers a clear and simple message, which we boldly place in the centre to emphasise its central position in our overall strategy.

The icons represent our three core businesses. Enclosed by a circle, we show that while our operations may be separate, they are united in working together to achieve our organisation’s common goal.

Realigning our Focus conveys our determination to fulfill the task which lies ahead. We temper our ambition with pastel shades which speak of our humanity. We are a team and we respect each other and this drives the sustainability of our success.

CONTENTS

6 Group Chairman’s Message

8 President and Group CEO’s Message

10 Corporate Profile

11 Beyond Boundaries

14 Stakeholder Engagement

16 Performance & Achievements

60 Looking Ahead

61 Appendix

63 GRI Content Index

4 Cover Rationale

5 About this Report5 Scope of the Report

5 Report Boundary

14 The Stakeholder Identification Process

14 Our Stakeholders

15 What is Material to Us15 Our Materiality Assessment Process

15 Our Material Issues

17 Innovative & High-Performance Culture18 Performance Summary

19 High-Performance Culture at UMW

29 Developing Capabilities and Moving Up the Value Chain

31 Dynamic Workforce32 Performance Summary

33 The Group Human Resource Strategic Roadmap

34 The Value Mindset

36 Agile and Sustainable Leadership

39 Employee Engagement and Diversity

43 Environmental Stewardship44 Performance Summary

45 Our Environmental Philosophy

48 Special Focus – The Toyota Environmental Action Plan – 6th Edition

55 Nurturing the Community & Society56 Performance Summary

57 Community Development: Building Corporate Citizenship

59 Environment: Doing Our Part

60 Education: Focusing on Academia

11 Our Geographic Footprint

12 Management Approach to Sustainability13 Our Sustainability Governance Structure

Objective

Provides comprehensive report of the Group’s performance, activities and outlook.

Frameworks applied

• Main Market Listing Requirements of Bursa Malaysia Securities Berhad

• Malaysian Financial Reporting Standards

• International Financial Reporting Standards

• Companies Act 2016• Malaysian Code on Corporate

Governance 2017

Cross-referencing

UMW Holdings Berhad websitewww.umw.com.my

Objective

Provides detailed disclosure of our management of sustainability risks and opportunities in the areas of Economic, Environment and Social.

Frameworks applied

• Global Reporting Initiatives GRI G4

• Main Market Listing Requirements of Bursa Malaysia Securities Berhad

Cross-referencing

UMW Holdings Berhad websitewww.umw.com.my

A N N U A L R E P O R T2 0 1 7

S U S T A I N A B I L I T Y R E P O R T 2 0 1 7

COVER RATIONALE

5

ABOUT THIS REPORT

This is the second annual report on the sustainability performance of UMW Holdings Berhad (UMW or UMW Group) and covers our activities from January to December 2017.

Our Sustainability Report has been prepared in accordance with the Global Reporting Initiative’s G4 (GRI G4) Sustainability Reporting Guidelines – Core option. It discloses our commitments under our four key sustainability pillars, namely Innovative and High-Performing Culture, Dynamic Workforce, Environmental Stewardship, and Nurturing the Community and Society. It covers 20 GRI aspects.

Our report meets Bursa Malaysia Berhad’s requirements governing sustainability reporting and should be read together with our Annual Report 2017 to obtain a comprehensive picture of our organisation’s overall performance.

Our sustainability framework remains a work in progress and we continue to refine our reporting.

F O R WA R D - LO O K I N GS TAT E M E N T S

This report contains forward-looking statements characterised by the use of words and phrases such as “might”, “forecast”, “anticipate”, “project”, “may”, “believe”, “predict”, “expect”, “continue”, “will”, “estimate”, “target”, and other similar expressions. As the business environment is constantly changing, all forward-looking statements are subject to uncertainties that could cause actual results to differ from those reflected in them.

F E E D B AC K A N D C O M M E N T S

We encourage readers to tell us your views on our approach to sustainability and to make suggestions for the development of our sustainability efforts and programmes. Comments and suggestions can be directed to:

S. VIKNESHWARANHead – Investor, Media Relations & Sustainability

UMW Corporation Sdn Bhd 10, Jalan Utas 15/7, 40915, Shah Alam, Selangor Darul Ehsan, Malaysia.

Email: [email protected]: +603 5163 5000

M A N U F A C T U R I N G & E N G I N E E R I N G

- Manufacturing -- Distribution -

E Q U I P M E N T

- Distribution -- Fleet Management -

- Trading -- After-sales Service -

A U T O M O T I V E

- Distribution -- Assembly -

- Manufacture -- Sales & Service -

S C O P E O F T H E R E P O R T

Our Sustainability Report describes the way we manage risks and opportunities in economic, environment and social (EES) issues. It gives information about our material sustainability issues, stakeholders and our Company’s activities and we explain our processes for assessing materiality and identifying and engaging with our stakeholders.

R E P O R T B O U N DA RY

Our Sustainability Report covers the activities of our three core businesses located in Malaysia where the Group holds management control, namely Automotive, Equipment and Manufacturing & Engineering.

The report does not cover our foreign and non-core business units.

R E P O R T I N G T H I S Y E A R

MALAYSIAN – BASED SUBSIDIARIES ONLY

6

S U S TA I N A B I L I T Y R E P O R T 2 01 7 U MW H O LD I N GS B ER H A D (9 0278- P)

G R O U P C H A I R M A N ’ S M E S S A G E

T A N S R I D A T O ’

S R I H A M A D

K A M A P I A H B I N

C H E O T H M A N

G r o u p C h a i r m a n

7


G R O U P C H A I R M A N ’ S M E S S A G E

TO OUR VALUED STAKEHOLDERS,

It gives me great pleasure to present our Sustainability Report for 2017. This is our second year of formally disclosing our sustainability strategies and our report illustrates our on-going commitment and resolve to an economic, environmental and social performance that will steer us to continued prosperity and generate sustainable value for all our stakeholders.

We have come a long way in the last one hundred years and are proud to have achieved a great deal. While our past performance gives us the confidence to believe that even greater success lies ahead, we also understand and acknowledge that we will have to stay flexible, agile and dynamic in order to anticipate, navigate and master the challenges the future holds.

An innovative and forward-thinking mindset is crucial to this task, particularly as we address the issue of sustainability. This concept has evolved enormously over the years to become a multi-layered discipline involving all aspects of an organisation’s operations.

Nevertheless, sustainability has been at the core of our business strategy since the outset, albeit in a less formal structure, and a key enabler of our growth over the last century. For us, sustainability means achieving excellence in everything we do – in our processes, the approach to our work, our commitment to customer satisfaction and our relationship with the communities where we live and serve.

Excellence is not just an aspiration, it is a conscious and mindful decision. Our goal is to be recognised as a regional industrial champion as well as a responsible corporate citizen with a reputation for sustainable environmental stewardship and for empowering our communities.

We therefore welcome the current emphasis placed on the reporting of sustainability practices. It is important and timely given the uncertain and volatile state of the markets in which we operate. We live in an increasingly globalised world and what affects one market often has a domino effect on many others. It is a world characterised by volatility, uncertainty, complexity and ambiguity, collectively known as VUCA. In this environment, companies need to assess their risks and opportunities from a holistic angle, not just a financial perspective.

The new sustainability requirements have encouraged us to refine our approach, think differently about certain elements within our sustainability framework, and to have robust and thoughtful discourse. These discussions have helped us to make our approach to sustainability more comprehensive and establish a concrete platform for our future initiatives. In this regard, succession planning is a key focus of our sustainability strategy. In order to take full advantage of the opportunities ahead, we need a modern workforce equipped with the professional and personal skills required to keep pace with today’s fast-moving, technologically-advanced landscape.

At the heart of our long-term success lies our ability to maintain and enhance our governance structure as an integral part of our sustainability mechanism. Our governance practices emphasise corporate business ethics, anti-corruption initiatives and a culture of integrity, and will continue to drive our organisation’s performance as we embrace the challenges that lie ahead.

We have reached a historic milestone in our corporate journey and this has strengthened our determination and sense of responsibility to carry and build on the hard work that has brought UMW to this stage and make our Company relevant for future generations. I look forward to leading our Company to greater heights in the years to come. Strong governance, good sustainability practices and continued investment in our people will position us to deliver strong growth and greater sustainable value for all our stakeholders.

I conclude by thanking our employees and management for their on-going contributions to placing our organisation on a sustainable footing and I also thank our other stakeholders, including our principal partners, for their invaluable support

and trust.

TAN SRI DATO’ SRI HAMAD KAMA PIAH BIN CHE OTHMANGroup Chairman

Strong governance, good sustainability

practices and continued investment in

our people will position us to deliver

strong growth and greater sustainable

value for all our stakeholders.

8


P R E S I D E N T & G R O U P C E O ’ S M E S S A G E

At UMW, our sustainability practices aim to increase our long-term growth potential and at the same time demonstrate our firm intention to enrich the lives of all the stakeholders who are connected with the Group and our operations. Our sustainability agenda is established on four pillars of equal importance, namely innovative and high-performance culture, environmental stewardship, dynamic workforce and nurturing the community and society. These four focus areas embody and represent the issues that matter most to us and we constantly review and reassess our approach to ensure that our initiatives result in increased benefits to all stakeholders.

B A D R U L F E I S A L

B I N A B D U L R A H I M

P r e s i d e n t & G r o u p C E O

9


P R E S I D E N T & G R O U P C E O ’ S M E S S A G E

In 2017, we worked hard to introduce new and innovative ways of achieving excellence in our sustainability agenda – in line with our overall strategy of strengthening our Group as an innovative, contemporary and forward-thinking organisation. I am proud to highlight that we achieved many of our sustainability objectives and have set ourselves even more ambitious goals for the coming year.

INNOVATIVE AND HIGH-PERFORMANCE CULTURE Throughout the year, a key priority was to firmly embed the culture of high-performance across all levels of our organisation. A high-performance culture motivates, improves, innovates and drives success and UMW is committed to promoting and supporting an environment that brings out the best of our human capital. We continue to inculcate and instil high performance in our people, our processes and our systems so that we remain ahead of our competitors, achieve our short-, medium- and long-term targets for growth and are always agile and prepared to meet the unexpected challenges that come our way.

DYNAMIC WORKFORCEOur human capital is our most important asset and we strive to attract and retain outstanding people to lift the Group to greater heights. This year saw the launch of our Group Human Resource Strategic Roadmap, a five-year agenda that will help us to become a Best in Class Organisation by 2021 with a strategic framework in place to underpin and sustain our organisational excellence. The first phase runs until 2019 and we invested time and effort throughout the year to upgrade and uplift the skillsets of our workforce with innovative training and development programmes geared to keep pace with industry and technological advances. We also strengthened our talent acquisition process to attract the next set of highly motivated individuals to join UMW and be the leaders of tomorrow.

ENVIRONMENTAL STEWARDSHIP In the field of environmental stewardship, we continued to demonstrate our long-standing commitment to conservation through renewed emphasis on managing our resources – reducing waste, practising energy efficiency and introducing initiatives to reduce emissions throughout our operations. No gesture is too small when it comes to conserving resources and we promote that mindset and culture amongst all our employees, our divisions and our external stakeholders.

Throughout the year, we continued to align our environmental commitments with the high standards set by our principal partners and we will continue to monitor and measure our performance against global benchmarks. NURTURING THE COMMUNITY AND SOCIETY Throughout the year, our focus on respecting and nurturing the community and society in which we operate was driven by corporate social responsibility initiatives in community development, environment and education. We partnered leading non-governmental organisations and local charity organisations to brighten the lives of underprivileged communities and we engaged with youth in a range of environmental awareness initiatives. In the realm of education, we awarded full scholarships worth RM2.5 million to 53 deserving undergraduates through our annual scholarship programme, which seeks to identify and recruit promising future talent for our three core divisions. We also continued to offer donations to local educational institutions to support their initiatives to enhance operational excellence. In all our sustainability endeavours, we have gone beyond standard compliance and set aspirational performance targets that stretch and challenge us. Our internal policies are stringent and we benchmark ourselves against the highest standards of best practices. We also constantly review and assess our performance in order to proactively identify and address areas for improvements. We will continue to do this in the years ahead. I would like to conclude by extending my warmest gratitude to all of our stakeholders who have supported us throughout 2017 and made significant and impactful contributions to our sustainability agenda. I also thank our Board of Directors, our management team and employees, as well as our external stakeholders and our principal partners for embracing with enthusiasm the complex developments and challenges in the sustainability arena. For 2018, we are already assessing the sustainability opportunities and challenges which lie ahead. We have established more ambitious targets to help us further build and strengthen our organisation and we are confident that we have the people, processes and systems in place to steer us to continued and greater success.

BADRUL FEISAL BIN ABDUL RAHIMPresident & Group CEO

10


THE AUTOMOTIVE DIVISION

The Automotive Division is currently the major contributor of the

Group. UMW assembles, markets and distributes some of Malaysia’s

most popular marques of passenger cars and commercial vehicles.

Through a partnership with Toyota Motor Corporation of Japan

which stretches back more than 35 years, we are the exclusive

distributor of Toyota and Lexus models in Malaysia. We are the

largest shareholder of Malaysian car manufacturer, Perusahaan

Otomobil Kedua Sdn Bhd (Perodua). We also export selected

models of our vehicles to neighbouring markets.

THE EQUIPMENT DIVISION

The Equipment Division specialises in the distribution, fleet

management, trading and after-sales services of imported

equipment for global brands. Our equipment has applications in

the logging, construction, mining, agricultural, industrial, logistic

and warehousing sectors. UMW Industries (1985) Sdn Bhd is the

market leader in Malaysia for material handling equipment and the

winner of multiple awards. The Equipment Division also distributes

its products in Singapore, Myanmar, Papua New Guinea, Vietnam,

Brunei and China.

Our key range of products is:

• Heavy Equipment – We offer a comprehensive range of heavy

equipment that are market leaders in road construction,

infrastructure development, mining, logging, quarrying,

property development, plantation and forestry.

• Industrial Equipment – We are strategically aligned with

renowned names and focus on material handling equipment

such as forklifts and industrial floor cleaning equipment such

as sweepers and scrubbers.

UMW Holdings Berhad is a leading industrial enterprise with diverse and global interests in the automotive, equipment and manufacturing

& engineering industries. The UMW Group has a presence in Malaysia, Singapore, Indonesia, Myanmar, Vietnam, Papua New Guinea,

Australia, China, India and Oman and we work with leading global organisations to cement our position as a leader in our core businesses.

The UMW Group focuses on three strategic business units:

C O R P O R A T EP R O F I L E

• Marine and Power Equipment – We are a well-established

supplier of industrial power products such as generators,

compressors and marine power engines.

THE MANUFACTURING & ENGINEERING (M&E) DIVISION The Manufacturing & Engineering (M&E) Division primarily

manufactures products for the aerospace and automotive industries

and we are a leading supplier of original equipment manufacturer

and replacement automotive parts in Malaysia.

We manufacture high-quality shock absorbers and hydraulic

power-steering pumps and systems through our subsidiary KYB-UMW

Malaysia. We also blend, market and distribute Pennzoil, Repsol and

GRANTT lubricants and we have blending plants in Malaysia and China.

UMW Aerospace Sdn Bhd manufactures and assembles fan cases

for Rolls-Royce Plc and is the first Malaysian company to have

the status of a Tier-1 aerospace engine component manufacturer

for Rolls-Royce Plc. UMW Aerospace Sdn Bhd is a wholly-owned

subsidary of UMW Group.

OTHERSOur other areas of business include technology and property

development. These are managed by UMW Technology Sdn Bhd

and UMW Land Sdn Bhd. A key aim of UMW Land Sdn Bhd is to

generate further growth for the Group by developing our 861-acre

land bank in Serendah into Malaysia’s first integrated industrial

park focused on high-value manufacturing.

