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Extracted from Annual Report 2015

At Megachem, we view Sustainability in terms of a shared responsibility towards improving not only our business but also our planet and our lives.

Today our world is confronted with unprecedented challenges such as climate change, scarcity of natural resources, human health and safety.

As a company we do not exist in a vacuum. We are part of the economic and social ecosystem. We will therefore work closely with all our stakeholders to enhance and integrate sustainability into our business models.

Every day, we shall strive with passion to make a lasting, positive difference in people's lives and embed this value into our corporate culture.

This report is a stamp of our commitment towards making a difference to our planet and our lives. This is our Journey towards the Megachem Sustainability Vision.

MEGACHEM
SUSTAINABILITY VISION

For Megachem, sustainability means aligning economic success with environmental and social responsibility. We recognize that the environmental and social interaction with our community affect our long term organizational success and thus the need to manage not only corporate and financial performance but also the environmental and social impact of our business.

As a guiding principle, our Megachem Sustainability Vision seeks to

  • achieve high standards of health and safety throughout our value chain,
  • protect our environment,
  • be a preferred employer by providing a working environment where people can feel a sense of belonging,
  • adopt best business practices and comply with all rules and regulations,
  • manage our risk to safeguard our economic sustainability; and
  • be a responsible member of society.

A. HEALTH, SAFETY AND ENVIRONMENT

We take pride in our commitment to maintain high level of health, safety and environmental protection ("HSE") standards. They are the foundations of trust that our people, customers and vendors place in us. We therefore aim to achieve uncompromised level of HSE standards in our plants, products and processes.

Our plants are built to meet stringent regulatory requirements in relation to HSE and our processes are designed with features to reduce HSE risk. Our goal is to operate the plant safely with no leaks or incidents that may cause serious injury to our employees, contractors or neighbors. We routinely prepare and practice our emergency response to potential incidents such as chemical spill or a fire. This involves working closely with the Singapore Civil Defence Force to jointly test our emergency response plans and procedures. The joint exercises continually improve our readiness to respond. If an incident does occur, we have procedures in place to mitigate the risk and reduce the impact on people and the environment.

We work continually to ensure that our products pose no risk to people or the environment when they are used responsibly and in the manner intended. Material Safety and Data Sheets detailing HSE measures are available for all products that we handle.

Another way in which Megachem contributes to international chemical safety is through our support of the United Nations' initiative to implement a Globally Harmonized System (GHS) of Classification and Labeling of Chemicals. It is currently implemented across the Group.

The framework for our HSE management is modeled after international standards. We have attained international certification such as the ISO 14001:2004 and OHSAS 18001:2007 certification and are now a member of the Responsible Care Program. We have also received several Responsible Care Awards for attaining excellence in meeting international HSE standards from the Singapore Chemical Industry Councils. Internal and external audits are being conducted annually to ensure that our HSE programs consistently meet international standards.

Currently not all entities within the Group are on board the ISO and Responsible Care program. We are however committed in rolling out these initiatives across our Group as soon as possible.

In the European Union (EU), all imported or manufactured chemical substances above a quantity of one tonne per year are subject to registration under Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations. Similar registration requirements and regulations exist for other markets. In Canada, the United States, Australia, Korea, China, Turkey and Thailand (coming in year 2016), for example, notification is also mandatory for new chemicals on the market.

In Megachem, our regulatory compliance team together with our supply chain team ensures that information required from our suppliers to comply with the REACH regulations are accurate and complete and that they are readily available for submission to the regulatory authorities.

Megachem's employees operate a large number of vehicles such as delivery trucks, high reach trucks and forklift trucks on our company's premise and on public roads every day. This has serious risks and hazards associated with it and can cause significant harm to the environment as well as humans if accidents occur.

At Megachem, we are aware of the risk and hazards and we have programmes to ensure that the drivers are well trained and the equipment are in good condition to carry out daily job requirements. Drivers for delivery trucks undergo special safety training and possess hazardous transport driving permit (HTDP). They are also trained in safe loading methods, securing of cargo and understand how to react during an emergency according to the transport emergency response plan (TERP).

The vehicles are also equipped with GPS and tracking device with speed limit alert. Their driving skills are regularly assessed by the supervisor. The vehicles are also regularly inspected and maintained by certified third party service provider. The delivery trucks are also subjected to inspection by the regulatory body such as Singapore Civil Defence Force (SCDF) and Land Transport Authority (LTA).

