Sustainability Report - Sustainability Disclosure Database

(Incorporated in Malaysia)
Sustainability Report
2010
(Incorporated in Malaysia)
Level 5, Wisma DRB-HICOM
No. 2, Jalan Usahawan U1/8
Seksyen U1, 40150 Shah Alam
Selangor Darul Ehsan
Tel : (03) 2052 8000
Fax: (03) 2052 8099
www.drb-hicom.com
B
About
the cover
Our Vision
Our Past, Present & Priorities
To be number 1 and continuously
excel in all that we do.
The past shapes the future from the seeds
we have sown, in the wake of present global
environmental priorities. In recognising that the
values of business sustainability directly impacts
on our natural surroundings, DRB-HICOM plays
a vital role as a responsible diversified company
of choice.
Our mission
To lead in the growth of the nation in
the areas of DRB-HICOM’s core businesses.
Our shared values
•Excellence
• Decorum
• Teamwork
• Integrity
• Innovation
• Quality
• Transparency
By being affirmative in our actions, the Group
contributes to long term commitment of
communities that are affected by our operations.
At the end of the day, our future generations will
not be denied their rights of the living planet that
it will be inheriting, in continuously being a force
of life that will be inspiring.
our
approach
to reporting
This is the first Sustainability Report produced by DRB-HICOM Berhad
(“DRB-HICOM”). It covers our responsibilities to our stakeholders and
the contributions we have made to sustainable development. Previously,
we have reported elements of our Corporate Responsibility (CR) performance
in our annual reports and on our website.
About this Report
Reporting Scope:
•DRB-HICOM commissioned comprehensive stakeholder
materiality analysis to identify and highlight major issues
of interest to our stakeholders and develop our approach
to these issues.
DRB-HICOM Sustainability Report covers our entire organisation
and includes quantitative and qualitative data for Financial Year
End (FYE) 2010. Some indicators are partial and only relate to
certain divisions or activities as indicated in the text.
•This Sustainability Report is consistent with our Annual
Report. This report features our core CR domains which
are aligned with the Bursa CR Framework. Our strategies,
achievements and future plans for sustainability management
are aligned with these guidelines especially in the areas
of sustainable environmental management, community and
social contributions, ethics in marketplace and workplace
culture. Where Group-wide information is not fully available,
we have provided performance data and case studies of our
subsidiaries that are representative of our general approach.
Reporting Period:
•The Report has been examined by OWW Consulting Sdn. Bhd.
to measure its reliability. Their conclusions are presented
in an Assurance Statement which can be found at the end
of this Report.
•We have continued our commitment to provide detailed
disclosure with indicators and clear performance trends.
We have also tracked data and statistics of our performance
to date and evaluated our progress in achieving targets.
•Our transparency efforts are not limited to this Report.
Other material issues, and detailed data on our internal
operations and business activities are reported in other
publicly available documents. This includes Corporate
Governance which is reported in more detail in our
Annual Report.
April 1, 2009 to March 31, 2010
Reporting Cycle:
Once a year
Reporting Framework
•Principal Framework:
GRI G3 Guidelines
• Additional Frameworks:
• Bursa Malaysia’s CR Framework
•ACCA Malaysia Sustainability Reporting Guideline
for Malaysian Companies 2005
DRB-Hicom Berhad
Sustainability
Report 2010
02
inside
contents
04.
Corporate
structure
06.
Group Managing
Director’s Statement
08.
DRB-Hicom
Strategy and Analysis
• Materiality Analysis
• Targets and Achievements
12.
18.
28.
•Duties and Responsibilities
of the Board
• Community Investment Programme
• Our Commitment to the Environment
Corporate
Governance
• Composition and Balance
• Board Committees
• Appointments and Training
• Directors’ Remuneration
• Internal Control
• Risk Management
•Related Party Transactions and
Relationship with External Auditors
•Protection of Informer (Whistle-Blower)
Our
Community
Our
Environment
Youth Development and Education
• Materials Management
Socio-Economic Development
•Waste Management
Quality of Life
•Energy Conservation and Management
•Direct and Indirect Impact
on Communities
• Other Community Initiatives
•Water Conservation and Management
•Climate Change and Our Green
Building Initiatives
• Biodiversity
• Other Environmental Initiatives
• Incidents of Non-Compliance
03
42.
54.
•Engagement with Our Suppliers
•Employment Practices
Our
Our
Marketplace Workplace
•Engagement with Our Customers
• Continuous Learning and Development
•Product Life-Cycle – Managing the
Health and Safety Impact
•Labour Relations and Management
•Marketing Communications
and Management
•Employee Performance : Human Rights
• Occupational Safety and Health (OSH)
•Compliance in Marketing
and Communications
66.
Income
Statements
67.
GRI Content
index
68.
Profile
disclosures
70.
DMA and
performance data
74.
Assurance
statement
DRB-Hicom Berhad
Sustainability
Report 2010
04
Corporate
Structure
PUSPAKOM
Sdn. Bhd.
E.I. : 100%
(operating Companies) as at 31 March 2010
Bank Muamalat
Malaysia Berhad
E.I. : 70%
Puspakom Teknik
Sdn. Bhd.
E.I. : 100%
Muamalat Invest
Sdn. Bhd.
E.I. : 70%
Flora Areana
Sdn. Bhd.
E.I. : 100%
Muamalat Venture
Sdn. Bhd.
E.I. : 70%
Rangkai Positif
Sdn. Bhd.
E.I. : 100%
HICOM University
College Sdn. Bhd.
E.I. : 100%
Uni.Asia Life
Assurance Berhad
E.I. : 51%
Uni.Asia General
Insurance Berhad
E.I. : 34.73%
Alam Flora
Sdn. Bhd.
E.I. : 60.53%
USF-HICOM
(Malaysia)
Sdn. Bhd.
E.I. : 100%
PHN Industry
Sdn. Bhd.
E.I. : 62.50%
KL Airport
Services
Sdn. Bhd.
E.I. : 100%
Scott & English
(Malaysia)
Sdn. Bhd.
E.I. : 70%
HICOM-Teck See
Manufacturing
Malaysia Sdn. Bhd.
E.I. : 51%
HICOM-HONDA
Manufacturing
Malaysia
Sdn. Bhd.
E.I. : 48%
Mega Consolidated
Sdn. Bhd.
E.I. : 100%
Uni.Asia Capital
Sdn. Bhd.
E.I. : 51%
Multi Automotive
Service and Assist
Sdn. Bhd.
E.I. : 55%
KLAS
Engineering
Services Sdn.
Bhd.
E.I. : 100%
Gadek (Malaysia)
Berhad
E.I. : 100%
HICOM United
Leasing Sdn. Bhd.
E.I. : 70%
Scott & English
Trading (Sarawak)
Sdn. Bhd.
E.I. : 35.70%
HICOM-YAMAHA
Manufacturing
Malaysia
Sdn. Bhd.
E.I. : 45%
HICOM Diecastings
Sdn. Bhd.
E.I. : 100%
Oriental Summit
Industries
Sdn. Bhd.
E.I. : 70%
HICOM Automotive
Plastics (Thailand)
Ltd.
E.I. : 50.99%
Suzuki Motorcycle
Malaysia
Sdn. Bhd.
E.I. : 29%
Proton City
Development
Corporation
Sdn. Bhd.
E.I. : 60%
HICOM Holdings
Berhad
E.I. : 100%
HICOM Builders
Sdn. Bhd.
E.I. : 100%
Automotive
Corporation
(Malaysia) Sdn. Bhd.
E.I. : 100%
HICOM
Automotive
Manufacturers
(Malaysia)
Sdn. Bhd.
E.I. : 93%
ISUZU HICOM
Malaysia
Sdn. Bhd.
E.I. : 49%
05
DRB-HICOM
Auto Solutions
Sdn. Bhd.
E.I. : 100%
Motosikal dan
Enjin Nasional
Sdn. Bhd.
E.I. : 70%
DRB-HICOM
Defence
Technologies
Sdn. Bhd.
E.I. : 100%
Edaran Modenas
Sdn. Bhd.
E.I. : 70%
Johnson Controls
Automotive
Holding
(M) Sdn. Bhd.
E.I. : 23.72%
Midea Scott
& English
Electronics
Sdn. Bhd.
E.I. : 40%
Comtrac
Sdn. Bhd.
E.I. : 70%
EON Properties
Sdn. Bhd.
E.I. : 79.05%
Euromobil
Sdn. Bhd.
E.I. : 79.05%
Mitsubishi Motors
Malaysia
Sdn. Bhd.
E.I. : 37.94%
EON Auto Mart
Sdn. Bhd.
E.I. : 79.05%
Proton Parts
Centre
Sdn. Bhd.
E.I. : 36.62%
ZF Steerings
(Malaysia)
Sdn. Bhd.
E.I. : 30%
Isuzu Malaysia
Sdn. Bhd.
E.I. : 49%
Suzuki Malaysia
Automobile
Sdn. Bhd.
E.I. : 40%
Defence Services
Sdn. Bhd.
E.I. : 100%
Edaran Otomobil
Nasional Berhad
E.I. : 79.05%
SRT-EON Security
Services Sdn.
Bhd.
E.I. : 31.62%
Honda Malaysia
Sdn. Bhd.
E.I. : 34%
Automotive
Conversion
Engineering
Sdn. Bhd.
E.I. : 79.05%
TRW Steering
and Suspension
(Malaysia)
Sdn. Bhd.
E.I. : 20%
HICOM
Berhad
E.I. : 100%
Glenmarie Cove
Development
Sdn. Bhd.
E.I. : 89.50%
Glenmarie
Properties
Sdn. Bhd.
E.I. : 100%
Horsedale
Development
Berhad
E.I. : 70.60%
Kenyir
Splendour
Berhad
E.I. : 100%
HICOM-Gamuda
Development
Sdn. Bhd.
E.I. : 35.30%
HICOM Facility
Management
Berhad
E.I. : 100%
Niro Ceramic (M)
Sdn. Bhd.
E.I. : 22.25%
HICOM Megah
Sdn. Bhd.
E.I. : 92.46%
Corwin Holding
Pte. Ltd.
E.I. : 83.21%
HICOM Indungan
Sdn. Bhd.
E.I. : 100%
Rebak Island
Marina Berhad
E.I. : 60%
Sectorial:
AUtomotive
Property & infrastructure
Services
Investment Holding
Jointly Controlled Entities/
Associated Companies
Note
E.I. - DRB-HICOM Group’s
Effective Interest
DRB-Hicom Berhad
Sustainability
Report 2010
06
Group managing
director’s
statement
The structuring of our sustainability model has certainly
posed new challenges to our Corporate Responsibility model.
We believe that we can successfully address them through
regular engagement to fulfil our commitment of “growing
together” with society. The Group has allocated 5% of its Profit
Before Tax (PBT) each year for its CR activities in the following
Financial Year.
In March 2010, DRB-HICOM has established a CR Steering
Committee which includes a dedicated CR Manager, Head of
Sectors and being led by the Group Chief Financial Officer.
The Committee is responsible for monitoring the adoption
of DRB-HICOM’s CR framework in all subsidiaries, ensuring
efficient resource allocation for the implementation of CR and
communicating the input received from stakeholders to the
Board of Directors and shareholders for implementation.
Community Initiatives
On behalf of the Board of Directors,
I am pleased to present DRB-HICOM’s
first Sustainability Report. This
Report highlights our contribution
to sustainable development and
the effects that our actions have
on our main stakeholder groups –
customers, shareholders, employees,
business partners, society and the
environment at large.
Moving from Corporate Philanthropy
to Corporate Responsibility
Over the years, the Group has developed a tradition of giving
generously to organisations and communities that require funds and
other forms of support. In October 2009, PricewaterhouseCoopers
(PwC) has introduced a Corporate Responsibility (CR) framework to
the Board of Directors that transform our various acts of corporate
philanthropy into a more formal and streamlined proposition.
Since 2009, our focus has evolved from ‘Corporate Social
Responsibility’ to ‘Corporate Responsibility’, realising our goal in
achieving a sustainable future involves balancing social, economic
and environmental issues. In recognising that CR is more than
just corporate philanthropy, the Group has put in efforts to include
stakeholders in all business activities to maximise its positive
impact on society and perform greater accountability.
As a good corporate citizen, we see communication and cooperation
with all stakeholders to be vital activities. Aligning our efforts with
those of our stakeholders, including shareholders, customers,
business partners, employees and society, DRB-HICOM is
pursuing initiatives to promote sustainability. Our Community
initiatives are structured into three main areas of focus, namely
Youth Development and Education, Socio-Economic Development
and Quality of Life. Recognising education as the Group’s main
community pillar, DRB-HICOM has developed its International
College of Automotive (ICAM) to produce a skilled workforce for the
automotive sector. We have also contributed to the development of
Albukhary International University (AIU) to complement its effort in
producing a knowledgeable workforce in non-automotive industries.
Ramadhan, being the holiest month in the Islamic calendar, is the
time for sharing with the less fortunate. DRB-HICOM is delighted
to share the joy of the holy month by giving a goodwill donation to
the underprivileged and including them in our celebrations, such
as the “Buka Puasa” event. The Group is also doing its utmost to
play its role as a model Corporate Citizen. We strongly encourage
our subsidiaries to be active in their social engagement.
Environmental initiatives
The Group has implemented an Environmental Management Plan
(EMP) to monitor the environmental impact of its operations.
We have built an Environmental Management System (EMS) to
manage all aspects of environmental performance including
emissions, water quality, materials use and waste management.
We are actively working to reduce our emissions at each stage
of production, distribution and sales. This Report places a
significant emphasis on our environmental performance which
is disclosed in the Environment section. We are committed
to achieving better reporting transparency by improving our
monitoring systems on environmental indicators in some of our
subsidiaries. We continue to propose a number of management
policies based on a growing awareness of environmental risks.
07
CR
Portfolio
Strategic themes
by CR dimension
CR Vision
Group’s CR strategy reflecting its range of interest and presence.
“We are committed to being a responsible corporate citizen,
especially in the development of communities in areas we operate in,
because their future is our future”
Community
•Nurture youth’s
interest in our
specialised areas
(e.g. Engineering)
•Address social
needs of local
communities
Environment
•Embed
environmental
considerations
in all aspects of
operations
30-35%
20-25%
Marketplace
•Encourage
vendors to act
sustainably
(i.e. ethical/green
procurement)
20-25%
Workplace
•Focus on CR
initiatives
that promote
continuous
learning and
development at
workplace
SUSTAINABILITY
The move towards sustainability involves balancing
social, economic and environmental issues
CSR
CR
Economic
Social
CORPORATE
PHILANTHROPY
Environment
25-30%
Marketplace Initiatives
With the new emerging business era, the roles of customers
and suppliers have become more complex. It is important
that DRB-HICOM promotes greater transparency and
accountability within its internal and external stakeholders.
Within DRB-HICOM’s marketplace framework, the main
stakeholders are our suppliers, vendors, contractors and
customers. We understand the utmost need of our customers.
We consistently deliver quality value added products and services
in the course of our business operations. We monitor quarterly
customer satisfaction surveys which are crucial for our
long-term business planning.
DRB-HICOM puts the collective interests of its Group Companies
ahead of any individual operating company’s interest. The
Group expects all of its subsidiaries to comply with the Group
Procurement Policy and Code of Ethics and Business Practice.
