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SERVICES - MALAYSIASTOCK.BIZ
DRB-HICOM                                                                                                                    Annual Report
BERHAD                                                                                                                               2018

Services
       Sector
Under DRB-HICOM’s Services Sector, we offer postal and logistics services, as
well as vehicle inspection, waste management, environmental services and
banking. Our education arm, meanwhile, comprises DRB-HICOM University of
Automotive Malaysia, the only tertiary institution in the region that is built by
the industry, for the industry with a focus towards automotive engineering.
POSTAL AND LOGISTICS

POS MALAYSIA BERHAD (POS MALAYSIA)

Pos Malaysia is the national postal organisation which,                agents, 95 Pos Laju outlets and 35 Pos Laju kiosks
today, is transforming into an end-to-end logistics services           nationwide. A total of 14 new Pos Laju outlets and kiosks
provider. With a history of more than 200 years, it has                were opened while 120 new self-service terminals (EziBox
over 3,700 touchpoints nationwide, and Pos Malaysia’s                  parcel locker stations and EziDrop terminals) were installed
reach extends from major cities to the most remote rural               at high footfall areas for added customer convenience. This
areas. Its complete distribution network supports a suite              brought the total number of self-service terminals to 210.
of e-Commerce solutions, from last mile delivery to
warehousing, logistics up to fulfilment operations.

Included in the vast network are 691 post offices and
95 Pos Laju outlets as well as the first and last mile
capabilities of its subsidiaries - Pos Aviation Sdn. Bhd.
("Pos Aviation"), Pos Air Cargo Express Sdn. Bhd. ("Pos ACE")
and Pos Logistics Berhad ("Pos Logistics"). Its services
are categorised broadly into Courier, Express and Parcel
("CEP"), Postal Services, International Business, Aviation,
Logistics and Others.

In FY2017/18, Pos Malaysia’s revenue increased by 18.7%
to RM2.5 billion, driven mainly by CEP business growth
and the inclusion of full-year revenues from Pos Aviation
and Pos Logistics (as compared to six months’ revenue in
FY2016/17). Although higher operating costs resulted in a
8.7% decline in PBT to RM117.3 million, the Group’s profit
after tax increased by 14.1% to RM93.3 million as a result
of a tax incentive for the Pos Aviation Group.

The CEP business – under the Pos Laju brand – dominates
about 40% of the domestic market with the widest network
coverage and largest courier fleet. During the financial year,
Pos Malaysia delivered 30% more courier items than the
previous year through its 691 post offices, 162 appointed

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DRB-HICOM                                                                                                                Annual Report
BERHAD                                                                                                                           2018

In view of growing e-Commerce, Pos Malaysia is upgrading        Revenue from postal services continued to decline as a
the automated processing capacity of its Integrated Parcel      result of decreasing mail volume and lower commissions
Centre ("IPC") in Shah Alam from 112,000 items per day          from the retail business. In mitigation, Pos Malaysia plans to
to 300,000 items per day. The upgrade is expected to be         expand its e-presentment solutions offered by subsidiary,
completed by August 2018. Meanwhile a second IPC is             DataPos, to customers migrating from physical statements
being developed in the Kuala Lumpur International Airport       to digital ones. It will also promote registered mail and
(KLIA) area; and once fully operational, will double Pos        Flexi-Pack products for lower value e-Commerce items that
Malaysia’s processing capacity.                                 do not need express last-mile delivery. In addition, it plans
                                                                to relocate as many Pos Malaysia outlets as possible into
Further enhancing its CEP services, Pos Malaysia launched       shopping malls to increase the retail element of its postal
a number of new products. These included EziFulfilment –        services such as bill payments, road tax and driving license
providing end-to-end e-Commerce services to SMEs; Cash-         renewals.
on-Delivery ("COD") and Credit Card-on-Delivery ("CCOD")
– allowing customers to order items online and pay on           The International Business consists mainly of the
delivery; and Xpres Drop, an enhanced and rebranded Pos         transhipment of e-Commerce items, mainly originating
Express Service offering affordable courier service to micro    from China, through the postal network. To enhance this
entrepreneurs. Additionally, customers can now purchase         business, Pos Malaysia is placing greater efforts to widen
Pos Laju Shield insurance, provided in collaboration with       its customer base, with a focus on offering more options to
Zurich Takaful, to cover valuable items delivered using Pos     meet the e-Commerce needs of those dealing with higher
Laju.                                                           value e-Commerce items.

                                                                Two key businesses under Pos Malaysia’s Other Services
                                                                are the one-stop Pos Ar-Rahnu Sdn. Bhd. ("Pos Ar-Rahnu")
                                                                gold centres and digital certification provided by Pos
                                                                Digicert Sdn. Bhd. ("Pos Digicert"). Pos Ar-Rahnu currently
                                                                operates 78 outlets and plans to add another seven in the
                                                                current financial year, while Pos Digicert is developing new
                                                                products and services to add to its stable of offerings.

                                                                Pos Aviation Sdn. Bhd. ("Pos Aviation"), a wholly-owned
                                                                subsidiary of Pos Malaysia, is a licensed independent
                                                                ground handler offering a comprehensive range of services
                                                                including inflight catering, aircraft maintenance and
                                                                engineering, ground handling and air-cargo handling.

                                                                Its revenue increased from RM135.19 million (for six
                                                                months in FY2016/17) to RM275.2 million for the full
                                                                FY2017/18. On a prorated basis, the aviation business
                                                                registered a modest 1.9% decline in revenue. Although
                                                                the air cargo handling business more than doubled due
                                                                to higher volume, this was offset by lower revenue from
                                                                inflight catering and ground handling as competitors
                                                                gained market share.

                                                                To improve its value proposition, Pos Aviation is enhancing
                                                                its customer relationship management through Key
                                                                Account Management. It is also implementing various IT

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DRB-HICOM                                                                                                                 Annual Report
BERHAD                                                                                                                            2018

platforms for integrated resource management and cargo
handling. In addition, Pos Aviation is looking to outsource
the management of aircraft handling equipment and to
introduce mobile apps for passenger-based services such
as flight check-in and mishandled baggage.

Pos Logistics, also a wholly-owned subsidiary, offers
general logistics, automotive logistics, project logistics,
freight management, e-Commerce logistics, marine logistics
and supply chain solutions. It’s revenue increased from
RM188.7 million (for six months in FY2016/17) to RM424.7
million for the full financial year under review. Strong
revenue growth was seen in the second half of FY2017/18
mainly due to the project logistics business serving the
Refinery and Petroleum Integrated Development ("RAPID")
project in Johor and coal transportation services for TNB
                                                                    incinerator, MRF and transfer station, Cleansing Services,
Fuel Sdn. Bhd.
                                                                    Green and Energy Sustainability Consultancy Services,
                                                                    Waste Water Treatment Services, Recycling and Collection
Going forward, Pos Logistics will focus on rationalisation
                                                                    of Industrial Scrap Services through its wholly-owned
and optimisation of warehouse space, entering the bulk
                                                                    subsidiary, DRB-HICOM Environmental Services Sdn. Bhd.
commodity (raw sugar, etc.) transport sector, and the
                                                                    ("DHES").
expansion of e-commerce logistics services to enhance the
sustainability of the Group’s logistics business.
                                                                    Along with continuous expansion in services offered and
                                                                    conscientious efforts to operate efficiently at optimum cost,
CONCESSIONAIRES
                                                                    Alam Flora has seen both its revenue and profit increase
                                                                    steadily over the years. In FY2017/18, revenue grew by
ALAM FLORA SDN. BHD. ("ALAM FLORA")
                                                                    9.0% to RM812.96 million, helping to boost PBZT by 5.6%
                                                                    to RM99.66 million. Operational and cost efficiencies have
Alam Flora provides solid waste and public cleansing
                                                                    been enhanced through the mechanisation and automation
services in Kuala Lumpur, Putrajaya and Pahang under a
                                                                    of a growing number of functions via strategic investments
22-year concession agreement with the Government of
                                                                    in the best technologies and innovation.
Malaysia until 31 August 2033. Outside of this concession,
it extends Integrated Facilities and Assets Management
                                                                    Driven by an overriding motive to always offer value-added
Services, Waste Facility Management such as landfill,
                                                                    services, this year the company adopted an integrated
                                                                    monitoring system – MFlora – that combines the Supervisor
                                                                    Monitoring System with the Vehicle Monitoring System and

