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Sustainability Report 2017

Manufacturing Integration Technology Ltd

Contents

1. Board Statement 1

2. Economic 2 2.1 Our Business 2 2.2 Economic performance, Financial summary, Markets 2 2.3 ISO9001 & ISO14001 2

3. Stakeholder Engagement 3

4. Material Factors 4 4.1 Materiality Assessment 4

5. Environment 6 5.1ElectricityandWaterConservation 6 5.2WorkPlaceAirandEnvironmentCertification 7 5.3LawsandRegulations 7 5.4SupplyChain 7 5.5InternationalEnvironmentCalendar 7

6. Social 8 6.1FairEmploymentPractices 8 6.2Training&Education 8 6.3CompensationandRewards 8 6.4PerformanceManagementandEngagement 9 6.5SafetyHealthandOverallWellBeing,Employeebenefits 9 6.6LeadershipDevelopmentforSuccessionPlanning 9 6.7WorkforceCharacteristicsandDiversity 9 6.8CommunityEngagement 12

7. Governance 13 7.1CorporateGovernance 13 7.2EthicsandIntegrity 14 7.3Whistle-BlowingPolicy 14 7.4RiskManagement 14 7.5InvestorRelations 15

GRI Standards Index 16Relevant corresponding reference location in our Annual Report 2017

1Manufacturing Integration Technology Ltd


Buildingsustainablebusinessesdeliver long-termshareholdervalueandgrowth.Webelievethata trulysustainablebusiness not onlymakes good economic sense, but does so in a responsibleway that enhances value for ourMITbrand,businessandstakeholders.OurBoardofDirectorsoverseesthebusinessaffairsoftheGroupandiscollectivelyresponsibleforourlong-termgrowthandsuccess.TheBoardremainscommittedtoadvanceoursustainabilityeffortsbyaligningsocialandenvironmentalperformancewiththebusinessandfinancialimpact.

Manufacturing Integration Technology Ltd (hereafter referred to as“MIT”or the“Group”) presents our first annualSustainabilityReport(the“SRReport”)whichcoversourGroup’soperationsandperformancefrom1January2017to31December2017(the“reportingperiod”).

This Report examines the Group’s key sustainability issues, management approach, performance measures andoutcomes.ItispreparedinaccordancewiththeGRI(4G)standards:CoreOptionandisguidedbytheSGXSustainabilityReportingGuide.Our inauguralReportprovides informationontheGroup’sactivitiesprimarily inSingapore. Itsonlyother overseas operations is in Shanghai, Chinawhereweoperate a precisionmachining and equipment assemblyfacility.SustainabilityperformanceinourShanghaiplantwillbeintegratedintooursubsequentSRsasitscontributionstotherestructurednewcorebusinessbecomemoresignificant,especiallywiththeimminentdivestmentoftheGroup’ssemiconductorbusinesstoaChineseprivateequityfund.(Pleaseseefootnote1)

The formulationofamorecomplete setof sustainability targetsonmaterialEnvironmental, SocialandGovernance(ESG)issuesstillrequirestimeandco-ordinationamongstourprocessownersandwehopetosharemoreabouttheminoursubsequentreports.Wehavenotsoughtexternalassuranceforthisreportingperiod.

OurBoardofDirectorsappointsaSustainabilitySteeringCommittee(SSC)headedbyourExecutiveDirector,Mr.LimChin Tongand supportedby the SSCCorporate team. The SSC’s role is primarily to ensure that all ESG factors andmaterialtopicswhicharelikelytoimpacttheGrouparedeterminedandevaluatedcomprehesivelywithappropriatemeasures taken to address them.

TheBoardholds thebelief thatachieving superiorESGperformancemustbeanongoingprocess thatwillnotonlyenhancetheGroup’sreputationalcapitalbutwillalsohelpdrivethebottomlineandlong-termhealthofthebusiness.

OurCommitteehadworkedcloselywithall relevant stakeholders inourecosystemtogathervaluablematerialESGfactorsandinsightsforoursustainabilityassessment.Wearepleasedthatseveralnewpoliciesandinitiativeshadbeendevelopedfromthesediscussionstoformpartofouroverallbusinesssustainabilitystrategy.

BoardStatement

Footnote1PROPOSEDDISPOSALOFTHEENTIREISSUEDSHARECAPITALOFMITSEMICONDUCTORPTE.LTD.http://infopub.sgx.com/FileOpen/MIT_SPA.ashx?App=Announcement&FileID=516788

2 Manufacturing Integration Technology Ltd


2.1 Our Business

ManufacturingIntegrationTechnologyLtd(MIT)wasfoundedin1992byourChairmanandManagingDirector,MrTonyKwong,toprovideindustrialautomationservicestotheelectronicsindustry.Overaspanof25years,wehavedevelopedtobecomeacapitalgoodssupplierservingthesemiconductor,solarandcontractequipmentmanufacturingindustries,not just inSingapore,butacrossAsia,EuropeandUSA.MITbecameapublic listedCompanyin1999withitssharestraded on the Main Board of the Singapore Exchange Limited.