We continue to be the champion in quality of our products and
services. Our achievements were recognised when four of our
operating companies were awarded for their quality excellence
by local and international bodies. These awards are outlined
in the Marketplace section of this report. On top of these
achievements, HICOM Automotive Manufacturers (Malaysia)
Sdn. Bhd. and ISUZU HICOM Malaysia Sdn. Bhd. obtained the
ISO 9001 certifications in the same year.
Workplace Initiatives
The Health and Safety of DRB-HICOM employees are essential to
the sustainability of its business. Our success relies heavily on a
strong foundation of training and development, career progression,
outstanding employee engagement and a high performance
culture. In particular our “Staff Welfare Fund” encourages
and facilitates our staff to give from their own salaries and
distributes funds to those in need. Over the last few years, we
have also reviewed every aspect of our safety management and
implemented Group-wide safety guidelines. We recognise the
importance of focusing our strategy into the development of
human resources that will support our corporate foundation and
long-term management success.
The Group continues to encourage employee involvement in our
social causes. This enables our people to thrive within the Group
and also as members of society.
Moving Towards Sustainability
The upcoming year will be one of the most challenging to date.
We are confident that with the commitment of our people,
strict internal controls and good management, we will be able
to meet the challenges ahead. We are in full support of the
Government’s effort to promote ethical standards within companies.
Our Community engagements are aligned with the Government’s
10th Malaysia Plan in promoting and nurturing skills.
There are many more challenges to meet on our continued
journey. We are making DRB-HICOM a stronger and greener
Group of Companies. We continue to work with our subsidiaries
and business partners to share our sustainable best practices
and ensure they are employing our own high standards of
business practices.
Acknowledgement
On behalf of the Board, I would like to express my deepest
appreciation to the management and staff for their dedication,
commitment and contribution to our key stakeholders for their
continued support.
As always, we hope you find our report useful and informative
and we appreciate your comments and feedback which are
invaluable to us in developing our future initiatives in-line with
the expectations of our stakeholders.
DATO’ Sri HAJI MOHD KHAMIL BIN JAMIL
GROUP MANAGING DIRECTOR
DRB-Hicom Berhad
Sustainability
Report 2010
08
DRB-HICOM
Strategy and Analysis
Materiality Analysis
Prior to our materiality analysis, we conducted a review exercise to identify and document significant opportunities, challenges and
priorities in our operating environment in order to anticipate the emerging expectations of our stakeholders and respond proactively.
DRB-HICOM Approach
StakeholdersIssues of Concern
– Section in the Report
Customers
•Product Responsibility
• Marketplace
•Direct and Indirect impact • Community
of Product and Services
• Compliance
Shareholders and Investors
•Economic Performance
• Annual Report
• Compliance
• Community
• Marketplace
•Workplace
•Environment
Employees
•Labour Practices •Workplace
• Human Rights Policy
Government and Regulatory Authority
• Compliance
• Community
• Direct and Indirect
• Marketplace
Impact of Operations
•Workplace
•Environment
Value Chain Partners
•Product Responsibility
• Marketplace
• Health and Safety Impact
•Workplace
Industry Peers
•Economic Performance
• Annual Report
• Business Behaviour
• Marketplace
The Public
• Corporate Citizenship
• Community
• Direct and Indirect Impact
on the Community
• Compliance
In formulating our sustainability framework, we have used the GRI-G3 Guidelines on Sustainability Reporting. Our sustainability efforts
have been structured as a result of this materiality analysis. This identifies issues concerning our social and environmental impact
arising from our operations and assesses their importance to our stakeholders. Our response to issues is constrained by the level of
control or our ability to affect certain policies and practices such as cases of suppliers and the Government.
09
Focus on material areas
We have formulated our approach to sustainability
reporting as a result of identifying the areas of
our operations with the most significant impact
and which are of most concern to our stakeholders.
This Report emphasises our priority areas, highlights
the rationale behind each selection and demonstrates
our commitment to addressing each area and its
current performance.
We have made a significant effort to increase
disclosure by using a proxy form for reporting
systems to give underlying context to data.
For example, performance data trends within the
Group are not always available, as some data are
deemed private and confidential. In such cases,
publicly available benchmarking data of subsidiaries
is used in lieu of Group-wide data. With reference
to our materiality mapping, these issues have
been identified, reviewed and approved by senior
management as part of our ongoing commitment
to sustainability.
Targets and Achievements
In moving towards achieving sustainability, our focus
on our CR programme is regularly reviewed to reflect
the changing business and CR agenda. DRB-HICOM
continues to address the issues that are material to
our business. We have set targets and monitor our
progress in achieving these goals.
CR Dimension
Community
Targets
Achievements
•To nurture youth’s interest in our specialised
areas (e.g. engineering)
•Nurturing young talents in technical and
non-technical fields
• To address social needs of local communities
•Various contributions for better societies’ welfare
•No allegation recorded
Environment
To embed environmental considerations in all
aspects of operations
Environmental Management System (EMS) to
monitor the Group’s environmental performance
Marketplace
To encourage vendors to act sustainably
(i.e. ethical/green procurement)
Integration of CR elements in the supply chain
system and responsible network deployment
Workplace
To focus on CR initiatives that promote continuous
learning and development at workplace
•Fair policy on employment practices and ethics
in the workplace
•Extensive career development and employability
DRB-Hicom Berhad
Sustainability
Report 2010
10
Our next generation will reaffirm
the future that will be grounded
on tenets of good conduct.
11
DRB-Hicom Berhad
Sustainability
Report 2010
12
Corporate
Governance
Corporate Governance sets out the
framework and process by which
companies, through their Boards of
Directors and management, regulate
their business activities. It balances
sound and safe business operations
with compliance of the relevant laws
and regulations.
The Board is pleased to have
applied the principles outlined in
the Malaysian Code on Corporate
Governance (“the Code”). The Company
has complied with all material
respects and best practices of the
Code during Financial Year ended
31 March 2010.
Composition and Balance
The current Board has eight members which is comprised of one
Executive Director and seven Non-Executive Directors (including
the Chairman) of whom five are independent as defined by the
Bursa Securities Main Market Listing Requirements.
The Directors are well experienced in their respective fields and
provide an effective blend of entrepreneurship, business and
professional expertise.
Board Committees
To ensure the effective discharge of its fiduciary duties, the
Board has delegated specific responsibilities to the respective
Committees of the Board. The functions and terms of reference
of Board committees and levels of authority delegated by the
Board to these Committees are clearly defined by the Board.
The Board retains full responsibility for the direction and control
of the Group.
Audit
Committee
Duties and Responsibilities of the Board
The Board has the overall responsibility in leading and
determining the Group’s overall strategic direction as well as
developing and controlling the Group. The Board approves the
Group’s Annual Management Plan and the overall strategic
direction on a yearly basis. The Board retains full and
effective control of the Group by reviewing the Management’s
performance against the Annual Management Plan and is
responsible for identifying principal risks and ensuring the
implementation of appropriate systems to manage these risks.
To ensure an efficient and structure decision-making process,
the Board of the Company and all Group Companies have
approved a framework on Limits of Authority (“LOA”).
The Directors continue to observe the Company Directors’
Code of Ethics and Business Practice, established by the
Companies Commission of Malaysia in carrying out their
fiduciary duties and responsibilities.
DRB-HICOM
Board
Nomination and
Remuneration Committee
Risk
Committee
13
Appointments and Training
There is a formal and transparent procedure for the appointment
of new directors and senior management personnel to the
Company, with the Nomination and Remuneration Committee
evaluating and making recommendations to the Board.
Following the appointment of new directors to the Board, the
Nomination and Remuneration Committee ensures that an
induction programme is conducted to enable them to get a full
understanding of the nature of the businesses. Current issues
within the Group, corporate strategies and the structure and
management of the Group are covered. All existing directors
have completed the Mandatory Accreditation Programme and are
also encouraged to attend continuous education programmes
and seminars to further enhance their professionalism in
carrying out their duties for the Group.
Directors’ Remuneration
The objectives of the Group’s policy on Directors’ remuneration
are to ensure that the Group attracts and retains Directors
of the calibre to run the Group successfully. In the case of
Executive Directors, remunerations are structured to link
rewards to corporate and individual Key Performance Indicators
(KPIs). In the case of Non-Executive Directors, the level of
remuneration reflects the experience and level of responsibilities
undertaken by the particular Non-Executive Director concerned.
The Nomination and Remuneration Committee is responsible
for setting the policy framework and making recommendations
to the Board on all elements of the remuneration and other
terms of employment of the Executive Directors and senior
management. The remuneration of Non-Executive Directors is
decided by the Board as a whole.
Internal Control
The Board has the overall responsibility for maintaining a
system of internal controls that provides reasonable assurance
of effective and efficient operations, compliance with laws and
regulations and internal procedures and guidelines.
The effectiveness of the Group internal control system is
reviewed by the Audit Committee periodically during its quarterly
meetings. The review covers the Group’s financial, accounting
and reporting policies and practices, reports of the internal and
external auditors and the adequacy of the system of internal
controls to safeguard the shareholders’ interests and Group’s
assets. The Group Internal Audit Division monitors compliance
with policies and the effectiveness of internal control structures
across the Group, whilst legal and regulatory compliance are the
responsibilities of the Legal Affairs Department and Corporate
Secretarial/Corporate Planning Divisions respectively.
DRB-Hicom Berhad
14
Sustainability
Report 2010
Corporate
Governance:
continued
Risk Management
DRB-HICOM Enterprise Risk Management (ERM) plan was established to develop strategic control measures on the impact from
our operations. We have identified a strategic management tool that identifies and mitigates potential risk, and addresses any future
non-compliance of statutory and regulatory requirements. Q-Radar System is the total governance solution being implemented in
DRB-HICOM. A built-in critical feature is in placed which offers the Company a systematic approach to the development of risk
profiles efficiently and comprehensively. This software solution allows the Company to systematically identify and assess the likelihood
and impact of risk occurrence. Consequently, the system allows for the development of effective and practical action plans to mitigate
these risks. Chart below outlines our Risk Management Framework. A detailed section describing the Group risk management plan
can be found in our Annual Report 2010.
Internal
Environment
Analysis
Objective
Setting
Event
Identification
Risk
Assessment
Monitoring
Information
and
Communication
Control
Activities
Risk
Response
15
Related Party Transactions and Relationship with External Auditors
All related party transactions are reviewed by the Audit Committee before recommending to
the Board to ensure compliance with Bursa Securities Main Market Listing Requirements.
The Audit Committee meets with the internal and external auditors at least twice a year to
discuss any issues arising from their audits without the presence of the Executive Directors and
Management. The external auditors also highlight matters that require the Board’s and Audit
Committee’s attention with recommended corrective actions.
Protection of Informer (Whistle-Blower)
A central reporting authority is established at the Office of the Group Managing Director to
examine reports and feedbacks not attended to by the receiving superiors or departmental heads.
Anonymous reporting of any infringement of the Codes another will not be entertained.
The information given and the identity of the informer shall remain confidential in the Company’s
effort to address the concerns. The Company will not under any circumstances jeopardise the
informer’s position as a result of making a report to the Company in good faith.
* A complete Corporate Governance statement can be found in DRB-HICOM’s Annual Report 2010.
DRB-Hicom Berhad
Sustainability
Report 2010
16
17
Everything is possible
when cohesive effort of communities
work towards common goals.
DRB-Hicom Berhad
Sustainability
Report 2010
18
our
community
Recognising that Corporate Responsibility (CR) extends beyond corporate
philanthropy, DRB-HICOM focuses its community efforts on long-term social
causes which leverage its scale and position as the leader in the industry.
DRB-HICOM aims to build a positive relationship, provide economic benefit
and help to improve the quality of life in the community where we operate.
Through our social engagement, we maximise the positive impact on the society,
bring long-term shareholder value and improve our business accountability.
Community Investment Programme
In FYE 2010, we have been actively involved in the community
investment programme including charitable donations, in-kind,
monetary contributions and sponsorships. These contributions
do not account for employee volunteerism, fundraising or
management time although these are also part of the Group’s
significant contributions.
While programmes are determined according to community
need, there are three strategic core themes which we focus on.
The Development of International College
of Automotive (ICAM)
The International College of Automotive (ICAM) is owned by
HICOM University College Sdn. Bhd. (HUCSB), a wholly owned
subsidiary of DRB-HICOM Berhad. The establishment of ICAM’s
59 acres campus was officiated by the Ministry of Higher
Education in April 2010.
ICAM is a private college established to help produce a
skilled and knowledgeable workforce for the automotive sector.
This workforce is a critical asset to DRB-HICOM, being the
single largest fully integrated automotive corporation in the
country. In addition to providing a continuous flow of trained and
skilled workers to the Group’s automotive businesses, ICAM is
also part of the Group’s vision in realising the nation’s aspiration
of creating a knowledgeable and skilled workforce, as prescribed
in the Government’s New Economic Model. This vision includes
the goal of making Pekan Automotive Complex the home of
ICAM, which houses automotive state-of-the-art technology and
produces competent workforce.
Youth
Development
and Education
DRB-HICOM
Community
Engagement
Socio-Economic
Development
Youth Development
and Education
Quality
of Life
19
ICAM aims to be the leader in providing the best educational
experience for those who wish to excel in the automotive
industry. The faculty-student ratio is 1:20 for technical courses
and 1:25 for business and management courses. ICAM’s unique
holistic approach combines relevant technical and practical
skills with the financial aspects of the business. ICAM’s training
programme covers technical problem-solving, on-the-job training
and business management. Students are given practical learning
opportunities through the internship programme and factory
visits. With the tagline “Powering Ambitions”, ICAM is committed
to fulfil the dream of young talented individuals, DRB-HICOM
Group, the automotive industry and Malaysia. Our world-class
manufacturing facilities coupled with skilled workforce that we
are producing is drawing the attention from international auto
manufacturers to invest in Pekan, which is recognised as the
automotive hub in the East Coast Economic Region Initiative.
At this initial stage, ICAM offers three-year diploma courses in
Automotive Management Systems, Vehicle Assembly Management
and Vehicle Inspection. These programmes are designed
to prepare candidates for degree programmes. A total of
75 employees from the HICOM Group of Companies were
enrolled in March 2010. Three more specialised courses will be
introduced in September 2010 including Auto Retail Management,
Auto Service Technology and Auto Parts Management.
We aim to create opportunities for young people through our
support of education and youth development. We support
programmes which promote leadership, life-skills, scholarships,
literacy and self-esteem.
DRB-Hicom Berhad
Sustainability
Report 2010
our
Community:
20
continued
School Adoption Programme by Rangkai
Positif Sdn. Bhd.
In July 2009, Sekolah Kebangsaan Serkat in Johor was adopted
by one of our subsidiaries - Rangkai Positif Sdn. Bhd. under the
School Adoption Programme. The total contribution for the year
was RM13,700.00 which was used to fund numerous activities
such as intensive UPSR workshops, study tour, Sambutan Hari
Raya Aidilfitri, National Independence Day celebration and High
Achievers Awards.
Strategic Alliance through The Albukhary
International University (AIU)
In-line with DRB-HICOM’s effort in talents and skills
development, the Company has contributed RM50 million
to the development of AIU in Alor Setar. The purpose of this
contribution is to complement the establishment of ICAM.
While ICAM produces graduates in technical fields, AIU aims to
support the other education wing by producing non-technical
graduates. This provides DRB-HICOM with a balanced pool of
talents in both areas.
This University was built to provide opportunities to the
underprivileged especially from third world countries to further
their education to degree qualifications in non-technical areas
such as Business Management, Accountancy, Computer Science
and Applied Science.