We also provide vehicle-financing services for our automotive

customers and travel agency services for the Group’s travel needs.

The sustainability practices of these non-core businesses are not

covered in this Sustainability Report.

11


B E Y O N D B O U N D A R I E S

MALAYSIA

CHINA

VIETNAM

SINGAPORE

INDONESIA

AUSTRALIA

INDIA

OMAN

MYANMAR

PAPUA NEW GUINEA

O U R G E O G R A PH I C FO OT PR I N T

UMW is a leading industrial enterprise with diverse and global interests in the automotive, equipment and manufacturing & engineering industries.

The UMW Group has expanded beyond Malaysian shores and now has an international presence in Singapore, Indonesia, Myanmar, Vietnam, Papua New Guinea, Australia, China, India and Oman.

11

Total Local Workforce 77.8%

Total Expat Workforce 22.2%



















12


M A N A G E M E N T A P P R O A C HT O S U S T A I N A B I L I T Y

“BUILDING SUSTAINABILITY THROUGH EXCELLENCE”

Our goal is to be an organisation that excels in everything that we do, and embodies excellence as the foundation to further build and enhance our products and capabilities and to remain relevant in the next 100 years.

M A N AG E M E N T A P P R OAC H T O S U S TA I N A B I LI T Y

For more than a century, sustainability has been at the heart of our business philosophy. It has enabled us to grow from our humble start as an automotive repair workshop to one of Malaysia’s largest industrial conglomerates. Our approach to sustainability is a long-term one with clear vision and a Group-wide strategy to help us achieve our sustainability targets.

OUR FOUR-PRONGED STRATEGY

• Financially strong

• Fortified with

sustainable

businesses

• Ingrained with

high-performance

culture which drives

innovation

• Caring and

responsible

corporate citizen

END STATE FOR UMW:

01020304

INNOVATIVE & HIGH-PERFORMANCE CULTURE

ENVIRONMENTAL STEWARDSHIP

DYNAMIC WORKFORCE

NURTURING THE COMMUNITY & SOCIETY

Providing customers with first-rate products

and services is central to the sustainability of

our business. Our definition of sustainability is

therefore grounded on the theme of excellence

and has four distinct elements:

• We constantly seek the betterment or

enhancement of our products by moving up

the value chain.

• We aim to create shareholder value and stay

relevant by addressing the EES impact of our

business.

• We are committed to new innovations to

drive us forward.

• We strive to be a responsible and respected

corporate citizen by protecting the

environment and nurturing our communities.

Our commitment to excellence extends to all four

pillars of our strategy, namely:

• Innovative and High-Performance Culture.

• Environmental Stewardship.

• Dynamic Workforce.

• Nurturing the Community and Society.

By implementing a range of initiatives in each of

the four pillars, we aim to build a company that is:

• Financially strong.

• Fortified with sustainable businesses.

• Ingrained with a high-performance culture

that drives innovation.

• Caring and responsible for its impact on the

environment and the community.

Our sustainability framework is embedded

into our Beyond Boundaries business strategy

which defines our ambition to become a high-

performing, regional conglomerate able to

compete with other industry champions.

O U R LO N G -T E R M S U S TA I N A B I L I T Y TA R G E T S

13


M A N A G E M E N T A P P R O A C HT O S U S T A I N A B I L I T Y

O U R S U S TA I N A B I LI T Y G OV E R N A N C E S T R U C T U R E

G OV E R N A N C E , E T H I C S A N D I N T E G R I T Y

Sustainability is a formal part of our management structure. Our Management Committee reviews and recommends all sustainability strategies, policies and other matters, including management systems, performance monitoring and regulations.

The Management Committee is chaired by UMW’s President and Group CEO. Our Board of Directors reviews and endorses strategies proposed by the Management Committee. The Sustainability Working Committee (SWC), chaired by the Director of Group Strategy, implements our sustainability initiatives and reports to our Management Committee.

UMW MAIN BOARD

DIRECTOR,GROUP STRATEGY

SUSTAINABILITYWORKING COMMITTEE

Chaired by

PGCEO

MANAGEMENTCOMMITTEE

Chaired by

14


O U R S TA K E H O L D E R S

S T A K E H O L D E R E N G A G E M E N T

The table below gives a summary of our stakeholder groups and ways we engage with them.

STAKEHOLDER GROUP

STAKEHOLDER DESCRIPTION METHOD OF ENGAGEMENT

Principal Partners These stakeholders are our long-term business partners who we have engaged with in joint ventures or other partnership/agency agreements.

• Principal engagement

Customers Our customers comprise retail customers, businesses and governments, both local and international.

• Marketing plan• Customer Satisfaction Survey• Customer feedback channel

Employees Our employees are key enablers of all our business activities and are involved in all parts of our value chain.

• Employee Engagement Survey• Trade unions• Events and functions

Shareholders Shareholders are the owners of the Company. • Annual General Meeting• Regular updates and

communications

Regulators Regulators stipulate and enforce the laws and regulations in the various markets where we operate.

• Regular updates and communications

Local Communities Our communities include, but are not limited to, the people who reside in the areas where we operate, NGOs, other businesses and other institutions.

• Financial and non-financial contributions

• Charity events• Volunteer programmes• Events and roadshows

Analysts Includes sell-side analysts that write reports on the Group’s results, performance and plans moving forward.

• Analysts briefings• One-on-one meetings• Investor conferences

Media Our media stakeholders include news editors and reporters who are responsible for the public dissemination of information related to our Company.

• Events and press conferences• Media briefings

T H E S TA K E H O L D E R I D E N T I F I C AT I O N P R O C E S S

Our operations have a wide reach and affect both external and internal groups, including our commercial stakeholders, the communities in which we operate and other not-for-profit organisations. These groups also have a direct influence on the outcomes of our operations. It is therefore important to understand their interests and needs.

The process of identifying and prioritising our stakeholders is a rigorous exercise carried out by the SWC in consultation with the Management Committee. The process and the list of stakeholders have been endorsed by the Board of Directors.

We have identified seven key stakeholder groups that are impacted by, or have an impact on, our business activities.

15


Materiality, in sustainability terms, is not limited to matters that may have a significant financial impact on our organisation but also includes matters that may impinge on our ability to meet present and future needs. Our definition of materiality is drawn from the guidelines provided by Bursa Malaysia where material issues are defined as such if they:

i. reflect an organisation’s significant EES impacts; orii. substantively influence the assessment and decisions of stakeholders.

For the purposes of this report, we have a list of material issues that are drawn from both internal and external sources. Feedback from external sources were obtained through proxies that engaged with them through regular engagements on an on-going basis. Through the materiality assessment process, we have identified 20 issues material to us. Each of these initiatives have been grouped under the relevant sustainability prongs that manage our EES impact.

O U R M AT E R I A LI T Y A S S E S S M E N T P R O C E S S

O U R M AT E R I A L I S S U E S

W H A T I S M A T E R I A L T O U S

18 6

5

2

7

8

10

11

13

14

19

20

12

9

4

1

16

3

15

17

Con

cern

to

stak

ehol

ders

Significance to the Company

important most important

mos

t im

port

ant INNOVATIVE & HIGH-PERFORMANCE CULTURE

1 Economic Performance2 Indirect Economic Impact3 Market Presence4 Procurement Practices5 Product & Services Labelling – Customer Satisfaction6 Product Quality & Safety7 Occupational Health & Safety


8 Energy9 Water10 Effluents & Waste11 Materials12 Supplier Environmental Assessment13 Transport14 Emissions

DYNAMIC WORKFORCE

15 Employment16 Training & Education17 Diversity & Equal Opportunity18 Labour/Management Relations

NURTURING THE COMMUNITY & SOCIETY

19 Local Communities20 Anti-Corruption

Labour Practices

Product Responsibility

Economic

Environment

Society

The rationale on why these issues are material to us can be found in the Appendix section of this report.

Legend: Priority Aspects

The outcome of our materiality assessment process is presented in our materiality matrix which shows UMW’s 20 key material issues.

16


P E R F O R M A N C E & A C H I E V E M E N T S

2017 was a year of consolidation for UMW during which we announced our strategic exit from our Oil & Gas (O&G) segment and our focus on the three core businesses of the Group. With currency volatility and subdued consumer sentiment, 2017 was not without its challenges. Nevertheless, amidst these adverse circumstances, we reported revenue of RM11,066.6 million and profit after tax of RM144.9 million – after revenue of RM10,436.8 million and loss after tax of RM415.6 million in 2016 for continuing operations.

Our Automotive Division remains the highest contributor to our revenue, accounting for more than 70%. Our Equipment and M&E Divisions continued to post higher revenue contributions in 2017. The M&E Division registered a loss before tax of RM17.7 million in 2017 as opposed to profit before tax of RM24.6 million in 2016 due to the pre-operating expenses of the aerospace business. The low crude oil prices continued to impact our unlisted O&G segment. We target and endeavour to exit the O&G segment by 2018 and focus on the long-term growth prospects of our three core businesses.

As a Group, we created direct economic value of RM11,457.0 million after RM10,782.8 million in 2016. In terms of our economic value to others, we distributed a total of RM11,399.4 million after RM11,419.1 million in 2016 in the areas of operating costs, employee wages and benefits, dividends and interest, taxes and spending on corporate social responsibility projects. The following table provides a breakdown

of this summary:

RM Million2015 2016

(Restated)2017

E C O N O M I C

Direct Economic Value Generated

Revenue 14,441.6 10,436.8 11,066.6

Other income 404.1 346.0 390.4

Total 14,845.7 10,782.8 11,457.0

Economic Value Distributed to:

Our Suppliers: Operating costs 13,364.3 10,234.9 10,269.7

Our Employees: Salaries and benefits 1,084.9 785.8 801.8

Our Lenders: Payments to lenders 126.8 44.3 119.0

The Government: Payments to governments 261.6 125.0 114.8

The Rakyat: Community investments 19.7 16.4 18.2

Our Shareholders: Payments to shareholders 629.9 212.7 75.9

Total 15,487.2 11,419.1 11,399.4

P E R F O R M A N C E & AC H I E V E M E N T S

I N N O V A T I V E & H I G H - P E R F O R M A N C E C U L T U R E

A high-performance culture means doing things differently

In today’s unpredictable and non-traditional marketplace, we need to be agile and nimble and able to drive

organisational change with speed.

Innovation and productivity are key determinants of sustainability

A high-performance culture drives innovation, productivity and improvement. An organisation with these attributes

stands head and shoulders above the rest.

High-performance is a mantra for the whole organisation

All parts of the organisation are aligned so that the people, processes and systems move in the same direction in

pursuit of the same goals.

F A C T S H E E T

P E R F O R M A N C E S U M M A RY

Our PerformanceWhy the need for a high-performance culture in our sustainability

strategy? Being in a high-performance culture means that our organisation

is populated by highly motivated individuals who are able to stimulate

change and inspire progress. We recognise the crucial need for continuous

improvement, innovation and productivity in order to deliver better products

and services.

100th year in existence

NO.1 J.D. Power 2017 Malaysia Sales Satisfaction Index (SSI) Study

1.37 M&E injury rate 2016: 5.03

50-YEAR relationship with Komatsu Ltd, Japan and Toyota Industries Corporation

5-STAR NCAP safety rating for Toyota Vios

16 number of accidents 2016: 24

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I N N O V A T I V E & H I G H -P E R F O R M A N C E C U L T U R E

Our transformation into a high-performance culture requires the alignment of all aspects of our organisation. With high-performing people, processes and systems in place, we can continually improve, innovate and lift productivity and ensure that we stay ahead of the curve.

It requires that our people, our processes and our systems work in the same direction towards a shared vision of continuous improvement and operational excellence so that we can stay ahead of challenges in the operating environment, achieve competitive advantage and realise our short-, medium- and long-term targets for sustainable growth.

People, processes and systems support each other. They are interdependent pieces of

the whole. And whilst our people remain the most important asset of our organisation,

they are unable to reach their full potential without the processes and systems in

place to further their excellence.

Each Division of our organisation sets its own high-performance targets and

collectively they contribute to achieving organisational excellence for the Group as

a whole.

People

Right Skills, Right Mindset

Right Process, Doing It Right

Good Framework,Value Creation

Process Systems

H I G H - P E R F O R M A N C E C U LT U R E AT U M W

A high-performance culture is our way of doing things. It is a change in our corporate culture designed to give us an enduring competitive edge, ensure our sustainable future and create value for all our stakeholders.

As we mark our 100th anniversary, the time is right to reflect on our past successes and look at what we need to do to take us through the next 100 years and beyond.

The cultivation of a high-performance culture is not the responsibility of just one Division or one layer of our Company, it is our overall vision and all our stakeholders must be clear about why we are driving change and moving in the same direction.

A high-performance culture drives every aspect of our organisation to consistently go that extra mile to contribute more to our sustainable future.

‘Business as usual’ no longer works. Today’s working climate is marked by volatility, uncertainty, complexity and ambiguity – VUCA. The VUCA working climate is unpredictable, fast-paced and non-traditional and it describes perfectly what is happening in the world right now. It is the new

normal.

Developing a high-performance culture is our way of getting ready for the unexpected challenges and turning them to our advantage. It is a strategy for steady leadership in an uncertain world. To adapt to our rapidly-changing external environment requires a high level of flexibility and agility. It requires the courage to make fast and bold decisions and a set of values ingrained in our hearts and minds. Ultimately, a high-performance climate means that we will stay a winner, head and

shoulders above the rest.

H I G H - P E R F O R M A N C E C U LT U R E T R A N S F O R M AT I O N

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Our people drive our aspiration to cement a high-performance

culture throughout our entire organisation. We therefore require a

cohesive team of highly motivated and skilled individuals, working

together to advance our Company to its next level. At UMW, we

foster a working environment which encourages interaction across

all levels of the organisation and an open leadership style which

welcomes constructive feedback, suggestions and ideas.

We seek individuals with a desire to catalyse change and inspire

progress, equipped with qualities which include problem solving

strengths, creativity and innovation, cognitive ability and agility,

a global mindset and digital skills – attributes that will help our

Company meet the changes and challenges of the future.

People

We fos ter a working environment which encourages interac tion across all levels of the organis ation and an op en leadership s t yle which welcomes cons truc tive fee dback, sug ges tions and ideas .

R I G H T S K I L L S , R I G H T M I N D S E T

We work hard to retain and nurture our employees through an

organisational infrastructure which cultivates engagement and

enthusiasm and offers reward to those who go above and beyond

their prescribed duties. We set clear expectations, define roles and

create a trusting environment in which each and every one of our

employees can thrive.

Whilst we seek to attract individuals driven by the desire to effect

change, we also recognise that continuity and stability are crucial

to a high-performance culture. Our existing talent, many of whom

have been with UMW for many years, continue to make a strong

contribution to the success UMW enjoys today. They are testament

to the Company’s ability to provide a corporate culture in which

outstanding people can perform and flourish and their historical

perspective and breadth and depth of knowledge are essential to

the sustainability of our success.

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With a strong team of high-performing people on board, an organisation is able to improve and innovate its processes, which is vital for sustainable growth in the diverse and fast-evolving marketplace in which we operate. Our high-performance processes help us to stay ahead of the curve and deliver products and services which consistently meet and often exceed customer expectations and enable us to stand head and shoulders above the rest. We set stringent standards in our adherence to a culture of high-performance in our processes and we expect all our stakeholders, both internal and external, to follow our lead.