Today,weoperatefromthreerentedfacilities,twoinAngMoKio(Singapore)andtheotherinJiadingDistrict(Shanghai,China).OurcorporateheadquartersisinSingaporetogetherwithourR&Dcentreforsemiconductorequipment.ThesemiconductorequipmentaremanufacturedinSingaporewhilethemoreheftysolarmachinesareassembledinourJiadingfacility.Inrecentyears,wehavedeepenedourlocalCEMcapabilitiestoofferbuilt-to-printmanufacturingservicesunder CASEM (Asia) Pte Ltd and customized factory automation solutions provided by Automated ManufacturingSolutionsPteLtd;bothwholly-ownedsubsidiariesofMIT.

2.2 Economic Performance, Financial Summary, Markets

WeclosedFY2017withsalesofS$65.929mandanetprofitofS$6.006m.Theexternalenvironmentwillcontinuetoremainuncertainthatcouldimpingeondemandgrowthintheglobalsemiconductorindustryespeciallyinthenear-term.Goingforward,weshouldseestrongerperformanceinourcontractequipmentmanufacturing(CEM)businessasitevolvestobecomethenewcentrepieceofMIT'scorebusiness.

Statement of Comprehensive Income(in S$’000 ) FY2013 FY2014 FY2015 FY2016 FY2017

Total revenue 31,301 64,273 90,351 35,527 65,929EBITDA(Earningsbeforeinterest,tax,dep&amort) (5,207) 10,962 20,495 (3,345) 7,831EBIT(Earningsbeforeinterest&tax) (6,505) 9,493 18,772 (4,674) 6,422Income(Loss)beforetax (6,491) 9,305 18,866 (4,556) 6,510Income(Loss)netoftax (6,491) 10,172 15,426 (5,496) 6,006Earningspershare(cents) (2.98) 4.65 6.79 (2.45) 2.61Dividendpayoutratio N.A. 10.8% 14.7% N.A. 38.3%Grossdividendpershare(cents) N.A. 0.50 1.00 N.A. 1.00

Figure 1: Financial Highlights of the last five years

2.3 ISO9001 & ISO14001 (since 2005)

WehavebeenISO9001(QualityManagement)&ISO14001(EnvironmentManagement)certifiedunderanIntegratedManagement System (IMS) since 2005. The primary focus of our IMS quality management is to meet customerrequirementsandtostrivetoexceedcustomerexpectations.Wemeasureoursuccessbyourabilitytoattractandretaintheconfidenceofcustomerswiththecontinuingstrongsupportofourbusinessandsupplychainpartners.Everyaspectofourinternalandexternalcustomerinteractionprovidesanopportunityforcontinuousimprovementtherebycreatinggreaterbusinessvaluethatissustainableoverthelonger-term.

As a testament to our product assurance, our semiconductor equipment are also certified to SEMI S2/S8 and CEMarkstandardstoensureaglobalstandardofsafetythataredemandedfromourequipmentbuyers.Thesestringentinternational standards cover a wide range of safety, health and environmental protection provisions, includingregulatoryrequirements,electrical,mechanical,fire,chemical,radiation,noiseandergonomicshazardsandmore.Thisevenincludeswarninglabelsandinstructionsontheproperdecommissioningofoursystemsfromactivestatusorthedisposaloftheequipment(oritsparts)attheendofitsproductivelife.

Economic



3. Stakeholder Engagement

Tocreatesustainablevalueforourstakeholders,weactivelyengagethemthroughthefollowingchannels:

S/N Stakeholders Engagement Channels/Platforms1 Employees Emails and bulletins, Bi-annual Managerial Open-Comm sessions, Departmental

Meetings,MITIntranet,StaffRecreationProgrammes

2 Shareholders/Investors/Analysts

AGMs,CompanyWebsite(wwww.mit.com.sg),AnnualReports,Half-yearlyfinancialreportdisclosure,SGXNetannouncements,Investorrelationstalks

3 Customers Supplier Evaluation /Key EquipmentGroup/ Technology roadmapmeetings, sitevisits,customeraudits,customersatisfactionsurveys

4 Vendors/Suppliers Meetings, vendor audits, supplier performance reviews, purchase agreements,supplier events

5 Community TradeorbusinessorganizationssuchasSNEF,SBF,SEMI,SSIA.Collaborationwithtertiaryinstitutionsoninternshipprogrammes

6 GovernmentandRegulators

Meetings with local authorities, seminars/talks, consultations with regulatorybodies,Annualreportsandpressreleases

Figure 2: Stakeholder Engagement Highlights

Stakeholder Engagement

Employees

Shareholders/ Investors / Analysts

Customers

Vendors/ Suppliers

Community

Government & Regulators



4. Material Factors

4.1 Materiality Assessment

OurmaterialityassessmentprocessforFY2017involvedtheSSCteaminconsultationwithourmajorstakeholderstoestablishESGissuesthataredeemedmaterialtoourcorebusinessesandthatarealsoofmajorconcerntothewidercommunity(Fig.3).Thisistoensurethatourstrategiesandresourcesarebetterdeployedinthoseareasthatmattermost.Fromthisprocess,16attributeswereidentifiedandprioritized(Fig.4)accordingtotheirmaterialitybasedontheGRI’sSustainabilityReportingStandards2016.