The funds that contributed to the development of this University
were also channelled to build the facilities on the campus
including a library, a multi-purpose hall, a sports complex,
students’ accommodation and lecture halls.
With the concept that AIU is adopting, it will soon become a
distinctive private University in the region, where all tuition
fees and living expenses of students are sponsored through the
Albukhary Foundation. Through these contributions, DRB-HICOM
aims to nurture the talents of young generations allowing them
to invest the skills learned to the socio-economic development of
the community and especially their country of origin.
This programme enabled DRB-HICOM to spearhead the
importance of education aligning with The 10th Government Plan
in skills and talent development through its subsidiary, Rangkai
Positif Sdn. Bhd. This subsidiary provides educational assistance
to the students by providing academic and non-academic
support including study tours in Cameron Highlands and Melaka
in October 2009. We also encourage student participation in
celebrating Malaysia Independence Day and Aidilfitri to promote
patriotism spirit of ‘1 Malaysia’ among the children who are our
future leaders. At the end of each year, awards are given to the
high achievers to recognise their achievements and to motivate
other students.
Honda Dream Fund
The Honda Dream Fund is a community project under the
Honda Global Philanthropy Initiative. The project is a joint effort
between Honda Malaysia Sdn. Bhd. and the United Nations
Development Programme (UNDP). The Honda Dream focuses
on helping underprivileged youth aged 17 to 24 by providing
them with the opportunity to pursue higher education and
skills training in Malaysian colleges, universities and vocational
institutions. Every year, 20 young people benefit from this
scholarship with RM1.15 million being invested in FYE 2010.
Honda’s belief in ‘The Power of Dreams’ also extends to giving
others the opportunities to pursue their own dreams. With the
skills and knowledge obtained from their studies, Honda hopes
that these youths will realise in their potential in helping society.
21
SOCIO-ECONOMIC
DEVELOPMENT
Bridging the Community through Yayasan AlBukhary
The Group invested a total of RM10 million to Yayasan Albukhary
for the development of the Albukhary Complex in Alor Setar.
Through this initiative, they have extended their effort in
serving the need of the underprivileged and the disabled society.
The money was used to fund the first phase of its 27.06 acres
development programme. This consists of the dialysis centre, an
orphanage, a tuition centre, an old folks’ home and a mosque.
The Albukhary Orphanage Centre is currently housing 54
orphans. We are sponsoring the education of these orphans
and providing them with good accommodation. Besides formal
education, the children are also encouraged to take part in
various sports and recreational activities in the afternoons and
on weekends. We also contributed facilities for the Albukhary
Dialysis Centre to serve the needs of the underprivileged.
In FYE 2010, we donated 18 dialysis machines to the centre.
Through this initiative, we help to cater to the medical needs of
the increasing number of kidney patients in Northern Malaysia.
We are supported by the Health Minister with the hope that
the Centre will complement the State Government’s effort in
alleviating acute health problems among the poor and to be
the nucleus for kidney treatment within the Northern Region
of the Peninsular.
We sponsored the development of Albukhary’s Senior Citizens
Centre to provide shelter and medical assistance to the aged
and underprivileged community. The Albukhary Mosque is the
pride of the Albukhary Complex. It is able to hold 10,000 people
comfortably. We also fund the setting up of the children’s library
at the mosque as a resource centre for the local children.
DRB-Hicom Berhad
Sustainability
Report 2010
our
Community:
22
continued
The Upgrading of Masjid At-Taqwa
Surau Al-Hidayah was built in 2004 which was later upgraded to Masjid At-Taqwa. DRB-HICOM through Proton City Development
Corporation Sdn. Bhd. (PCDC) contributed a total of RM2.2 million to the development and upgrading of this mosque. In December
2009, Proton City site in Tanjong Malim was chosen by Jabatan Agama Islam Perak (JAIP) to host the Sambutan Maal Hijrah
Peringkat Negeri Perak 1431H and for officiating of Masjid At-Taqwa. The Masjid caters to 3 main groups namely Muslimin and
Muslimat from Universiti Pendidikan Sultan Idris (UPSI), staff of PROTON Tanjong Malim Plant and the Proton City residents.
The Masjid can accommodate approximately 700 people for Friday prayers.
As a host, PCDC also sponsored all expenses on the Maal Hijrah evening including meals for 1,000 attendees which amounted
to RM26,000.00.
Yayasan Pembangunan Anak
Yatim dan Miskin (PEMANGKIN)
Since April 2009, DRB-HICOM has
become one of the official funders
of PEMANGKIN. Our contributions
were channelled to help the orphans
and underprivileged children
affected by the tsunami in Acheh.
The PEMANGKIN programme was
officiated in April 2009 by YABhg.
Datin Paduka Seri Rosmah Mansor,
Patron of Yayasan Pembangunan
Anak Yatim dan Miskin (PEMANGKIN)
in Panggung Sri Utama Kraftangan
Malaysia, Kuala Lumpur. This is
a five-year commitment by the
Company with total contributions
of RM30,000.00 each year. Through
this programme, we aim to provide
education opportunities to the
orphans and underprivileged children.
Among the projects that were organised by PEMANGKIN was Projek Kecemerlangan Pendidikan IT, providing financial support for
the orphans and poor community in Pondok Pesantren Moden Al Falah Abu Lam-U. PEMANGKIN has also introduced the Program
Keluarga Angkat Prihatin and Skim Anugerah Kecemerlangan Pelajar Miskin dan Yatim Nasional (SATUN).
23
Majlis Berbuka Puasa
As a Malaysian Company, we are sparked by the spirit of
sharing during the Ramadhan month. Majlis Berbuka Puasa is
an annual celebration where we sponsor orphans and single
mothers to a break-fasting event. In FYE 2010, 42 orphans and
35 single mothers from Rumah Anak-Anak Yatim Sg. Manggis
and Persatuan Ibu Tunggal Wangsa Maju were invited.
We are working jointly with the Surau Al-Hidayah Committee
in sponsoring Majlis Berbuka Puasa throughout the 30 days
of Ramadhan. The Committee helps to identify 30 Surau within
the area of our operations in Glenmarie and other automotive
plants in Pekan and Shah Alam. RM2,500.00 is contributed to
every surau for the buka puasa event which brings the total
annual contributions to RM75,000.00 across 30 Surau in that
Ramadhan month.
The Group also extends its contributions in cash and in-kind
donations amounted to RM30,000.00 to other organisations such
as Rumah Anak Kesayanganku orphanage in Bukit Beruntung,
Rumah Sinar Harapan for the elderly and Rumah Ehsan for
people with special needs.
Another similar event in FYE 2010 was held in Pekan - Majlis
Berbuka Puasa Bersama Warga DRB-HICOM Pekan. The event
was held at Taman Perdana surau with the total crowd reached
to almost 1,000 staff including families.
Yayasan Harapan Kanak-Kanak Malaysia
Official launch of ‘Kem Harapan’ was held
on 16 and 17 of May 2010 at Universiti Putra
Malaysia (UPM) by YABhg. Datin Paduka Seri
Rosmah Mansor, the Patron of YHKM as
the Guest of Honour. Through this initiative,
DRB-HICOM aims to promote education by
sponsoring summer camps at eight selected
schools. In FYE 2010, the Company sponsored
300 orphans and underprivileged students
from Standards 4 and 5 under this
programme. The total contribution during
the year was RM70,000.00
The children in the camp were given arts
projects with DRB-HICOM as their subject.
All the paintings were submitted to
DRB-HICOM and the Company is considering
using these paintings for Corporate Annual
Calendar in 2010.
DRB-Hicom Berhad
Sustainability
Report 2010
our
Community:
24
continued
Rebak Island Resort, Langkawi & Pusat Pemulihan
Dalam Komuniti (PDK)
DRB-HICOM believes in serving people by being actively involved
in improving the quality of the lives of underprivileged women,
youth, children and the disadvantaged. Rebak Island Resort
belongs to the Group Property and Infrastructure Division.
Since 2004, Rebak Island Resort Langkawi has played host to
children with special needs who live in Pusat Pemulihan Dalam
Komuniti (PDK) for the breaking of fast during the month of
Ramadhan. The school houses 51 children who have special
needs, ranging from 4 to 29 years old. In 2005, Rebak Island
Resort also invited the children for Majlis Buka Puasa and
donated RM2,000.00 to the school.
Since 2006, the management of Rebak Island Resort celebrates
New Year Lunch together with the children in the school.
In FYE 2010, 51 children and youth from the home were invited
to the Rebak Island Resort for a Hari Raya Open House and
High-tea Session.
DRB-HICOM strongly encouraged its employees to take part in
its CR initiatives. Volunteering has been credited to providing
people with additional and transferable skills as well as
increasing workforce morale. In FYE 2010, employees were
catalysts for our mission. Rebak Island Resort, as a subsidiary
of DRB-HICOM, upholds this spirit of employee volunteering.
Staff of the Resort actively organised activities for the children
including games and performances during each visit.
Quality of Life
Palestinians Fund
Touched by the plight of hundreds of thousands of Palestinian victims, DRB-HICOM
had established a special fund called the DRB-HICOM Palestinian Fund. This fund
is a charity that provides financial assistance for victims in Palestine. Contributions
made were entirely voluntary and strictly in a private capacity. Donation boxes
were placed at strategic locations within the building in Corporate Head Quarters
and distributed to all Group companies. RM200,000.00 was raised and the fund
was passed to the National Humanitarian Fund for Gaza. The donations were given
to Dana Kemanusiaan Palestin (DAKAP) of Utusan Malaysia Berhad/Islamic Relief
Malaysia and Tabung NSTP Untuk Gaza amounting to RM100,000.00 each.
Another initiative that the Company has organised to raise funds for the victims
in Gaza is the “Malam Amal Atas Nama Kemanusiaan”. DRB-HICOM contributed
RM1,000,000.00 to help alleviate the suffering of Palestinians that were affected
by the war in Gaza.
DRB-HICOM’s Contribution towards the Victims of Padang Earthquake
More than 20 companies within the Group have pledged to contribute to this
programme. The contributions were given to the Malaysian Red Crescent Society.
In FYE 2010, our in-kind contributions amounted to RM69,359.40. This consisted of
instant dry food, milk powder, blankets, daily necessities and clothing. DRB-HICOM
had RM5,000.00 canvassed funds from staff in the Head Office. The collection was
used to build basic houses at selected villages.
In October 2009, Bank Muamalat Malaysia Berhad sent nine employees and two
medical experts to help the humanitarian relief effort of Padang earthquake.
These volunteers helped the emergency team in building a temporary treatment
centre (Posko Perubatan) and tents for the survivors in Pariaman Village, Padang.
The Company also contributed in-kind donations to help the victims in forms of
medications, food, drinks, tents, blankets, candles and kain sarong.
25
Sahabat Korporat Tabung Haji
This is our third year of contributions to the Sahabat Korporat
Tabung Haji. In 2007, we donated an ambulance worth
approximately RM170,000.00 to provide medical mobility to
the pilgrims. In 2008, we subsidised a set of Panduan Perjalanan
Jemaah Haji dan Doa-doa and Panduan Solat Sunat Di Tanah
Suci to 40,500 pilgrims, amounting to RM110,500.00. In
FYE 2010, we contributed RM150,000.00 in the form of 500 units
of cabin bags. This aims to provide convenience and comfort to
the pilgrims.
DIRECT AND INDIRECT IMPACT ON COMMUNITIES
Being a good corporate citizen, DRB-HICOM provides the
nation with a strong foundation for economic growth,
productivity improvement, sustainable prosperity and global
competitive advantage. As a business enterprise, we recognise
our responsibility to our stakeholders and to the nation to
continually improve the financial performance of our company
and its business. We do this in a responsible way by fostering
sustainable growth in the industries and communities in which
we operate.
In designing, developing and implementing sustainable solutions
for our stakeholders, DRB-HICOM has a significant impact on
the economy through employment, productivity and our supply
chain. During the 2009/2010 Financial Year, DRB-HICOM’s
business activities have supported a workforce of more than
20,000 employees. DRB-HICOM has not faced any penalties for
non-compliance with applicable laws and regulations concerning
the impacts of its operations on communities.
OTHER COMMUNITY
INITIATIVES
Anti-Competitive Behaviour
As a public listed entity, DRB-HICOM strictly abides by the
governing acts, authorities, rules and regulations. Any dealing,
buying or selling of DRB-HICOM shares by employees is
undertaken very carefully to avoid the implications of insider
trading laws.
The Company handles many forms of transactions and
undertakes various types of business activities. Any form
of business undertakings are carefully overseen, to avoid
the implications of money laundering as defined by the
statutory laws.
We are pleased to report that there were no incidents or
penalties for violations involving anti-competitive, anti-trust and
monopolistic practices at any time during this period. We are
also pleased to report that there was no significant incident or
penalties for non-compliance with laws and regulations at any
time during this reporting period.
Prevention of Corruption
It is highlighted very clearly in the Company’s Code of Ethics
and Business Practice that any form of bribery is not tolerated.
Staff cannot put themselves in an obligated or compromised
position in any business dealing. Staff should not accept gifts
from principals, vendors, suppliers, contractors, customers and
other third parties that may influence or are perceived to be
able to influence decision-making processes. There have been no
significant penalties for non-compliance with applicable laws and
regulations with regards to corruption.
Supporting Public Policy Developments
DRB-HICOM ensures full compliance with applicable laws
and regulations. At all times the Company shall not harm
the relationship with government offices or departments.
DRB-HICOM employees are committed to cooperating with
reasonable requests for information from government agencies
and regulators.
Any contribution to NGOs and NPOs made on behalf of
DRB-HICOM was approved in written form by the Corporate
Communications Division.
DRB-Hicom Berhad
Sustainability
Report 2010
26
27
The future of our environment
lies in our own hands that
they will inevitably inherit.
DRB-Hicom Berhad
Sustainability
Report 2010
28
our
Environment
The heart of DRB-HICOM’s approach to environmental stewardship focuses on
the efficient use and conservation of resources in the most effective way.
This helps the Company to protect the environment and reduce operating
costs. For this reason, energy, water and waste management programmes form
the centrepiece of our environmental strategy. By reducing the environmental
impact of our operations, we provide better value for our stakeholders and
benefit the wider community.
29
Our Commitment to the Environment
Environmental responsibility is a central part of our commitment to our stakeholders. We make continuous improvements to our
business to help protect the environment by operating responsibly. The Group is integrating the Plan-Do-Check-Act (PDCA) cycle into
its Environmental System to achieve service excellence.
The Group’s environmental policy upholds its Environmental Management System (EMS), which has been externally benchmarked
against international certifications including the ISO 14001. DRB-HICOM conducts regular environmental auditing of our production
facilities while governmental environmental agencies periodically inspect our production line system.
Many of our subsidiaries have achieved ISO 14001 certifications and we continue to monitor the performance of other subsidiaries in
their efforts to achieving this certification. Subsidiaries that have obtained ISO 14001 certifications are:
• HICOM Diecastings Sdn. Bhd.
• HICOM-Honda Manufacturing Malaysia Sdn. Bhd.
• HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
• HICOM-Yamaha Manufacturing Malaysia Sdn. Bhd.
• Oriental Summit Industries Sdn. Bhd.
•PHN Industry Sdn. Bhd.
• Alam Flora Sdn. Bhd.
Environmental Management System – PDCA Cycle (Alam Flora)
Alam Flora was the first Solid Waste Management Company that received the
ISO 14001 certification in Malaysia. The Company obtained the ISO 14001:2004
certification for its operation management of solid waste. The Environmental
Management System (EMS) Committee is responsible for monitoring its
environmental performance. The scope covered by the EMS is aligned with
DRB-HICOM’s operational plan.