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DRB-HICOM                                                                                                                Annual Report
BERHAD                                                                                                                           2018

Customer Relations Management. With MFlora, Alam Flora is
able to schedule collection services, plan effective routes,
ensure the availability of suitable vehicles, equipment and
manpower as well as organise collection methods – all
under one platform.

Meanwhile, DHES has its own strategic roadmap to keep
enhancing its services and grow its business. Targets set for
the current financial year include:

   • Diversification into waste processes & solutions
   • Expansion of integrated facilities management
   • Diversification and expansion into downstream waste
     management
   • Technology innovation & value-added services
   • Expansion of business via acquisitions & joint
     ventures

PUSPAKOM SDN. BHD. ("PUSPAKOM")

PUSPAKOM has for the last two decades been undertaking           online appointment and payment system that guarantees
all mandatory inspections of commercial and public               service time within 60 minutes; and a Queue Management
vehicles in Malaysia to ensure they are roadworthy and           System ("QMS") to shorten the waiting time of walk-in
safe. In addition, it provides inspection services for hire-     customers.
purchase financing, ownership transfer and the registration
of imported vehicles under its suite of offerings for private    In terms of service quality, PUSPAKOM extended the use
vehicles.                                                        of tablets in the inspection process to all inspection
                                                                 centres and mobile teams, thus eliminating human errors
The lower TIV in FY2017/18 was reflected in a slight             and increasing the integrity of its inspection activities. It
contraction of PUSPAKOM’s mobile services and Hire               has also created a digital link between its off-site centres
Purchase Inspection ("HPI"), leading to a 0.9% drop in the       to a Centralised Monitoring Centre ("CMC") for greater
company’s revenue to RM140.13 million. Meanwhile, higher         control and oversight. This has been complemented by an
operating costs in the face of inflationary pressure and         upgraded Computerized Automated Vehicles Inspection
impact from new terms in a renewed Collective Agreement          IT System ("CAVIS"), strengthening the integrity of its
contributed to a 44.2% decrease in PBZT to RM8.12 million.       inspection data. PUSPAKOM’s e-Management Dashboard
                                                                 ("PMD"), meanwhile, has been enhanced to enable real-
Motivated by the need to expand its business to maintain         time performance monitoring.
both top and bottom lines, the year saw PUSPAKOM launch
insurance sales and renewal services, with imminent plans        Going forward, PUSPAKOM expects revenue to increase
to extend into related services such as road tax renewal.        once e-hailing ride laws are gazetted in the second half
The idea is to offer a “One-Stop Centre” for added customer      of 2018 which will see more vehicles mandated for
convenience.                                                     roadworthiness checks. At the same time, it intends to grow
                                                                 its door-to-door mobile inspection service, reaching out to
Customers have always been given priority at PUSPAKOM,           untapped markets to optimise its current mobile service
and various initiatives have been implemented to enhance         capacity. It is also set to ramp up promotions of voluntary
their experience. This led to the launch of MyPUSPAKOM, an       vehicle inspections, and will continue to look for ways to
                                                                 keep improving its service delivery.

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DRB-HICOM                                                                                                               Annual Report
BERHAD                                                                                                                          2018

OTHER SERVICES                                                       Moving into FY2018/19, Bank Muamalat has embarked on a
                                                                     Five-Year Strategic Business Plan with the aim of delivering
BANK MUAMALAT MALAYSIA BERHAD                                        sustainable performance. The plan focuses on five main
("BANK MUAMALAT")                                                    objectives, namely: harnessing digital technologies,
                                                                     becoming the preferred investment solutions provider, to
Bank Muamalat provides Islamic banking services out of a             be the banker of choice for each localised community, to
network of 63 branches nationwide. With total assets of              be recognised as a socially responsible bank, and to excel
RM24.0 billion, it is the eighth largest Islamic bank in the         further in the area of customer service.
country.
                                                                     The year has begun on a positive note, with Bank Muamalat’s
The bank’s performance during the financial year under               appointment by Permodalan Nasional Berhad to be an
review saw it maintain its revenue at RM1.2 billion while            Amanah Saham Nasional Berhad agent.
growing its PBT by 34.7% year-on-year to RM229.7 million,
mainly as a result of concentrated efforts to enhance its            Underlining all its activities, Bank Muamalat will continue to
asset quality. This led to a decrease in non-performing              enhance its efficiencies, particularly in cost rationalisation
financing ("NPF") ratio from 2.31% to 1.92%. Bank                    and asset quality improvement in order to drive better
Muamalat also charted improved allowance for impairment              financial performance.
on financing as the it recorded a total write back of RM55.4
million as compared to a net provision of RM81.3 million in
the preceding year.

Gross financing stood at RM14.9 billion while total deposits
grew to RM20.2 billion, equivalent to 1.3% growth from a
year ago. Meanwhile, the Bank’s capital remained strong,
reflected by the improvement in risk weighted capital ratio
to 18.4% from 16.7% a year ago.

In line with its commitment to socially responsible banking,
in December, Bank Muamalat achieved a milestone by
becoming the first Islamic bank to be accepted as a member
of the Global Alliance for Banking on Values ("GABV"). This
further strengthens its resolve to help uplift the socio-
economic well-being of the customer segments it serves,
and to focus on sustainable companies that have positive
social, environmental and cultural impacts.