To measure the success of our processes, we constantly assess our performance in the following two key focus areas:

Process Our commitment Building Product Quality and Customer Trust

ENSURING PRODUCT QUALITY AND SAFETY

AUTOMOTIVE DIVISION

Our relationship with Toyota Motor Company (TMC) stretches back over 35 years and as the sole distributor of the Toyota and Lexus marques in Malaysia, we endeavour to meet the high standards customers the world over expect from Toyota.

The concept of Kaizen, or continuous improvement, requires the on-going pursuit of excellence and the desire to push beyond boundaries. We integrate Kaizen throughout our entire value chain.

We adhere to the technical requirements set by TMC, which specify vehicle safety standards that are generally higher than those set by Malaysian regulators. Our car models carry a minimum 3-Star safety rating from the ASEAN New Car Assessment Programme (NCAP). The ASEAN NCAP tests new cars on Adult Occupant Protection (AOP) and Child Occupant Protection (COP).

The performance of our products and the quality of our services are fundamental to our ability to attract customers, generate trust and hence retain their loyalty. Product quality and customer trust are therefore inextricably intertwined and it is crucial that we always deliver on our product promises, before, during and after delivery.

At the same time, exemplary standards of occupational health and safety are essential to protect both our employees and customers. Given the nature of the hazardous materials and processes we use in the manufacture of our products, our workplaces must adhere to the highest standards of health and safety and to this end, we constantly monitor and introduce improvements to our working environment. Our ability to craft products which meet the highest safety standards is critical for ensuring customer trust and our long-term business sustainability.

Embracing Occupational Health and Safety

Building Product Quality and Customer Trust

RIGHT PROCESS, DOING IT RIGHT

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F E A T U R E T T E

A S E A N N C A P A W A R D F O R T O Y O T A V I O S


EQUIPMENT DIVISION

In the Equipment Division, we are mainly involved in the sale and service of equipment and parts for a number of niche segments. We have the largest equipment servicing fleet in Malaysia and can therefore provide extensive after-sales and maintenance services to our clients wherever they may be. We have a comprehensive range of training and development initiatives to ensure our staff can serve our clients at the highest possible standards. Our value-added services include consultation on fleet management, equipment rental, financing and other administrative issues.

We have drawn from our long partnership with our Japanese partners to include elements of their business philosophy in the management of our own business. For example, we incorporate Toyota Production System (TPS) into our own value chain to ensure that our people are focused on continual improvement and better performance.

The New Car Assessment Programme for Southeast Asian Countries (ASEAN NCAP) is an automobile safety rating programme established by the Malaysian Institute of Road Safety Research and the Global New Car Assessment Programme. It is targeted to elevate vehicle safety standards, raise consumer awareness and encourage a market for safer vehicles in the region.

In 2017, our Toyota Vios received a 5-Star safety rating in the sedan category. Evaluated for its adult and child occupant protection and safety assist technologies, the model’s safety features include seven airbags across all variants and active safety features such as a seatbelt reminder system for its front occupants and Electronic Stability Control in all its variants.

Our processes emphasise safety at each stage of our products’ life cycles:

Marketing and PromotionOur commitment to product quality and safety extends to our marketing and promotion activities where we provide our customers with facilities and training to safely handle our products. For example, we have constructed a forklift training circuit, which provides regular training to our customers. Facilities and programmes such as these help protect inexperienced users from hazards associated with the untrained use of industrial equipment. For Heavy Equipment machineries, operation and daily maintenance training will be conducted at site upon deliveries. In every case, our facilities and programmes emphasise the need for safety in the use of all equipment.

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F E A T U R E T T E

B U I L D I N G C U S T O M E R T R U S T – A 1 0 0 - Y E A R S T O R Y

When Chia Yee Soh set his eyes on his first motorcycle, he knew he was looking at the future of transport. Although an apprentice in a bicycle shop, Chia’s natural curiosity in all things mechanical got the better of him, prompting him to take the motorcycle apart even though the customer was only looking to repair the tyres on the vehicle. Chia’s fascination with the internal combustion engine wouldn’t go away, and he eventually set up his own automotive repair shop at the young age of 19 in 1917.

He named his shop United Motor Works and sought out the knowledge and expertise needed to provide services that were not available elsewhere. While the reputation of his shop’s capabilities grew, Chia also made sure that the shop’s reputation as a place that cared for its customers grew in tandem. His focus on customers and efforts in building trust and customer loyalty would draw in new customers and his shop flourished.

For a hundred years, UMW has kept this principle of equating good business with customer satisfaction as part of its core business philosophy. Through both good times and bad, UMW has preserved the passion, integrity and vision that began with our founder and we continue to adhere to his emphasis on maintaining customer satisfaction. By doing so, we have evolved from a humble automotive repair shop in 1917 to the thriving RM7 billion company that we are today.

Storage, Distribution and SupplyUMW maintains yards and warehouses at strategic locations for the storage of inventory comprising a range of equipment from large heavy industry movers to small equipment parts. We emphasise a culture of safety in our storage areas as careless behaviour can lead to equipment and property damage, and more importantly, harm our employees.

Use and ServiceWe encourage our clients to sign service contracts with us as this allows UMW to guarantee equipment quality, maintenance and safety on an on-going basis. This is part of our commitment to safety as regular maintenance allows us to ensure optimal performance of the equipment to prevent injuries arising from equipment faults. Service schedules are meticulously followed and we have teams of experts ready at hand to provide support when necessary.

M&E DIVISION

The M&E Division has a diverse portfolio in aerospace, automotive components and lubricants and maintaining customer satisfaction requires on-going skills training for all our staff. We also draw on the best practices adapted from our partners, TMC and KYB Japan. We hold regular meetings with our clients to discuss their needs and expectations in terms of product quality, pre- and after-sales service and work together to explore collaborative opportunities.

To uphold quality and safety, each of our production lines undergoes stringent product testing and quality accreditation. We emphasise research and development (R&D) to develop new innovations for our products and services and our lubricants and automotive components businesses have in-house R&D teams. We also share advanced technical know-how and support with our partners.

Making sure our customers trust our products and services is fundamental to our future success. At every stage of our products’ life cycle – from the manufacturing and production process through to distribution and after-sales service – we put the needs of our customers first.

E N S U R I N G C U S T O M E R S AT I S FAC T I O N

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AUTOMOTIVE DIVISION

In the field of customer satisfaction, our performance regularly leads the market. Each year, the prestigious global market research company J.D. Power issues two customer satisfaction studies for car companies.

In 2017, UMW Toyota Motor ranked highest in the Malaysia Customer Service Index (CSI) Study for customer satisfaction for the second consecutive year. The study assesses dealership performance for service quality, service initiation, vehicle pick-up, service advisor and service facility. The findings were based on responses from 2,705 new vehicle owners.

In the J.D. Power 2017 Malaysia Sales Satisfaction Index (SSI) Study, Toyota tied for first place, taking the top spot for the fourth time in five years.

The study measures the factors that contribute to customer satisfaction starting with the new vehicle purchase experience, namely salesperson, dealer facility, delivery timing, deal, delivery process and sales initiation and was based on responses from 2,130 new vehicle owners.

Sales Satisfaction Index

Position 2013 2014 2015 2016 2017

1 Toyota Toyota Toyota Mitsubishi Toyota & Isuzu

2 Nissan Honda Mitsubishi Mazda

3 Suzuki Hyundai Honda Nissan Nissan

4 Mazda Nissan Nissan Toyota Honda

5 Ford Perodua Mazda Honda Mazda

6 Perodua Perodua Mitsubishi

7 Proton Proton Perodua

8 Proton

Customer Service Index

Position 2013 2014 2015 2016 2017

1 BMW Toyota Mazda Toyota Toyota

2 Volkswagen Nissan Mitsubishi Mazda Mitsubishi

3 Honda Isuzu Honda Mitsubishi Mazda

4 Mazda Mazda Ford Kia Nissan

5 Mercedes-Benz Honda Kia Isuzu Volkswagen

6 Toyota Nissan Honda Isuzu

7 Isuzu Nissan Ford

8 Toyota Perodua Perodua

9 Perodua Volkswagen Proton

10 Volkswagen Hyundai Honda

11 Hyundai Proton

12 Proton Ford

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The Toyota Gazoo Racing Festival (TGR) was launched in August, a carnival-like event of exciting entertainment, games, challenges and food as well the chance to test drive and buy new Toyota vehicles. The highlight of the festival is the Vios Challenge street race in which 40 drivers and racing teams, which included eight local celebrities, push the Toyota Vios to its limit. The race aims to elevate the sporty and youthful image of the Toyota Vios in support of its tagline ‘All About The Drive’ and raise interest in the Malaysian motorsports scene. The TGR began in Batu Kawan in Penang and was staged in the Malaysia Agro Exposition Park Serdang in November. In 2018, the festival continues to Medini City, Iskandar Puteri in Johor Bahru, with the season finale in March at Kuala Lumpur's Technology Park Malaysia.

Customer loyalty is crucial to our sustainability and this year we continued to enhance our customer service. Training programmes on hospitality and competencies development were provided to our frontline staff and our employees were involved in various social, environmental and safety initiatives to engage more closely with the local community. The overall customer experience at our showrooms was enhanced by upgrades to our lounge and kids' corner as well as the introduction of mobile phone charging stations and utility payment kiosks. We also expanded our range of products to include tyres, car care and accessories in addition to our maintenance and body and paint services.

The Toyota Mobile Apps service was launched in January, enabling our customers to conveniently connect and interact with us, make service appointments, check their service history and get updates on our latest products.

EQUIPMENT DIVISION

The Equipment Division places high emphasis on customer satisfaction. This includes ensuring that their after-sales facility, workshops and employees are able to handle customers' queries and concerns. For example, the Industrial Equipment Division strives to ensure that its after-sales facility and workshop receives the After-Sales and Services Evaluation Certification (ASEC) from Toyota Industries Corporation (TICO). In addition, under TICO's Service Technician Education Programme (STEP), our technicians go through certified training to guarantee that they have the expertise to deliver first-class service to our customers. On the other hand, the Heavy Equipment segment regularly sends their after-sales personnel to Komatsu’s Asia Training and Demonstration centre located in Bangkok, Thailand.

As the Equipment Division operates in a highly dynamic operating environment where customer needs and expectations can quickly change, the Division practices active engagement with its clients. Our service personnel are trained to proactively meet and anticipate the needs of our customers to offer innovative solutions that will create greater value for our customers in meeting their equipment needs.

We are proud to report that we have the largest equipment servicing fleet in Malaysia to provide after-sales service and maintenance to our clients wherever they may be.

M&E DIVISION

Customer satisfaction levels of the M&E Division are gauged through customer feedback for each individual company. Towards this end, businesses within our M&E Division conduct regular engagements with clients to determine their needs and expectations in terms of product quality, pre- and after-sales service and work together in exploring possible collaborative opportunities.

Our commitment Embracing Occupational Health and Safety

UMW has an Occupational Health and Safety (OHS) policy that safeguards our employees, customers, visitors and other relevant stakeholders. Senior management reviews the OHS policy annually during the OHS Management review meeting. In addition, the Group’s Safety and Health Committee meets once every three months to ensure that proper systems are in place to meet the needs of a changing environment. In addition, we comply with Malaysian law in populating our Safety and Health Committees equally with managerial and employee representatives.

We have a formal process for undertaking workplace risk assessment called the Hazard Identification, Risk Assessment and Risk Controls (HIRARC). The HIRARC is verified by SIRIM QAS International Sdn Bhd via an OHSAS 18001 audit.

Throughout the year, UMW Toyota Motor engaged in a range of initiatives to elevate the brand’s image and expand its market share.

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In March and April, SIRIM QAS conducted an OHSAS 18001:2007 surveillance audit for 10 companies in the Group and concluded that the management system at all companies has been adequately maintained according to OHSAS 18001:2007 standard.

Ten companies in our Group hold OHSAS 18001:2007 accreditation:

Implementation of Occupational Health and Safety Management System at Ipoh and Kuantan BranchesThis year, UMW management approved the extension of the OHSAS 18001 certification to all companies within the Group. Group HSE is tasked with completing the certification by 2020. OHSAS is a system to enhance and manage occupational health and safety at the workplace. The implementation began on 27 November in the Ipoh and Kuantan branches of UMW Industries (1985) Sdn Bhd and UMW Equipment Sdn Bhd and will be followed in January at UMW Aerospace Sdn Bhd. The companies are expected to be awarded certification towards the end of 2018.

UMW-HSE Green Card and Best HSE Contractor Award The UMW HSE Green Card was launched in December, which is essentially a ‘passport’ for contractors to work on the UMW premises. To be awarded a Green Card, the contractor must attend and pass a one-day safety and health training session. Contractors must then ensure that all their staff adhere to the same stringent HSE standards while working on the UMW premises. The Green Card must be renewed annually and the contractor has to attend refresher training. In addition, UMW gives out the Best HSE Contractor Award to the contractor who has demonstrated excellence in HSE. Contractors are judged on their compliance with UMW HSE procedures, their accident rate and their overall commitment to maintaining the highest standards of HSE.

Road Safety Briefing by Road Safety DepartmentIn May, Group HSE, in collaboration with the Road Safety Department, organised three sessions of road safety talks for staff as part of our goal of achieving zero road accidents. The sessions covered safety issues such as the selection of safety helmets, vehicle maintenance, road safety signs and speed limits. More than 200 staff attended the talks.

Safety Training on Basic Maintenance of Toyota Hilux and HiaceIn collaboration with the UMW Toyota Motor Knowledge Centre (TKDC), six sessions of safety training on the basic maintenance of Toyota Hilux and Hiace models took place from August to October. A total of 110 mechanics and service van drivers from the Equipment Division attended the training, which combined classroom theory with practical sessions on the techniques for handling and driving service vans and basic van maintenance.

• UMW Corporation Sdn Bhd • Lubritech International Holdings Limited, Hong Kong• UMW Equipment Sdn Bhd • UMW Industries (1985) Sdn Bhd • UMW Industrial Power Sdn Bhd • UMW Pennzoil Distributors Sdn Bhd / Lubetech Sdn Bhd• UMW Advantech Sdn Bhd • Automotive Industries Sdn Bhd• UMW Equipment & Engineering Pte Ltd, Singapore • KYB-UMW Malaysia Sdn Bhd

The accreditation is a testimony of the Group’s commitment to adhere to the highest international Health, Safety and Environment (HSE) standards. More of our companies are expected to receive OHS certification in 2018.

Our Emergency Response Plan provides the framework to respond to any OHS and environment incident. We have not reported any incidents in the past.

Our Safety Awareness Programme consists of awareness and training sessions on a range of issues, including basic fire safety, chemical spillage, gas handling and machine safety. The Group’s HSE Department spearheads activities at the Group level and our individual business units conduct their own safety workshops.

In 2017, we established the Group HSE Council, a platform for the Group to discuss strategic HSE initiatives with a view to implementing best practices consistently across the Group as we stride towards achieving world-class HSE standards by 2020. The HSE Council is led by En. Zailani Ali, Executive Director Group Human Resource and consists of representatives from the Group HSE, Automotive, Equipment and Manufacturing & Engineering Divisions and a representative for our operations in East Malaysia. The council will meet every quarter, unless there is a need for urgent issues to be discussed.

HSE ACTIVITIES

Gearing up to HSE 4.0During the year, we organised a range of HSE activities in order to inculcate high standards of HSE practices across the Group.

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HSE Activities at BranchesGroup HSE visited selected OHSAS non-certified branches throughout the year to enhance HSE awareness amongst staff and guide them towards compliance with HSE legal requirements and Occupational Health and Safety Management System (OHSAS) requirements. Visits took place at Nilai in March, Melaka in July and Kluang in September and included inspections to observe HSE good practices and determine if any improvements were needed, and briefings on emergency preparedness and response.