EMS Committee Organisation Chart
GM Operation/Advisor
EMR
EMS Project Coordinator
FM and Scheduled
Waste
HR, Admin
and Training
Collection and
Cleansing
3R and Business
Development
Environment
Landfill and
Disposal
Quality
Assurance
Safety, Health
and ERT
We have taken proactive action by practising two types of monitoring programmes:
• Regulated monitoring as requested by the Department of Environment (DOE) and based on specified standards
•Self-voluntary monitoring to determine our environmental impacts
Promotion and
Publicity
DRB-Hicom Berhad
30
Sustainability
Report 2010
our
Environment:
continued
EMS Committee Roles and Responsibilities
CommitteeScope
Environmental Management Representative (EMR)To initiate, coordinate and monitor the effectiveness of the
implementation of EMS within the company
Fleet Management (FM) and Scheduled WasteTo ensure that operational vehicles and scheduled waste
management comply with regulations (Scheduled Waste Reg. 2005,
Control of Emission from Diesel Engines Reg. 1996 and Control
of Petrol Engine Reg. 1996)
Collection and Cleansing
o implement and monitor the operation criteria on environmental aspects
T
of collection and cleansing activities for effective operational control
3R and Business DevelopmentTo promote recycling programmes for solid waste among internal
employees and the public for waste minimisation
HR, Administration and TrainingTo coordinate and organise awareness programmes among employees,
contractors and suppliers based on significant environmental impacts
and work skills
Promotion and PublicityTo monitor and respond to customer complaints or feedback and to
promote and publicise the EMS programme
EnvironmentTo monitor and report on key environmental performance indicators
and their status of regulatory compliance with related environmental
legal and other requirements
Landfill/Disposal
o monitor current facilities and future planning on design and ensure
T
that they comply with Environmental Impact Assessment (EIA) standards
Quality AssuranceTo ensure consistency between ISO 9001 and ISO 14001 and provide
management system audit support
Administration
To monitor and report on monthly consumption of natural resources
Safety and Emergency Response Team (ERT)To oversee safety and health aspects and monitor compliance with
regulations under Departmental of Occupational Safety and Health
(DOSH) and the establishment of emergency response team
Our Environmental Communications System
We use various channels of communication to deliver our message on all material issues such as waste reduction, recycling and
environmental cleanliness. This includes articles, active engagements and the use of electronic media. Our principal regulatory risk areas
surround the Environmental Quality Act 1974, Occupational Safety and Health Act 1994 and Local Government Act 1976, but they are not
limited to these regulations.
One of our subsidiaries, Alam Flora, partnered with the media in 2004 on an essay-writing contest with a Tamil daily-Tamil Nesan.
Our relationship with the media has helped us advocate our cause more effectively.
31
MATERIALS MANAGEMENT
Waste Management
Material usage for HICOM-Teck See, being a one stop centre for
plastic products, is polypropylene (PP) and Acrylonitrile Butadiene
Styrene (ABS). PP is a thermoplastic polymer that is resistant
to many chemical solvents, bases and acids. ABS is used by
HICOM-Teck See to make light, rigid, moulded body parts,
wheel covers and joinery panels.
We are working to establish a sustainable operation in all of our
subsidiaries. Alam Flora pledges to meet the challenges of being
the largest Solid Waste Management Company in the region.
It has established environmental, safety and health, quality
systems and enterprise risk management. We communicate these
policies to all stakeholders including customers, employees,
vendors, contractors and shareholders.
We encourage the conserving of natural resources by minimising
waste and practising the principles of reuse and recycling by
engaging all staff and supply chain partners. The materials
recycling rates in HICOM-Teck See have been constant for
the period between 2007 and 2009 which are estimated at
approximately 3%. All of our Manufacturing and Engineering
(M&E) companies recycle 100% of their packaging.
Materials Consumption (kgs)
- HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
6,000,000
5,070,535
5,000,000
4,549,958
4,000,000
Alam Flora has implemented a Solid Waste Management System
throughout its Company. It actively promotes waste minimisation
and recycling. Its waste management concept incorporates the
3R (Reduce, Reuse and Recycle) principle. Scheduled waste
generated from its depot and workshops at all service areas
consist of used oil, contaminated rags and filters and lead
batteries. The disposal for off-site treatment at prescribed
premises for each type of scheduled waste is handled and
managed by appointed contractors licensed with DOE. The list
of inventory and the consignment note are monitored closely in
accordance with the Environmental Quality (Scheduled Wastes)
Regulations 2005.
Total Weight of Waste by Disposal Method
- Alam Flora Sdn. Bhd.
Method (‘000 tonnes)
2005
2006
2007
2008
2009
3,635,355
Landfill Disposal
3,000,000
1876.7 1830.8
Recycling
9.7
11.3
1951.1 2052.2 2093.1
12.4
10.5
9.9
Total Waste (kT)
- Alam Flora Sdn. Bhd.
2,000,000
(’000 tonnes)
1,000,000
0
2,500
07
08
09
12.4
2,000
9.7
10.5
9.9
11.3
1,500
1,000
500
0
1,877
1,831
1,951
2,052
2,093
05
06
07
08
09
Waste Recycled (kT)
Waste Disposed (kT)
DRB-Hicom Berhad
32
Sustainability
Report 2010
our
Environment:
continued
Total Weight of Recyclable Waste by Type (‘000 tonnes)
- Alam Flora Sdn. Bhd.
2005
2006
2007
Total Recyclables by Type
- Alam Flora Sdn. Bhd.
2008
2009
Paper
5.8
8.1
9.5
7.1
5.8
Glass
0.2
0.2
0.1
0.07
0.04
Plastic
1.2
1.1
0.9
1.1
1.5
Steel
2
1.6
1.7
1.9
2
Aluminium
0.1
0.07
0.06
0.1
0.2
E-Waste
0.012
0.01
0.01
0.2
0.01
Composting
0.05
–
–
–
0.3
Beverage Carton
–
0.006
0.003
0.003
0.003
Others
0.4
0.2
0.033
0.009
0.009
Total
9.7
11.3
12.4
10.5
9.9
0.14%
0.01%
0.44% 1.06% 1.59%
2.02%
11.87%
18.67%
64.21%
Beverage Carton
E-waste
Composting
Aluminium
Others
Glass
Plastic
Steeel
Paper
33
Leachate Rectification Programme
Leachate spillages during collection and transportation to the
disposal sites are considered as having a major impact on the
community in which we operate. To minimise this impact,
we have monitored our leachate containment system since
March 2004. Our special team comprises of experts and
specialists from the Research and Development (R&D) Division
and the Operations Division. The purpose of this Committee is
to investigate the root cause of spillages and provide solutions.
Our recent analysis shows that 80% of compactors were
experiencing leachate spillages problems, of which 19% are
known to be due to problems related to the conditions of other
parts of the compactors due to rain or washing water entering
into the compactors.
As part of our rectification steps, we have installed additional
leachate storage on all new compactors purchased. We continue
to refurbish and restore old compactors and purchase new
compactors that are able to cope with the significant increase of
leachate amounts produced by domestic solid wastes.
Transported Hazardous Waste
Among the scheduled Waste generated from operations in
HICOM-Teck See are paint sludge, waste thinner, empty cans
and cotton rags. Most of these toxic wastes are flammable.
The graph below shows the level of hazardous waste transported
from our operations.
Transported Hazardous Waste (tonnes)
- HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
Source of Leakage
2%
200
15%
158
150
43%
110
104
100
50
40%
0
Transportation
Compacting
Cornering
Others
07
08
09
DRB-Hicom Berhad
Sustainability
Report 2010
our
Environment:
34
continued
Energy Conservation and Management
DRB-HICOM values efficiency, as evident in our operation
management, to reduce the energy required to operate our
business. Energy efficiency benefits the environment and lowers
the total cost of ownership by reducing power consumption.
Our energy conservation initiatives include:
•Switching off computers and other electrical appliances
during lunch hour
•Employee awareness programme on energy saving
and cost efficiency
•Divisions individual target and monitoring system
on electricity usage
Energy-related greenhouse gas emissions are also tracked as
a measure of environmental impact. The table below shows the
electricity consumption for Wisma DRB-HICOM.
Total Energy
(Electricity) Consumption
CO² metric tonnes *
2005
3,731,452
2,078.46
2006
3,634,843
2,024.64
2007
3,207,577
1,786.65
2008
3,423,531
1,906.94
2009
3,505,991
1,952.87
* Estimates are based on the indirect Greenhouse Gas emissions
protocol of the World Business Council for Sustainable
Development and the World Resources Institute.
35
Wisma DRB-HICOM has achieved a total savings of 6.4% in
energy consumption throughout the five years period between
2005 and 2009.
The graphs below show the Energy Consumption and CO²
Emission from Energy Use in Holiday Inn Kuala Lumpur
Glenmarie for the three year period between 2007 and 2009
Electricity Consumption (kWh)
- Wisma DRB-HICOM
Energy Consumption (kWh)
- Holiday Inn Kuala Lumpur Glenmarie
7,000,000
4,000,000
3,731,452
3,634,843
6,700,277
3,423,531
3,505,911
3,200,000
6,910,277
6,664,722
5,600,000
3,207,577
2,400,000
4,200,000
1,600,000
2,800,000
800,000
1,400,000
0
05
06
07
08
09
0
07
08
09
CO2 Emission from Energy Use (tonnes)
- Holiday Inn Kuala Lumpur Glenmarie
7,000
5,600
4,117.5
4,200
3,992.4
3,971.2
2,800
1,400
0
07
08
09
DRB-Hicom Berhad
Sustainability
Report 2010
our
Environment:
36
continued
Energy Efficient Initiatives
Stakeholders who want to validate or develop custom
energy-efficient solutions can work directly with the
Company’s research team. We are in the process of identifying
technologies which deliver the most efficient solutions. One
of our subsidiaries, OSI, is purchasing mix argon gas which is
renewable. DRB-HICOM complies with the technology standards
and works with industry groups by supporting international
initiatives such as Earth Hour.
Water Comsumption (m3)
- Wisma DRB-HICOM
60,000
51,554
51,047
48,000
43,853
43,904
43,779
36,000
Water Conservation and Management
Syarikat Bekalan Air Selangor (SYABAS) supplies domestic
water to Wisma DRB-HICOM. Our environmental impact relating
to water use is relatively high due to the nature and size of
our operations. Actions to reduce water consumption included
the flow restriction devices on taps and the upgrading of toilet
cisterns. Air-cooling units have been installed in most of our
M&E subsidiaries. Most of the sewage water generated from the
Wisma DRB-HICOM is channelled to the centralised sewerage
networking system which is disposed of at the treatment plant
under Indah Water Consortium (IWK). During field construction
activity, environmental controls are implemented to manage soil,
waste and other materials to prevent them being washed into
natural waterways.
24,000
12,000
0
05
06
07
08
09
37
CLIMATE CHANGE AND OUR GREEN BUILDING INITIATIVES
Climate Change presents potential risks and opportunities to our business in the medium and long term. The Group has responded by
starting the Green Building Project initiative. The concept of green building brings together a vast array of practices and techniques
to reduce and ultimately eliminate the impacts of buildings on the environment and human health. DRB-HICOM has also introduced
energy and water efficiency targets and implemented initiatives to reduce greenhouse gas (GHG) emissions. Holiday Inn Kuala Lumpur
Glenmarie was assessed and benchmarked as meeting the requirements of the Green Globe Company Standards for Accommodation
– Business Hotel Sector in October 2008. Its achievement was further recognised by it obtaining the Bronze Benchmarked status in
April 2010 by the EarthCheck Certifications which is the world’s leading environmental practices monitoring programme, used by the
travel and tourism industry. The benchmarking process covers employees, guests, suppliers, contractors, agents and wholesalers.
Below is the summary of Holiday Inn Kuala Lumpur Glenmarie achievements against the EarthCheck Standard Benchmarking.
CriteriaSub-Criteria
CalculatedBaseline (BL)Achievements
EnergyEnergy Consumption
281.4 MJ / Guest Night
480 MJ / Guest Night
WaterWater Savings 63.7 Points
50 Points13.7 points better than the BL
WasteWaste sent to Landfill
13.7 L / Guest Night
4 L / Guest Night
Waste Recycled
60.1 Points
50 Points10.1 Points better than the BL
Community Commitment
62%
60%
Community Contributions
71.7 Points
50 Points21.7 Points better than the BL
PaperPaper Products
82.9 Points
50 Points32.9 Points better than the BL
Cleaning
90.5 Points
50 Points40.5 Points better than the BL
88.9 Points
50 Points38.9 Points better than the BL
Community
Cleaning Products
PesticidesPesticides Products
71% better than the BL
243.6% below the BL
2% better than the BL
Holiday Inn Kuala Lumpur Glenmarie is committed to integrating its Environment Management System (EMS) into its everyday
business activities and operations. It adheres to statutory environmental regulations by closely monitoring its work processes.
The Management team has appointed an EMS Committee as the Green Globe Coordinators, who are responsible for ensuring
ongoing environmental performance, identification and environmental risks, recording and monitoring of impacts and implementing
environmental and social sustainability measures.
Environmental Expenditures by Type – Alam Flora Sdn. Bhd.
Operating Cost ComponentDescriptionAmount
Environmental ManagementPollution Prevention, Monitoring, Auditing, Environmental Training, Safety and Health measures
Landfill Management
Operational Cost and Upgrading of Existing Landfills
Social ActivityEducational activities and Environmental Awareness Programmes
Recycling Activity
Recycling Expenses and 3Rs Awareness Programme
TOTAL
RM1,430,000.00
RM866,000.00
RM143,000.00
RM2,116,000.00
RM4,555,000.00
DRB-Hicom Berhad
Sustainability
Report 2010
our
Environment:
38
continued
BIODIVERSITY
OTHER ENVIRONMENTAL INITIATIVES
Honda Malaysia Sdn. Bhd. collaborated with WWF-Malaysia to
initiate a 5-year conservation project of the Sumatran Rhino,
in support of the Department of Wildlife and National Parks
(PERHILITAN), Perak State Parks Corporation, Sabah Wildlife
Department and the Yayasan Sabah Group. With a five million
Ringgit contribution from Honda Malaysia the fund enables the
Company to work closely with WWF-Malaysia and its partners in
the conservation project. The ‘Rhino Secure’ project is the first
and only corporate sponsorship solely dedicated to the Sumatran
Rhino, being the most endangered animal. Honda Malaysia
contributed a total of RM890,000.00 on this conservation project
in FYE 2010.
Emission of Ozone-Depleting Substances
Danum Valley in Sabah and Royal Belum in Perak were chosen
for the implementation of the ‘Rhino Rescue’ project because
most Sumatran Rhino activities have been recorded here in the
past 2 years.
The ozone layer is essential for the survival of humans and
other animals. Certain gases including CFCs and HCFCs damage
the ozone layer. As part of DRB-HICOM’s energy strategy,
the Company has introduced a Preventive Maintenance
programme to minimise breakdown cases which requires
recharging of refrigerant gases such as R12/22 [CFC/HCFC].
Green Purchasing
DRB-HICOM continues to uphold its Green Purchasing
Programme where we purchased more than 100,000
biodegradable plastic recycling bags. The bags were made
using tapioca compounds which are degradable and more
environmentally friendly.