Stakeholders Stakeholders' Concerns Engagement Channels/PlatformsEmployee 1. Safe and conducive workplace

2.Fairlaborpracticesandcompensation3.JobSatisfaction&CareerDevelopment

√Traininganddevelopmentopportunities√Grievancehandling/feedbackchannels√ Regular reviews and performance appraisals

incorporating people development and careerplanning

√Progressivehumanresourcemanagementpractices

Shareholders/Investors/Analysts

4.Stableandsustainablegrowth5.Reasonablereturnstoshareholders6.Goodcorporategovernance

√Goodfinancialdiscipline√Strongcorporategovernancepractices√Sustainablebusinessmodel

Customers 7.Quality,Cost&Delivery8.RiskManagement(BusinessContinuity)9. Ethical leadership

√Strengthenourqualitymanagementsystems√ReinforceourEnterpriseRiskManagement framework√MaintainstrongInternalcontrols√Zerotoleranceoncorruptionandfraud

Vendors/Suppliers

10.FairVendorSelectionprocess11. Timely payment 12.Ethicalsupplychainpractices

√Ensuringintegrityinallpurchasingdecisions.√Adheringtopurchasingagreementterms√InternalCodeofConductthatalsoappliestosupply

chain partners

Community 13.EmploymentOpportunities14.Goodcorporatecitizenship

√CreatingnewjobsandbuildingaSingaporecore√Re-employmentofsilverworkforce√Participatingincommunityevents

Government& Regulators

15. Maintain high standards of corporate governance

16.Supportdevelopmentoflocalindustries

17.Protectionofenvironment

√Complywithallapplicablelawsandregulations√Addedassurancefrominternalandexternalaudits√MaintainandimproveourIntegratedManagement

System(IMS)

Figure 3: Material Factors assessed by Stakeholders

Material Factors



4.1 Materiality Assessment (cont'd)

Figure 4: Materiality Assessment based on the 16 attributes identified in Figure 3

Material Factors



5. Environmental

5.1 Electricity and Water Conservation

Onenvironmentalmanagement,weaimtocomplyfullywithall legalregulationsandrequirementsandtoconsumeresourcesresponsibly, focusingonminimizing impactsthroughpreventionatsource,reduction,re-useandrecyclinginitiatives.

Our energy and water efficiency efforts also apply to our daily office activities as we actively seek to reduce ourconsumptionofenergyandwaterthroughresponsiblepracticessuchas:

• Upgradingofequipmentandlightingthataremoreenergyefficient• Separationofpaper/plastic/metal/generalwasteforrecycling• Collectionandrecyclingofofficepaperwastebyauthorizedcontractors• Automationofbusinessprocessese.g.ERP,E-leavesystemetc• Inculcating“GreenOfficeandGreenHome”habitssuchasswitchingofflightsandelectricalapplianceswhen

notinuse,practicingairconditioningenergysavingtipsandevenencouragingtheuseofrecyclablebagsandreusablecutlerysetsorcontainersformealtakeaways

Ourmostdirectenvironmental impactstemsfromtheuseofelectricity.Ourwaterconsumptionhasbeenrelativelyminimalovertheyears.Therearenowaterdischargeorchemicalsusedinourequipmentmanufacturingprocesses.

Belowaresomestatisticsonourconsumptiontrendandrecordsofthelastthreeyears:

Year Actual Consumption (KWh) Turnover (S$M) (KWh/S$)2015 1,351,711.81 90.4 0.0152016 1,396,202.14 35.5 0.0392017 1,504,127.02 65.9 0.0232018(Target) - - 0.021

Figure 5: KWh Consumption vs Turnover

Year Total direct CO2 or Carbon Equivalent Emissions

(Metric Tons)

Total indirect CO2 or Carbon Equivalent Emissions

(Metric Tons)

Turnover (S$M) Emissions Intensity

(MT/S$’000)2015 N.A 1,006 90.4 0.01112016 N.A 1,039 35.5 0.02932017 N.A 1,119 65.9 0.01702018(Target) - - 0.0150

Figure 6: Emissions Intensity

SOURCE:https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator

Environmental



5. Environmental (cont'd)

Figure 7: Collection and Recycling of Office paper waste

5.2 Work Place Air and Environment Certification

MIThasbeen certified ISO14001 since2005 toprovideanassurance to all stakeholders thatwehaveaneffectiveenvironmentalmanagementsysteminplacetominimizetheimpactouroperationswouldhaveontheenvironment,toensurethatallapplicablelawsandregulationsarecompliedwithandtocontinuallyimproveonourbusinessprocessesto achieve higher level environmental standards that we have set for ourselves.

Toensureasafeandhealthyphysicalworkenvironmentisbeingmaintained,indoorairqualityassessmentshavealsobeenconductedwithinourpremisesonaperiodicbasis,lasttestedon14thMarch2017.

