Communication on Progress 2019 Report STATEMENT OF CONTINUED SUPPORT Hinopak Motors Limited has been maintaining its commitment for the past thirteen years and yet promises to reflect it in it principles, standards and policies in future as well. With great pleasure I present our twelfth, comprehensive Communication on Progress (COP). Although Hinopak is facing severe challenges in business activities due to economic crises, yet trying to fulfill its commitment of giving back to society. This report endorses Hinopak’s commitment towards UNGC principles of Human Rights, Labour, Environment and Anti-corruption. I sincerely thank our employees and stakeholders for their contribution towards company’s sustainable development and request them to continue their efforts with more zeal and patience in supporting our initiatives. YOSHIHIKO NANAMI President & CEO May 31, 2019 Hinopak Motors Limited Human Rights Hinopak Motors Limited UNGC Communication on Progress 2019 Organizational Profile GRI Ref. No. 2.1 Name of the Organization Hinopak Motors Limited Assembly, manufacturing and sales of Hino Trucks and 2.2 Primary brands, products, and/or services. Buses and Sales of Hino Genuine Parts. Operational structure of the organization, Hinopak is a subsidiary concern of Hino Motors Limited 2.3 including main divisions, operating Japan and Toyota Tsusho Corporation. companies, subsidiaries, and joint ventures. 2.4 Location of organization’s headquarters. Karachi, Pakistan Number of countries where the organization operates, and names of countries with either 2.5 major operations or that are specifically One (Pakistan) relevant to the sustainability issues covered in the report. 2.6 Nature of ownership and legal form. Public Limited Company The company serves markets of Pakistan and some of the Middle East & African countries. Markets served (including geographic 2.7 breakdown, sectors served, and types of Types of customers include: customers/beneficiaries). 1. Institutional customers 2. Commercial customers Number of Employees as on March 31, 2019 = 376 (978 including contract and contractor’s employees) For following refer to Annual Report 2018-19 available at: http://www.hinopak.com/finance.htm Scale of the organization 2.8 Net sales (2018-19)= Rs. 19.1 billion Total capitalization = Rs. 3.6 billion (0% Debt, Surplus funds) Quantity of Products Produced (2018-19) - Hino Chassis: 2,850 - Bus and other specialized bodies: 822 - Hilux Frame: 10,377 Significant changes during the reporting 2.9 None period regarding size, structure, or ownership. 1. Certificate of Excellence award in Automotive Sector 2019 by Management Association of Pakistan (MAP) Awards / citations received during the 2.10 reporting period 2. EFP Best Practices Award in Occupational Health and Safety 2019 (OSH) 3. Horticultural Society of Pakistan /Annual Award 2019 ISO 14001:2004 Certified Management Systems ISO 9001:2008 Certified OHSAS 18001:2007 Certified 1 Hinopak Motors Limited Human Rights Hinopak Motors Limited UNGC Communication on Progress 2019 - Employers’ Federation of Pakistan (EFP) - Overseas Investors Chamber of Commerce & Industry (OICCI) - Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Affiliations / Memberships - Management Association of Pakistan (MAP) - Pakistan Automotive Manufacturers Association (PAMA) - S.I.T.E. Association - Pakistan Japan Business Forum (PJBF) - Pakistan Society for Training & Development (PSTD) - Marketing Association of Pakistan Report Parameters 3.1 Reporting period for information provided 1 June 2018 ~ 31 May 2019 1. UNGC Communication on Progress (COP): 09 June 2018 3.2 Date of most recent previous report/s 2. Annual Report 2018-19 3.3 Reporting cycle Annual Ahsan Waseem Akhtar General Manager HR, Admin & HSE [email protected] Contact point for questions regarding the Nabila Mujahid Faisal 3.4 Section Manager Health, Safety & Environment report or its contents [email protected] Sabira Agha Associate HRD & OD [email protected] Governance, Commitments and Engagement Board of Directors (Highest Governance Body) Board Committees: The Audit Committee is responsible for: a. Determination of appropriate measures to safeguard company’s assets; Governance structure of the organization, b. Review of quarterly, half-yearly and annual including committees under the highest financial statements of the Company, prior to the 4.1 governance body responsible for specific approval of the Board of Directors; tasks, such as setting strategy or organizational oversight. c. Review of management letter issued by external auditors and management’s response thereto and monitor the action plan to improve the control environment; d. Review of the scope and extent of internal audit and ensuring that the internal