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DRB-HICOM                                                                                                                   Annual Report
BERHAD                                                                                                                              2018

DRB-HICOM UNIVERSITY OF AUTOMOTIVE                                     of the Center for Academic and Curriculum Transformation
MALAYSIA ("DRB-HICOM UNIVERSITY")                                      ("CACT"). As a further incentive to attract more students,
                                                                       DRB-HICOM University has set aside close to RM52 million
DRB-HICOM University, located within DRB-HICOM’s                       for a scholarship package which is expected to benefit
Automotive Complex in Pekan, is the only university in                 more than 3,000 students over a period of three years.
the country that focuses on the automotive ecosystem.
Established as the International College of Automotive                 To fund its own research, the university has secured grants
Malaysia five years ago, it was conferred full-fledged                 amounting to RM144,460 from the National Knowledge
university status on October 2015. Today, its Faculty                  Transfer Programme ("KTP") Fund, and another RM239,390
of Engineering & Technology and Faculty of Business &                  from the Public-Private Research Grant ("PPRN") under
Management offer a total of 51 programmes from the                     the Ministry of Higher Education. Quality of research at
foundation level to doctorate.                                         DRB-HICOM University is attested by various forms of
                                                                       recognition. During the year, teams from the university
The university has a current enrolment of 1,350 students,              won silver and bronze medals and a merit at the Malaysia
while a total of 1,160 students have graduated, with 80%               Technology Expo ("MTE") in February 2018. Much of the
gaining employment within six months.                                  research conducted benefits the Group’s subsidiaries
                                                                       in terms of process improvement, greater production
A key contributor to the high employability of its graduates           efficiencies and upskilling of employees.
is the focus on being industry relevant. This is guaranteed
by the fact that most of the programmes offered are                    In keeping with the digital revolution, the university will be
developed internally, with significant input from                      engaging in more digital systems to enhance its enrolment,
DRB-HICOM Group subsidiaries. The curriculum, moreover,                teaching, learning and marketing activities. Its business
offers a balanced blend between theory and practice based              programmes also incorporate modules on e-Commerce,
on the ‘university by the industry, for the industry’ concept.         preparing students to leverage the power of digital
                                                                       technology once they enter the work stream.
In FY2017/18, the university introduced 25 new programmes,
doubling the number offered a year previously. The focus               In the longer term, DRB-HICOM University envisages
now is to increase its student intake. One initiative towards          becoming the ASEAN Automotive University. Towards
this end is to offer part-time programmes in FY2018/19. A              this end, it has been engaging with academic institutions
School of Advanced and Distance Learning ("SADLe") has                 and professional bodies within ASEAN as well as China
been set up to spearhead the part-time programme, which                on knowledge sharing, developing academic exchange
is to be coupled with online learning under the auspices               programmes as well as conducting joint research. Among
                                                                       the academic institutions and professional bodies that have
                                                                       shown interest in such programmes are Sanya University of
                                                                       Hainan China, Beijing Geely University, Guangdong Industry
                                                                       Polytechnic, Guangdong Railway Polytechnic, Universitas
                                                                       Ubudiyyah Indonesia, Institute of Islamic Banking and
                                                                       Finance Malaysia, and Malaysia Board of Technologists. In
                                                                       addition, the university is collaborating with the Malaysia
                                                                       Automotive Institute ("MAI") to offer stipends to eligible
                                                                       postgraduate students in automotive related studies.

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DRB-HICOM                                                                                                              Annual Report
BERHAD                                                                                                                         2018

Properties
       Sector
DRB-HICOM is involved in property development, hospitality and concession
development and construction. It is currently developing Proton City in
Perak, and residential properties under the Glenmarie brand in Johor. It also
has concessions to develop Media City in Kuala Lumpur and an Immigration,
Customs, Quarantine and Security ("ICQS") Complex at the border with
Thailand. It also owns and manages the Holiday Inn Kuala Lumpur Glenmarie,
Vivanta by Taj in Langkawi, and Glenmarie Golf and Country Club, in Shah
Alam.
PROPERTY DEVELOPMENT

• Glenmarie Johor – In February 2018, 189 units of
double-storey link houses were completed under Phase
1A of the Glenmarie Johor development in Tebrau, Johor.
Glenmarie Johor Phase 1 is a 69-acre mixed residential
freehold development comprising link houses, semi-
detached units and cluster homes. Tebrau is a sought-
after location due to its proximity to Johor Bahru’s central
business district as well as the Malaysia-Singapore
Causeway. Phase 1B, comprising 102 units of double-storey
link houses, is scheduled for completion in November
2018. To date, this phase has registered a take-up of 88%.

• Proton City – This 4,000-acre township in Tanjong
Malim, Perak comprises industrial, residential, commercial
and institutional components surrounded by lakes, the
state-of-the-art PROTON manufacturing plant and Universiti           CONCESSION DEVELOPMENT AND
Pendidikan Sultan Idris. The development is set against              CONSTRUCTION
the backdrop of the majestic Banjaran Titiwangsa.
                                                                     MEDIA CITY DEVELOPMENT SDN. BHD.
In February 2018, the 980-acre National Automotive                   ("MCDSB")
Cluster @ Proton City ("NAC") was launched to spearhead
the next wave of investment in the Malaysian automotive              DRB-HICOM has a 51% equity in Media City Ventures Sdn.
industry. Once completed in 2022, it will house PROTON               Bhd. ("MCVSB"), the parent company of MCDSB, which holds
Holding Berhad’s entire operations, as well as become                a 23-year concession from the Government of Malaysia
the future focal point for third-party local and foreign             to design, construct and upgrade the buildings and
automotive vendors, with a focus towards high-technology             media facilities in the existing Angkasapuri Complex and
components.                                                          thereafter manage the resulting Media City Complex. Once
                                                                     completed, Media City will boast the latest broadcasting
During the financial year, Proton City further completed             technology and infrastructure to support a comprehensive
47 units of Jasmine Bungalow and Maple Semi-Detached                 digital network for Radio Televisyen Malaysia.
homes in the development.

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DRB-HICOM                                                                                                                Annual Report
BERHAD                                                                                                                           2018

The redevelopment of Angkasapuri, estimated to cost               The new RM425 million complex, with greater handling
RM860 million, is targeted to be completed in stages from         capacity, is being developed to help ease traffic congestion
September 2018 to June 2020.                                      that has been building up over the years at the checkpoint.
                                                                  With better security facilities, it will also enhance national
NORTHERN GATEWAY INFRASTRUCTURE SDN.                              security at the border.
BHD. ("NGISB")
                                                                  NGISB celebrated a milestone on 1 November 2017 when
NGISB, a 100%-owned subsidiary of DRB-HICOM, holds                Phase 1 of ICQS was completed and opened to traffic.
a 28-year concession beginning 14 June 2014 from the              Construction of Phase 2 has begun, and is scheduled to
Government of Malaysia to develop and subsequently                be completed by June 2019. Upon completion, ICQS Bukit
manage a new ICQS Complex in Bukit Kayu Hitam, Kedah.             Kayu Hitam will serve more than three million travellers
Being directly connected to the highway at the northern           and one million vehicles per year.
part of Peninsular Malaysia, ICQS Bukit Kayu Hitam offers
smooth cross-border access from and to Thailand.

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DRB-HICOM                                                                                                       Annual Report
BERHAD                                                                                                                  2018

ASSET AND FACILITY MANAGEMENT

GLENMARIE GOLF & COUNTRY CLUB ("GGCC")

GGCC is one of the most prestigious golf courses and club houses in the country, attracting high-profile
tournaments such as the international Eurasia Cup. Other tournaments hosted during the year included the 12th
AmBank Group-SportExcel International Junior Golf Championship, and the 100 Plus Malaysian Junior Open Golf
Championship. Total revenue from membership and events for the financial year amounted to RM22.3 million.

HOLIDAY INN KUALA LUMPUR GLENMARIE ("HIKLG")

HIKLG is a business and leisure resort-styled hotel in Shah Alam, Selangor. Despite a slowdown in tourism, it
recorded a higher number of guest arrivals than in the previous year, achieving an average occupancy rate of
62% as compared to 59% in FY2016/17, with revenue totalling RM25.7 million.