5.3 Laws and Regulations

In the area ofWSHE,we comply fullywith the relevant laws and regulations under the Fire SafetyAct,WorkplaceSafetyandHealthAct,EnvironmentPublicHealthActandEnvironmentalProtectionandManagementActthatregulatesgeneralwastecollection,thecontroloftradeeffluents,ozone-depletingsubstances(ODS),noise,hazardoussubstances,airpollutionandpreventionoffireandothers.Thereisnorecordofviolationagainstanyoftheregulationsduringthereportingyear.

5.4 Supply Chain

Ourmainsuppliersconsistoforiginalequipmentmanufacturers(OEMs)andfabricationhouses.OEMssupplyuswithstandardpartsorcomponentssuchasmotors,pneumatics, lasers,optics,actuators,sensorsetcwhereasfabricationsuppliers provide mainly machined parts, sheet-metal parts, structures and covers according to our engineeringspecifications.Weseektoinfluenceoursupplychainpartnerstowardssustainablepracticesbyoutliningourexpectationsinthevendorselectionprocessaswellasthroughourannualevaluationoftheirperformance.ToremaininourApprovedVendorList(AVL),ourtopvendorshadtomeetahostofperformancecriteriarangingfromqualityassuranceandservicelevels aswell as adhering tobestpracticesor internationally establishedCodeofConduct governinghuman rights,businessandintegrity,andsafety,healthandenvironmentalstandards.Weaimtoapplythesestandardstoallournewmajorsuppliers/vendors. It isourbeliefthatsecuringapoolof like-mindedsuppliersthatshareourcommitmenttosustainabilitywillmitigateriskstoouroperationsandreputation.Wearealsobroadeningourvendorbaseforalternativepartssupplytoimprovedemandplanning,costcompetitivenessandensurecertaintyofsupply.Wethereforeaimtomaintainatleastoneprimaryandonesecondarysupplysourceforcriticalpartsandlongleaditemswhereverpossible.

5.5 International Environment Calendar

We promote international Environmental Days as special days to raise the awareness of environmental issues andenvironmentalprotection.Wemarktheseenvironmentaldaystodisseminateinformation,educateaboutrisksinourecosystem,andtoencourageparticipationon“Carfreedays”,observing“EarthHour/Day”,”WorldBiologicalDiversityDay”andeven“WorldAnimalDay”,justtonameafew.

OurnextapproachbeyondawarenesswillbetoencourageandmeasuretheparticipationlevelofourstaffinthevariousactivitiesassociatedwiththeseglobalinitiativessothatthesevaluescanbeimbibedintothematapersonallevelandalsoaspartofourcorporateDNA.

Environmental



6. Social

MIT is committed to carrying out its business missionefficiently ,effectivelyandresponsiblywith integrityandrespect for the law, the environment and well-being ofemployees and the community at large. Our commitment tomaintainthehigheststandardsofbusinessethicsandtocontinuallyimproveourCorporateSocialResponsibilitypractices is paramount. We expect the same level ofcommitment from every employee and our partners in the conductoftheirdailyworkaffairsandintheirrelationshipwith all our major stakeholders.

Our Employees

6.1 Fair Employment Practices

MITadherestothephilosophyespousedintheTripartiteGuidelinesonFairEmploymentandotherbestHRpracticesthatwehadpublicly pledgedwith TripartiteAlliance forFairandProgressiveEmploymentPractices(orTAFEP).

WealsosubscribetotheResponsibleBusinessAllianceCodeof Conduct (formerly the Electronic Industry CitizenshipCoalition)toensurethatourworkingconditionsaresafe,that workers are treated with respect and dignity and that ourbusinessoperationsareenvironmentally responsibleand conducted ethically.

MITendeavorstoupholdthespiritofthesebestpracticesand to conform to (and continually improve on) itsstandards in accordance with acceptable managementpracticeswithinthejurisdictionofthelocallawsinwhichweoperate.Someofthekeyprinciplesareto:

• Recruit, select, promote, reward and train employees on the basis ofmerit such as skills, experience andability, regardless of race color, age, gender, sexualorientation, ethnicity, national origin, disability,pregnancy, religion, political affiliation, unionmembershipormaritalstatus

• Treat employees fairly and with respect and implement progressivehumanresourcepractices

• EmbracethediversityofallmemberswithintheMITfamily

• Provide employees with equal opportunities fortraining and development based on their individualneedstohelpthemachievetheirfullestpotential

• Promote and provide a harassment free environment• Reward employees fairly based on their ability,

performance,contributionsandexperience• Respectforprivacyandprotectpersonalinformation

Social

• Provide transparency in and accountability for theGroup’sperformanceandpractices

• AbidebylocalregulationsincludingSafety.HealthandEnvironmental laws

6.2 Training and Education

Wearefocusedondevelopingourpeopleandgettingthevery best from our staffwhilst helping them to achievetheirindividualcareeraspirations.Wewantouremployeesto feel that they are contributing to our purpose andbelievetheorganizationsupportstheminthisendeavour.MIToperatesinatechnologyspacewherewecontinuallyinvestonR&D.Similarly,webelievethat it is inourbestinterest to invest in the careers of our employees through continuouslearning.WedothisbyinvestinginstructuredOn-Job-Training, providing Core Skills Training (at bothindividual and group levels), as well as exposing themto development opportunities where they can get toundertake stretched projects or assignments, and even to lead them.