Towards ‘Zero’ Occupational Illness in the WorkplaceIn April, 29 participants from the service and workshop department of UMW Equipment Sdn Bhd attended an internal training programme on chemical handling and the proper use of personal protective equipment (PPE). The Occupational Safety & Health Act (OHSA) 1994 – Use and Standard of Exposure of Chemicals Hazardous to Health Regulation 2000 requires training to be conducted at least once every two years. During the training session, UMW Advantech Sdn Bhd also conducted Local Exhaust Ventilation (LEV) monitoring, which measures the laboratory suction system to ensure staff are protected from inhaling hazardous chemicals.

Accident Reporting and InvestigationIn May, Group HSE, in collaboration with UMW Training Centre Sdn Bhd (UTC), organised two days of training on accident reporting and investigation. The training was conducted for HSE practitioners, Safety and Health committee members and OHSAS committee members.

The training was designed to guide the participants on how to report and investigate incidents in compliance with legal requirements and UMW procedures, identify and determine factors that contribute to incidents and accidents, collect evidence and analyse incident data, identify immediate and root causes and establish action plans to prevent the same incidents from recurring and also provide hands-on experience to the participants investigating the incidents.

Ergonomic Awareness CampaignIn September, UMW Toyota Motor organised an ergonomic awareness campaign at its Cheras 3S outlets. The one-day event included an exhibition on ergonomic risks, best practices and stretching exercises for office and workshop staff and a PPE booth for staff to learn more about the equipment available on the market and test their comfort and usability. The highlight of the event was a luncheon talk by the UMW Toyota Motor Safety and Health Unit which was attended by more than 40 staff.

Environment, Health and Safety DayIn April, UMW Advantech Sdn Bhd organised an Environment, Health and Safety (EHS) Day for its employees as part of its Zero Lost Time Injury campaign. The day included lots of fun events to raise EHS awareness amongst employees, including quizzes and competitions, as well as activities to enhance the safety of employees, including health screening and a demonstration of how to use personal protective equipment. Employees also took part in the Jom Cari Hazard competition and as a result, more than 300 hazards were registered, which management committed to resolve.

Meanwhile, the Group posted the following OHS statistics for the year under review:

2015Injury rate

(accident rate)Occupational disease rate

Lost work days rate

Work-related fatalities

No. of accident cases

Automotive 1.86 0 60.48 0 13

Equipment 5.45 0 34.63 0 5

M&E 5.03 0 9.11 0 6

UMW Corporation 2.22 0 3.15 0 1

2016Injury rate


Lost work days rate



Automotive 1.37 5.35 7.46 0 10

Equipment 7.64 0 36.7 0 7

M&E 5.03 0 18.94 0 6


2017Injury rate


Lost work days rate



Automotive 1.17 0.59 13.85 0 8

Equipment 3.68 0 14.82 0 4

M&E 1.37 0 4.95 0 2


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Systems

AUTOMOTIVE DIVISION

Toyota Production SystemWe have drawn from our long association with our Japanese partners to include elements of their Toyota Production System (TPS) business philosophy in our own value chain. TPS is an original manufacturing philosophy based on the concepts of Jidoka and just-in-time. Jidoka means ‘automation with a human touch’ and is a way to recognise and correct issues that could cause faulty production. Just-in-time is about refining and co-ordinating the production processes to eliminate waste and achieve the best possible efficiency. TPS is not limited to the vehicle production process and also comprises principles focused on customer satisfaction, continual employee development and process excellence.

M&E DIVISION

LEANaeroTM

The M&E Division has developed LEANaeroTM, a proprietary production system that takes features from the Toyota Production System and the Rolls-Royce Production System to maintain a lean operational structure

G O O D F R A M E W O R K , VA LU E C R E AT I O N

A s the op erational landscap e b ecomes more ef f icient and sophis ticate d, our s ys tems have to s tay nimble and f lexible to help us rapidly adapt to changing ex ternal circums tances .

Cost Competitiveness & Business Expansion

High-Performance Culture

Continuous Process Improvement Continuous People Improvement

focus

principles

Best Quality, Highest Productivity,

Lowest Cost

that promotes flexibility, enhances overall manufacturing efficiency, minimises waste and maximises profitability. LEANaeroTM focuses on performance excellence in the production line and will be deployed at all operating companies in the M&E Division.

LEANaeroTM is a manufacturing framework that defines the method which the M&E business adheres to in its business operations. Based on the lean manufacturing philosophy, the system aims to enhance efficiencies and introduce flexibility into the organisation, resulting in benefits for both internal and external stakeholders. Some of the system’s key implementation objectives include:

• Increased customer satisfaction• Reduction in costs• Increased competitive advantage• Improved staff performance• Ease of business expansion• Minimise waste

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D E V E LO P I N G C A PA B I LI T I E S A N D M OV I N G U P T H E VA LU E C H A I N

Our long-term future rests on our ability to keep pace in the fast-moving and sophisticated technological age. A decade ago, we introduced the Beyond Boundaries mission statement – a rallying call for all our business units to push through existing limitations, innovate and ensure that we remain a relevant and sustainable commercial entity and grow our market presence.

Moving up the value chain means enhancing the capabilities of our existing operations through innovation, leading-edge technical knowledge and expertise to create products, processes and solutions that meet the challenges of the changing operating environment.

Processes are continually reviewed and assessed for possible improvements in the spirit of Kaizen and of a high-performance culture. The same applies to talent development, as an underlying assumption of the LEANaeroTM system is that only the best people can manufacture the best product. LEANaeroTM contains five distinct principles that apply throughout the value chain:

i. Standardisation: Processes are optimised through standardisation and visualisation exercisesii. Just-in-time: Costs are optimised through the elimination of waste, inconsistency and overburdensiii. Customer first: Values are established from the customer’s point of viewiv. Jidoka: Processes are established with quality in mindv. Hitozukuri: People are developed to become problem solvers through Kaizen

S T A N D A R D I S A T I O N

J U S T - I N - T I M E

C U S T O M E R F I R S T

J I D O K A

H I T O Z U K U R I

Process Standardisation & Visualisation

Elimination of waste, inconsistency,

overburdens

Value from customer’s point of view

Process built-in-quality

Develop people to become problem solvers through Kaizen

L E A N a e r o T M

Driving Innovation within the GroupInnovation is a key driver of sustainable business. It ensures that our products and services keep pace with the fast-evolving market landscape and we stay one step ahead. Innovation adds value to all our stakeholders – from our employees who wish to be a part of a forward-thinking organisation, which emphasises ideas and new ways of doing things, right through to our consumers who seek the most relevant solutions for their needs. Innovation is a collective responsibility and we welcome the ideas of all our stakeholders.

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F E A T U R E T T E

P N B G R O U P I N N O V A T I O N C H A L L E N G E 2 0 1 7

The PNB Group Innovation Challenge is an annual competition judged by CEOs of various companies within the PNB Group. It focuses on sustainable and innovative ideas for quality improvement projects and in 2017, ‘Idea Pitching’ was introduced into the competition. Three groups from UMW participated in the competition.

Developing the Heavy Equipment Segment with Principal Partner In August 2017, UMW Corporation Sdn Bhd (UMWC) signed a letter of intent with Komatsu Ltd to form a joint venture company to expand the distribution of Komatsu’s heavy equipment products in Malaysia, Singapore, Myanmar and Papua New Guinea. The joint venture builds on the 50-year relationship we enjoy with the Japanese multinational. The new company will also help to elevate us into new growth segments and introduce new products to meet demand for heavy equipment in the burgeoning construction sector, supported by sales to the natural resources sector such as mining and forestry.

Moving into the Aerospace SectorIn line with our determination to ascend the value chain, in 2015, we entered a 25+5 year agreement with Rolls-Royce Plc to manufacture and assemble fan cases for the Trent 1000 and Trent 7000 aero engines.

In November, UMW Aerospace delivered its first fan case for Rolls-Royce’s Trent 1000 engine. The engines power the Boeing 787 Dreamliner. The delivery makes us the first Malaysian company to become a Tier-1 supplier to Rolls-Royce and demonstrates our capabilities in high-value manufacturing, providing us with a strong platform for future expansion and value creation.

The development of our industrial land bank in Serendah, Selangor for the construction of the fan case manufacturing plant will allow us to further innovate by enhancing and developing new manufacturing processes and automation technologies.

UMW Aerospace will provide high-skilled employment, consisting of engineers, skilled workers and management personnel. By 2021, the new plant expects to hit full production capacity of 250 fan cases a year. The plant will provide employment for 200 workers when in full capacity.


D Y N A M I C W O R K F O R C E

F A C T S H E E T

Success is driven by the strength of our human capital

We develop the strengths of our existing talent, seek to attract and retain highly motivated individuals with the

skills to take us into the future and we understand the need for a robust succession planning framework to ensure

our sustainability.

Diversity and inclusiveness are key components of our organisation

We promote diversity to help us shape a better organisation. We thrive on the inclusion of many different

perspectives, we promote gender equality and we foster engagement between all levels of our organisation.

We develop our people to ensure the next generation of leaders

We invest in skills to accelerate the professional and personal development of all of our employees. Our managers inspire

high-performance behaviour. We benchmark our processes against international organisations to ensure we do

things right.


Our WorkforceUMW regards its employees as among its most important assets and as

crucial determinants of the Company’s performance today and in the future.

Additionally, our talents today are next in line to take over the management

and stewardship of our Company, hence the need for them to be prepared

with the requisite skills and ability to lead the organisation. Our focus

on building a sustainable workforce is therefore in line with both our

sustainability commitment and our goal to build a relevant business.

9,169

Total number of employees - Malaysian workforce

850

New hires for 20172016: 912

41%

Employees aged 30-40 years old

Women represent about

20%

of our workforce – Malaysian subsidiary only

49.84 HOURS Average training hours per employee in 2017

13.3%

2017 turnover rate 2016: 15.6%

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We will have a robus t succession fr amework in place with a large p o ol of skille d employees from which to cho ose and a culture of continuous learning and value creation .

T H E G R O U P H U M A N R E S O U R C E S T R AT E G I C R OA D M A P

Our employees are our most important assets and crucial determinants of our performance over the past century, today and in the future and will continue to be the main drivers that will transform the Group into a high-performing organisation. Achieving a sustainable workforce is a transformation journey. We therefore have a five-year roadmap for changing and integrating our organisational behaviour. Our Group Human Resource Strategy Roadmap will help us to become a Best in Class organisation by 2021 with sophisticated strategies in place for achieving continuous organisational excellence.

Our Group Human Resource Strategic Roadmap is structured in three phases.

Our first phase requires us to Strengthen our Foundation. Our second phase focuses on Institutionalisation and the third phase being the

Best In Class Organisation. We already have in place a highly skilled and motivated workforce who has helped to bring us to our current level of success. These individuals are highly valued for their in-depth knowledge and we will continue to nurture and develop them to ensure they continue to fulfil their potential. To do this will involve comprehensive and consistent review of our performance and reward system for our staff, the implementation of new training and development programmes as well as measures to enhance our talent acquisition framework and governance to attract and retain top talent at all levels.

The next two-year phase begins in 2019 and is our Transformation phase. It builds on the earlier phase and will be defined by new performance management, an emphasis on key performance indicators, ambitious targets and digitisation, an institutionalisation of our high-performance culture, robust succession management and leadership and a focus on cementing our reputation as a global player in the high-value manufacturing and industry arena.

Our determined adherence to the strategies of these two phases will ensure that by 2021, we will be an Employer of Choice and a Best in Class organisation that talented people aspire to work and stay within. We will have a robust succession framework in place with a large pool of skilled staff from which to choose and a culture of continuous learning and value creation. Our rewards practices will be supportive of our high-performance culture and operating as a high-performance organisation will simply be our natural way of doing things.

34



F E A T U R E T T E

U M W S C H O L A R S H I P P R O G R A M M E

In November, UMW launched its newly enhanced

Scholarship Award Programme and awarded 53 full

scholarships to first degree holders as part of our

commitment to support building the nation’s future

leaders. In 2017 alone, a total of RM1 million was invested

in new young talent. The scholarship award is open to

children of UMW’s employees as well as the general public.

While we offer scholarships both internally and externally,

the focus has always been for the children of our employees

and serves as a token of appreciation from the Group for

the loyalty and commitment given by the employees.

Collectively, these values ensure a sustainable workforce that will take us forward into the next century.

RECRUITMENT INITIATIVES

UMW constantly seeks new talents who can add value and we are active participants at local career fairs and campus recruitment events.

For the fourth consecutive year, we took part in the UKEC-GRADUAN Malaysian Career Fair in support of the Government’s efforts to bring local talents studying abroad back to Malaysia.

• Shorter working hours for pregnant employees.• Optional extended maternity leave.• Enhanced maternity care benefit.• Enhanced compassionate and congratulatory leave.• Enhanced pilgrimage leave.• Replacement of public holidays that fall on a Saturday.

TALENT MANAGEMENT

Managing talent is a strategic priority that helps us stay ahead of the competition. Our Talent Management Framework is designed to prepare our talents to be the next-in-line leaders and take our organisation to greater heights. Our Division Talent Council and Group Talent Council are responsible for developing our talents. The next generation of leaders are groomed and developed via our Accelerated Leadership Programme and Executive Education Programme.

REWARDS AND PERFORMANCE

To attract and retain our employees, we provide an equitable and market competitive salary and benefits package. Benefits extended to our full-time employees include medical coverage for themselves and their families, insurance coverage, above minimum mandatory employer contribution to the Employees Provident Fund and maternity, compassionate, congratulatory and pilgrimage leave in addition to annual leave entitlements. We constantly review our benefits enhancements and in 2017, we announced the following:

• Honourable To facilitate our efforts in building trust and establishing relationships by maintaining the highest levels of integrity in every one of our relationships.

• Vibrant In terms of developing new ideas and fresh thinking in developing solutions to enhance our products and services.

• Unshakeable In our commitment to build loyalty in our customers, principal partners and other stakeholders of the organisation.

• Pioneering In line with our founder’s aspiration of being bold and taking risks that develop and shape our industries.

T H E VA LU E M I N D S E T

Our staff always meet the expectations of our four core values, namely Honourable, Vibrant, Unshakeable and Pioneering. These values are interpreted in the following ways:

35



Total workforce by region: Unit 2015 2016 2017

Malaysian subsidiary pax 10,876 10,171 9,169

Total Malaysian subsidiary workforce by Division: Unit 2015 2016 2017

Automotive pax 7,325 6,857 6,422

Equipment pax 1,047 992 997

M&E pax 1,197 1,217 1,237

Oil & Gas pax 696 502 n/a

Others pax 611 603 513

pax 10,876 10,171 9,169

Malaysian workforce: Unit 2015 2016 2017

Exec Director/Director pax 21 22 18

SGM/GM pax 76 78 70

AGM/SM pax 188 181 164

M/AM pax 736 723 656

SE/Executive pax 2,324 2,229 2,013

Non-Management pax 7,531 6,938 6,248

Total Malaysian subsidiary workforce pax 10,876 10,171 9,169

Malaysian subsidiary workforce: Unit 2015 2016 2017

New hire pax 1,220 912 850

Turnover pax 1,287 1,586 1,220

Turnover rate % 11.9 15.6 13.3

Malaysian workforce new hire by: Unit 2015 2016 2017


SGM/GM pax 15 4 15

AGM/SM pax 22 16 12

M/AM pax 40 60 39

SE/Executive pax 133 135 82

Non-Management pax 1,008 694 701

Total Malaysian subsidiary new hire 1,220 912 850

Malaysian workforce turnover by: Unit 2015 2016 2017


SGM/GM pax 12 8 17

AGM/SM pax 28 32 31

M/AM pax 69 76 68


Non-Management pax 1,019 1,248 934

Total Malaysian subsidiary turnover pax 1,287 1,586 1,220

36



AG I L E A N D S U S TA I N A B L E L E A D E R S H I P

PRODUCING ‘ALL-ROUNDER’ EMPLOYEES

While we expect our employees to be highly qualified and skilled in their areas of specialisation, we also recognise the value of having ‘all-rounder’ employees with well-developed soft skills, such as critical thinking, leadership, problem solving and effective communication skills. Employees should also have a rudimentary knowledge about other components of business in the value chain that may have an impact on them.