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DRB-HICOM                                                                                                               Annual Report
BERHAD                                                                                                                          2018

VIVANTA BY TAJ - REBAK ISLAND, LANGKAWI

Vivanta by TAJ - Rebak Island, Langkawi is a luxury resort under the globally renowned Vivanta by TAJ brand. Offering
the allure of staying on a private island, the five-star resort continues to be a popular choice among local and
foreign tourists, achieving an occupancy rate of 69.3% for the year and revenue of RM26.69 million.

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DRB-HICOM                                                                                                 Annual Report
BERHAD                                                                                                            2018

A viable bottom                                                                             Sustainability
                                                                                                     Report

    line from sustainability

Statement by                  There exists a perception gap between local and global companies in the sustainability
                              movement, with the latter being ahead in terms of understanding and adoption.
                              Nevertheless, more local companies are embracing concepts such as Sustainable
DATO’ SRI SYED FAISAL ALBAR   Development Goals (“SDGs”) and incorporating these into their business approach.
BIN SYED A.R. ALBAR
                              The positive adoption is mostly due to the entire chain or spectrum of economy adopting
Group Managing Director       these goals, such as institutional changes which require corporate sustainability
                              reporting or commitment, to secure financial loans, building permits, trade allowances
DRB-HICOM Berhad              and concessions. Bursa Malaysia’s mandatory reporting is one such sample of institutions
                              playing their part to drive the local sustainability movement, and with time, I believe
                              local companies will catch up with the advanced pursuits of their western counterparts.

                              Since formation, DRB-HICOM has consistently gone beyond achieving regulatory
                              compliance and incorporated elements of sustainability into its business practices, with
                              a large focus on resource efficiency as well as health and safety of our staff.

                              At present, DRB-HICOM recognises the importance of viewing sustainability in a more
                              holistic manner, incorporating human capital, carbon emissions and local community
                              into its sustainable policies as well as overall business practice.

                              To drive our Group’s mission, a Sustainability Steering Committee was established in
                              the Group to oversee and support the sustainability movement across our companies.
                              Our current sustainability efforts focus on five key themes: Safety and Health; Energy
                              Management; Waste Management; Human Capital and Corporate Responsibility, and
                              quarterly reporting of data keeps us abreast of the progress as well as the challenges
                              that we face throughout our Group.

                              Social Factors
                              DRB-HICOM operates throughout Malaysia, representing the primary labour provider
                              in several locales. Therefore, in these areas, we have a direct impact not only on the
                              environment, but also on local communities through employment, trade and economy,
                              as well as housing demand.

                              Our organisation undoubtedly creates a pressure on the micro environment within which
                              we operate. Hence, it is of utmost importance that we have a sustainable approach to
                              our business, and ensure that local communities receive the benefits of our success as
                              well.

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DRB-HICOM                                                                                                                       Annual Report
BERHAD                                                                                                                                  2018

In the financial year 2017/18, DRB-HICOM conducted 25                   For the long-term outlook, DRB-HICOM is         committed to
community development activities throughout Malaysia which              continuously analyse and innovate our manufacturing processes
included giving out more than 3,000 free motor vehicle checks at        as well as business plans, to not only ensure we are efficient
festive seasons, developing electric vehicle technology for public      from an energy perspective, but also ensure that we are one
transportation usage as well as giving back to local communities.       step ahead of our competitors with regard to market demands.

With regard to Safety and Health, over the past few decades,            With waste generation, DRB-HICOM has yet to fully adopt a
the Malaysian Government has made effort to clamp down                  circular economy, but has begun exploring the collection of
on workplace accidents, and coupled with new and advanced               food waste through Alam Flora. This can be further enlarged
technology, safety at the workplace has significantly increased.        across more businesses and waste categories, but will take some
                                                                        time. Employing a fully circular economy will need detailed
While many corporations still view occupational safety as               consideration and independently assessed case studies for
important due to the financial impact accidents present, here           all subsidiaries. This is to guarantee that a feasible and solid
at DRB-HICOM, we have always viewed safety with a high level            business case to go down this road can be established prior to
of priority as it can impact one’s livelihood or even cost a life.      fully venturing into a circular economy concept.
Beyond this loss, we must consider the impact onto a family,
especially if the deceased is the sole breadwinner.                     Challenges
                                                                        As a conglomerates with over 70 subsidiaries and around
As compared to financial year 2016/17, we successfully decreased        56,000 employees, clearly our size is a challenge. Related to
our incident cases by 11.1%. The primary measure taken to               that is the diversity of our business, which include automative
achieve this decrease was through educational workshops and             distribution, automotive manufacturing and assembly, banking,
awareness campaigns, which were conducted on a regular basis.           education, waste management, postal, as well as certification.
                                                                        The challenge is in finding an effective system that can be
The Group Human Capital Division along with the Group Safety            applied across the industries.
and Health Department coordinate these efforts across the Group,
and a quarterly meeting is convened at the Steering Committee           Despite the challenges, we know that our sustainability efforts
level to ensure we keep pace with progress of the efforts.              have borne fruit in many of the areas that we have focused on,
                                                                        with some areas beginning to show significant results. As it
At DRB-HICOM, our talent pool is vital to our success, and we are       stands, we are currently developing roadmaps for these, as well
firm believers that an inspired and happy workforce will produce        as addtional initiatives, so that there is a clearer blueprint for us
quality output. Training is key to ensure that our talent can           to achieve our sustainable targets.
develop a hunger for innovation and that each person at all levels
of a department is the right fit for the job. In the financial year     Growth
2017/18, we invested RM13 million into our staff by providing           With sustainability gaining traction across the globe and also
over 4,000 training sessions across all our subsidiaries.               locally, the entire economic chain will demand sustainable
                                                                        practices across our organisation. This can be sustainable
In order to enhance professional work performance and develop           human resource practices and sustainable usage of resources.
a balanced workforce, activities that provide team building and         This is where the opportunity for competitive advantage lies.
social skills are conducted throughout the year. There was an
average 20% increase in the number of participants for training         As the economic chains pressure businesses to be sustainable,
activities, which is a good sign of employee participation and          merely adhering to regulatory requirements would be a
morale. We also recognise the trend of the digital world today,         disadvantage to the Group, therefore, DRB-HICOM is committed
and are preparing for Industry 4.0 which will assume a greater          to strategising and targeting our sustainability goals through
role in the future economy.                                             benchmarked reporting. As the automotive and construction
                                                                        industry moves toward more sustainable concepts, creative
Resource Management                                                     thinking and innovation will continue to take root in DRB-
Beyond the resources explored for our manufacturing,                    HICOM, and with time, we should be able to lead the local
DRB-HICOM has begun to explore resource management from an              market in being sustainable across our entire business portfolio.
organisational perspective, monitoring our energy usage as well
as our waste generation data.
                                                                                                                      Syed Faisal Albar
Over the past two years, we have required our subsidiaries to
declare and work toward reducing their energy consumption, as
this is the simplest and lowest hanging fruit for any business.
To date, we have taken measures to decrease our energy
consumption by almost 9% as compared to the previous year.
Moving forward, we intend to work with more subsidiaries to
reduce energy consumption, as well as conduct equipment
audits, as ageing or inefficient equipment can be a major cause
of energy wastage.
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ABOUT THIS REPORT
DRB-HICOM Berhad is proud to present its second Sustainability Report and the progress of making our
Group a more sustainable business. Sustainability has been ingrained in our values since the inception of
our Group. With our diversified business in multiple sectors, we are conscious of the impact our businesses
have on the environment, workplace, local community and economy. Reporting on our sustainability
initiatives not only gives us an opportunity to showcase our progress and performance, but also identify
expectations and concerns of our stakeholders. Through this exercise, we hope to unveil what sustainability
means to our Group and our stakeholders, including the efforts taken to make DRB-HICOM a responsible
and sustainable Malaysian conglomerate.