Year Training Places

Training Hours

Avg no. of

training hours

Avg No. of Training day (260 days/

year)2015 590 3344 18.37 12.862016 476 2131 11.40 8.202017 360 1675 8.54 6.442018(Target)

550 2700 15.0 10.00

Figure 8: Training MetricsNote: Training data only includes Orientation and external trainingconducted

6.3 Compensation and Rewards

Ourcompensationpolicyisintendedtobewell-balanced,competitive, performance based and aligned with theachievements of each employee. While the approach reflects an emphasis on pay-for-performance, it is alsodesignedtoattract,motivateandretainhighperformingand high potential employees. Employees are alsoincentivizedthroughannualbonusthataretiedtofinancialandnon-financialmetricsaswellasstock-optionawardsforkeystafftoenablethemtobenefitfromthegrowthoftheGroup.



6. Social (cont'd)

6.3 Compensation and Rewards (cont'd)

In addition, a range of statutory and non-statutory staffbenefitsareofferedtoemployees includingmedicalanddental benefits, term life, personal accident plans, longservice awards, paternity, maternity and other leave benefits etc. that we peg to industry practices. Beyondthis, MIT provides paid-leave for employees attendingwork-related training courses making use of their ownSkillFuture credits.

We believe it is also important to recognize the rightbehavior and reward them (either individually orgroups) financially andbypeer to peer recognition.Our“SpontaneousAward”programhasworkedwelltoensurethatexceptionaleffortsperformedbyemployee(s)aboveandbeyondthenormalcourseofdutydonotgounnoticedbut are positively reinforced through these on-the-spotrewards.

6.4 Performance Management & Engagement

MIT is committed to carry out an objective and fairperformance management system to align the Group’sobjectives with individual performance, reward resultsand to support people development in the process. Even though the formal PA assessment is conducted once a year,managersand their staffareencouraged to reviewand discuss performance issues on an ongoing basis.Performance Improvement plans are also developed for under-performingemployees.

Apartfromone-on-onedialogueswithemployees,wealsoengage them throughothermedia such asOpen-Commmeetingswithsenior staff, regulardepartmentbriefings,corporateupdatesthroughe-platforms(emails, intranet)and even during corporate social events.

Employee feedback is also encouraged to help MITunderstand what makes them more engaged and to address real and latent disengagement risks in the process. Such feedback channels are not confined toengagementsurveysbutwillalsoincludeallformsofopencommunications and focused groups (both formal andinformal).

6.5 Safety, Health and overall well being, Employee Benefits

Our WSHE Committee includes representation fromthevariousbusinessunits tohelpus inourendeavor toensurethattheworkplacecontinuestoremainfreefromindustrialhazardsandaccidents.

Social

Apart from monthly meetings and inspections, theCommittee for the reporting year had been very muchinvolved in other activities such as promoting WSHEawareness, reviewing our safety risk management framework, undergoing training in first aid (and AED),exercising vigilance over dengue and ZIKA outbreaks,and seeing to the conduct of emergency evacuationexercises.Oneofthemanyotherrecommendationsthathadbeencarriedoutwasalso toensure thatworkplacesafety policies and manufacturing work instructionsare documented in at least two major languages for the benefitofourforeignworkers.

Number of Accidents and Man-Days Lost (2015-2017)

Year Man-days Lost Number of Accidents2015 100 12016 6 22017 8 22018(Target) 0 0

Figure 9: Number of Workplace Accidents over last three years

Alloftheincidentsreportedhavebeenminor.Singularcasein 2015 involved a minor ankle injury sustained outside of theofficebutinconnectionwithemploymentrequiringaperiodofhospitalizationleave.

6.6 Leadership development for succession planning

OurBoardofDirectorsthroughitsNominatingCommitteehasoversightofSeniorManagement(includingtheCEO)talent and succession plans which is reviewed annually. EnsuringapipelineofeffectiveleadersfortheGroupwhowill be ready and able to assume greater responsibilitywhen critical positions become available is still work inprogressfortheBoardandHR.

6.7 Work Force characteristics and Diversity

We view the diversity of our people as a source of strength. We seek to create an inclusive work environment that extendsbeyondjustageandgenderdifferencestoincludedrawing on the range of cultural dimensions represented bythedifferentnationalitiesandbackgrounds.



Social

6.7.1WorkForceStrength

Figure 10: Employee Strength at year endFootnotes: Employees located at Singapore HQ only (exclude MIT Shanghai)*2017 Others include nationalities from Myanmar, Indonesia, United States and Switzerland

6.7.2GenderDiversity

Gender Diversity

Figure 11: Gender Diversity

6.7.3NumberofSeniorPositionsheldbyMales/Females

Managerial / Principal EngineerLevel & Above

Figure 12: Senior positions held by Male/Female staffOurExecutiveCommittee(EXCO)teamiscurrentlyheldbySingaporeans(male)



6.7.4AgeDistribution

Figure 13: Age Distribution

6.7.5Employees’Qualifications

Figure 14: Employees’ Qualifications

6.7.6Attrition

Figure 15: Number of new hires vs resignations

Social



Social

6.7.7OfferingRe-EmploymenttotheSilverWorkforce

Recognizingthedepthofknowledgeandexperiencethatour more senior colleagues bring to the workplace, weencouragethemtocontinueworkingwithusbeyondthestatutory retirement age. To-date, all eligible employeeshave been offered one to three years re-employmentcontracts.