Employees are required to wear suitable safety clothing and personal protection equipment (PPE) such as helmet, safety shoes, reflective clothing at work. Pathways are appropriately indicated in Megachem's premises. Thanks to the programme in place at Megachem, we are not only able to reduce the number of incidents/accidents, but also able to increase the safety awareness of our employees.

The production and use of chemicals in workplaces present one of the most significant challenges in workplace protection programs. As part of our company's efforts, we strive to ensure the safety and health of the employees in Megachem. Workplace safety and health is an important practice towards this goal. In order to enhance and promote safety awareness among staff and the neighbours of Megachem, Safety Day programme is organized for all our employees. For this event, SCDF officers provide us with better understanding of safety standards in handling flammable and hazardous chemicals. The other activities of this program includes safety video sharing, safety quiz and safety games.

We are committed to energy efficiency and conservation of resources. Our efforts in this area includes reducing paper, electricity and water consumption, reducing waste water, paper recycling and adopting proper chemical waste treatment methods.

Most of our office lighting systems uses energy saving features to reduce electricity consumption.

Product and sales information such as product and material safety data sheets are maintained in our system and transmitted to our customers electronically thus reducing usage of paper. Sales invoices are also transmitted electronically to other entities within our Group.

Most of our delivery trucks are in compliance with the EURO V standard which helps to reduce the emission of CO2 and other gases.

B. SUSTAINABLE HUMAN CAPITAL

Megachem is influenced by the effects of demographic changes worldwide. The rising life expectancy, shrinking and aging population represent special challenges for companies' human resources management. We at Megachem have an important role to play in mastering the demographic challenges of the future. By the way in which we address these challenges, we can shape the social environment in which we operate while at the same time securing competitive advantages. Sustaining our human capital therefore becomes critical for us to achieve our long term goals.

With a view to maintaining the employability of our workforce, increased focus is placed on preventive health care. Regular health screening examinations and a wide range of sporting activities are examples of what we do to positively influence employees' health. We also provide comprehensive health insurances to our employees to help defray part of their medical costs.

Competition for talent will become more intensified as well with the changing demographics. Megachem's human resource management adopts a holistic approach that not only provides tangible rewards but also intangibles such as work-life balance practices, education sponsorship, continuous training and upgrading as well as flexible work schedule. Our employees are also entitled to various type of leaves such as parental care, career break/sabbatical, prolonged sickness, dependent care, maternity, paternity and examination leave. These initiatives are also aimed at prolonging the employability of our employees.

As a Work Life Achiever Award recipient, Megachem commits to create and sustain a working environment supportive of work life balance for all employees where they are respected partners of the business.

Our Higher Learning Education program provides financial assistance to eligible employees who choose to further their professional education and training ("PET") that will enhance their knowledge and skills.

Megachem is a certified "People Developer" organisation in Singapore. "People Developer" is a certification awarded by Spring Singapore to companies which have achieved the niche Business Excellence standard for human resource development. This niche standard provides us with a total approach to attracting, managing and engaging employees for high performance and aims to bring the best out of our people.

Megachem welcomes interns/attachment students to embark on an exciting learning journey with challenging assignments and projects. Upon graduation, these interns are encouraged to apply and join the Company as Management Trainees in their first step towards building a promising career.

Megachem will never discriminate against its employees on grounds of race, religion, gender, marital status or age.

C. COMMUNITY

At Megachem, we recognize that businesses have a part to play in nation-building especially in providing assistance to people who are less fortunate than others. As such, we work closely with charitable organizations in finding ways for us to contribute to society. These come not just in the form of monetary contribution but also in committing time and effort in these organizations' activities. Annually, Megachem visits several charitable homes during which we make monetary contribution as well as provide basic necessities to them. We also participate annually in several fund-raising events and in youth development program.

GOVERNANCE

To ensure that our business is sustainable, Megachem believes strongly in upholding the highest standards of corporate governance. We strive to ensure that the value of good governance is deeply embedded in our corporate culture and entrenched in our policies and processes.

RISK MANAGEMENT

Risk management is an integral part of Megachem's business, at both the strategic and operational level. A robust risk management supports the achievement of our business objective, thereby providing sustainability to our business and preserving shareholders' value.

In recent years there has been an increasing awareness of sustainability issues and higher expectations from customers and suppliers on our sustainability practices. Megachem welcomes them to conduct audit on our operations during which we value their feedback and input so that we can make continual improvement.