To this end, we conduct a number of initiatives, including regular performance reviews. Management are assessed twice a year and non-management staff once a year.

Each year, our Training and Development Department organises in-house management and leadership courses, as well as functional and technical workshops. UMW also provides a budget for external training and development for relevant staff.

Toyota Fitness CentreIn order to promote productivity in the workplace and nurture the importance of achieving a balance between work and personal life, UMW Toyota Motor launched the Toyota Fitness Centre in 2017 to provide a facility where employees are able to take a break from work and indulge in health activities. Employees can enjoy the fully-fledged fitness centre at attractive membership rates subsidised by the Company.

Small Interest GroupIn order to encourage employees to bond together through common interests and hobbies, UMW Toyota Motor has established Small Interest Groups (SIG) to promote the work life balance through voluntary initiatives by employees who share common hobbies. In 2017, five new recreational groups were formed, namely the Toyota Runners Group, Cooking & Baking Club, Anglers Club, Toyota Outbound Club and 4WD Club.

Quick and Easy KaizenQuick and Easy Kaizen (QnE) was introduced in 2008 to encourage staff to implement simple improvement projects at their workplace. The objective of the initiative is to promote challenge, creativity and a Kaizen mindset in all UMW Toyota Motor staff. In 2017, a total of 608 QnE projects were organised and RM36,9024 and 1,081 hours were saved.

UMW Toyota Motor Group Quality Control Circle (QCC) Forum UMW Toyota Motor Group QCC Forum serves as a platform for all companies in UMW Toyota Motor Group to share quality control achievements to top management. The objective is to recognise staff efforts and encourage the Kaizen spirit amongst staff. The 2016 UMW Toyota Motor Group QCC Forum was held at the Concorde Hotel, Shah Alam on 14 April 2017 where nine projects from UMWT, ASSB, AISB and TBU were presented in the presence of more than 110 guests including the senior management.

Education Assistance SchemeUMW encourages employees to continuously develop and upgrade themselves by attending further education programmes conducted by institutions of higher learning accredited by the Malaysian Qualifications Agency. This benefit is applicable to all levels of employees and UMW sponsors a range of undergraduate and postgraduate programmes.

UMW Executive Development ProgrammeThe UMW Executive Development Programme aims to develop young leaders for the future. Over a period of two years, participants are immersed in development programmes and a job rotation schedule to maximise their exposure to all relevant areas of their development.

37



Digital Shift, Smart Factory, Industry 4.0 in the Malaysian Context, Workforce Transformation and UMW’s Industry 4.0 Framework. A total of 907 employees have participated in the programme.

UMW Technical AcademyThe UMW Technical Academy (UTAc) provides formal technical training and certification through a series of programmes in collaboration with the Department of Skills Development Malaysia. UTAc is equipped with a comprehensive range of equipment and machinery for apprentices to develop their skills and experience.

Sistem Latihan Dual NasionalSince its inception in 2013, the Sistem Latihan Dual Nasional (SLDN) programme has become UTAc’s flagship programme in developing mechanics in theoretical and practical knowledge. In 2017, a total of 15 junior mechanics from UMW Equipment Sdn Bhd attended the eight-month training programme and in March 2018 will be awarded with SKM Level 3 - Earth Moving Equipment.

Diploma in Manufacturing Engineering (Industrial Automation and Robotic) ProgrammeIn May, UMW welcomed 20 students of the first intake of the Diploma in Manufacturing (Industrial Automation and Robotic) programme, a new two-and-a-half-year programme designed in collaboration with Kolej Kemahiran Tinggi MARA. The joint diploma programme is specially designed and tailored according to UMW and Industry 4.0 needs. The students will be offered employment within UMW upon graduation subject to their academic performance.

Executive Diploma in Business AdministrationUMW fully sponsors the Executive Diploma in Business Administration (EDBA), a diploma programme accredited by the Malaysian Qualifications Agency. In 2017, a total of 20 students from UMW graduated during the 16th Academic Awards Ceremony at SEGi College Subang Jaya. The 18-month programme specialises in Business and Administration, providing a broad foundation in aspects of principal management, organisational development, human resource management, cost and financial accounting, marketing management, entrepreneurship and business research. The curriculum, course content, academic standards and course assessment are designed to allow students to acquire academic knowledge and develop personal skills and abilities for career advancement.

SL1M-UMW: Graduate Enhancement ProgrammeThe SL1M-UMW: Graduate Enhancement Programme (GEP) was initiated in response to the Government’s call for local employers to produce graduates with the skills required by employers. The programme consists of soft and functional skills training, as well as on-the-job training for industry experience. The training programmes are conducted internally by UMW line trainers and in 2017, UMW trained 324 SL1M-UMW: GEP participants.

Industry 4.0 Awareness ProgrammeAs UMW prepares for the future, the Company is heavily investing in developing employees with Industry 4.0 knowledge. The Industry 4.0 Awareness Programme covers Landscape Changes and Disruption,


Average training per employee Hours 24.10 34.34 49.84


Average training per employee by: - -

Exec Director/Director Hours 14.15 27.89 16.00

SGM/GM Hours 33.62 37.66 37.43

AGM/SM Hours 22.77 24.62 36.00

M/AM Hours 22.69 30.47 62.26

SE/Executive Hours 25.16 35.12 70.56

Non-Management Hours 26.30 50.21 76.81

38



DEVELOPING FUTURE LEADERS

Developing leaders is a crucial component of our sustainability efforts to build an enduring business. Since the formalisation of our succession planning framework, our talent pool has almost doubled from the initial 100 talents. We also give these candidates the opportunity to attend training programmes from established learning partners, including Harvard Business School, Harvard Business Publishing, an affiliate of Harvard Business School, ICLIF, Leaderonomics and Dale Carnegie.

Learning from Leaders SeriesThe Learning from Leaders Series enables our leadership candidates to interact with and learn from Senior Leaders in an informal manner. In 2017, we conducted two sessions with our President and Group Chief Executive Officer En. Badrul Feisal Abdul Rahim and Dr. Tommy Weir, a world renowned speaker, founder of the Emerging Markets Leadership Centre and Professor at Hult International Business School. The speakers delivered the lectures ‘Up Close and Personal’ and ‘Leadership in the Disruptive World’ respectively.

UMW Leadership CompetenciesIn 2017, we developed our new Leadership Competencies to replace our Management Competencies and prepare and strengthen our employees for future roles. The Leadership Competencies have the following objectives:

Collaborate & Cooperate

(CC)

Stra

tegi

c A

gilit

y(S

A)

Ana

lyti

cal

Thin

king

(AT)

Impact & Influence (II)

Develop

Others

(DO)

Integrity(In)

Custom

er

Service

Orientation

(CSO

)

Achievement

Orientation

(AO)

Drive

Innovation &

Creativity(D

IC)

HO

N O U R A B L E U N

S HA

KE

AB

LE

VIBRANT

PIO

NE

ER

ING

Nurture Operational

Str

ateg

ic

Talent Excellence

Gro

wth

• Talent acquisition by establishing standard criteria for sourcing and interviewing.

• Training and development as a focus to identify gaps for development.

• Performance management by emphasising qualitative aspects of an employee’s key performance indicators.

• Career and succession planning as an assessment to identify gaps for potential successors.

• Organisational alignment and planning by communicating organisational culture and values and focusing on consistent ‘language’ about performance.

The UMW Leadership Competency Model

In 2017, the Group Human Resource Division, in collaboration with the UMW Training Centre, held Leadership Competency Awareness workshops for 1,076 employees.

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E M P LOY E E E N G AG E M E N T A N D D I V E R S I T Y The age ratio of our Malaysian workforce reflects the age profile of the country. In 2017, about 28% of our employees were under 30, 41% were between 30 and 40, 22% between 40 and 50, and 9% above 50.

ENCOURAGING WOMEN’S PARTICIPATION

In 2017, women made up 20% of our Malaysian workforce and 32% of our total management positions. To attract women to our workforce, we provide ‘mom-friendly’ facilities such as mothers’ rooms and designated parking bays for pregnant employees. In 2017, women’s representation on the Board was more than 30%.

28% 41%

9%

22%

<30 30-40 40-50 >50

Malaysian Workforce Age Profile in 2017

TOWNHALL SESSIONS AND EMPLOYEE ENGAGEMENT ACTIVITIES

Open communication fosters closer bonds between the management and our employees and helps to drive us towards our growth targets. Our quarterly townhall sessions in our Central Region invite discourse on business directions, achievements, and market challenges and we hold similar engagement sessions for employees in our branches. We also regularly conduct employee engagement activities such as festival celebrations, sports tournaments and recreational activities. These non-work get-togethers help to sustain morale and improve interpersonal relationships between all members of our organisation.

CULTURE DIAGNOSTIC SURVEY

Following our previous Employee Engagement Surveys conducted in 2013 and 2015, in August, our UMW Culture Diagnostic Survey revealed that our employees are committed to working towards a high-performance culture. The exercise invites focus groups to discuss areas of concern and as a result Action Planning Workshops will be conducted in 2018 to identify quick wins and long-term transformation strategies.

Diversity and Equal OpportunitiesOur employment policies and practices create an inclusive working environment to ensure that all our stakeholders, regardless of gender, ethnic background and skin colour, are treated fairly. Our recruitment practices focus on proficiency, competency, potential and whether the candidate demonstrates a desire to succeed with us as part of the UMW family.

We welcome a plurality of ideas and perspectives to help us overcome challenges. A diverse workforce helps us better understand the needs of our customer base which in turn promotes sales growth and customer loyalty. All employees, especially management, have a responsibility to promote diversity and inclusion through their behaviour, attitudes, influence and authority. In 2017, we maintained our record of zero complaints of discrimination in the workplace.

40




Number of maternal leaves pax 126 123 116

% return to work after maternal leaves % 99% 96% 97%


Female employees pax 2,099 2,014 1,794

Male employees pax 8,777 8,157 7,375


Malaysian female workforce: Unit 2015 2016 2017


SGM/GM pax 8 7 6

AGM/SM pax 48 48 43

M/AM pax 242 237 220


Non-Management pax 1,006 950 852

Total Malaysian subsidiary female workforce 2,099 2,014 1,794

Malaysian workforce by: Unit 2015 2016 2017

Bumiputera pax 8,044 7,613 6,949

Chinese pax 1,803 1,644 1,450

Indian pax 726 673 631

Others pax 303 241 139


Malaysian subsidiary workforce by: Unit 2015 2016 2017

Less than 30 years old pax 4,046 3,082 2,524

Between 30 to 40 years old pax 4,002 4,038 3,760

Between 40 to 50 years old pax 2,001 2,085 2,003

More than 50 years old pax 837 966 882


41



F E A T U R E T T E

R A I K A N 1 0 0 T A H U N U M W C A R N I V A L

On 5 October 2017, UMW Group Chairman, Tan Sri Dato’ Sri Hamad Kama Piah bin Che Othman officiated the Raikan 100 Tahun UMW Carnival to celebrate the establishment of UMW 100 years ago and show appreciation for the dedication and hard work of all our employees. The day included talks by Kevin Zahri, Malaysia’s fitness guru, and Zahariz Khuzaimah, the solo Malaysian cyclist famous for his round-the-world adventure, and a performance by Malaysian songstress, Dayang Nurfaizah. Other activities included football, archery, carnival games and performances.

Collective Agreements and Labour RelationsWe foster strong rapport with both in-house and national unions. In 2017, we began negotiations on the Collective Agreement (CA) due for renewal on 31 December 2017. The notice period for CA is three years. The CA review for 2018 to 2020 will be benchmarked against the Group’s and industry best practices. A total of 68% of our Malaysian workforce are non-management, which are covered under the CA.


Management pax 3,344 3,233 2,924

Non-Management pax 7,532 6,938 6,245


WHISTLEBLOWING POLICY

We expect our staff to observe the highest levels of professionalism and business ethics at all times, and we view ethical breaches or conflicts of interest very seriously. In 2009, to build a more transparent and accountable workforce, we implemented a Whistleblowing Policy. This policy welcomes disclosures of suspected wrongdoings that include mismanagement, malpractices, corrupt practices, fraud and abuse of power or breach of any laws and regulations by any member of the Board, management or employees. The policy provides employees with an avenue to report wrongdoings in an appropriate manner and without fear of reprisal.

42


F E A T U R E T T E

H R A S I A B E S T C O M P A N I E S T O W O R K F O R I N A S I A 2 0 1 7

A S I A B E S T E M P L O Y E R B R A N D A W A R D S

In 2017, for the fourth consecutive year, UMW again lived up to its reputation as one of the most sought-after companies to work for in Asia. A total of 9,360 employees from 320 companies across Malaysia responded to the HR Asia Best Companies to Work for in Asia Survey. HR Asia is a trade journal published by Business Media International with comprehensive coverage of the Asian region. The summary of findings is based on three factors that determine the satisfaction of the individual in an organisation, namely Heart, Mind and Soul. The survey was followed by a site audit by HR Asia representatives.

In 2017, we were awarded the accolade of Asia Best Employer Brand from the Employer Branding Institute, an organisation that connects senior leaders in human resources to share their best practices throughout the world. The awards were hosted by the World HRD Congress and Stars of the Industry Group and endorsed by the Asian Confederation of Business. Winners were chosen based on their initiatives in learning and development, communicating distinctiveness in employee hiring, retention practices and continuous learning programmes.


UMW GROUP INTEGRITY DIVISION

Established in 2015, the Group Integrity Unit (GIU) is tasked with further enhancing UMW’s corporate business ethics, anti-corruption and governance practices.

Since its inception, the GIU has organised various activities to enhance the integrity training and awareness for all employees of the Company and so far they have managed to develop a strong foundation with 30 UMW Integrity Fellows that function as a catalyst for enhancing the Group’s integrity mechanism.

In 2017, the GIU’s key initiatives included an Integrity Forum for UMW’s Senior Management on the theme of ‘Upholding and Institutionalising Integrity as a Key Factor in Driving Organisational Performance’ and a series of Integrity Awareness Roadshows for the Automotive Division.

E N V I R O N M E N T A L S T E W A R D S H I P

F A C T S H E E T

We manage resources and we minimise our environmental impact

We use our resources judiciously, make every effort to minimise the environmental impact of our operations

andensure that our products are used and disposed of in a responsible way.

We inculcate environmental awareness throughout our organisation

We implement a wide range of initiatives both within our organisation and in the wider community to instil the

importance of respect for the environment.

We meet environmental laws and requirements

Our main business units hold environmental certification from prestigious bodies and we regularly assess and

improve our environmental strategies to sustain standards.


Go GreenWhat does environmental stewardship mean to us? Environmental

stewardship means that we remain fully committed to do our part in

protecting the environment and being in harmony with nature, managing

resource use, reducing waste and being energy efficient.

542,583.29 GJof energy consumption 2016: 516,569.39 GJ

665.9 GJ of energy generated from renewable resources

60,601.64 tCO2emissions generated in 2017

477,586.76 m3 of water used in 2017

141,832.00 m3 of water used is drawn from groundwater

6,845.79 tonnes of waste in 2017 2016: 7,462.09

45


O U R E N V I R O N M E N TA L P H I LO S O P H Y

For UMW, environmental stewardship means that

we are committed to protecting the environment

in which we operate. We manage our resources

well, reduce waste and practice energy efficiency.