Our Reporting Approach                                                Scope and Boundaries
This report has been prepared in reference to the framework           This report covers the sustainability performance and
and guidance provided by the Global Reporting Initiative              progress of all our businesses in Malaysia, unless otherwise
(“GRI”) Standards. The content of the report is based on the          stated. This report has encapsulated the overall sustainability
reporting principles as defined by GRI Standards, which               performance of our Group for the period starting from 1 April
includes:                                                             2017 to 31 March 2018. Our inaugural sustainability report
                                                                      was published in 2017 and has captured information from 1
   • Stakeholder Inclusiveness - capturing our stakeholders’          January 2016 to 31 December 2016. We are determined to
     expectations and concerns                                        publish our sustainability performance and progress annually
   • Sustainability Context - presenting our performance in           through our sustainability report. References to DRB-HICOM,
     the wider context of sustainability                              the Company, the Organisation, the Group and we refer to
   • Materiality - identifying and prioritising the key               DRB-HICOM and/or its sectors and subsidiaries.
     sustainability issues that our Group encounters
   • Completeness - reporting all sustainability topics that          Feedback
     are relevant to our Group and influence our
                                                                      For further details, you may contact:
     stakeholders
                                                                      Name        : Mahmood bin Abdul Razak
The Material references included in this report are as stated
                                                                      Designation : Head, Group Strategic Communications Division
below:
                                                                      Email       : info@drb-hicom.com
   • GRI 203 Indirect Economic Impacts 2016
   • GRI 302 Energy 2016
   • GRI 306 Effluents and Waste 2016
   • GRI 403 Occupational Health and Safety 2016
   • GRI 404 Training and Education 2016
   • GRI 407 Freedom of Association and Collective
             Bargaining 2016
   • GRI 413 Local Communities 2016

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                                                                                                        Sustainability
                                                                                                                 Report

                                   B

A

                                                       C

AWARDS AND RECOGNITION

A. HR ASIA AWARDS - BEST COMPANIES TO WORK FOR                      C. MALAYSIA HR AWARDS 2017 – EMPLOYER OF CHOICE
   IN ASIA 2017                                                        AWARD (PRIVATE SECTOR)
   DRB-HICOM was acknowledged as one of the Best                       DRB-HICOM won Bronze under the Employer of Choice
    Companies to Work for in Asia 2017, scoring above                  Award (Private Sector), being recognised for its continuous
    the industry average rating on all categories that                 commitment and sustainability for the development of its
    include workplace culture, employee engagement,                    human capital.
    career advancement and development opportunities.
                                                                    D. ASIA SUSTAINABILITY REPORTING AWARDS 2017
B. HR EXCELLENCE AWARDS 2017 – HR LEADER OF THE
                                                                       DRB-HICOM was nominated as the finalist of Asia’s Best
    YEAR AWARD
                                                                       Sustainability Report within an Annual Report.
    DRB-HICOM’s former Head of Group Human Capital,
    the late Muhammad Rizal bin Md. Zain, was awarded
    the HR Leader of the Year Award for his contribution in
    implementing considerable changes to the business.

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OUR COMMITMENT TO SUSTAINABILITY

         SUSTAINABILITY
         VISION

                                               SUSTAINABILITY
                                               MISSION

A sustainable business is a profitable business. We understand that our business depends on a large amount of
resources which has a significant impact on the environment and society at large. We see a potential threat to our
long-term success if we don’t hold ourselves accountable for such impacts. As a responsible Group, we are determined
to take accountability for the footprints we leave behind. We are determined to operate responsibly through the
integration of Social, Economic and Environmental (“SEE”) principles throughout our Group’s value chain. This is a
commitment for all our business sectors, and the Group as a whole, as we work together to incorporate sustainability
into our daily operations.

In 2015, the Sustainable Development Goals (“SDGs”), also known as Global Goals, were set up by the United Nations.
These are a set of 17 Goals that was a call of action to end poverty, protect the environment and help people lead
a peaceful and prosperous life. Malaysia is committed to support and implement the 2030 Agenda for Sustainable
Development and its 17 Goals. We at DRB-HICOM reaffirm our support, aligning to the national aspirations towards
achieving the national SDGs. We have mapped our material factors influencing our business to relevant SDGs. We are
making progress in achieving these goals within and outside the Group.

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                                                                                                                         Sustainability
                                                                                                                                  Report

                    Business Themes                        GRI Standards Disclosure Indicator                     Key Initiatives

                                                                    SAFETY AND HEALTH
                                                           403-1:    Workers representation in        • DRB-HICOM Emergency Assistance
   3 GOOD HEALTH
                       8   DECENT WORK
                           ECONOMIC
                                                                     formal joint management–           Team (“D-HEAT”)
     AND
       WELL-BEING          GROWTH
                                                                     worker health and safety         • Injury Prevention and Intervention
                                                                     committees                         Programmes

                                                           403-2:    Types of injury and rates of
                                                                     injury, occupational diseases,
                                                                     lost days, absenteeism, and
                                                                     number of work-related
                                                                     fatalities

                                                                   ENERGY MANAGEMENT
                                                           302-1     Energy Consumption within the    • PROTON Green Initiative
  7    AFFORDABLE
       AND CLEAN      12    RESPONSIBLE
                            COMSUMPTION   13 CLIMATE
                                             ACTION
                                                                     organisation                     • Energy Management System in
       ENERGY               AND
                            PRODUCTION                                                                  Manufacturing & Engineering
                                                           302-4     Reduction of energy
                                                                     consumption

                                                                    WASTE MANAGEMENT
                                                           306-2     Waste by type and disposal       •   Separate@Source Programme
   3   GOOD HEALTH
                      12    RESPONSIBLE
                            COMSUMPTION
                                                                     method                           •   Buy Back Center
       AND
       WELL-BEING
                            AND
                            PRODUCTION                                                                •   Food Composting
                                                                                                      •   Material Recovery Facility
                                                                                                      •   Awareness Programmes
                                                                                                          (Eco-Ranger, Waste is Amaze)
                                                                                                                  Note: All initiatives are from Alam Flora

                                                                     HUMAN CAPITAL
                                                           404-1:    Average hours of training per    • Seminar Skor SPM DRB-HICOM dan
  4    QUALITY
                       8   DECENT WORK
                           ECONOMIC
                                                                     year per employee                  Berita Harian
       EDUCATION
                           GROWTH
                                                                                                      • DRB-HICOM We Care Programme
                                                           404-2     Programmes for upgrading         • Human Capital Engagement Day
                                                                     employee skills and transition
                                                                     assistance programmes