6.8 Community Engagement

To support the community in which we operate, our employees are encouraged to contribute their personaltimeandexperiencemeaningfullytobenefitsociety.Oneof the ways is through charity work and to support causes for the needy or less fortunate in the spirit of volunteerism. MIT is also investing in our youths through internshipprograms and providing practical work experiences forthese students.

6.8.1 Internship Collaboration with ITE and tertiaryInstitutions

• NanyangPolytechnicSchoolofEngineering12weeksITP

• SPSchoolofMechanical&AeronauticalEngineering22 weeks Internship

• RP School of Engineering 20 weeks internship

• NTUSchoolofElectrical&ElectronicEngineering20weeks Industrial Internship Programme

• SMU School of Management 15 weeks InternshipProgramme

• ITE School of Accountancy 22 weeks Internship Programme

6.8.2Recruitmentofgraduatingstudents

WefurthermoreencouragegraduatingstudentstoapplyforsuitablepositionswithinourGroupofCompaniesthattheyhadbecomefamiliarwithduringtheirinternshipwithus.

6.8.3IndustrialVisits

MITasacorporatecitizenalsoactivelycollaborateswithtertiaryinstitutionsparticularlywithSingaporePolytechnic,NgeeAnnPolytechnicandNanyangPolytechnicwhereweregularlyorganizefactoryvisitsforstudents.Wealsohostteaching delegates from within and outside of the region to enable them to gain first-hand insights into our localhome-grown capabilities in the high-tech engineeringspace.

6.8.4MembershipofAssociations

• SingaporeNationalEmployersFederation• SingaporeBusinessFederation• SEMI• SingaporeSemiconductorIndustryAssociation

6.8.5SocialandEconomicLawsandRegulations

MITcomplieswithallgovernmentallawsandregulationsinthisarea.Thereisnorecordofanynon-complianceormanagement labourdispute lodgedwith theMinistryofManpower.



Governance

7. Governance

7.1 Corporate Governance

A high standard of corporate governance is integral in ensuring sustainability of the Group’s business as well assafeguardingshareholders’interestandmaximizinglongtermshareholdervalue.WecontinuallystrivetoensurethatthevalueofgoodcorporategovernanceisdeeplyembeddedintoourcorporateDNA.WeareveryheartenedtonotethatourGovernanceandTransparencyIndex(GTI)rankingshadsteadilyimprovedovertheyearsculminatinginhavingtheprestigious“TransparencyAward–Small&MidCap”conferredonusattheSIAS18thInvestorsChoiceAwards2017.(PicturesSource:SIASwithpermission)

Figure 16: GTI Ranking and Scores

Source: SGX website 2018

Award winners of The SIAS 18th Investors Choice Awards 2017

GTI Year Score Ranking2013 29 4802014 37 3662015 44 3402016 60 1522017 65 100

2018(Target)

Our Chairman & MD, Mr. Tony Kwong receiving the award from the SGX RegCo CEO Mr. Tan Boon Gin



Governance

7.2 Ethics and Integrity

MIT'sCodeofConductestablishesanethical frameworkforbusinesspracticesandconducttowhichallemployeesarerequiredtoadheretowithoutexceptions.Employeesare expected to exercise good judgment, prudence and with clarity of intention and to seek to avoid eventhe appearance of any improper behavior in their dailyinteractions with their colleagues, customers, suppliers,business associates and with the general public. MITexpects the same high standards of business ethics andintegritytobeupheldbyouragentsorpartnersandthosethatitdoesbusinesswith.

MIT'sCodeofConductcoversethicalissuesandguidanceconcerning:

• Outside employment and Personal Interest• Conflictofinterest• Compliancewithlaws,rulesandregulations• InsiderTradingprohibitions• DisclosurerequirementsandAccuracyofrecords• InvestorRelationsandBusinessCommunications• Social Media• DiscriminationandHarassment,andPrivacy• Workplace Violence• ProperUseandProtectionofAssets• CompetitionandFairDealing• BusinessIntegrityandNoimproperAdvantage• BriberyandCorruption(Entertainment,Giftsand

Gratuities)• PurchasingPractices&EqualBusinessOpportunity• Copyright and Licensing Compliance• Confidential Information/Intellectual Property

Protection

Awarenessiscreatedfromtheveryfirstdayofemploymentbywayofbasicethicstrainingatthetimeofon-boarding.MasterclassesonBusinessEthicsforseniorstaffarealsobeingconductedperiodically.Aspartofourinternalauditcompliance practices, all staff are required to sign anacknowledgement of their compliance to the Code and to declareanyexistingorpotentialconflictofinterestonanannualbasis.Therearefurthermoreprocedurestoensurethatall transactionswith interestedpartiesare reportedtimely to the Audit Committee whilst ascertaining thattransactionsarebeingconductedonanarms-lengthbasis

and are not deemed prejudicial to the interests of the Grouporitsshareholders.