Conserving the environment is directly related to

our long-term business sustainability goals.

Our long-standing commitment to environmental

conservation rests on our understanding of

the importance of existing in harmony with the

natural environment. As a conglomerate with

extensive manufacturing capabilities, we rely on

natural resources for our raw materials and we

therefore work very hard to reduce the impact

of our business activities and our products on

the environment. We work with our partners

to constantly refine our environmental goals,

programmes and frameworks.

UMW Toyota Motor champions its environmental

stewardship programme through the Toyota

Environmental Action Plan (TEAP). The

initiative promotes the following environmental

commitment:


• Establish a low-carbon emission society.

• Establish a recycling-based society.

• Reduce environmental risk and establish a

society in harmony with nature.

• Promote environmental management.

• The Sixth Environmental Action Plan runs

from 2016 to 2021 and covers all business

areas from manufacturing to managing

end-of-life vehicles.

Other companies in our Group also implement

environmental management systems.

Our main business units hold environmental

certification from prestigious bodies and work to

ensure that their specific operations comply at all

times with environmental laws and requirements.

Note:* Restatement – Data includes Heavy Equipment East Malaysia business operations which was previously unavailable.

We collate and report our efforts collectively under our Group environmental material

indicators.

The indictors reported here include data from the Group’s Malaysian subsidiaries

from our core businesses: Automotive, Equipment* and M&E.

Our commitment Ensuring Energy Efficiency

The nature of our businesses means we consume a high level of energy. Our production

processes use the most, although our servicing businesses also make a significant

contribution to our consumption.

Our Equipment Division, for example, has several sales and distribution branches

across Malaysia and they consume electricity at a rate typical of a corporate office

or showroom, our servicing vans and fleets consume diesel in order to service our

Equipment customers, across various construction, logging and mining industries,

and our production plants use energy in a variety of forms, including electricity from

the national grid and other fuels such as natural gas.

As we continue to improve our environmental track record, we focus on the following

areas:

Ensuring Energy

Efficiency

Monitoring Emissions

Reducing Effluents

and Waste

Managing Resources

and Materials

Water Conservation

and Treatment

46


F E A T U R E T T E

E N E R G Y S A V I N G R E M I N D E R S I N I T I A T I V E S I N O U R O F F I C E S

Even the smallest energy saving actions, such as turning off lights and air conditioning quickly add up and make a substantial difference to our environmental footprint.

We believe that energy efficiency is as much a habit as it is knowledge and we aim to instil energy efficiency behaviour as second nature in our staff in the hope that by cultivating environmental awareness in the workplace, they will bring these habits home with them.

The energy usage within the Group in 2017 was as follows.


We therefore have a range of energy efficiency initiatives in place to reduce our environmental impact. All our offices employ energy saving

measures and we conduct regular energy conservation campaigns throughout our businesses.

UMW Corporation Sdn Bhd runs a continual Energy Saving Campaign to raise awareness amongst staff and to secure greater buy-in

to participate in our initiatives. The campaign encourages staff to switch off air conditioning during lunch and when there are fewer

employees in the office.

UMW Toyota Motor’s energy efficiency initiatives overlap with TEAP’s policy on carbon emissions and the Automotive Division also tracks

other environment-related data points that contribute to the Group’s overall sustainability performance.

Energy Usage within the Group in 2017

Unit 2015 2016 2017

UMW Group GJ 622,325.60 516,569.39 542,583.29

Unit 2015 2016 2017

Automotive GJ 497,452.40 389,497.13 403,605.40

Equipment GJ 30,552.14 29,351.01 28,701.71

M&E GJ 87,030.78 90,357.88 103,470.28

47



Our commitment Monitoring Our Emissions

Carbon emissions are the main cause of climate change and human activity is a leading source. UMW has a range of initiatives to reduce its carbon emissions by enhancing fuel and energy efficiencies.

Our energy efficiency measures are drawn from our Group-wide commitment to reduction and from the policies of our principal partners such as Toyota Motor Corporation and KYB Japan. In the near future, we aim to establish a carbon reduction target for our Group as a whole, which will serve as the benchmark for future initiatives.

We are committed to directly reducing our emissions throughout all our manufacturing, production and transportation processes.

The following is a comparative chart of the Group's emissions for 2017.

Group’s Emissions in 2017

Unit 2015 2016 2017

UMW Group tC02-e 71,643.67 59,204.14 60,601.64

Unit 2015 2016 2017

Automotive tC02-e 58,121.43 45,071.44 44,166.49

Equipment tC02-e 3,013.97 2,924.41 2,822.40

M&E tC02-e 9,413.30 10,102.36 12,590.54

Our commitment Reducing Effluents and Waste

UMW handles effluents and waste in line with local regulations. Solid waste from our offices in Shah Alam, Selangor is managed by Cerah Alam Sdn Bhd, an independent contractor with over 30 years of experience in the waste treatment industry. To promote environmentally friendly habits among our employees, we measure the amount of solid waste produced annually and challenge them to reduce the amount in the following year.

Our Equipment Division produces scheduled waste in the form of used lubricants and batteries resulting from servicing customer vehicles. These are disposed of in compliance with the Department of Environment's regulations. Our Automotive Division, in addition to the waste and effluent management plans in place as part of TEAP, also uses recycled waste that is treated in-house, via our own water treatment plant. This reduces the burden on public water treatment facilities and ensures that the quality of the recycled water meets the needs of our production facilities.

In the M&E Division, the management of effluents and waste is a priority because of the substantial volume of by-products generated in the materials manufacturing process. We ensure that industrial effluents and waste are properly disposed of at all times.

• Legal requirements relating to solid waste.• Role of society in reducing waste.• Activities that can be conducted to create 3R awareness

amongst staff.• How to recycle used items to avoid wastage and protect the

environment.

3R (REDUCE, REUSE, RECYCLE) ACTIVITIES

In 2017, Group HSE organised a 3R visit to SW Corporation in Cyberjaya to find out more about Malaysia’s 3R programmes and enable us to implement our own 3R initiatives more effectively. The knowledge we gained covered:

SCHEDULED WASTE TRAINING

In 2017, Group HSE, in collaboration with UMW Industries (1985) Sdn Bhd, organised five sessions of scheduled waste management training for mechanics, contractors and members of the Environmental Committee. The training was designed to enhance the staff’s knowledge of Malaysia’s Environmental Act and Regulations, especially those governing scheduled waste management. A total of 65 staff attended the training sessions which focused on scheduled waste from spent oil and lubricants, contaminated rugs and gloves and used oil filters. The training highlighted best practices for the storage, transportation, inventory and disposal of scheduled waste and the implications of non-compliance with regulations.

The following is a comparative chart of our Group’s waste production in 2017.

Group’s Waste Production in 2017

Unit 2015 2016 2017

Scheduled Tonnes 4,774.75 6,608.01 5,895.02

General Tonnes 996.37 854.08 950.77

UMW Group Tonnes 5,771.12 7,462.09 6,845.79

Our commitment Water Conservation and Treatment

Our measures for managing our water impact range from passive initiatives such as water monitoring and tracking to proactive measures such as the construction of treatment facilities to ensure we return pure water back into our ecosystems. In the near future, we aim to develop a Group-wide target for our water initiatives.

UMW Corporation conducts a continuous Save Water Campaign to make employees aware of the importance of water conservation and underscore water conservation as a collective effort, which is the responsibility of everyone. Similar tracking and monitoring mechanisms are in place at our Equipment Division, although its water impact is smaller than in the other business Divisions.

48



The following chart provides an overview of our water consumption in 2017.

Group’s Water Consumption in 2017

Unit 2015 2016 2017

UMW Group m3 447,570.53 416,239.10 477,586.76

2015 2016 2017

Automotive m3 316,168.00 275,436.23 321,936.00

Equipment m3 27,211.53 29,293.51 44,540.00

M&E m3 93,807.00 96,098.36 99,098.76

Our commitment Managing Resources and Materials

We commission raw materials as inputs into our manufacturing plants and hence environmental conservation begins at the very start of our manufacturing process. The procurement of raw materials and resources is governed by strict procurement systems. We have a range of supplier assessment programmes in place and their environmental track record is one of the key areas we scrutinise when we procure materials.

This indicator is relevant to both our Automotive and M&E Divisions. Our other Divisions use marginal amounts of raw materials in their business activities and so this indicator is not relevant to them. The main function of our corporate centre is to administer the Group from our headquarters in Shah Alam, Selangor. Since 2015, the corporate centre has implemented a ‘No Plastic’ campaign, to reduce the use of plastic bags, cutlery and other disposable items.

On the M&E side, the Division aims to import only half of its required raw materials and plans to source the rest locally. This policy is intended to reduce carbon emissions associated with importing materials and bolster the local marketplace, creating a more sustainable supply chain. To further ensure that our production processes are operating at maximum efficiency, we track our raw materials such as base oil used in our lubricant manufacturing businesses.

The following is a comparative chart of our Group’s materials usage in 2017.

Group’s Material Usage in 2017

Unit 2015 2016 2017

UMW Group Tonnes 35,339.44 35,830.83 30,369.38

S P E C I A L F O C U S – T H E TOYOTA E N V I RO N M E N TA L AC T I O N PL A N – 6 T H E D I T I O N

UMW Toyota Motor’s environmental policy is aligned with the commitments of our principal car partner, Toyota Motor Corporation (TMC). The Toyota Earth Charter requires all Toyota affiliates to minimise emissions and waste in the pursuit of environmentally friendly technologies. The ultimate aim of the Charter is to promote the harmonious coexistence of the environment and the economy. As TMC’s partner in Malaysia, UMW Toyota Motor has integrated the basic goals of the Charter into our Sustainability Policy as guidelines for our own approach to environmental protection.

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F E A T U R E T T E

T O Y O T A E N V I R O N M E N T A L C H A L L E N G E 2 0 5 0

Toyota is committed to go beyond zero environmental impact to achieve a net positive impact. The Environmental Challenge 2050 consists of six challenges with targets that Toyota aims to meet by the year 2050.

• The New Vehicle Zero CO2 Emissions Challenge will see Toyota reduce its vehicle CO2 emissions by 90% compared to 2010 levels by 2050. To achieve this, Toyota is developing technologies to boost fuel efficiency performance and next-generation, eco-friendly vehicles with low or zero CO2

emissions, including hybrid, plug-in hybrid, electric and fuel cell vehicles.

Toyota’s Environmental Initiatives 2015 03

SpecialFeature

Challenge for Establishing a Future Society in Harmony with Nature

Toyota Environmental Challenge 2050

Challenge to Zero & Beyond

Solar power generationSolar power generationSolar power generationSolar power generationSolar power generation

Geothermal heatGeothermal heatGeothermal heatGeothermal heatGeothermal heat

hybrid vehiclePlug-in

hybrid vehicle

Fuel cell vehicle

Wind power

Small-scale hydropower

BiomassBiomassBiomassBiomass

Electric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging stationElectric vehicle charging station

Fuel cell busFuel cell busFuel cell bus

Electrolytic CO2-free hydrogen

Hydrogen tankHydrogen tankHydrogen tankHydrogen tankHydrogen tankHydrogen tank

Hybrid vehicleHybrid vehicleHybrid vehicleHybrid vehicleHybrid vehicleHybrid vehicleHybrid vehicleHybrid vehicle

Electric vehicleElectric vehicleElectric vehicleElectric vehicleElectric vehicleElectric vehicleElectric vehicle

Fuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truckFuel cell forklift truck

Stationary fuel cellStationary fuel cellStationary fuel cellStationary fuel cellStationary fuel cellStationary fuel cell

Hydrogen stationHydrogen station

Toyota Environmental Challenge 2050

• The Life Cycle Zero CO2 Emissions Challenge will see Toyota reduce the CO2 emissions produced in travelling, manufacturing and in the entire life cycle of the vehicle. Applying eco-friendly designs will make it easier to dismantle vehicles and the Eco-Vehicle Assessment System sets environmental targets such as life cycle, CO2, and recyclability.

• The Plant Zero CO2 Emissions Challenge has two main pillars, namely developing and introducing low CO2 manufacturing technologies to simplify and streamline processes, including an innovative process called Karakuri which does not consume any energy at all, and using renewable energy sources such as solar power and wind power along with hydrogen energy.

• Minimising and Optimising Water Usage challenges Toyota to reduce the amount of water it uses in its vehicle manufacturing processes. Initiatives include collecting rainwater to reduce the usage of industrial water, raising the water recycling rate through filtering, recycling wastewater for reuse, and returning clean water to the local environment.

• Establishing a Recycling-based Society and Systems focuses on end-of-life vehicles. The Toyota Global 100 Dismantlers Project establishes systems for properly treating end-of-life vehicles. To improve resource efficiency, Toyota focuses on four key areas, namely use of eco-friendly materials, use of auto parts for longer, developing recycling technologies, and manufacturing vehicles from end-of-life vehicles.

• Establishing a Future Society in Harmony with Nature focuses on tree planting, environmental conservation activities, environmental education to enrich the lives of the communities in which Toyota operates, and partnerships with international organisations.

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UMW Toyota Motor’s JourneyOur commitment towards environmental stewardship began in 2000, when UMW Toyota Motor, in collaboration with the Department of Environment, outlined the foundations of its environmental policies.

We launched our environmental policy and introduced our 5-Year Environmental Action Plan which serves as a guide for our initiatives and targets as well as extending our sustainability priorities beyond minimum legal compliance to focus on higher standards in line with our sustainability vision.

2002

We began monitoring air emission and water discharge as well as extending our environmental policy to our after-sales facilities. We launched our Toyota Suppliers Environmental Guidelines.

2003

We commenced formal certification of the environmental management systems (EMS) of our branches.2004

We established targets to certify all sites with ISO:14001 certification.We introduced our Dealers’ Environmental Risk Audit Programme at all service and dealer outlets.

2005

We enhanced the Toyota Suppliers Environmental Guidelines by integrating the Toyota Green Purchasing Standards set by TMC.

In 2006, we decided to align our environmental policy with the global environmental goals of the 4th TEAP (2006-2010). As stipulated by TEAP, UMW Toyota Motor has committed to the following goals:

• To become the leader in environmental conservation among automotive companies in Malaysia.• To minimise pollution through proactive prevention measures, conservation of natural resources and recycling efforts.• To promote environmental and conservation efforts to our business partners.• To actively disclose environmental and conservation efforts to our business partners. • To actively disclose environmental information to the public.• To strive to comply and achieve a better performance level.

We renewed our commitment and made appropriate adjustments to our environmental policy and initiatives when TEAP was updated to its fifth edition in 2011 and again in 2016 following the introduction of TEAP’s sixth edition.

2006

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AUTOMOTIVE DIVISIO N ’ S SUS TAINAB ILIT Y PR AC TICE TO DAY

UMW Toyota Motor’s sustainability practices are aligned with the Toyota Global Challenge 2050, which identifies six challenges for the motor groups:

• New Vehicle Zero CO2 Emissions Challenge.• Life Cycle Zero CO2 Emissions Challenge.• Plant Zero CO2 Emissions Challenge.• Minimising and Optimising Water Usage.• Establishing a Recycling-based Society

and Systems.• Establishing a Future Society in Harmony

with Nature.

These six challenges are divided into 26 distinct Action Items, each of which comes with its own set of discrete targets. UMW Toyota Motor has chosen to work on 14 of the 26 Action Items because of their relevance to the local context. These include:

• Pursue increased transport efficiency and reduce CO

2 emissions in logistics activities.• Reduce CO2 emissions in production activities.• Reduce water consumption in production

activities.• Reduce waste and use resources

efficiently in production activities.• Reduce packaging materials and use

resources efficiently in logistics activities.• Promote the nature conservation activity:

Connecting Regional Conservation Activities with Region and Community.