                                                           407-1     Operations and suppliers in
                                                                     which the right to freedom of
                                                                     association and collective
                                                                     bargaining may be at risk

                                                           413-2:    Operations with significant
                                                                     actual and potential negative
                                                                     impacts on local communities

                                                             CORPORATE RESPONSIBILITY
                                                           203-1     Infrastructure investments and   • Breast Cancer Screening
   3 GOOD
     AND
          HEALTH
                       4   QUALITY
                           EDUCATION
                                          7   AFFORDABLE
                                              AND CLEAN              services supported               • Back to School Programme
       WELL-BEING                             ENERGY

                                                           413-2     Operations with significant
                                                                     actual and potential negative
                                                                     impacts on local communities

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OUR APPROACH TO SUSTAINABILITY

Themes

For the inaugural sustainability report published in 2017, we carried out assessments to identify economic, environmental and
social concerns that impact our operations and those that were of the utmost importance to our stakeholders. Safety, Health
and Environmental (“SHE”) matters - occupational safety and health, waste management as well as energy consumption and
reduction concerns were identified as having significant impact to the Group. Similarly, for social matters, developing human
capital stood out as having significant impact to us, followed by the Group’s corporate responsibility.

Based on the key concerns identified, we have formed specific themes and assigned teams to take responsibility in managing
these themes and their impacts. The teams have developed specific goals, targets and initiatives to ensure there is continuous
progress within the Group in managing all the material concerns. We are certain this will ensure a sustainable business model
for the Group.

                OCCUPATIONAL             ENERGY                 WASTE               TRAINING AND           COMMUNITY
                 SAFETY AND            COMSUMPTION            MANAGEMENT             EDUCATION            RELATION AND
                   HEALTH                  AND                                                            CONTRIBUTION
                                        REDUCTION

                                     DRB-HICOM SUSTAINABILITY THEMES

               SAFETY AND              ENERGY                WASTE                   HUMAN               CORPORATE
                 HEALTH              MANAGEMENT            MANAGEMENT                CAPITAL           RESPONSIBILITY

Managing Our Supply Chain
We have built a strong relationship with our vendors and suppliers over the years, all of whom have been instrumental in the
success of our business. We provide equal business opportunities to all suppliers through fair tendering and a Request for
Quotation (“RFQ”) process whereby all participants are evaluated transparently by the appointed committee members. Points
are awarded to locally-based suppliers in our tender/RFQ evaluations where found practical. Prior to invitation in any tender
or RFQ, a supplier will be screened through our pre-qualification (“pre-Q”) evaluation. Only the suppliers who pass the pre-Q
will qualify to participate in any tender or RFQ.

DRB-HICOM is committed to conduct business in a transparent and ethical manner. The Ethics in Procurement clause in our
Group Procurement Policy (“GPP”) outlines the behaviours and conditions that the procurement personnel must adhere to. We
manage conflicts of interest, procurement relationships and ethical conduct of suppliers through our Invitation To Bid (“ITB”)
documents that are issued to participating suppliers during all tender exercises. The ITB documents provide the requirements
suppliers have to strictly adhere to. The following are the relevant clauses:

1.   Clause   2.7 : Confidentiality
2.   Clause   2.8 : Bidder’s Undertaking
3.   Clause   2.16 : Bribery and Solicitation
4.   Clause   2.17 : Compliance to Safety, Health and Environment Regulations and Guidelines
5.   Clause   2.18 : Immigration Regulations

Any unethical behaviour is to be reported directly to the DRB-HICOM Group’s toll-free Whistleblower hotline: 1-800-88-2005.
This is mentioned in both GPP and ITB.

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                                                                                                                       Sustainability
                                                                                                                                Report

SUSTAINABILITY GOVERNANCE
Progress on sustainability within the Group is dependent on a good governance structure. DRB-HICOM is in the process
of taking sustainability from a topic not included in the Board’s agenda to one that is considered a key component in the
Board’s business strategy. This outcome is achieved through the formation of a governance structure where sustainability
considerations are embedded at all levels within the organisation.

Governance Structure
The highest level where sustainability matters are considered is with the Board of Directors. The Board Risk and Sustainability
Committee (“BRSC”) reports to the Board of Directors and are responsible for the effective oversight of sustainability initiatives
(in particular, sustainability reporting guidelines prescribed by Bursa Malaysia). The BRSC delegates the Sustainability Steering
Committee (“SSC”) the responsibility of implementing effective initiatives that inculcate a sustainability driven culture at
DRB-HICOM. The SSC is also obligated to set goals and targets for key sustainability matters identified. The Sustainability
Working Committee (“SWC”) reports to the SSC and is responsible for managing all related information and perform assessments
on sustainability related programmes. SWC also provides incentives for the employees to be environmental and socially
responsible, and work together to help DRB-HICOM progress in a sustainable direction.

                                                  Board Risk and Sustainability
                                                      Committee (”BRSC”)

                                                     Sustainability Steering
                                                        Committee (”SSC”)

                                                     Sustainability Working
                                                       Committee (”SWC”)

                                                                                       Group Corporate
                           Automotive             Services          Automotive
                                                                     Properties
                                                                                       Support Services

Sustainability Risk Management
Risk Management is important for the Group to identify and
manage risks more effectively. By understanding the risks within
our business processes, we are able to evaluate the possibilities                               eviews of the ris rofiles the ontrol
                                                                                             ro ed res and stat s of the a tion lans are
to mitigate or even transform it into opportunities. Generally,                                     ond ted on a arterly asis
sustainability is perceived as the preventive overlay for risks.
At DRB-HICOM, we categorise risks into several groups; these
include sustainability-related reputational risk, industrial risk,
and organisational risk, among others. We have established a                                    Signifi ant ris iss es and stat s of
comprehensive system towards managing these risks within DRB-                                a tion lans are reviewed and dis ssed
                                                                                                     at to management level
HICOM.

The Group’s three lines of defense provide assurance to manage
                                                                                           Management of the res e tive om anies are
risks at various levels within the Group. Several initiatives have                         rovided with re orts to ena le them to review
been implemented to measure and mitigate risks at all sectors,                               dis ss and monitor the ris rofiles and
units and divisions, on a frequent basis. This ensures that risks                                im limentation of a tion lans
identified are assessed thoroughly to reduce the severity of any
possible impact.                                                           Our Sustainability Risk Management Approach

For further information on risk management at DRB-HICOM, please
view information provided between pages 74 and 79.
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 ENGAGING OUR STAKEHOLDERS
 Engaging our stakeholders to understand their expectations and concerns on our businesses helps us identify areas within our
 operations that require improvement. Taking effective actions for the identified concerns and expectations will automatically improve
 the performance of our Group. We also believe in maintaining transparent communication with our stakeholders to ensure that they
 are aware of our performance, and support our growth as we progress.

 Our Stakeholders
 We nurture our relationship with our employees, who are the backbone of our business; the customers, to whom we strive to deliver
 quality products and services; suppliers and contractors, that provide products and services to us; local communities, to whom we
 are accountable for; and our esteemed investors and regulators. These are key stakeholders who have the greatest impact on our
 organisation, and with whom we engage regularly.