IndealingwithMIT’ssecurities,ourDirectorsandOfficersare also expected to strictly abide by internal Code ofBest Practices on Securities Transaction established incompliance with SGX listing rule 1207(19) to ensurethat they do not run afoul of securities regulationsespecially on insider-trading. The Securities TransactionCode furthermore enables MIT to monitor such sharestransactions by requiring them to report within two (2)business days whenever they deal in its securities. To-date,therehasbeennoincidentofcorruption(allegedorotherwise)andnolegalcasesbroughtagainsttheGrouporouremployeesbytheauthorities.

7.3 Whistle-Blowing Policy

Bribery or corruption or ethical violations in any formwill not be tolerated in any circumstances and anyincidentreportwillbelookedintoveryseriously.Wehaveestablished a direct whistle blowing channel that goesrightuptotheattentionoftheAuditCommitteemembers(comprising Independent Directors) who will deal withthese matters or any other serious acts of businessimpropriety. Whistle-blowers are assured of anonymity,confidentialityandnon-retaliation.Wearegladtoreportthatsince2008whenourwhistle-blowingpolicywasfirstintroduced, therehasbeennoofficial complaintor caselodgedwiththeCommittee.

7.4 Risk Management

WehaveanEnterpriseRiskManagement(ERM)Committeeinplace,reportingtotheAuditCommitteeoftheBoard.The ERM is responsible for identifying operational,compliance andfinancial risks areas affecting theGroupand implementing measures to mitigate these risks. A2-pagesummaryofourriskmanagementreporthasbeenhighlighted in our Annual Report 2017. By identifyingandmanaging theserisks theGroupwillbeable to takeabalancedapproachtomanagingrisksandrewardsandtomakemore informed decisions to better protect andsafeguard the interests of our stakeholders.



Governance

7.5 Investor Relations

We welcome all stakeholders to approach us and support the sustainability of our business. You may also readthe Group's latest announcements at www.sgx.com orparticipateinourAGMandothercorporateeventstokeepapprised on more current developments. If you have any questions, comments, suggestions or feedback relatingto this report, please send them to Mr Lim Chin Tong, [email protected].

Executive Director, Mr. Lim Chin Tong during one of his IR Talk



GRI Standards General Disclosures Annual Report Section Reference

Organization Profile

102-1 Nameoftheorganization Cover Page102-2 Activities,brands,products,andservices CompanyProfilePage1102-3 Locationofheadquarters CorporateInformationInnerbackpage102-4 Locationofoperations Chairman’s Message Page 2-3 and

OperatingReviewPage8102-5 Ownership and legal form Shareholders’InformationPage89102-6 Markets served Company Profile Page 1, Chairman’s

MessagePage2-3102-7 Scaleoftheorganization Page9andNotes toFinancial Statements

Page77102-8 Informationonemployeesandotherworkers SRReportPage8-13102-9 Supply chain Page1-3andSRReportPage7102-10 Significantchanges to theorganizationand its

supply chainChairman’sMessagePage2-3OperatingReviewPage8FinancialSummaryPage 9

102-11 Precautionaryprincipleorapproach RiskManagementPage11-12102-12 Externalinitiatives Chairman’sMessagePage2-3102-13 Membershipofassociations SR Report Page 12

Stragtegy

102-14 Statementfromseniordecision-maker SR Report Page 1 Board Statement102-15 Keyimpacts,risks,andopportunities SRReportPage4-5Materiality

Ethics and Integrity

102-16 Values, principles, standards, and norms of behaviour

SRReportPage8-15Social&Governance

102-17 Mechanisms for advice and concerns aboutethics

SRReportPage13-15Governance

Governance

102-18 Governancestructure BoardofDirectorPage4-5KeyExecutivePage6-7

102-19 Delegatingauthority CorporateGovernancePage14-26102-20 Executive-level responsibility for economic,

environmentalSRReport-BoardStatementPage1

102-21 Consulting stakeholders on economic,environmental, and social topics

SRReport-BoardStatementPage1

102-22 Composition of the highest governance bodyanditscommittees

CorporateGovernancePage14-26

102-23 Chairofthehighestgovernancebody BoardofDirectorsPage4-5102-24 Nominating and selecting the highest

governancebodyCorporateGovernancePage19-20

102-25 Conflictsofinterest SR Page 14102-26 Role of highest governance body in setting

purpose, values, and strategyCorporateGovernancePage14-26

GRI (G4) Standards ContentIndex




GRI Standards General Disclosures Annual Report Section Reference Governance

102-27 Collective knowledge of highest governancebody

BoardofDirectors/KeyExecutivesPage4-7

102-28 Evaluating the highest governance body’sperformance

CorporateGovernancePage15and22-24

102-29 Identifying and managing economic,environmental, and social impacts SRReportPage1-15

102-30 Effectivenessofriskmanagementprocesses RiskManagementPage11-12andCorporateGovernancePage26-31

102-31 Review of economic, environmental, and social topics SRReport-Page2-12

102-32 Highestgovernancebody’sroleinsustainabilityreporting SRReport-Page1

102-33 Communicatingcriticalconcerns SRReport-Page3-4102-34 Natureandtotalnumberofcriticalconcerns SRReportPage4-5