Environmental Friendly Chemical
We ensure that only chemicals approved by the Department
of Chemistry Malaysia and our Environmental Management
Department (EMD) are used in any operation activities or
cleaning work.
Geographical Information System (GIS)
In 2004, GIS was extensively practiced to support Alam
Flora’s overseas tender bid such as Singapore, Das Island
and Mauritius. It also supports current mapping component
requirements for domestic operations. The successful integration
of GIS with Global Positioning System (GPS) has helped Alam
Flora to obtain a high degree of accuracy in monitoring its
environmental indicators.
39
Environmental Compliance for FYE 2010
INCIDENCE OF NON-COMPLIANCE
Regulatory Body
Category
and Achievements
We monitor our corporate risk on non-compliance of statutory
and regulatory requirements related to the environment as
categorised below:
Noise level – day timeDepartment of Yes
Environment (DOE)
- 65.0 dBA
•Environmental Quality Act 1974 on pollution
prevention and control
Noise level – night timeDepartment of Yes
Environment (DOE)
- 55.0 dBA
• Occupational Safety and Health Act 1994
Dust particulate Malaysian EnvironmentalYes
concentration
Quality (Clean Air)
• MercuryStandards - 0.4 g/Nm³
• Cadmium
•Lead
• Arsenic
• Zinc
• Copper
• Antimony
Air QualityRegulation 25 - Yes
Environmental Quality
(Clean Air) Regulations
1978
Metal substance Environmental QualityYes
concentration(Clean Air) Regulations
1978
Stack and Standard C –Yes
Genset EmissionRegulation 25,
Environmental Quality
(Clean Air) Regulations
1978
•Factory and Machinery Act 1967
•Road and Transport Act 1987 on noise and black
smoke emission
•Local Government Act 1976 on waste dumping policy
•Street, Drainage and Building Act 1974 on
spillage management
Two incidents of non-compliance occurred in Alam Flora
operations during FYE 2010. One incident was due to leachate
occurrence caused by heavy rain which resulted in the collapse
of the perimeter bund. In responding to this risk, Alam Flora
closed the landfill and repaired the earth bunds immediately.
In a separate incident, one of the vehicle’s smoke level exceeded
50 Hartridge Smoke Unit (HSU) as shown on the meter due to
ageing vehicles. Alam Flora has reduced the average vehicle
ageing by 10 years since March 2010.
DRB-HICOM conducts continuous cycle of risk assessment,
internal auditing and detailed recording of non-compliances
in addition to its commitment to these regulations. During the
FYE 2010, DRB-HICOM did not face any penalties for violations
of environment-related laws and regulations. The Group
complies with all significant environmental requirements under
the Department of Environment’s legal regulations. There were
no significant fines or penalties incurred for environmental
non-compliance during the course of operations.
DRB-Hicom Berhad
Sustainability
Report 2010
40
What matters most are lessons
of life that define our ability to
understand the feasibility of possibilities.
41
DRB-Hicom Berhad
Sustainability
Report 2010
42
our
Marketplace
DRB-HICOM’s marketplace involves achieving sustainability within the
supplier and customer chain in order to promote greater transparency and
accountability within internal and external stakeholders.
Within DRB-HICOM marketplace, the most important stakeholders are our
suppliers, vendors, contractors and customers. We understand the utmost
needs of our customers and consistently deliver quality and value-added
products and services in our business operations.
43
DRB-HICOM Manufacturing and Engineering Awards and Achievements in Financial Year 2009/2010
Automotive Component Manufacturers
PHN Industry Sdn. Bhd.
• Honda Supplier of The Year 2009/2010
• Best Quality Award from Toyota Boshuku UMW Sdn. Bhd. (TBU)
•Certificate of Excellence – Top 5 (Open Category) for Quality Management
Excellence Awards (QMEA) 2009 from The Ministry of International Trade
and Industry (MITI)
Oriental Summit Industries Sdn. Bhd.
• Toyota Outstanding Quality Performance Award
•Perodua Most Welcoming Vendor
Motorcycle Engine Assemblers
HICOM-Honda Manufacturing
•Appreciation Award from Kedah Industrial Skills and
Malaysia Sdn. Bhd. Management Development Centre
HICOM-Yamaha Manufacturing
•Quality Environmental (5S) Company Certification from Malaysia Productivity
Malaysia Sdn. Bhd. Corporation (MPC)
•Yamaha Green Partner Award
•National Award for Management Accounting (NAfMA) Best Practice
Automotive Assemblers
HICOM Automotive Manufacturers
•Awarded Custom Golden Clients Cukai Dalam Negeri (CGCCDN) FROM Kastam
Malaysia Sdn. Bhd. DiRaja Malaysia Pahang for 2009-2010 and 2010-2011
• ISO 9001:2000 Certification
• ISO/TS 16949 Certification
ISUZU HICOM Malaysia Sdn. Bhd.
• ISO 9001:2000 Certification
ENGAGEMENT WITH OUR SUPPLIERS AND VENDORS
DRB-HICOM manages risk related to its supply chain through
its Group Procurement Policy, Code of Ethics and Business
Practice. DRB-HICOM’s Group Procurement Policy sets
guidelines on the minimum standards expected for procurement
policies, procedures and systems. The Group Procurement
Policy covers all subsidiaries, jointly controlled entities and
associated companies. It also sets clear procedure and
procurement methods, relating to Request for Quotations (RFQ),
tender process and Group-Wide Price Agreements (GWPA).
The establishment of a Tendering System has resulted in
more transparent policies and guidelines. The Group’s overall
compliance has improved by 30% between December 2009 and
April 2010.
Suppliers are required to complete a vendor’s profile and
pre-qualifying evaluation form before they can be included in
DRB-HICOM’s vendors list. Group Companies are required to
evaluate the performance of at least a minimum of 50% of their
existing vendors every two years.
DRB-HICOM’s vendor evaluation includes:
•Production capability
• Delivery responsiveness
•Pricing
•Financial stability
•Expansion plans
DRB-Hicom Berhad
Sustainability
Report 2010
our
Marketplace:
44
continued
Investment and Procurement Practices: Human Rights
Screening and Training of Suppliers and Contractors
DRB-HICOM complies fully with national and international
laws and agreement in human rights and fair labour rights.
We conduct comprehensive suppliers and contractors
assessments in ensuring a fair and transparent procurement
practices among the group.
DRB-HICOM, through our subsidiaries, has integrated
its CR initiatives through our engagement with suppliers.
Some examples of initiatives that were conducted in 2009 include:
VendorPHN Industry Sdn. Bhd.
Development
HICOM-Teck See Manufacturing
Malaysia Sdn. Bhd.
Motosikal Dan Enjin Nasional Sdn. Bhd.
Honda Malaysia Sdn. Bhd.
HICOM-Honda Manufacturing
Malaysia Sdn. Bhd.
DRB-HICOM’s Ethics in Procurement Policy covers the prevention
of misuse of position within the organisation. This policy
deals with conflict of interest among parties, fair dealing and
confidentiality of information whereby employers must not use
confidential information for personal gain. Employees should
disclose any material facts that may give rise to a potential
conflict of interest. Gratuities in the form of gifts, bribes and
favours are forbidden among employees.
ICOM-Yamaha Manufacturing
H
Malaysia Sdn. Bhd.
HICOM Diecastings Sdn. Bhd.
ISUZU HICOM Malaysia Sdn. Bhd.
Vendor Programme Honda Malaysia Sdn. Bhd.
AppreciationHICOM Honda Manufacturing
Malaysia Sdn. Bhd.
Motosikal Dan Enjin Nasional Sdn. Bhd.
Dealer Team BuildingSuzuki Malaysia Automobile Sdn. Bhd.
Dealer AppreciationEON
ProgrammeSuzuki Malaysia Automobile Sdn. Bhd.
Automotive Corporation (Malaysia)
Sdn. Bhd.
Locally-based suppliers
Honda Malaysia Sdn. Bhd.
DRB-HICOM puts the collective interest of its Group of
Companies ahead of any subsidiary. It is our standard practice
to allocate at least 40% of our work to locally-based suppliers.
The Company has implemented a vendor development
programme which stipulates that all vendors must comply
with the Group Procurement Policy in addition to their internal
development programme.
Motosikal Dan Enjin Nasional Sdn. Bhd.
For high-volume purchases, vendors are assessed on
various parameters including their quality and environmental
performance. DRB-HICOM has implemented internal audits for
vendors where top performers are honoured with appreciation
and performance awards.
Suppliers’ Conference Honda Malaysia Sdn. Bhd.
Dealers’ Conference
Honda Malaysia Sdn. Bhd.
Customer LoyaltySuzuki Malaysia Automobile Sdn. Bhd.
Programme
Customer EducationUni.Asia General Insurance Berhad
Programme
Agency RecognitionUni.Asia Life Assurance Berhad
Programme
45
ENGAGEMENT WITH OUR CUSTOMERS
We engage with our customers to deliver high quality products
at maximum efficiency in delivery time and cost. DRB-HICOM
implements the Just-In-Time (JIT) system in its M&E divisions.
JIT is an inventory strategy that aims to improve a business’
return on investment by reducing in-process inventory and
associated carrying costs. This system has been introduced to
ensure the right information and materials are delivered.
Takt time refers to the maximum time per unit required to
produce a product in order to meet its customer demand.
The size of any supply batch may vary due to the processes’
cycle time, location of suppliers and weight or size of the
raw materials. A smaller batch size is encouraged for lesser
inventory which results in better cash flows.
The establishment of a Pull System in JIT helps to avoid the
tendency of overproduction by setting rules and signals to
regulate the supply of products or information. This system
allows a minimum buffer stock to ensure no disruption of supply
to the process when required.
Pull
Lower
Inventory
JIT
Batch
Size
Takt
Time
DRB-Hicom Berhad
46
Sustainability
Report 2010
our
Marketplace:
continued
Customer Satisfaction
As a recognised industry leader, DRB-HICOM is aware of its
responsibility of to meeting the high level of service and quality
product offerings expected by our customers. Our Customer
Relationship Management (CRM) programme provides guidelines
to all operating companies on their interactions with customers.
This is a strategy where DRB-HICOM interacts with customers,
clients and sales prospects. The implementation of CRM
has increased the Company’s market share, improved sales
productivity, achieved higher customer loyalty and retention
rates, reduced operating expenses and has resulted in a
higher profitability.
DRB-HICOM conducts customer satisfaction surveys in response
to customers’ expectations. Criteria assessed in this survey
include the quality and speed of services, pricing, complaints of
problems, contact person availability and company performance.
Customer satisfaction is ranked with scores from one to
five, with five being the highest customer satisfaction index.
Following the survey, corrective actions are taken to improve
the lower rank performances. The department with the lowest
ranking score is required to take corrective actions to improve
their performance. The progress of the corrective actions and
improvements are monitored by the head of customer service
or the department head. The Group conducts various customer
satisfaction surveys which are seen as essential to its current
M&E businesses.
The chart below outlines the steps involved in DRB-HICOM’s
Customer Survey System.
Survey
Objective
•To start a survey
outlining the key
objectives.
Information
Gathering
•Information could
be obtained from
the various fields
such as exploratory
research, survey
structure, question
types and sensitivity
and privacy.
Collecting
Feedback
•Feedback is obtained
from interviews,
appointments,
meetings, phone
calls, mails, fax,
email and online.
Customer survey is
often conducted on
an annual basis to
internal and external
customers.
Management
Action Plan
•Counter-measures
and corrective
actions by assigning
responsible person
or department.
•Setting time-line
for completion
and monitoring
performance.
47
Customer Return Rate in Parts Per Million (PPM)
Excellent product quality is one of our commitments to all our customers. DRB-HICOM continues to monitor the feedback and
responses that it receives regarding the quality of its products. The graphs below show the overall Customer Return Rate (CRR) of
HICOM-Teck See and PHN Industry over the past five years. Both graphs demonstrate that the CRR based on unsatisfactory products
have improved significantly and consistently over this period.
CRR of Hicom-Teck See Manufacturing Malaysia Sdn. Bhd.
Parts
Parts
PerPer
Million
Million
7,000
7,000
6,085
6,085
6,000
6,000
5,000
5,000
4,000
4,000
3,000
3,000
2,500
2,500
2,000
2,000 2,000
2,000
2,000
2,000
1,000
1,000
1,000
1,000
1,464
1,464
981981
150150
100100
100100
100100
100100
100100
100100
100100
100100
100100
100100
100100
100100
39 39
6 6
7 7
136136
4 4
0 0
0 0
0 0
0 0
0 0
40 40
20 20
11 11
0 0
238238
04 04 05 05 06 06 07 07 08 08 AprApr May
May Jun
Jun JulJul Aug
Aug Sep
Sep OctOct Nov
Nov Dec
Dec Jan
Jan Feb
Feb Mar
Mar
2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2010
2010 2010
2010
CRR of PHN Industry Sdn. Bhd.
Parts
Parts
PerPer
Million
Million
(PPM)
(PPM)
70 70
67 67
67 67
67 67
60 60
50 50
40 40
40 40
35 35
35 35
26 26
26 26
35 35
35 35
35 35
35 35
35 35
35 35
35 35
35 35
35 35
35 35
35 35
30 30
20 20
10 10
14 14
12 12
12 12
14 14
13 13
10 10
0 0
2 2
1 1
1 1
0 0
0 0
0 0
1 1
1 1
1 1
04 04 05 05 06 06 07 07 08 08 AprApr May
May Jun
Jun JulJul Aug
Aug Sep
Sep OctOct Nov
Nov Dec
Dec Jan
Jan Feb
Feb Mar
Mar
2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2009
2009 2010
2010 2010
2010
Actual
Actual
Target
Target
DRB-Hicom Berhad
48
Sustainability
Report 2010
our
Marketplace:
continued
Customer Privacy
DRB-HICOM’s CRM module limits access to detailed customer
contact lists. This secured layered access to data on clients is
instrumental in preventing any breaches of customer privacy.
Information affecting corporate bodies, customers and employees
cannot be disclosed in any manner without proper authorisation.
The obligation of employees to protect and preserve such
proprietary, confidential or sensitive information continues even
after leaving the service of the Company. Customer privacy is
protected and regulated throughout DRB-HICOM’s Code of Ethics
and Business Practice. There have not been any breaches in
customer privacy or loss of customer data during the period
under review.
PRODUCT LIFE-CYCLE – MANAGING THE HEALTH
AND SAFETY IMPACT
DRB-HICOM considers its health and safety challenges at every
stage of the product life-cycle, from development and design,
manufacturing and operations, to product use and recovery.
Our efforts are guided by the corporate health and safety policy
and governance set to continuously improve our product health
and safety performance.
KL Airport Services Sdn. Bhd. (KLAS) is one of DRB-HICOM’s
subsidiaries that offers in-flight catering services, ground
handling and cargo handling for the major airlines in Kuala
Lumpur International Airport (KLIA). Based on the international
recognised World Food Safety Guidelines, KLAS has achieved the
Hazard Analysis and Critical Control Points (HACCP) certification
for its health and safety standards of its product life-cycle.
HACCP is a systematic preventive approach to food safety and
pharmaceutical safety that addresses physical, chemical and
biological hazards as a means of prevention rather than finished
product inspection. Key actions or Critical Control Points (CCP)
is enforced by KLAS to eliminate the risk associated with any
hazards. CCP is practiced in all stages of food production and
preparation processes including packaging, storage, chilling
and distribution.
The diagram below shows various Critical Control Points (CCP)
being adopted in KLAS’s food preparation process including
cooking, chilling, storage and deliveries.