• Boost contribution to environmental education: Connecting Environmental Activities to the Future.

• Promote environmental contribution through biotechnology and afforestation business automotive peripheral technology, and forest conservation activities.

• Promote strengthening of consolidated environmental management.

• Reduce volatile organic compound emissions in production activities.

• Promote environmental activities in cooperation with business partners (dealers and distributors).

• Further strengthen global employee education and awareness activities.

• Enhance active disclosure of environmental information and communication.

Our BenchmarksIn addition to meeting the environmental targets specified by TMC, UMW Toyota Motor’s environmental initiatives also contribute to the targets set by the UMW Group. UMW Toyota Motor contributes to report in the five key material areas outlined for the Group as follows:

We monitor the fuel consumption of our plants on an annual basis to ensure that they meet our targets for reduced consumption. Electricity consumption is similarly monitored and benchmarked against targets every year.

Our commitment Ensuring Energy Efficiency

F E A T U R E T T E

H A R N E S S I N G R E N E W A B L E E N E R G Y A T A S S E M B L Y S E R V I C E S S D N B H D

In 2015, in line with TEAP, Assembly Services Sdn Bhd (ASSB) was fitted with solar panels on a medium-scale to reduce its dependence on electricity from the grid. The photovoltaic module system features 630 solar panels, can generate up to 204,324 kWh of clean, renewable electricity each year, and effectively reduces the size of our carbon footprint.

The following tables provide a brief overview of the energy generated from solar panels in 2015, 2016 and 2017.

Energy Consumption from Renewable Resources

Unit 2015 2016 2017

Solar Panels GJ 467.8 713.2 665.9

Ensuring Energy

Efficiency

Monitoring Emissions

Reducing Effluents

and Waste

Managing Resources

and Materials

Water Conservation

and Treatment

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F E A T U R E T T E

R E D U C I N G E M I S S I O N S I N T R A N S P O R T O F C A R S


Our commitment Monitoring Our Emissions

Our commitment Reducing Effluents and Waste

At UMW Toyota Motor, our priority is to promote the sale of next-generation, energy efficient vehicles and meet the emission reduction targets set for Toyota affiliates under TEAP. The latter has implemented a range of initiatives including:

• Implementing the Eco Vehicle Assessment System environmental assessment system at every stage of vehicle development.• Pursuing increased transport efficiency and minimising carbon emissions in logistics activities.• Actively participating in TMC’s initiative to promote an integrated approach in traffic flow management and eco-driving to reduce

carbon emissions in road transport sectors.• Reducing CO

2 emissions in production activities.

In line with our commitment to reduce our environmental footprint, we strive to cut our emissions throughout all our manufacturing, production and transportation processes. To this end, UMW Toyota Motor enforces strict guidelines in its vehicle logistics activities. By increasing the load efficiency in transporting our cars from our factory to the dealer outlets, we minimise the number of trips our vehicle carriers make and hence cut the amount of fuel we use and the emissions we generate. We also look for new delivery routes to our outlets to reduce the distance and time taken for our carriers to travel. In 2017, we were able to reduce our carbon dioxide emissions to 17.24kg/unit against our target of 18kg/unit.

In line with TEAP, UMW Toyota Motor tracks and manages the effluent and waste as a by-product of its production processes. We promote waste volume reduction by developing and introducing relevant production technology and through daily Kaizen activities, we strive to promote the efficient use of resources. Our initiatives comply with the guidelines of the Department of Environment with whom we conduct regular engagement.

With respect to the individual business units of the UMW Toyota Motor Group, the most significant producer of waste and wastewater is ASSB, the vehicle manufacturing arm. To manage its environmental impact, ASSB tracks the amount of wastewater produced.

Effluents by Method Unit 2015 2016 2017

Wastewater treatment plant m3 35,650.7 65,743.0 91,910.00

Sewage water treatment plant m3 27,873.3 57,250.0 48,005.00

Total effluents m3 63,524.04 122,993.00 139,915.00

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F E A T U R E T T E

S C R A P M E T A L M A N A G E M E N T A T U M W T O Y O T A M O T O R O U T L E T S

F E A T U R E T T E

R E T U R N A B L E B O X E S I N I T I A T I V E


In 2017, UMW Toyota Motor began an initiative to increase awareness on the importance of recycling scrap metal, encourage outlets to scrap their metal with licensed metal scrap collectors and maintain proper records. Outlets usually generate scrap metal under warranty and insurance claims and these items must be stored for a specific period of time before being disposed and ultimately recycled. Whilst UMW Toyota Motor headquarters monitors all warranty and insurance claims, scrap disposal is monitored by the outlets. This initiative has already proven to be very successful and in the second half of the year, UMW Toyota Motor reported a 70% increase in the collection of scrap metal to 31,105kg.

Reducing packaging material is a simple but effective way of reducing our environmental footprint. Our Service Parts Centre uses returnable boxes for outbound delivery. Plastic boxes that have been tested for strength and durability carry spare parts and glass boxes carry glass material such as windscreens to outlets. Each box is labelled with an outlet code to keep track of it and to ensure that each outlet returns the box to the Service Parts and Logistic Division (SPLD) in Sungai Buloh for future use. Returnable boxes have a lifespan of two years, after which they are replaced. This initiative has enabled UMW Toyota Motor to reduce its packaging material by an annual average of 2.7% or 0.43 tonnes.

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Our commitment Water Conservation and Treatment

Our commitment Managing Resources and Materials

Our water conservation and treatment efforts are bound by TEAP and we focus on reducing water consumption in our production activities. TEAP continuously promotes water conservation through new initiatives coordinated with new plants and through Kaizen in the workplace.

At UMW Toyota Motor, a rigorous water usage monitoring system monitors the amount of water used from year to year. Our Save Water Campaign encourages staff to be conscious of their water usage and to conserve water whenever possible.

UMW Toyota Motor’s management of resources and materials is aligned with the TEAP goal of reducing the usage of natural resources. The priority is to increase the use of renewable resources and recycled materials, with particular emphasis on reducing the use of petroleum-based plastics by developing recycled resin or ecological plastic technology and establishing a used resin collection system. Our operations also emphasise the reuse of rare resources such as rare earth-based materials and the development of carbon fibre reinforced plastic technologies.

ASSB is one of UMW Toyota Motor’s significant water users and draws its water from two other sources apart from municipal water supplies. It has a constructed tube well which channels groundwater and reuses recycled water drawn from its water treatment plant. By using water from alternative sources, ASSB reduces its consumption of water and puts naturally occurring groundwater and recycled water to good use. The following table provides an overview of ASSB’s use of groundwater and recycled water for 2015, 2016 and 2017.

Water Withdrawal by Source Unit 2015 2016 2017

Tube wells m3 184,939.00 152,505.00 141,832.00

Recycled water m3 95,479.00 71,607.00 33,693.00

Total water withdrawn m3 63,524.04 122,993.00 139,915.00

• Creating and implementing environmental management systems and continuously improving their environmental conservation activities (for example, they must be certified under ISO:14001).

• Working towards reducing GHG emissions through the entire life cycle of their products.

• Reducing their impact on water supply and quality.• Promoting resource reduction and recycling of their

products in manufacturing plants and logistics activities.• Complying with all applicable laws in their management of

chemical substances.• Ensuring that their products and activities contribute to

biodiversity and promote the concept of harmony with nature.

Under TEAP, our automotive procurement policies are guided by the Toyota Green Purchasing Guideline (TGPG), which aims to meet the environmental challenge by going beyond zero-impact towards making a net positive environmental impact. The TGPG makes specific requests of its suppliers and vendors to ensure that their business activities are environmentally friendly and that they can provide long-term and stable procurement of cost-effective products. Some of the key criteria expected of suppliers and vendors under the TGPG include:

N U R T U R I N G T H E C O M M U N I T Y & S O C I E T Y

We create value for the community

We engage with communities through a wide range of corporate social responsibility initiatives designed to enhance

their daily lives. We support local communities through charitable contributions and volunteerism.

We nurture the environment in which we operate

We give back to our nature and ultimately the people living in the area through community programmes such as tree

planting, beach cleaning and by promoting environmental awareness in school children.

Education drives the sustainability of communities

We further academic and cultural excellence in the community through donations to educational institutions,

student sponsorships and NGOs.

F A C T S H E E T


Think and LearnUMW recognises that its operations take place within the contexts of

communities and societies, and depends on these contexts for the success of

its activities. It is therefore in our best interest to ensure the sustainability of

our communities and societies to develop mutually beneficial relationships.

UMW is committed to the continual development of the communities and

societies in which it operates to empower and enrich the lives of

our stakeholders through our non-commercial activities.

>RM8 MILLION raised through Toyota Classics since 1990

10 YEARS partnership with MERCY Malaysia

17 YEARS

running – Toyota Eco Youth

450KG of rubbish collected during our Beach Cleaning Programme

47,708 community hourssince 2009

15,300 trees have been planted (2011 to 2017) as part of our Environment initiative

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Our commitment Community Development: Building Corporate Citizenship

F E A T U R E T T E

O U R P A R T N E R S H I P W I T H M E R C Y M A L A Y S I A

From 2009 and 2017, we have provided MERCY Malaysia with RM3.3 million to support its community service initiatives.

MERCY Malaysia is a prominent player in the global humanitarian arena, providing disaster relief for communities in Malaysia and beyond. MERCY Malaysia’s mission to bring aid to marginalised groups and people affected by disasters is aligned with our own goal of helping communities in time of need.

In 2017, our partnership with MERCY Malaysia included offering medical services via the UMW MERCY Malaysia Mobile Clinic to vulnerable communities in Sabah, Sarawak and Peninsular Malaysia. In 2017, this partnership provided healthcare to approximately 549 people and since 2009, more than 27,000 people have benefited from this initiative.

UMW’s community programme provides annual support to several not-for-profit and non-political organisations throughout the country. We assess and evaluate the needs of community groups on a case-by-case basis.

We encourage all of our employees to embrace the culture of volunteerism. The UMW Community Champions programme formalises our employees’ participation in community service programmes and UMW bears the participation costs and offers employees time off work to take part in community projects.

In 2017, UMW Community Champions performed a total of 8,258 volunteer hours in programmes approved by the Company, bringing the total number of hours to 47,708 since 2009 when the programme started.

One of our leading partners in our CSR programme is the non-governmental organisation, Four Wheelers 4 Charity (4W4C). Our projects in 2017 included:

Kembara MSAM-UMW 2017For the second year, UMW organised the event in conjunction with Minggu Saham Amanah Malaysia 2017 (MSAM). A 10-vehicle convoy carrying 30 UMW Community Champions visited Orang Asli villages and an orphanage to distribute essential items including rice, cooking oil, flour and sugar. The convoy covered almost 300km to reach far-flung places in Temerloh, Bera and Kuala Krau. Participants also conducted a ‘gotong-royong’ at Kampung Paya Luas. More than 600 people benefited from this initiative.

Kembara Ramadhan-UMW 2017For the second year, volunteers from UMW and 4W4C visited underprivileged families to provide assistance during the fasting month. The convoy’s first stop was Pusat Pendidikan Dalam Komuniti in Melaka, a learning centre for the disabled community, where the convoy contributed ‘baju raya’ to the trainees and household items to the centre. The convoy then visited three underprivileged homes where the Community Champions conducted ‘gotong-royong’ to clean and repair houses and then at Surau Nur Iman Kuala Linggi, the convoy organised ‘Majlis Berbuka Puasa’ and distributed Ramadhan Packs to 190 recipients.

Jejak Kembara Ilmu UMWThe aim of the two-day visit was to promote the importance of education and reading to Orang Asli students from Sekolah Rendah Kebangsaan Ulu Slim in Perak. Around 90 students benefited from this visit and took part in activities such as mural painting, storytelling, a tele-match and a colouring contest.

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Helping Underprivileged Communities during the Festive SeasonThroughout the year, UMW brought cheer to children, the elderly and the underprivileged communities during the festive seasons. During Ramadhan and Hari Raya, UMW celebrated with the elderly occupants at Pusat Jagaan Siti Nor Aini in Kajang and contributed RM10,000 from its Zakat Redistribution Fund to the home, and also treated 40 children from Sekolah Kebangsaan Bandar Baru Salak Tinggi to a shopping outing and a nice restaurant meal. Each child was given a RM300 voucher to spend and UMW also contributed RM10,000 from its Zakat Redistribution Fund to the school. A group from UMW celebrated Chinese New Year with 110 elderly occupants of Rumah Victory in Puchong and also contributed RM5,000 to the home, during the Deepavali celebrations, UMW visited the Rita Handicapped and Disabled Welfare Home, cleaned the home for its 152 inhabitants and also donated RM3,000 to the association, and at Christmas, 29 elderly residents of the Sarawak Hun Nam Siang Tng Home in Kuching, Sarawak were cheered up by singing and dancing activities carried out by UMW and volunteers of Kelab UMW Sarawak. UMW also contributed RM5,000 to the association and brought goody bags for each resident.

Programme with Special ChildrenWe organised a fun half-day horse riding programme for Pusat Harian Kanak-Kanak Istimewa Negeri Sembilan (PERKIS) at Jabatan Perkhidmatan Veterinar Negeri Sembilan. A group of 28 children took part in feeding and riding the horses.

Community Outreach ProgrammeUMW visited the Asnaf community in Ijok in Selangor and helped to repair and clean 18 houses and distributed essential items to underprivileged families and to the Maahad Tahfiz Raudhatul Nur Iman religious school.

Community Champions Programmes with the HomelessIn April, June and August, UMW collaborated with KASEH4U to provide basic meals to homeless people. More than 1,000 people benefited from the programmes.

Visit to Children in HospitalVolunteers from UMW visited children in Hospital Wanita dan Kanak-Kanak Sabah to lend support to the children and their families, by interacting, playing games and singing songs. UMW also donated two units of LED TVs and toys to the hospital.


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TOYOTA CLASSICS CONTINUES TO RAISE CHARITABLE FUNDS FOR YEAR 2017

The Toyota Classics programme started more than 25 years ago and is UMW Toyota Motor’s longest-running CSR initiative. Each year, the programme raises funds for charity by organising performances by world-class orchestras at the Dewan Filharmonik Petronas in KLCC.

Proceeds from ticket sales and corporate donations to the Toyota Classics concert have benefited orphanages, drug rehabilitation centres, the National Cancer Society, old folk’s homes, welfare homes and hospices. Since its inception in 1990, the programme has raised more than RM8 million, helping UMW Toyota Motor support 65 charities and NGOs.

The 2017 edition of the Toyota Classics featured the Royal Philharmonic Concert Orchestra from the UK, led by Golden Globe and Emmy Award winner, Anthony Weeden, which raised funds for the Department of Music at Universiti Putra Malaysia that aims to empower youth susceptible to depression through music, and for the environmental protection organisation, Pertubuhan Pelindung Khazanah Alam Malaysia.

In past years, the following orchestras have performed as part of the Toyota Classics programme:

UMW is acutely aware of the impact of our operations on the natural environment and we have in place a comprehensive environmental programme designed to mitigate the environmental impact of our operations. We also recognise that the responsibility for environmental protection extends beyond our activities and each year, we organise a range of activities to encourage environmental stewardship in our communities.

ENVIRONMENTAL INITIATIVES IN 2017

Trees for LifeAs part of the Shah Alam Trees for Life programme, we contributed RM10,000 to Majlis Bandaraya Shah Alam towards the purchase of approximately 4,000 shrubs and trees. 80 of our UMW Community Champions took part in the initiative.