102-35 Remunerationpolicies Corporate Governance Page 22-23 andStatementByDirectorsPage27-31

102-36 Processfordeterminingremuneration CorporateGovernancePage22102-37 Stakeholders’involvementinremuneration Nil102-38 Annualtotalcompensationratio Notdisclosedduetocommercialsensitivity102-39 Percentage increase in annual total

compensationratioNotdisclosedduetocommercialsensitivity

102-40 List of stakeholder groups SRReport-StakeholderEngagement,Page3-4

102-41 CollectiveBargainingAgreements NA102-42 Identifyingandselectingstakeholders SR Stakeholder Engagement Page 3102-43 Approach to stakeholder engagement SR Stakeholder Engagement Page 3102-44 Key topics and concerns raised SRStakeholderEngagementPage4-5

102-45 Entities included in the consolidated financialstatements

NotestotheFinancialStatementsPage41-88

102-46 Definingreportcontentandtopicboundaries SR Board Statement Page 1 102-47 List of material topics SRStakeholderEngagementPage4-5102-48 Restatementsofinformation N.A.,firstreport102-49 Changesinreporting N.A.,firstreport102-50 Reportingperiod SR Board Statement Page 1

102-51 Dateofmostrecentreport N.A.asthisisthefirstreportissued

102-52 Reportingcycle SR Board Statement Page 1102-53 Contactpointforquestionsregardingthereport SR Page 20

102-54 ClaimsofreportinginaccordancewiththeGRIStandards SR Board Statement Page 1

102-55 GRIcontentindex SRReportPage16-19102-56 External assurance We have not engaged external assurance



GRI Standards General Disclosures Annual Report Section Reference Market Performance

201-1 Direct economic value generated anddistributed

Chairman’s Message Page 2-3, OperatingoverviewPage8,FinancialSummaryPage9,5YearFinancialHighlightPage10

201-4 Financial assistance received from government Page 54Market Presence

202-1 Ratiosofstandardentry levelwagebygendercompared to local minimum wage

NA

202-2 Proportion of senior management hired fromthe local community

SRSocialPage10-11

Anti-Corruption

205-1 Operations assessed for risks related tocorruption

SRGovernancePage13-14

205-2 Communication and training about anti-corruptionpoliciesandprocedures

SRGovernancePage13-14

205-3 Confirmed incidentsof corruptionandactionstaken

Nil

Environment

302-1 Energyconsumptionwithintheorganization SREnvironmentalPage6-7302-3 Energy intensity SREnvironmentalPage6-7302-4 Reductionofenergyconsumption SREnvironmentalPage6-7

Emissions

305-1 Direct(scope1)GHGemissions NA305-2 Energy Indirect Greenhouse Gas Emissions

(Scope2)SREnvironmentPage6

305-4 GreenhouseGasEmissionsIntensity SREnvironmentPage6305-5 ReductioninGHGemissions SREnvironmentPage6305-7 Nitrogen oxides (NOX), sulfoxides (SOX), and

othersignificantairemissionsSREnvironmentPage6

Effluents and Waste306-1 Waterdischargedbyquality&destination SREnvironmentPage7

Environmental Compliance307-1 Non-compliancewith environmental laws and

regulationsNil

Supplier Environmental Assessment308-1 Percentage of new suppliers that were screened

using environmental criteriaSRSupplyChainPage7

308-2 Negative environmental impacts in the supplychainandactionstaken

SRSupplyChainPage7





GRI Standards General Disclosures Annual Report Section Reference

Employment401-1 Newemployeehiresandemployeeturnover SR Social Page 11401-2 Benefits provided to full time employees that

are not provided to temporary or part-timeemployees

NA

401-3 Parental leave SR Social Page 9Occupational Health & Safety

403-1 Workers representation in formal jointmanagements worker

NA

403-2 Injury and incidents SR Social Page 9403-4 Health & safety topics covered in formal

agreements with trade union SR Social Page 9

Training and Education404-1 Average hours of training per employee SRSocialPage8404-2 Programs for upgrading employee skills and

transitionassistanceprogramsSRSocialPage8

404-3 Percentage of employees receiving regular performance and career development reviews

SRSocialPage8

Diversity and Equal Opportunities405-1 Diversityofgovernancebodiesandemployees SR Social Page 11

Local Community413-1 Operationswithlocalcommunityengagement,

impact assessments, and development programs

SR Social Page 12

Supplier Social Assessment414-1 Newsuppliersscreenedusingsocialcriteria SRSupplyChainPage7

Socioeconomic Compliance419-1 Non-compliance with laws and regulations in

the social and economic area Nil



Sustainability SteeringCommittee 2017

Chairperson:

Mr Lim Chin Tong (ExecutiveDirector)

Committee Members:

Tan Ban Hee (ChiefFinancialOfficer)

Cavin Teo Siew Heng (Head,CorporateServices)

Tommy Ng Fook Keong (SeniorFinanceManager)

Jessica Ng Choon Mui (Head,CashManagement&Secretariat)

sustainability report 2017 - singapore exchange...sustainaility report 201 building sustainable...

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