Receiving (CCP1)
Frozen Items
Thawing
Storage: raw fruits and
vegetable (CCP2)
Storage: raw meat (CCP2)
Storage: dairy and
ready-to-eat product (CCP2)
Raw food preparation
Storage (CCP2)
Plating of cold meals (CCP5)
Cooking (CCP3)
Cold Holding (CCP2)
Blast chilling (CCP4)
Tray setting (CCP5)
Portioning (CCP5)
Final holding (CCP2)
Dispatch & transport
49
Areas
Critical Actions
CP1 : Control at Food Receiving
• To verify safe food temperature control during transport from supplier
• Maximum temperature for chilled food is 8°C
•Frozen food must not show sign of thawing
CP2 : Control of Temperature Refrigerator
•To prevent growth of pathogenic microorganism to harmful levels
during storage
• Room temperature must not exceed 8°C
CP3 : Control of Food Cooking
•To ensure destruction or reduction to safe levels of pathogenic bacteria,
viruses and parasites
• Minimum required core temperature are:
Poultry 74°C
Seafood 65°C
Eggs 74°C
Meats 65°C
Dairy 72°C
CP4 : Control at Food Chilling
•To prevent harmful growth of vegetative pathogenic bacteria during post-cook
chilling process
•Food must be chilled to 5°C within 4 hours
CP5 : Control of Food Handling
•To prevent growth of pathogenic microorganisms to harmful
levels during handling
• The exposure to ambient temperature shall not exceed 45 minutes
•Food temperature must be less than 15°C
MARKETING COMMUNICATIONS AND MANAGEMENT
DRB-HICOM adopts CRM in its marketing and communications
with its customers, clients and the community. CRM strategically
manages all interactions between DRB-HICOM and its customers.
It integrates marketing, sales, service, operations and information
technology to deliver value-added products and services to its
customers more effectively.
DRB-HICOM’s Service Improvement Programme ensures its
services surpass customers’ expectations and guarantees their
overall satisfaction. This programme employs industry best
practice and provides systematic customer handling throughout
the group companies.
Products and Services Information
DRB-HICOM’s Dealership Customer Relationship Centre (DCRC)
supports all dealership departments by managing each customer
contact with the dealership throughout the entire ownership cycle
from follow-up after the sale to providing new vehicle information.
The DCRC is a single point of contact for the customer.
The DCRC provides a toll-free dealership number for customer
enquiries including scheduling service appointments, product
information, services and parts promotion. Our DCRC
management team also identifies the pattern in customers’
purchase histories to design the most effective method of
engagement in the future.
Compliance in Marketing and Communications
There have been no significant incidents of non-compliance
with regulations and voluntary codes relating to marketing
communications including advertising, promotion and
sponsorship during this period. The Group has not sold any
products in any barred markets within and outside Malaysia.
DRB-Hicom Berhad
50
Sustainability
Report 2010
our
Marketplace:
continued
PRODUCT SAFETY AND QUALITY MANAGEMENT
Quality Management Principles of DRB-HICOM
DRB-HICOM’s Manufacturing & Engineering (M&E) Division are
required to comply with the Integrated Management System
(IMS). The objective of IMS certification is to focus on satisfying
customers’ requirements and other stakeholders’ needs through
a systematic and structured business approach process.
One of DRB-HICOM’s subsidiaries, PHN Industry, has
been certified with ISO/TS 16949 which defines the system
requirement for an organisation in the automotive supply chain
and ISO 9001 which sets the quality guidelines for its
non-automotive and automotive products.
DRB-HICOM’s ‘Quality Right 1st Time Every Time’ initiative
adopts the Quality Management System (QMS) and the Six
Sigma certification standards. The framework achieves quality
improvement through various preventive activities. It covers the
quality of tools and manufacturing techniques. It also provides
guidelines for the quality assurance of its procedures and
systematic activities.
Customer
Focus
Leadership
Supplier
Relations
QUALITY
MANAGEMENT
People
Involvement
Factual
Decision
Making
Process
Approach
Continuous
Improvement
System
Approach
DRB-HICOM focuses on several key quality management
principles in its M&E Division.
The 10 Common Steps of Quality Improvement Team (QIT):
Step 10: Horizontal Replication
Step 09: Preventing Future Recurrence
Step 08: Project Verification
Step 07: Implementation
Step 06: Countermeasure
Step 05: Analysis
Step 04: Selection of Theme
Step 03: Define Present Losses
Step 02: Establish Schedule
Step 01: Model Selection
The 10 common steps of Quality
Improvement Team (QIT) are practiced
primarily by the management staff which
focuses on increasing work productivity
without compromising quality. The aim
of QIT is to reduce production costs by
ensuring a smooth production flow and
provide a timely delivery.
51
Key areas of Quality Improvement Team:
P – increase Productivity
Q – improve Quality/zero defect
C – reduction in Cost
D – on-time Delivery
S – Safety/zero accident
M – improve Morale
DRB-HICOM has implemented a Plan-Do-Check-Act (PDCA) cycle that encourages continuous improvement efforts. The four stages
in PDCA involve planning for improvements, trialling small scale test changes, a verification and validation stage, followed by the
implementation of the changes to improve overall performance. PDCA is used on an ongoing basis to analyse customer and supplier
mappings. The data is also used for geographical analysis, process mapping, standardisation and training for relevant stakeholders.
Deming Circle Plan
ACT to get
the greatest
benefit from the
changes
CHECK to see
if changes are
working and
to investigate
selected processes
Tools:Process Mapping
Process Stand
Ardisation Controlled
Reference Information
Formal Training For
Standard Processes
A
Act
C
Tools:Data Checksheets
Graphical Analysis
Control Charts
Key Performance
Indicators
Check
P
Plan
Tools:Customer/Supplier
Mapping Cause
& Effect Diagram
Flowchart Pareto
Analysis Brainstorming
Evaluation Matrix
PLAN for
changes to
bring about
improvement
Tools:Small-Group
Leadership Skills
Experiment Design
Conflict Resolution
On-Job Training
DO changes
on a small
scales first to
trial them
D
Do
Penalties for Non-compliance of Products and Services
DRB-HICOM has a comprehensive quality control system that is regularly evaluated and improved through its CRM process. There has
been no significant incidence of non-compliance with laws and regulations concerning the provision and use of DRB-HICOM’s products
and services during this period. In addition, the Group did not have any major incidents of non-compliance with regulations or its own
voluntary codes concerning the health and safety impacts on its life-cycle analysis.
DRB-Hicom Berhad
Sustainability
Report 2010
52
53
A conducive workplace encourages
one to go beyond and
out of the box in driven creativity.
DRB-Hicom Berhad
Sustainability
Report 2010
54
our
Workplace
Employment Diversity and Fair Pay Policy
Employment Diversity by Gender
30,000
18,947
25,000
17,919
18,013
20,000
15,000
EMPLOYMENT PRACTICES
10,000
Local Hiring Policy and Statement of Compliance
Our hiring policy gives priority to the local workforce to promote
Malaysia’s social and economic development. The policy does
not discriminate against age, disabilities and other aspects of
an individual’s background. We are pleased to report that there
have been no incidents of employee discrimination across our
operations during this reporting period.
7,162
5,000
0
4,561
4,568
07
08
09
Male
Female
55
Employment Diversity by Race
There are no disparities in pay between men and women.
We have a fair pay policy regardless of all levels of positions
and gender. Although there is no minimum wage law in
Malaysia, we benchmark our salary based on market scale and
provide wage levels that are within the upper market rates.
There is no discrimination in position and pay between men
and women at DRB-HICOM. Our salary ratio between men and
women is 1:1.
5.30%
7%
9.20%
Number of employees by age group *
Age Group
<30
30-40
40-50
>50
35
49
71
27
2009
Number of employees by gender *
78.50%
Female
Malay
India
88
Male
99
Number of employees by contract type *
Chinese
Others
PermanentNon-Permanent
177
* for Corporate Office Only
Employment Diversity by Type
19.60%
80.40%
Executive
Non-Executive
5
DRB-Hicom Berhad
56
Sustainability
Report 2010
our
Workplace:
continued
DRB-HICOM Workplace Mapping
Diversity of Women *
10
Employee
Recognition
8
6.3
6.1
6
6
Transparent
Promotion
Process
5.8
5.7
Cross Functional
Opportunities
4
1.9
2
1.4
05
0
1.6
1.7
1.3
06
07
08
Formal Training
and
Development
09
women in Management (%)
women in Top maangement (%)
Employee Turnover Rates (%) *
2007
2008
2009
Female
10
12
13
Male
20
21
18
<30
4
6
2
30-40
17
11
13
40-50
4
10
10
>50
5
6
6
By Gender
By Age Group
* for Corporate Office Only
Involvement
in Continuous
Improvement
57
DRB-HICOM Workplace Initiatives
HICOM-Teck See Manufacturing
•Family day for HICOM-Teck See staff and family
Malaysia Sdn. Bhd.
•Sponsoring of six staff for Diploma Course in ICAM
•Motivation course for all non-management staff for Shah Alam
and Tanjung Malim Plant
•Kuliah Agama for employees of HICOM-Teck See
•Introducing an in-house skill based training centre for employees
of HICOM-Teck See
• Contribution to staff on compassionate ground
PHN Industry Sdn. Bhd.
•Long Service and Zero MC Award
•Employee’s Welfare programme
• Health programme
•Employee Suggestion Scheme (ESS)
•Employee appreciation programme
Automotive Corporation (Malaysia) •Workplace safety campaign
Sdn. Bhd.
•Establishment of OSHE with participation from the management and employees
KL Airport Services Sdn. Bhd.
• Company contribution to Kelab Sukan
•Ergonomics Awareness Programme
• Ramp Safety Programme
Benefits Provided for Full-Time Employees
•Annual, medical, maternity, compassionate, and paternity leave (including serious illness, death of family members)
•First time marriage and pilgrimage leave for any religion
•Examination leave
•Prolonged illness leave – full pay for the first six months
• Medical, dental benefit (including dependent family – spouses and children)
•Health screening: once every two years for Executives aged above 40 years old, once every year for Executives aged above
50 years old
•Employees Provident Fund (EPF): For employees joining after 5 years, DRB-HICOM’s contribution increases up to 16%
•Professional membership: reimburse up to RM500.00 for senior manager level and above
• Housing loan interest rates subsidy up to 4%
• Critical illness coverage up to a maximum amount of RM50,000.00
• Allowance for company car use for general manager level and above
• Travel allowance and in-house sports club use
DRB-Hicom Berhad
Sustainability
Report 2010
our
Workplace:
58
continued
Staff Welfare Fund
Employee Satisfaction Index (ESI)
DRB-HICOM Staff Welfare Fund is a voluntary
contribution scheme from the management
and employees. It is not part of the Company
medical benefits. This fund is used in the event
of deaths of staff members or their children
and damage caused by natural disaster.
Our employee satisfaction survey is carried out annually
to measure employees’ satisfaction on their job and work
environment. This survey allows employees to comment on
the Company’s activities and benefits scheme.
The survey form measures employees’ feedback on the following:
• Top Management of the Company
•Understanding of Company Vision, Mission, Values and
business objectives
• Human Capital Development activities within the Company
•Salary and fringe benefits offered by the Company
•Facilities provided by the Company including canteen,
Surau and in-house clinic
•Understanding of DRB-HICOM’s manufacturing system
•The Company’s communication system (top-down, bottom-up
and communication matrix)
•Working environment
Questions include topics on skills, knowledge, leadership,
problem-solving and employee perception. Once approved by the
Group Managing Director and Head of Human Resource Division,
employees are required to complete this survey. The Operating
Committee will analyse the feedback and plan corrective actions.
The overall average employee satisfaction level rating in 2009 is
4.03 out of maximum rating of 6. This ESI is derived from the
responses received in the Employee Feedback Survey (EFS).
Highlights: 149 DRB-HICOM Children
Receive Cash Rewards
In June 2010, we paid a total of RM61,150.00 to
reward our employees’ children who obtained
outstanding results in their PMR, SPM and
STPM examinations. This initiative encourages
the promotion of educational excellence within
the Company, in-line with the Government’s
effort in producing high numbers of skilled and
knowledge-based workers. It is also part of
our efforts in giving back to the employees and
their families. Of the 149 students who received
awards, 82 were PMR students, 64 were SPM
students and 3 were STPM students.
Notice Period for Operational Change
Any operational changes occurring that may potentially affect
our employees will be communicated throughout the Group. The
Group Human Resource Division gives notice to all employees
via email or other electronic modes. These platforms are used
by the management to communicate updates and changes within
the Group. We recognise the importance of having a two-way
dialogue between the management and employees, regardless of
the size of the changes. We consult with our unions on ad-hoc
changes and respect our employees’ rights based on Malaysia’s
Industrial Relations Act 1967.
59
CONTINUOUS LEARNING AND DEVELOPMENT
We recognise our employees as the core asset to the Company
and believe in their lifelong learning. DRB-HICOM continues
to invest in human capital development to strengthen
their employability. The Board of Directors encourages
communications at all levels to help our employees think
and act as one cohesive organisation in the best interests
of the Company.
Training and Development
In FYE 2010, the average training expenses per employee
was RM4,131.00 and the average training hours per employee
in corporate office was 67.12.
New Employee Induction (two days)
New employees undergo an induction programme where
they are briefed on material issues including:
a) The Group’s Policy, Vision and Mission
b) Corporate Culture
On the Job Training (OJT) (three months)
OJT is an important way in which we assist our employees
in acquiring relevant knowledge and skills at work by
performing tasks under the close supervision of an
experienced trainer.
c) Work Regulations
Coverage:
d) Work Safety
•Production staff
e) Environmental Policy
• Maintenance and Engineering staff
f) Product Range
• Quality control staff
g) Production System
•Production support, such as logistics, planning, forklift
drivers and crane operators
h) Organisation Structure
i) Role and Task of the employee
Implementing OJT:
j) Group Procurement Policy
OJT programme consists of practical training (70%)
and non-practical module (30%). It ensures employees’
understanding on their actual role. OJT is conducted by
each Department Head.
The Duration of the induction shall be determined
by the personnel from respective functional areas.
Employees must qualify the induction programme
prior to joining the OJT.
Talent Development and Succession Planning
As part of our commitment to developing our employees and
ensuring their career progression, we actively promote our
Talent Development and Succession Planning initiative. High
potentials employees are identified to be developed as future
leaders in DRB-HICOM and subsidiaries. This initiative provides
employees the opportunity to achieve career growth and for the
Company to retain highly talented employees.
Each employee must qualify the OJT in order to pass the
probationary period. Manual evaluation procedures are
conducted to employees who fail to perform the OJT. All
employees are given three chances before being terminated.
The Group has implemented 14 ‘one-day assessment centre
sessions’ which is conducted by consultants. The assessment
covers all criteria required for an employee to become a leader
of the organisation. The outcome of the assessment represents
the employees’ competencies level and likelihood to move
through vertical and horizontal changes in the organisation.
The results are also used to develop each employee’s
development programme which includes training, coaching,
project assignments and rotational placements in various areas
within DRB-HICOM.
DRB-Hicom Berhad
Sustainability
Report 2010
our
Workplace:
60
continued
Skill Chart
Skill Chart is a method for monitoring and identifying employees’ ability. This method
helps managers to identify each employee’s skill and conduct a proper work schedule
accordingly. In developing the skill chart, we categorise the departments into smaller
sections for proper planning on monitoring, evaluation and training systems.