                                                              Frequency of
  Stakeholders               Mode of Engagement                                           Concerns                  Expectations
                                                              Engagement

   Customers        •   Website / Social Media Platforms      •   Continuous
                    •   Marketing Promotions and Activation   •   As needed
                    •   Media Conferences                     •   As needed
                    •   Customer Call Centres                 •   Continuous
                    •   Consumer Surveys                      •   Annually

   Employees        • DRB-HICOM Talent Development            • Continuous
                      Programme
                                                                                1.   Management of health      1.   Provide training
                    • Excellence Award and Scholarship        • Annually
                                                                                     and safety                     and education to
                      Programmes
                                                                                     risks in all operations        all employees
                    • Code of Ethics and Business Practice    • Continuous
                      (“COEBP”)
                                                                                2.   Total energy              2.   Community
                    • Whistle Blower Policy                   • Continuous
                                                                                     consumption in all             engagement,
                    • Dialogue with National and              • As needed
                                                                                     operations                     impact assessment
                      In-House Unions
                                                                                                                    and development
                    • DRB-HICOM Safety, Health and            • Quarterly
                                                                                3.   Impact of                      programmes in all
                      Environment Council
                                                                                     infrastructural                operations
                                                                                     developments,
 Suppliers and      • Business Negotiation                    • As needed
                                                                                     investments and           3.   Safe disposal of
  Contractors       • DRB-HICOM Group Procurement             • Continuous
                                                                                     services                       effluents and
                      Policy (“GPP”)
                                                                                                                    waste from all
                    • Vendor Development Programme            • Annually
                                                                                                                    operations that
                                                                                                                    have least impact
                                                                                                                    on communities
Local Communities • Participation In and Sponsorship          • As needed
                                                                                                                    and biodiversity
                    of Community Service Events / NGO
                    Events
                  • Social and Environmental                  • As needed
                    Contribution Programme
                  • Safety, Health and Environmental          • Quarterly
                    Campaigns

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                                                                                                      Sustainability
                                                                                                               Report

                                                         Frequency of
 Stakeholders         Mode of Engagement                                          Concerns                 Expectations
                                                         Engagement

  Investors     • In-House, One-to-One and Small          • Ad hoc       4.   Violation of freedom    4.   Assessment of
                  Group Meetings with Stakeholders                            of association and           suppliers on
                • Annual General Meeting (“AGM”) /        • Annually/         collective bargaining        environmental
                  Extraordinary General Meeting             As needed         of workers                   criteria to mitigate
                  (“EGM”) of Shareholders                                                                  negative impacts in
                • Media Briefings                         • As needed    5.   Risks and incidences         supply chain
                • Dialogue Between the Group and          • Ad hoc            related to corruption
                  Investors                                                                           5.   Diversity in
                • Roadshows and Teleconferences           • As needed    6.   Water use by all             representation
                                                                              operations,                  of all employee
  Regulators    • Attend Workshops and Seminars           • Continuous        Greenhouse Gas               categories (age
                  organised by Regulatory Agencies                            (GHGs) and other             group, gender,
                  to Stay Abreast of Any Regulatory                           significant emissions        minority group
                  Requirements                                                produced by                  etc.), and equal
                • Pro-Active Engagement / Consultation    • Continuous        operations                   opportunity
                  with the Relevant Regulatory Bodies
                  on Corporate Compliance Matters                                                     6.   Assessment of
                                                                                                           suppliers on human
                                                                                                           rights criteria to
                                                                                                           mitigate negative
                                                                                                           impacts in supply
                                                                                                           chain emissions
                                                                                                           produced by
                                                                                                           operations

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MATERIALITY ASSESSMENT
With reference to the GRI Standards reporting guidelines, our report is developed based on the
Materiality principle that encompasses economic, environmental and social sustainability issues of our
operations. We conducted focus group discussions to understand our stakeholders’ concerns. Feedback
from stakeholders were compiled by external consultants. DRB-HICOM has conducted the materiality
assessment and validation through discussions with respective working groups. The Materiality matrix
was compiled and mapped according to the influence of sustainability issues to stakeholders and
significance of economic, environmental and social impacts to DRB-HICOM. Seven material sustainability
issues were identified as highlighted in the materiality matrix below:

                                                                                              1

                                                                                                          1.    Occupational Health and Safety
                        8
                                                                                     2                    2.    Training and Education
                                                                                                          3.    Energy
                                                                                                          4.    Indirect Economic Impacts
                                                                                                          5.    Local Communities
                                                                            3                             6.    Effluents and Waste
                                                                                                          7.    Freedom of Association and
INFLUENCE OF                                               4          5                                         Collective Bargaining
STAKEHOLDER
ASSESSMENT &
                                                    6                                                     8.    Anti-Corruption
  DECISION                                                                                                9.    Water
                                                                      7
                                                                                                          10.   Supplier Environmental Assessment
                                                                                                          11.   Diversity and Equal Opportunity
                    9                                                                                     12.   Emission
                                                                                                          13.   Human Right Assessment
                            10
                                                           11                   12
                                                                 13
                                                                                                         Respective indicators can be found in GRI
                                                                                                         Standards Content Index on pages 156-157

                                        SIGNIFICANCE OF ECONOMIC
                                     ENVIRONMENTAL & SOCIAL IMPACTS

                                                                                                      Climate Check
         Evaluation of Previous Reports                                                  (comparative analysis on: peers, best-in-class
                                                                                                and international standards)

               External Stakeholder                                                           Management Interactions
                 Communication                                                            (management meetings and focus group
  (compiled survey results by external consultant)                                                   discussions)

       Materiality Assessment Validation
       (discussions with theme and sustainability                                                 GRI Standards Mapping
                       committee)

                                                        Our Materiality Assessment Approach

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                                                                                                                            Sustainability
                                                                                                                                     Report

                                          Safety and Health                                                            Key Highlights in
                                                                                                                         FY2017/18

                          11.1%                                                                       42.7%
                          Reduction on Total Number of                                                Reduction on Total Lost Time
                          Incidents                                                                   Injuries

                          Competency Based

                          Hiring and Training                                                         Launched

                          for SHE Practitioners                                                       Behaviour-
                                                                                                      Based Safety
                          More than                                                                   Programme
                          150                                                                         in Composites Technology
                                                                                                      Research Malaysia Sdn. Bhd.
                          for SHE Practitioners throughout the Group

                 1                                                                        2
                                                                                          2
              NO POVERTY                                                              ZERO HUNGER

                 3                    4                  5               6                7            Target for Safety and Health
                                                                                                       in FY2017/18
             GOOD HEALTH           QUALITY             GENDER        CLEAN WATER     AFFORDABLE AND
            AND WELL-BEING        EDUCATION           EQUALITY      AND SANITATION    CLEAN ENERGY

                                                                                                       To reduce by 2% total number of
                 8                    9                 10              11               12            incidents against FY2016/17 level

              DECENT WORK     INDUSTRY, INNOVATION     REDUCED       SUSTAINABLE       RESPONSIBLE
                                      AND            INEQUALITIES     CITIES AND      COMSUMPTION
            ECONOMIC GROWTH
                                                                     COMMUNITIES     AND PRODUCTION

                                                                                                                     ACHIEVED
                                INFRASTRUCTURE

                13                  14                  15              16                17

                CLIMATE              LIFE               LIFE        PEACE, JUSTICE    PARTNERSHIPS
                ACCTION          BELOW WATER          ON LAND        AND STRONG       FOR THE GOALS
                                                                     INSTITUTION

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Why It Matters
At present, DRB-HICOM stands as one of the largest and most
diversified conglomerates in Malaysia. We put forward a
formidable force with about 56,000 employees across the nation,
mainly involved in the Automotive, Services, and Properties,
sectors. With a diverse range of operations that are interlinked
in generating sustainable value to the Group, maintaining our
employees’ wellbeing is undoubtedly a top priority for the Group.
Besides striving to build a healthier and resilient workforce,
we believe a strong safety and health culture will increase the
productivity of our business operations and protect our brand’s
reputation.