Mangrove PlantingA total of 106 UMW Community Champions and volunteers from Perodua participated in a Mangrove Tree Planting programme at Sungai Pelek, Sepang, which was organised together with Lembaga Urus Air Selangor, Pejabat Daerah Tanah Sepang and Jabatan Perhutanan Selangor. The programme helped raise awareness about the importance of conserving mangrove forests and contributed directly to environmental preservation efforts through the planting of mangroves. In just one day, more than 1,000 mangrove trees were planted.

Beach Cleaning ProgrammeA group of more than 50 volunteers from UMW took part in a one-day beach cleaning programme with the support of Pejabat Daerah Tanah Sepang and Majlis Daerah Sepang. Around 450kg of rubbish was collected. UMW also sponsored five concrete benches to Majlis Daerah Sepang.

Our commitment Environment: Doing Our Part

• The New York Symphonic Ensemble• Japan’s Sapporo Symphony Orchestra,

Century Osaka Orchestra and Nagoya Philharmonic Orchestra

• The National Chamber Orchestra of Toulouse, France

• The Royal Swedish Chamber Orchestra• The Orpheus Chamber Orchestra from

the US• The Vienna Volksoper Symphony

Orchestra, Austria• The London Festival Orchestra• The Cadaques Orchestra, Spain• The North-east German Philharmonic

Orchestra• The Budapest Operetta Theatre

Orchestra

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TOYOTA ECO YOUTH

Our Toyota Eco Youth (TEY) flagship environmental programme made ‘Reducing Carbon Footprint’ the key theme for this year. A total of 12 schools comprising 72 students and 24 teachers from across the country took part in the programme. The programme started as an eco-competition between schools and has been running for 17 years. During that time, a total of 235 schools in Malaysia and more than 1,700 students have taken part.

As part of the programme, each school selects an environmental issue in their surrounding community and uses Toyota’s Problem Solving methodology to address it. We believe that through this exercise, which sees young students interacting with the public, relevant government agencies and their peers on environmental issues, students will improve their understanding of environmental conservation.


Our commitment Education: Focusing on Academia

We believe that education guarantees the sustainability of communities. We conduct a wide range of educational programmes for students at all levels of their academic life. UMW offers scholarships to top-performing students and graduate training programmes to nurture the next generation. We also work with partners on a broad range of educational programmes, from helping with basic essentials to tutoring and organising innovative programmes.

As UMW raises its prominence both at home and regionally, sustainability is an increasingly essential part of our corporate culture and a key element of our strategic planning. As we keep pace with the fast changes shaping our markets, our sustainability practices and targets will become more sophisticated. As we refine our sustainability agenda, we will continue to be a highly sought-after partner within the business environment and the communities in which we operate. Our commitment remains towards developing sustainability goals for the short-, mid- and long-term, in order to elevate our reputation as a forward-thinking organisation.

Sustainability will continue to guide every aspect of our operations.

L O O K I N G A H E A D

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SPM Educational ProgrammeWe conducted an education programme to help prepare Form 5 students for their upcoming SPM examinations. The programme, called Bengkel Motivasi dan Pecutan Akhir Matematik & Bahasa Inggeris SPM 2017, was jointly organised with the Petaling Perdana District Education Office with the involvement of national daily Utusan Malaysia. A total of 114 students from 19 schools in Shah Alam attended the two-day workshop, which helped students prepare for their English and Mathematics subjects.

Outing for Underprivileged ChildrenA team of volunteers took a group of 41 children to Kuala Lumpur’s National Planetarium to educate them about science and astronomy. The highlight of the programme was the Sky Simulation where children enjoyed educational and entertaining shows about astronomy, the night sky and exploration.

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A P P E N D I X

Strategy GRI Aspect

Placement (Concern to Stakeholders/ Significance to Company) Rationale

Product & Services Labelling – Customer Satisfaction

High/High

Customers are critical for the Company to ensure business growth. Any customer dissatisfaction could lead to an adverse impact on UMW’s financial performance and reputation.

Product Quality & Safety High/High

Customers are important stakeholders of UMW and the Company has a responsibility towards their safety, especially as the products of the Company could have severe consequences in the event of any malfunctions.

Occupational Health & Safety High/HighMismanagement of occupational health & safety can have an adverse impact on the Company, e.g. loss of productivity and imprisonment.

Economic Performance High/HighAs UMW invests in entering new industries and expanding its current core businesses (by building manufacturing plants in less developed areas), these Aspects are considered important to the majority of stakeholders and to the Company.

Indirect Economic Performance Medium/High

Market Presence Medium/MediumInformation on UMW’s market presence is important to highlight the Company’s positive impact on the local community that it operates in.

Procurement Practices Low/High

UMW plays an important role in developing several industries in Malaysia (e.g. aerospace, automotive). Information on its procurement policy can highlight the Company’s responsible procurement practices and the positive societal impact generated by the Company.

EmploymentHigh/High

Employees are part of UMW’s prioritised stakeholders due to their high dependence and influence on the Company, and their integral role in developing UMW’s workforce. Based on a review of peer companies, “best-in-class” companies have covered the identified Aspects when reporting on efforts and initiatives pertaining to employees.

Training & Education

Diversity & Equal OpportunityHigh/Medium

Labour/Management Relations

MATERIAL ISSUES RELEVANT TO UMW AND THEIR CORRESPONDING GRI ASPECTS

INCULCATING INNOVATIVE

& HIGH-PERFORMANCE

CULTURE

HAVING A DYNAMIC

WORKFORCE

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62


A P P E N D I X

Strategy GRI Aspect

Placement (Concern to Stakeholders/ Significance to Company) Rationale

Materials High/Medium

Due to the nature of UMW’s businesses, materials usage is necessary for operations and managing this efficiently can have positive impacts (e.g. cost reduction, lower waste generation). However, as the Company is an assembler, this might be beyond the Company’s control due to requirements set by principal partners.

Energy

High/Medium

Due to the nature of UMW’s businesses, energy consumption and its resulting GHG emissions can be significant in its operations. Industry benchmarks have highlighted energy management and operational eco-efficiency as key issues.

GHG Emissions

Effluents & Waste High/Medium

Scheduled and solid wastes are inevitable by-products of UMW’s operations. However, steps have been taken to minimise the production of waste (e.g. reduction of used/spent oil). Industry benchmarks have also highlighted effluents and waste as key focus areas.

Water High/Medium

Contamination of or waste run-offs into water supply can severely impact the environment, stakeholders and Company reputation. Additionally, issues pertaining to water have impacted similar companies in the region.

Supplier Environmental Assessment

Medium/MediumUMW is able to influence environmental performance across its supply chain by setting requirements for its suppliers.

Transport Medium/MediumDue to the nature of UMW’s businesses, transporting products for operations and managing this efficiently can have positive impacts.

Anti-corruption Medium/High

It is important for the Company to ensure that there are robust anti-corruption measures in place across its supply chain. Any infringement could have a severe impact on the Company’s licence to operate and its reputation.

Local Communities Medium/Medium

Local communities are important stakeholders and the Company has a responsibility to mitigate any negative impacts towards them and, where possible, provide assistance to them.

MATERIAL ISSUES RELEVANT TO UMW AND THEIR CORRESPONDING GRI ASPECTS


NURTURING THE

COMMUNITY & SOCIETY

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G R I C O N T E N T I N D E X

G E N E R A L S T A N D A R D D I S C L O S U R E S

General Standard Disclosures Disclosure Descriptions Page Number

S T R A T E G Y A N D A N A L Y S I S

G4-1 Statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability.

Page 7, Page 8

G4-2 Description of key impacts, risks, and opportunities.

Page 7, Page 8, Page 12-13

O R G A N I S A T I O N A L P R O F I L E

G4-3 The name of the organisation. Page 7

G4-4 The primary brands, products, and services. Page 10

G4-5 The location of the organisation’s headquarters. Page 5

G4-6 The number of countries where the organisation operates, and names of countries where either the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the report.

Page 10-11

G4-7 The nature of ownership and legal form. Page 10

G4-8 The markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).

Page 10-11

G4-9 The scale of the organisation. Page 10-11, Page 16, Page 35

G4-10 Workforce statistics. Page 35

G4-11 The percentage of total employees covered by collective bargaining agreements.

Page 41

G4-12 Description of the organisation’s supply chain. Page 10

G4-13 Significant changes during the reporting period. None

G4-14 The precautionary approach or principle is addressed by the organisation.

Page 13

G4-15 Externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses.

Page 49

G4-16 Memberships of associations (such as industry associations) and national or international advocacy organisations.

None

This report has been prepared accordingly to the “In Accordance” – Core option as provided by the GRI guidelines. This index shows each disclosure and relevant references within the report.

64



G E N E R A L S T A N D A R D D I S C L O S U R E S

Standard Disclosure Disclosure Descriptions Page Number

I D E N T I F I E D M A T E R I A L A S P E C T S A N D B O U N D A R I E S

G4-17 Entities included in the organisation’s consolidated financial statements or equivalent documents.

Page 5

G4-18 The process for defining the report content and the Aspect Boundaries.

Page 15

G4-19 The material Aspects identified in the process for defining report content.

Page 5, Page 15

G4-20 The Aspect Boundary within the organisation. Page 5 – Report Boundary

G4-21 The Aspect Boundary outside the organisation. Page 5 – Report Boundary

G4-22 Restatements of information provided in previous reports.

Page 16 – Community investments for UMW Group, Page 45

G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries.

None

S T A K E H O L D E R E N G A G E M E N T

G4-24 List of stakeholder groups engaged by the organisation.

Page 14

G4-25 The basis for identification and selection of stakeholders with whom to engage.

Page 14

G4-26 The organisation’s approach to stakeholder engagement.

Page 14

G4-27 Report key topics and concerns that have been raised through stakeholder engagement.

Page 15, Appendix

R E P O R T P R O F I L E

G4-28 Reporting period. Page 5

G4-29 Date of most recent previous report. Page 5

G4-30 Reporting cycle. Page 5

G4-31 The contact point for questions regarding the report or its contents.

Page 5

G4-32 The “in accordance” option the organisation has chosen.

Page 5

G4-33 The organisation’s policy and current practice with regard to seeking external assurance.

No external assurance conducted for the year under review. We recognise the role of external assurance in enhancing the credibility of our reports. We aim to have external assurance for our future reports moving forward.

G O V E R N A N C E

G4-34 The governance structure of the organisation. Page 13, Annual Report 2017 – Statement on Corporate Governance.

E T H I C S A N D I N T E G R I T Y

G4-56 The organisation’s values, principles, standards and norms of behaviour.

Page 34

65



S P E C I F I C S T A N D A R D D I S C L O S U R E S

DMA and Indicators Disclosure Descriptions Page Number

Identified Omission(s)

Reason(s) and Explanation(s) for Omission(s)

C A T E G O R Y : E C O N O M I C

M A T E R I A L A S P E C T : E C O N O M I C P E R F O R M A N C E

G4-DMA Generic Disclosures on Management Approach.

Page 16, Appendix

G4-EC1 Direct economic value generated and distributed.

Page 16

G4-EC3 Coverage of the organisation’s defined benefit plan obligations.

Page 34

M A T E R I A L A S P E C T : M A R K E T P R E S E N C E


Page 11, Page 29, Appendix

G4-EC6 Proportion of senior management hired from local community at significant location of operation.

Page 11 Proportion of total workforce only

M A T E R I A L A S P E C T : I N D I R E C T E C O N O M I C I M P A C T S


Page 30, Appendix

G4-EC7 Development and impact of infrastructure investments and services supported.

Page 30

M A T E R I A L A S P E C T : P R O C U R E M E N T P R A C T I C E S



G4-EC9 Proportion of spending on local suppliers at significant locations of operation.

Page 48

C A T E G O R Y : E N V I R O N M E N T A L

M A T E R I A L A S P E C T : M A T E R I A L S



G4-EN1 Materials used by weight or volume. Page 48

M A T E R I A L A S P E C T : E N E R G Y


Page 45-46, Page 51, Appendix

G4-EN3 Energy consumption within the organisation.

Page 46, Page 51

M A T E R I A L A S P E C T : W A T E R


Page 47-48, Page 54, Appendix

G4-EN8 Total water withdrawal by source. Page 48, Page 54

G4-EN10 Percentage and total volume of water recycled and reused.

Page 54

66







C A T E G O R Y : E N V I R O N M E N T A L ( c o n t i n u e d )

M A T E R I A L A S P E C T : E M I S S I O N S



G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1).

Page 47

M A T E R I A L A S P E C T : E F F L U E N T S A N D W A S T E



G4-EN22 Total water discharge by quality and destination.

Page 52

G4-EN23 Total weight of waste by type and disposal method.

Page 47

M A T E R I A L A S P E C T : T R A N S P O R T


Page 52, Appendix

G4-EN30 Significant environmental impacts of transporting products, other goods, materials and members of the workforce.

Page 52

M A T E R I A L A S P E C T : S U P P L I E R E N V I R O N M E N T A L A S S E S S M E N T



G4-EN32 Percentage of new suppliers that were screened using environmental criteria.

Percentage of suppliers screened using environmental criteria

Data unavailable for the year in review

C A T E G O R Y : S O C I A L

S U B - C A T E G O R Y : L A B O U R P R A C T I C E S A N D D E C E N T W O R K

M A T E R I A L A S P E C T : E M P L O Y M E N T


Page 34-35, Appendix

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region.

Page 35

G4-LA3 Return to work and retention rates after parental leave, by gender.

Page 35

M A T E R I A L A S P E C T : L A B O U R / M A N A G E M E N T R E L A T I O N S


Page 41, Appendix

G4-LA4 Minimum notice periods regarding operational changes, including specified in collective agreements.

Page 41

67







C A T E G O R Y : S O C I A L ( c o n t i n u e d )

M A T E R I A L A S P E C T : O C C U P A T I O N A L H E A L T H A N D S A F E T Y



G4-LA5 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes.

Page 25

G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender.

Page 27

G4-LA7 Workers with high incidence or high risk of diseases related to their occupation.

Page 26-27

M A T E R I A L A S P E C T : T R A I N I N G A N D E D U C A T I O N


Page 36, Appendix

G4-LA9 Average hours of training per year per employee by gender, and by employee category.

Page 37

G4-LA10 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Page 36-38

G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.

Page 36

M A T E R I A L A S P E C T : D I V E R S I T Y A N D E Q U A L O P P O R T U N I T Y


Page 39, Appendix

G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

Page 39-40

S U B - C A T E G O R Y : S O C I E T Y

M A T E R I A L A S P E C T : L O C A L C O M M U N I T I E S


Page 57, Appendix

G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programmes.

Page 57-60

68







C A T E G O R Y : S O C I A L ( c o n t i n u e d )

M A T E R I A L A S P E C T : A N T I - C O R R U P T I O N



G4-SO4 Communication and training on anti-corruption policies and procedures.

Page 42

S U B - C A T E G O R Y : P R O D U C T R E S P O N S I B I L I T Y

M A T E R I A L A S P E C T : C U S T O M E R H E A L T H A N D S A F E T Y



G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement.

Page 21-23

M A T E R I A L A S P E C T : P R O D U C T A N D S E R V I C E L A B E L L I N G



G4-PR5 Results of surveys measuring customer satisfaction.

Page 24

U M W H O L D I N G S B E R H A D (90278-P)

No. 10, Jalan Utas (15/7),40200 Shah Alam,

Selangor Darul Ehsan, Malaysia.

Tel: (603) 5163 5000Fax: (603) 5519 3890

www.umw.com.my

UMW HOLDINGS BERHAD (90278-P)ir.chartnexus.com/umw/website_HTML/attachments/... · 2018-04-24 · value for all our stakeholders. We have come a long way in the last one hundred years

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