The managers identify their process flow and assign employees to each process.
This Skill Chart is updated a minimum of every six months.
Employee Competency Programme
Managers’ competencies mapping are assessed through our Assessment Centre
(AC) programme. Areas for improvement are identified during this AC exercise and
programmes are developed as a result to improve managing people skills.
A Key Performance Indicator (KPI) matrix is employed to quantify our financial and
non-financial targets. This matrix measures our success in reaching these targets.
The KPIs are monitored periodically which cover components of Financial, Future
Growths, Critical Priorities and Key Enablers. Variances which are identified during
this process are addressed. This structured approach is important as the achievement
of each employee’s KPIs directly affects the Company’s KPIs as a whole.
Attitude
Abilities
Competency
Perform to job efficiently
within stipulated time
Competency
Meets all commitments
in timely manner
Competency
Perform to job accurately
without error
Competency
Skill
Knowledge
Competency Development Assessment
DRB-HICOM has implemented a Competency Development Assessment to help
employees understand where their management competencies lie and identify
areas for improvement. Employees are assessed on their capability to use knowledge,
skills and abilities to perform “critical work functions”. This assessment includes:
•Evaluating employees’ performance and competencies
• Identifying knowledge and skill gaps
• Developing employees’ learning plans
• Delivering a customised training curriculum
61
All employees are encouraged to
participate in the Company’s Continuous
Improvement Programme (CIP). This
programme continues to assist the
Company in improving Quality, Cost,
Delivery, Safety and Morale (QCDSM)
through a better sense of belonging
among employees.
The implementation of CIP includes the following activities:
There are 2 types of CIP:
No.Activities
-Innovative Creative Circle (ICC):
Participated in by the shop-floor and
non-management staff.
1Education andFacilitator, leader
Training
and Group members
-Quality Improvement Team (QIT):
Participated in by the management staff.
2
Who is Involved?
Group FormationLeader and Group members
3Project
Proceedings
Management, facilitator, leader,
and Group members
4Project Evaluation
and Convention
Management, leader, Group
members and Panel of Judges
DRB-Hicom Berhad
Sustainability
Report 2010
our
Workplace:
62
continued
Employee Feedback Survey (EFS)
DRB-HICOM has conducted an annual Employee Feedback
Survey (EFS) since 2007. This survey offers an accurate
representation of employees’ behaviours, feelings and ideas
for improved organisational development. It is a two-way
communication channel between employees and the Company
whereby the management addresses the feedback received
from employees.
LABOUR RELATIONS AND MANAGEMENT
Employee Engagement – Employee Suggestion
Scheme (ESS)
This year’s EFS was conducted in March 2010 and 161 responses
were received out of 220 questionnaires that were distributed
(73.2% response rate). The responses show that employees
are proud to be part of the Company and are confident on
its success. They also believe in their capability but would
like to receive more feedback from the senior management.
The prices and service standards in the cafeteria obtained the
lowest satisfaction levels. In responding to this issue, we have
engaged a new cafeteria operator who provides better quality of
food and services with reasonable price.
DRB-HICOM’s ESS is an important part of its Total Quality
Management (TQM) activities. The scheme is practised to create
a highly motivated workforce through a collective effort of the
entire workforce. Our ESS Committee includes representatives
from management and non-management levels. The Committee
is responsible for enforcing the effective use of the scheme and
review its response. In FYE 2010, a high number of suggestions
were received and more than 50% of them were implemented
in a relatively short time. The success of this scheme is a
testament to our Total Employee Involvement (TEI).
The Group has implemented a Performance Management
System (PMS) to communicate employees’ performance at work.
Senior management conducts a mid-year and end-year review
to 100% of its employees. The Group’s PMS process includes
setting expectations for employee performance, maintaining
a dialogue between senior management and employees to
track performance gaps. Regular departmental meetings are
encouraged to monitor and set KPIs for managers.
Suggestions which involve cost savings are forwarded to the
Finance Department for verification. Inputs received are
displayed on the ESS Display Board to update employees on
the feedback progress. As the Group promotes a system of
employee-driven suggestions, it recognises employees who
propose rewarding suggestions.
No employees at DRB-HICOM corporate office are affiliated
with any unions. However, a large group of employees is
represented by 10 national unions in 19 DRB-HICOM subsidiaries
and 13 in-house unions in nine subsidiaries. We cooperate fully
with our employee representative groups and conduct regular
collective agreements and open dialogues.
Collective Bargaining Agreements
63
DRB-HICOM In-House Unions
Union
•Kesatuan Pekerja-Pekerja Alam Flora Sdn. Bhd.
CompanyMembers
Alam Flora Sdn. Bhd.
•Kesatuan Penyelia-Penyelia Alam Flora Sdn. Bhd.
•Kesatuan Pekerja- Pekerja DEFTECH
1917
210
DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) 95
•Kesatuan Pekerja-Pekerja EON SemenanjungEdaran Otomobil Nasional Berhad (EON)
540
•Kesatuan Jurujual EON Semenanjung
204
•Kesatuan Pekerja-Pekerja EON sabah
48
•Kesatuan Pekerja-Pekerja EON Sarawak
67
•Kesatuan Pekerja-Pekerja HICOM Engineering Sdn. Bhd.
HICOM Engineering Sdn. Bhd.
140
•Kesatuan Pekerja-Pekerja HICOM Honda Malaysia Sdn. Bhd.
HICOM-Honda Manufacturing Malaysia Sdn. Bhd.
310
•Kesatuan Pekerja-Pekerja Honda Malaysia Sdn. Bhd.
Honda Malaysia Sdn. Bhd.
750
•Kesatuan Pekerja-Pekerja MODENAS
Motosikal Dan Enjin Nasional Sdn. Bhd. (MODENAS)
485
•Kesatuan Pekerja-Pekerja PHN Industry Sdn. Bhd.PHN Industry Sdn. Bhd.
330
•Kesatuan Pegawai-Pegawai Bank Muamalat Malaysia Berhad
380
Bank Muamalat Malaysia Berhad
Total 5,476
DRB-Hicom Berhad
Sustainability
Report 2010
our
Workplace:
64
continued
OCCUPATIONAL SAFETY AND HEALTH
DRB-HICOM Group provides and maintains a safe and healthy
working environment for all employees and contractors. We have
implemented a series of comprehensive programmes aimed at
improving the level of awareness of occupational health and
safety. These awareness programmes have minimised the
level of occupational accidents and injuries among our workers.
The Group has set a target to achieve zero work accident and to
have all subsidiaries OHSAS 18001 certified.
Our Safety, Health and Environmental (SHE) policy clearly defines
the safety management system that includes the structuring of
the operating unit, planning activities, outlining safety procedures
and developing resources for the implementation of the SHE
policy. Operating units should comply with all SHE legislative
requirements, code of practices and guidelines.
DRB-HICOM has established a SHE Steering Committee
which includes senior management from various divisions.
The Committee is responsible for monitoring the implementation
of policies and best practices relating to health and safety issues
and ensuring compliance with applicable laws. 50% of
the Committee is represented by employees.
Each operating unit conducts training programmes on SHE policy
to create awareness on safety risks and precautionary steps.
The Group also introduced training programmes on hazard
risks including the Chemical Health Risk Assessment (CHRA),
crane operations and forklift operations. The effectiveness of
these training programmes is evaluated regularly.
Our corrective and preventive policy states that all serious
cases must be reported to the corporate office within 24 hours
of occurrence. The Emergency Response Team (ERT) in every
operating unit is trained to respond actively to these emergency
situations. The Safety and Health Officer (SHO) or the identified
personnel is responsible in ensuring the timely scheduling of
SHE audit.
Below is the list of subsidiaries that have obtained OHSAS18001
certification:
• HICOM Diecasting Sdn. Bhd.
• HICOM-Honda Manufacturing Malaysia Sdn. Bhd.
• HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
• HICOM-Yamaha Manufacturing Malaysia Sdn. Bhd.
• Oriental Summit Industries Sdn. Bhd.
•PHN Industry Sdn. Bhd.
Occupational Accidents – DRB-HICOM Group Companies
No. of FirstNo. ofNo. ofTotal No. ofNo. of Lost
Year
Aid CasesMinor AccidentsMajor AccidentsAccidentsTime Injury
2008
21
53
74
148
984
2009
21
52
59
132
956
65
OSH Topics Covered in Collective Agreements
Distribution of and Feedback on the Report
DRB-HICOM Safety, Health and Environmental Manual covers
comprehensive health and safety topics, which include:
•Review of an inventory of all occupation, critical task
analyses and procedures
•Results from the hazard identification and risk assessment
•Results from the environmental aspects and impact evaluations
•Accident or incident data analysis
•Feedback from workers and management
• Applicable regulations
• Training programmes on safety, health and environmental
This report is available to all stakeholders in hard copy
on request and can be downloaded from our website.
For further information and comments please contact:
Zanariah Mohd Ali
Corporate Responsibility Manager
Level 5, Wisma DRB-HICOM,
No.2, Jalan Usahawan U1/8, Seksyen U1,
40150 Shah Alam, Selangor Darul Ehsan,
Malaysia.
Tel : 603-2052 8000
Fax: 603-2052 8099
Awareness Training for Serious Diseases
Notes on Data Collation and Presentation
Although all employees are covered by medical insurance and
benefits, the Company is committed to preventing the spread
of any serious diseases. The case of Influenza A (H1N1) has
infected many Malaysian citizens. In responding to this issue,
DRB-HICOM conducted a comprehensive education programme,
equipping all employees with the provision of guidelines on
prevention approaches. Health screening programme was
conducted during the peak season of this virus spread.
The Company also displayed awareness posters at strategic
points of the building including all subsidiaries.
The compilation and presentation of this report is according to
GRI-G3 Guidelines.
EMPLOYEE PERFORMANCE – HUMAN RIGHTS
DRB-HICOM recognises that respecting the human rights of
employees is our most basic responsibility. We have introduced
our Human Resource Policy which covers human rights issues
such as policies on collective bargaining and discrimination.
This Policy is also incorporated in our Procurement practices,
with human rights screening as standard clauses in supplier
and contractor contracts. All our Human Rights practices are
monitored with regular internal audits. Our Human Rights
training programmes address issues on discrimination
and diversity policy. DRB-HICOM conducts training on Labour
Law to all employees including subsidiaries. Training includes
the Children and Young Person Act, the Employment Act,
the Industrial Relations Act and the Trade Union Act.
We outsource our security services to a security provider
specialist and have no control to include the securities
personnel in our human rights training.
We are pleased to report that there have been no significant
incidents of discrimination or risks to freedom of association
and collective bargaining. There were no incidents of violations
of human rights involving the rights of indigenous people at any
time in the company’s history.
We comply fully with The Children and Young Persons
[Employment] Act of Malaysia, which prohibits the employment
of children under the age of 14. There have been no reported
incidents or risks of child, forced or compulsory labour.
We considered the limitations in the availability of data or in the
case where stakeholders can not be involved or the availability
of any form of reportable information in our reporting process.
For our Sustainability Report 2010, we have put our utmost
effort on disclosure and in reporting all information we have
as comprehensively as possible. Where there are gaps in the
data, we have classified these as “partially reported”. This is
especially in the Environment and Workplace sections of the
Report, as we are still in the process of implementing systems
to monitor some indicators. In cases where we are not able to
provide detailed figures, we have included aggregate information
which we consider them to be the most material for the Group
and is a representative of our approach.
We are improving our data collection systems across our
operations to achieve a more comprehensive and accurate
data to be disclosed in future reports. With regards to
GHG Emissions, we have applied the GHG Protocol 2004
recommended by GRI from the World Business Council for
Sustainable Development and the World Resources Institute.
We are not able to report on specific areas of EN10 and EN20
as we do not have sufficient supporting data on these cases.
We will continue to improve our data collection system on other
environmental emissions and to make this available in our next
report. We have disclosed our total water discharged (EN21)
partially and we are in the process of developing our water
quality monitoring system. There is an absence in disclosure on
employee turnover rate by region (LA2) and we will make sure
to include our operations from inside and outside Malaysia when
measuring this indicator in the next report. The development
of these systems is given priority in our 2010-2011 Group
Agenda. We expect to be able to provide a more comprehensive
information and transparent reporting after these processes have
been fully implemented.
The Company has provided a Disclosure on Management Approach
(DMA) in each of the categories and profile disclosures. We are
able to provide full or partial data on 118 out of 120 Performance
Indicators. We believe the remaining indicators do not influence
the overall CR assessment of the Company.