How We Approach It
All our practices pertaining to Safety, Health and Environment
(“SHE”) are guided by the Group’s SHE policy. The policy adopted
four key principles, namely compliance, reduction of pollution,
communication and continual improvement, to underpin our
overarching commitment towards protecting the environment
where we operate as well as our employees’ workplace safety
                                                                                 1                   COMPLIANCE

and health.

                                                                                                   2
Every employee in DRB-HICOM is accountable for adhering to                                                           REDUCTION OF
the policy while remaining vigilant for potential SHE hazards in                                                      POLLUTION
their daily operations.

The SHE Council is headed by the Group Managing Director with
the Group SHE acting as secretariat to the council. The Council,
with active participation from Senior Management of the Group,
meets quarterly to review the Group’s SHE strategy and examine
the progress on the Group’s SHE performances and audit results.
                                                                                 3                COMMUNICATION

Ultimately, the establishment of the Council is to ensure safe
work practices, create conducive working environment and build
SHE culture within DRB-HICOM in order to sustain ideal health
levels of all our employees.                                                                       4                   CONTINUAL
                                                                                                                     IMPROVEMENT
A strong safety culture relies on effective communication in the
workplace. Today, there are more than 150 SHE practitioners
across the Group who ensure and drive compliance monitoring
in regard to safety and health.                                           Key Principles in DRB-HICOM ‘SHE’ Policy

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                                                                                                                                                            Sustainability
                                                                                                                                                                     Report

Integrated Reporting Occupational Safety,
Health & Environmental (“IROSHE”)
In 2015, Group SHE introduced a web-based data
management system – IROSHE that enables us to monitor
                                                                                                                                                              14,333

                                                                                               Total Number of Workdays
on our SHE performance not only at Group level but also
at the subsidiaries. It is compulsory for all subsidiaries
to report their SHE performance (e.g. energy, waste and
                                                                                                                           FY2016/17
safety & health) via IROSHE on a monthly basis.
                                                                                                                             39,753,022
IROSHE will help in generating effective reports and
analysis from the data collected. All results will be                                                                                             8,212
subsequently reported to the SHE Council.

                                                                                                                           FY2017/18
Our Performance
We track our Total Lost Time Injuries 1 and Total Number                                                                         Total Lost time Injuries
of Incident Cases 2 to better manage and control potential
risk. Consequently, these measures are making a markedly
positive impact on our performance.

In FY2017/18, we managed to reduce the total number of
incident cases by 11.1%. It went down from 760 to 676
incidents, which is equivalent to 84 fewer incidents than
the previous year. This result has exceeded our target of
2% reduction of FY2016/17 level.                                                                                                                              760
                                                                                               Total Number of Incidents

Moreover, we have achieved 42.7% reduction in the total
lost time injuries from 14,333 to 8,212 lost workdays.                                                                     FY2016/17
This indicates a decrease of 6,121 days in total number                                                                      39,753,022
of lost workdays due to injury or illness as compared to
FY2016/17 3.                                                                                                                                      676

Near Miss Reporting
                                                                                                                           FY2017/18
We encourage our employees to report near miss incidents
across all operations as part of the measures to prevent
any such recurrence. Our near miss reporting system is                                                                           Total Number of Incident Cases
designed to ensure that all near miss incidents (including
minor incidents) are reported, recorded and investigated
in a consistent and effective manner.

1
  Total Lost Time Injuries (Total Lost Workdays): The number of workdays on which the employee would have worked but could not because of occupational injury or occupational
   poisoning or occupational disease
2
  Total Number of Incident Cases: Incident cases include occupational injury/disease, fatality, pandemic case, fire, natural disaster and property damage
3
  The data disclosed represents 25 selected subsidiaries

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Key Initiative 1: DRB-HICOM Emergency Assistance Team (“D-HEAT”)
Established in the wake of floods in Pahang during December 2014 to January 2015, D-HEAT is a trained team that responds
to any disaster or crisis when the Management of DRB-HICOM deems fit for it to be deployed.

D-HEAT members are selected according to the criteria issued by Fire and Rescue Department of Malaysia (“BOMBA”). The
members have undergone various training courses under the guidance of Balai Bomba Seksyen 15, Shah Alam. Some of the
trainings have included light Search and Rescue (Land and Water), Self-Contained Breathing Apparatus (“SCBA”), first aid,
firefighting and rappelling.

D-HEAT Search and Rescue Navigation (“SARNAV”) Training at Taman Botani Negara Shah Alam,
Selangor
In FY2017/18, D-HEAT members underwent various training courses under the supervision of BOMBA Kota Anggerik and Forest
Ranger Taman Botani Shah Alam. On 24 and 25 March 2018, in collaboration with BOMBA, Kota Anggerik had organised a
Search & Rescue Navigation (“SARNAV”) training session at Taman Botani Negara Shah Alam, Selangor.

Key Initiative 2: Injury Prevention and Intervention Programmes
In our continual efforts to nurture SHE culture and instil greater awareness among employees, DRB-HICOM conducts various
injury prevention and intervention programmes to minimise the risk of injury. Several activities and training programmes have
been conducted by our subsidiary companies, including Composites Technology Research Malaysia Sdn. Bhd. (“CTRM”), Pos
Malaysia and PROTON, to ensure a thorough understanding of safety and health roles and responsibilities.

The activities and programmes undertaken by the aforementioned subsidiaries in FY2017/18 include:

                 CTRM                             Pos Malaysia                             PROTON

   OCCUPATIONAL HEALTH AND                OCCUPATIONAL HEALTH AND               OCCUPATIONAL HEALTH AND
   SAFETY                                 SAFETY                                SAFETY
   Safety, Health and Enviroment          SHE Mobile Campaign                   SHE Campaign
   (”SHE”) Campaign
                                          Accident Prevention Team (”APT”)
   Cutting Apparatus - Knife                                                    ROAD SAFETY
                                          SoHELP Programme Participation
   Improvement                                                                  Defensive Driving
                                          SHE D’Hearty - Counselling for
   Behavior Based Safety (”BBS”)          MVA Victim                              oad Safety Briefing and
   Programme                                                                    Inspection Road Hazard Mapping
                                          Plant Safety Audit
                                                                                Commuting Safety Support
   ROAD SAFETY                            Fire Training and Evacuation
                                                                                Programme
                                          Dengue Prevention - Fogging
   Road Safety Campaign                                                         Safety Inspection Video
                                          and Misting.
   Forklift and Reach Truck
   Improvement                            ROAD SAFETY
   Integrated Gemba with Health           Motorcycle Defensive
   Management System (Unsafe Act          Riding Training
   and Unsafe Condition)                  Motorcyle Safety Audit
                                          Road Safety Pledge
                                          Advocacy Programme

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