audit function has adequate resources and is appropriately placed within the Company; e. Ascertaining that the internal control system 2 Hinopak Motors Limited Human Rights Hinopak Motors Limited UNGC Communication on Progress 2019 including financial and operational controls, accounting system and reporting structure are adequate and effective; f. Instituting special projects, other investigations on any matter specified by the Board of Directors, and to refer any matter to the external auditors or to any other external body; g. Monitoring compliance with relevant statutes and best practices of corporate governance. The Human Resource & Remuneration Committee is responsible for: a. Recommending human resource management policies to the board; b. Recommending to the board the selection, evaluation, compensation (including retirement benefits) and succession planning of the CEO; c. Recommending to the board the selection, evaluation, compensation (including retirement benefits) of CFO, Company Secretary and Head of Internal Audit; and d. Considering and approving on recommendations of CEO on such matters for key management positions who report directly to CEO. Refer to performance indicator ref. no. LA13 for details on the BOD and the Audit Committee. 4.2 Chair of the highest governance body Chairman (Non-Executive Director) For organizations that have a unitary board Refer to performance indicator ref. no. LA13 structure, state the number and gender of 4.3 members of the highest governance body that The Board of Directors has 9 members; where 6 are non- are independent and/or non-executive executive directors. members. Shareholders: Mechanisms for shareholders and employees - Annual General Meeting (AGM) 4.4 to provide recommendations or direction to the highest governance body. Employees: - Suggestion Boxes (located at conspicuous places around the company premises) 3 Hinopak Motors Limited Human Rights Principle 1: Businesses should support and respect the protection of internationally Human Rights proclaimed human rights; and Commitment: Hinopak Motors Limited is committed to Principle 2: make sure that they are not complicit in human rights abuses. respecting and protecting the dignity of people in all its areas of operations. All stakeholders are assured of sincere efforts to uplift conditions with regard to health and safety, provide sound labour-management relations and participate in human resource/community development. Furthermore, Hinopak is committed to avoiding complicity of human rights abuses in all its areas of operation. Policies, Systems, Processes and Programs Besides the policies and processes detailed in previous COP documents (published since 2006) the following actions were initiated/emphasized on during the reporting year under each process/system with respect to the Human Rights principles: A. HEALTH & SAFETY SYSTEMS . Healthy & Safe Working Environment - 5,708 training man-hours achieved under staff training Picture 1: Health test camp for skin diseases. on occupational HSE. - Health awareness session on “Skin diseases” was conducted in which 80 employees participated. - Hinopak arranged medical test camp for skin diseases in October 2019 for employees. Total 132 employees were checked (ref picture 1 ) - Health awareness session on “Influenza, its cause, prevention & control” was conducted in September 2019 in which 120 employees participated. - 9th Safety Conference was held in May 2019 in order to enhance safety culture in the company. (ref picture 2) Picture 2: Group Photo on 9th Health & Safety - Announced mock drills held for both manufacturing Conference facilities and the head office staff to assess organizational readiness to cope with emergencies. ERP teams include rescue, firefighting, spill etc (ref picture 3) - As per our OHSAS Policy, every year, both Canteen staff and drivers go through medical checkups to ensure they are fit for the job. This year, 24 drivers, and 18 Canteen staff went through these tests, which includes CBC, Urine DR, Anti HCV, Eye Test, Chest PA, HBs Ag & HIV to name some. - To raise knowledge, awareness and skills amongst school students about road safety issues, road safety Picture 3: Picture taken during mock drill activity awareness sessions titled ‘Hino Aagahi’ were 4 Hinopak Motors Limited Human Rights conducted in several government schools in Karachi, educating 100 children (ref picture 4) . Monitoring & Awareness - Monthly Safety Patrolling by Top Management, in order to visually check safety issues of both the plants and to show their seriousness towards implementation of safety policies. - Daily safety monitoring/patrolling around the assembly and manufacturing facilities being done through the Safety Administration Team (SAT).