DRB-Hicom Berhad
Sustainability
Report 2010
66
Income
Statements
for the financial year ended at 31 March 2010
Group
2010
RM’000
Company
2010
2009
RM’000RM’000
RM’000
2009
Revenue
6,314,134
6,101,427
323,223
231,475
Cost of sales
(5,099,605)
(5,201,320)
–
–
Gross profit
1,214,529
900,107
323,223
231,475
211,433
–
–
–
Other income
– gain on disposal of estates
– gain on disposal of investment in associated companies
–
567,481
–
–
– others
172,151
149,553
32,112
5,870
Selling and distribution costs
(144,073)
(141,848)
–
–
Administrative expenses
(742,965)
(519,111)
(44,706)
(24,577)
Other expenses
(113,437)
(219,359)
(13,860)
(46,224)
Finance costs
(68,566)
(95,655)
(28,765)
(43,327)
Share of results of jointly controlled entities (net of tax)
56,250
63,246
–
–
Share of results of associated companies (net of tax)
72,572
70,529
–
–
Profit before taxation
657,894
774,943
268,004
123,217
Taxation
(114,629)
(49,562)
(60,523)
(37,411)
Net profit for the financial year
543,265
725,381
207,481
85,806
67
GRI
Content index
GRI Reporting Area
CoreAdditionalStatus
Profile Disclosures
Strategy and Analysis
2
–
All Reported
Organisational Profile
10
–
All Reported
Report Profile
4
–
All Reported
Report Scope and Boundary
7
–
All Reported
GRI Context Index
1
–
All Reported
Assurance
1
–
All Reported
Governance
10
–
All Reported
Commitments to External Initiatives
3
–
All Reported
Stakeholder Engagement
4
–
All Reported
All Reported
DMA and Performance Indicators
Economic
7
2
All Reported
Social Performance : Labour Practices & Decent Work
9
5
All Reported
Social Performance : Human Rights
6
3
All Reported
Social Performance : Society
6
2
All Reported
Social Performance : Product Responsibility
4
4
All Reported
16/17
12/13
90
28
Environmental
TOTAL
Reported
DRB-Hicom Berhad
Sustainability
Report 2010
68
Profile
Disclosures
Section : AR – Annual Report 2010; FC – Front Cover; FC(i) – Inside Front Cover
Application : C – Core; A – Additional
Status : • Fully Reported; Partially Reported; x Not Reported
Profile Disclosures Status
Strategy and Analysis
1.1
1.2
Group Managing Director’s & Chairman’s StatementsP6-7
Description of key impacts, risks and opportunitiesP6-8
•
•
Organisational Profile
2.1 Name of the organisationFC
2.2 Primary brands, products and/or services
AR(13), P5
2.3 Operational structure of the organisationP4-5
2.4 Location of organisation’s headquartersP65
2.5 Number of countries where the organisation operates
AR(28-29), P4-5
2.6 Nature of ownership and legal form
AR(28-29), P4-5
2.7 Markets servedP4-5
2.8 Scale of the reporting organisationFC(i)
2.9 Significant changes during the reporting periodP6-9
2.10 Awards received in the reporting periodP7, P43
•
•
•
•
•
•
•
•
•
•
Report Profile
3.1
3.2
3.3
3.4
Reporting period for information providedFC(i)
Date of most recent previous reportFC(i)
Reporting cycleFC(i)
Contact point for questions regarding the report or its contentsP65
•
•
•
•
Report Scope and Boundary
3.5 Process for defining report contentFC(i)
3.6 Boundary of the report FC(i), P9
3.7 Specific limitations on the scope or boundary of the reportFC(i), P9
3.8 Basis for reporting on joint ventures, subsidiaries etcFC(i), P4-5, P9
3.9 Data measurement techniques and the basis of calculationsP31-37, P58
3.10 Explanation of the effect of any re-statement of informationP6-7, P65
3.11 Significant changes from previous reporting periods FC(i), P6-7
•
•
•
•
•
•
•
GRI Content Index
3.12 Table identifying the location of the Standard Disclosures P67
•
Assurance
Policy and current practice on external assuranceP74-76
•
69
Profile Disclosures Status
Governance 4.1 Governance structure of the organisationP12
4.2 Status of the Chair of the BoardP12
4.3 Independent and/or non-executive Board membersP12
4.4 Mechanisms to provide advice to the Board AR(96-97), P13
4.5 Link between compensation and performance of the Board
AR(100-102), P13
4.6 Avoiding conflicts of interestP15
4.7 Qualifications and expertise of the BoardP12
4.8 Mission or values, codes of conduct and principlesFC(i), P12, P25, P43
4.9 Management of CR performanceP6-9, P67
4.10 Evaluating the performance of the BoardP12-14
•
•
•
•
•
•
•
•
•
•
Commitments to External Initiatives
4.11 Addressing the precautionary approach or principleP14-15, P45, P58
4.12 External CR principles P7, P39, P43, P48
4.13 Memberships of associations P39, P63
•
•
•
Stakeholder Engagement
4.14
4.15
4.16
4.17
List of stakeholder groups engaged by the organisation P8
Basis for identification and selection of stakeholders P7-8
Approaches to stakeholder engagementP8-9
Key topics and concerns raised by stakeholdersP8
•
•
•
•
DRB-Hicom Berhad
Sustainability
Report 2010
70
DMA and
Performance Data
Section : AR – Annual Report 2010; FC – Front Cover; FC(i) – Inside Front Cover
Application: C – Core; A – Additional
Status : • Fully Reported; n Partially Reported; x Not Reported
SectionStatus
ECONOMIC
Disclosure on Management Approach
P18-25, P66
Economic Performance
EC1Economic value generated and distributed
EC2 Risks and opportunities due to climate change
EC3 Coverage of the defined benefit plan obligations
EC4Significant financial assistance from government
CP6, P66
CP37
CP57
CP25
•
•
•
•
Market Presence
EC5Standard entry level wage vs. local minimum wage
EC6Spending on locally-based suppliers
EC7Local hiring policies
AP55
CP44
CP44, P54
•
•
•
Indirect Economic Impacts
EC8 Investments and services primarily for public benefit
EC9 Indirect economic impacts CP18-25
AP25
Disclosure on Management Approach
•
•
P54-65
Employment
LA1Employment type, employment contract and region LA2Employee turnover by age group, gender and region
LA3 Benefits provided to full-time employees
CP54-56
CP56
AP57
•
n
•
Labour/Management Relations
LA4 Collective bargaining agreements
LA5Notice period for operational change
CP62-63
CP58
•
•
Occupational Safety and Health
LA6
LA7
LA8
LA9
% workforce represented in OSH committees
OSH injury and accident statistics Awareness training for serious diseases
OSH topics covered in collective agreements AP64
CP64
CP65
AP65
•
•
•
•
Training and Education
LA10 Average hours of training per year per employee LA11Skills management and lifelong learning LA12 % of employees with regular reviews
CP59
AP59-61
AP59-61
•
•
•
Diversity and Equal Opportunity
LA13 Indicators of employee and Board diversity
LA14 Basic salary men vs. women
CP54-56
CP55
•
•
71
SectionStatus
SOCIAL PERFORMANCE: HUMAN RIGHTS
Disclosure on Management Approach
P44, P54-55, P62-65
Investment and Procurement Practices
HR1 Agreements with human rights clauses or screening
HR2 Human rights screening of suppliers and contractors
HR3 Human rights training
CP65
CP44
AP65
•
•
•
Non-Discrimination
HR4 Incidents of discrimination and actions taken
CP54-55, P65
•
Freedom of Association and Collective Bargaining
HR5 Risks to freedom of association and collective bargaining
CP62-63
•
Child Labour
HR6 Risk of incidents of child labour
CP65
•
Forced and Compulsory Labour
HR7 Risk of incidents of forced or compulsory labour
CP65
•
Security Practices
HR8Security personnel trained human rights issues
AP65
•
Indigenous Rights
HR9Violations involving rights of indigenous people
AP65
SOCIAL PERFORMANCE: SOCIETY
Disclosure on Management Approach
•
P18-25
Community
SO1 Impacts of operations on communities
CP25
•
Corruption
SO2 Risks related to corruption
SO3 Training in anti-corruption policies and procedures
SO4 Actions taken in response to incidents of corruption
CP25
CP25
CP25
•
•
•
Public Policy
SO5Public policy development and lobbying
SO6 Contributions to political organisations
CP25
AP25
•
•
Anti-competitive behaviour
SO7 Anti-competitive, anti-trust and monopoly penalties
AP25
•
Compliance
SO8Penalties for non-compliance with laws and regulations
AP25
•
DRB-Hicom Berhad
Sustainability
Report 2010
72
DMA and
performance Data:
continued
SectionStatus
SOCIAL PERFORMACE: PRODUCT SAFETY
Disclosure on Management Approach
P42-51
Customer Health and Safety
PR1Life-Cycle stages – health and safety impacts
PR2 Incidents of non-compliance
CP48-49
AP51
•
•
Products and Service Labelling
PR3 Type of product and service information
PR4 Incidents of non-compliance
PR5 Customer satisfaction systems
CP49
AP49
AP46, P49
•
•
•
Marketing Communications
PR6 Compliance in marketing, communications etc.
PR7 Incidents of non-compliance
CP49
AP49
•
•
Customer Privacy
PR8Substantiated complaints breaches of customer privacy
AP48
•
Compliance
PR9Penalties for non-compliance of products and services
CP51
•
ENVRONMENTAL
Disclosure on Management Approach
P28-39
Materials
EN1 Materials used by weight or volume
CP31
EN2 % of input materials that are recycled
CP31
•
•
Energy
EN3 Direct energy consumption by primary source
EN4 Indirect energy consumption by primary source
EN5Energy conservation and efficiency improvements
EN6Energy-efficient or renewable energy
EN7 Reducing indirect energy consumption
CP34-35
CP34-35
AP34-36
AP36
AP34-36
•
•
•
•
•
CP36
AP36
A
-
•
•
x
Water
EN8 Total water withdrawal by source
EN9Significant impact of withdrawal of water
EN10% and total volume of water recycled and reused
Biodiversity
EN11Protected areas and areas of high biodiversity value
EN12Impact on biodiversity
EN13Habitats protected or restored.
EN14Managing impacts on biodiversity.
EN15Protected species with habitats in areas of operations
CP38
CP38
AP38
AP38
AP38
•
•
•
•
•
73
SectionStatus
Emissions Effluents and Waste
EN16Direct and indirect greenhouse gas emissions
EN17Other relevant indirect greenhouse gas emissions
EN18Greenhouse gas emissions and reductions achieved
EN19Emissions of ozone-depleting substances
EN20NOx, SOx and other significant air emissions
EN21Total water discharge by quality and destination
EN22Total weight of waste by type and disposal method
EN23Total number and volume of significant spills
EN24Transported hazardous waste
EN25Water bodies affected discharge and runoff
CP34
CP34
AP34
CP38
C
-
CP36
CP31-32
CP33
AP33
AP36
•
•
•
•
x
n
•
•
•
•
Products and Services
EN26Environmental impacts of products and services
EN27% of products and packaging reclaimed
CP28-39
CP31
•
•
Compliance
EN28Penalties for environmental non-compliance
CP39
•
Transport
EN29Environmental impacts of transporting products
AP33, P39
•
AP37
•
Overall
EN30Total environmental expenditures by type
DRB-Hicom Berhad
Sustainability
Report 2010
74
Assurance
Statement
enquiries@oww-consulting.com
www.oww-consulting.com
Assurance Statement
DRB-HICOM BERHAD
(Company No: 203430-W)
Introduction
OWW Consulting Sdn Bhd (OWW) is a specialist in Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI).
We were engaged by DRB-HICOM Berhad (“DRB-HICOM”) to provide assurance services for their Sustainability Report 2010
(the “Report”). This is the first year in which we have conducted assurance of DRB-HICOM’s Sustainability Report.
The Report and its contents are the exclusive responsibility of DRB-HICOM. Our responsibility is to perform limited assurance
procedures over the Report and underlying processes within the scope set out below:
•Economic
•Social Performance: Labour Practices & Decent Work
•Social Performance: Human Rights
•Social Performance: Society
•Social Performance: Product Responsibility
•Environmental
In each case verification was conducted through low-level assurance via information provided by DRB-HICOM.
It is agreed that DRB-HICOM expects to be able to provide a response to each of the GRI-G3 Guideline Protocols and to provide an A+
or Advanced Application Level which requires reporting on each of the GRI-G3 indicators, even if the report is an omission statement.
Exclusions from the scope of our work
Excluded from the scope of our work is information relating to:
•Statements of commitment or intention to undertake action in the future;
•Statements of opinion, belief or aspiration;
•Information in internal or external documents referred to in the Report, except insofar as we have viewed their existence as part
of the assurance process.
Basis of our opinion
In conducting this engagement we have considered the principles of balance, comparability, accuracy, timeliness, clarity, relevance and
reliability as in the Global Reporting Initiative (GRI) G3 Guidelines.
We have also taken into account the principles of independence of assurance in the GRI-G3 Guidelines and have been mindful of the
AA1000AS and the the International Standard on Assurance Engagements (ISAE 3000) although we have not been asked to apply these
standards directly.
We have conducted this engagement to provide a reasonable rather than an absolute level of assurance and we believe that the work
conducted and described herein provides a reasonable basis for our conclusions.
OWW Consulting Sdn. Bhd. (Registration No.: 739490-K)
Suite 2B-12-13 Block 2B, Plaza Sentral, 2 Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia.
Tel: +603 2261 4310, Fax: +603 2261 4359
75
Our review included the following activities:
•Interviews and one-to-one meetings with relevant personnel at corporate and subsidiaries level responsible for the information
in the Report;
•Interviews and one-to-one meetings with relevant external stakeholders related to DRB-HICOM activities, including employees,
suppliers and representatives from Yayasan Albukhary;
•Documentary evidence was reviewed from communications meant for both internal and external circulation but emanating from
within DRB-HICOM. This comprised of manually generated internal reports, reports generated from internal specialist management
information systems, performance data, internal policies, established codes of conduct, operating manual, internal newsletters,
safety procedures and the annual audited financial reports of DRB-HICOM;
•Observed related facilities and areas including notice boards, management offices, traffic monitoring centre;
•A review of figures for all direct and indirect greenhouse gas (CO2) emissions and reductions (EN16, 17 & 18) as well as for
economic value generated (EC1) to ascertain the accuracy of the calculation of the figures reported;
•Challenges to the Corporate Responsibility (CR) related statements and claims made in the Report.
During our investigation we discussed the necessary changes in the Report with DRB-HICOM personnel and determined that these
changes have been adequately incorporated into the final version. We relied on representations made to us during the course of our
assurance work by DRB-HICOM personnel.
Information in the Report that is directly sourced from DRB-HICOM Annual Reports is considered to be reliable based on the audit
statement of the Independent Chartered Accountant and Registered Auditor to these statements.
We provided advice on which data is necessary and how this data should be compiled to comply with the GRI-G3 Guidelines. All data
and corrections were provided directly by DRB-HICOM staff. In the same reporting period we have not provided any other advisory or
other work for DRB-HICOM which may have been used in this report.
Conclusions
1.In our opinion, the Report meets the content and quality requirements of the Global Reporting Initiative Sustainability Reporting
Guidelines (Version G-3);
2.The Report provides a fair representation of DRB-HICOM’s social accounting and reporting activity for the period covered by
the Report;
3.The information in the Report is reliable and free from significant bias;
4.DRB-HICOM has processes in place for identifying, understanding and managing its environmental and social responsibilities and
for capturing, understanding and responding to the views of its main stakeholders;
5.In our opinion the report contains new information in each domain which we believe is a fair and balanced reflection of the efforts
of DRB-HICOM to develop and improve their approach to sustainability and reporting. It has also reflects the Company’s efforts to
achieving better transparency, covering wider stakeholder groups.
OWW Consulting Sdn. Bhd. (Registration No.: 739490-K)
Suite 2B-12-13 Block 2B, Plaza Sentral, 2 Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia.
Tel: +603 2261 4310, Fax: +603 2261 4359
DRB-Hicom Berhad
Sustainability
Report 2010
Assurance
Statement:
76
continued
Recommendations
In the context of future CSR Reporting at DRB-HICOM, we recommend that the company:
•Continues to monitor the use of performance indicators among all subsidiaries;
•Continues to improve the scope and quality of measurement and reporting of environmental data especially in water management,
and to improve workplace data in employee turnover rate;
•Introduces clearer links between CR issues and financial performance;
•Extends the use of impact measures such as Social Return on Investment (SROI) and introduces the use of Environmental Return
on Investment (EROI);
•Implements alternative energy programmes and GHG reduction programmes to reduce overall GHG equivalent emissions from the
Financial Year End 2010 baseline and to calculate the Group’s footprint level;
•Introduces processes for the ongoing monitoring, measurement and reporting of DRB-HICOM against material indicators and
targets to demonstrate continuous commitment to the reporting process and responding to stakeholder interests
Considerations and limitations
In relation to our assurance work and conclusions, the following considerations and limitations should be noted:
•Certain information is excluded from the scope of our assurance work, as stated above and in the Report itself;
•Due to its nature and the methods used for determining, calculating or estimating such data, environmental and social data are
subject to inherent limitations. Therefore this assurance statement should not be relied upon to detect all errors, omissions or
misstatements in the Report.
•The assurance statement cannot guarantee the quality of social accounting and reporting processes used by DRB-HICOM.
11th August 2010
OWW Consulting Sdn Bhd
Dr Geoffrey Williams
Chief Executive Officer
Statement by OWW Consulting Sdn Bhd on Independence, Objectivity and Capability
OWW Consulting Sdn Bhd (OWW) is a specialist in Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI)
with established experience in providing independent CSR advisory, reporting and assurance services.
OWW Consulting has implemented a Code of Conduct in Assurance and Assessment and a Code of Ethics across our company.
Our Code requires that that all of our employees maintain high ethical standards and makes explicit reference to the independence
and objectivity of our assurance and assessment engagements which we believe conform to emerging international best practice.
Our assurance team conducting the work for this report have experience in conducting engagements of this type for sustainability
reports, systems and processes. They are familiar with current guidelines and best practice and update their experience on a
regular basis.
OWW Consulting Sdn. Bhd. (Registration No.: 739490-K)
Suite 2B-12-13 Block 2B, Plaza Sentral, 2 Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia.
Tel: +603 2261 4310, Fax: +603 2261 4359