Hotel Royal : Annual Reports And Related Documents

HOTEL ROYAL

SUSTAINABILITY REPORT 2016

FOREWORD

BY THE CHAIRMAN

Dear Shareholders,

We are pleased to submit our full Sustainability Report for FY2016, which provides a snapshot of our economic, social and environmental performance and how we manage sustainability issues in our hospitality business.

Central to this Report is the Materiality Matrix that outlines the strategic priorities of Management and our stakeholders, and provides a discussion on each of these factors highlighted.

We truly believe that our Group's growth cannot be achieved at the expense of the environment and the well being of the communities in which we operate in. Our business interests must be aligned with socio-environmental priorities in order to build lasting businesses for future generations.

We believe in creating a sustainable business strategy that can align with profitability. Moving ahead, we will review our Materiality Matrix from time to time, taking into account the feedback that we continue to receive from our engagement with our stakeholders, and as we encounter new challenges in the business environment.

We hope that our sustainability initiatives will lead to increased value creation in the years to come, and that our shareholders and investors will find this Report useful.

Chairman

1 November 2017

Hotel Royal's sustainability strategy is developed and directed by the senior management in consultation with the Board of Directors. The Group's Sustainability Committee, which includes senior management executives, is led by the Group's CEO, and tasked to develop the sustainability strategy, review its material impacts, consider stakeholder priorities and set goals and targets, as well as collect, verify, monitor and report performance data for this Sustainability Report.

Our Report will begin with a review of the material aspects that both stakeholders and the Company view was being critical to the success and sustainability view as being of the Company. We will seek to assess any changes in these material aspects when compared to the preceding year, where applicable, and look into issues that may have a large variance. These may include changes to the business environment, stakeholder feedback and sustainability trends.

Hotel Royal Limited is a hospitality group that places much emphasis on executing a sustainable business strategy with profitability and shareholder value as foremost priorities. As a responsible corporate citizen operating in Singapore and the Asia-Pacific region, the Group's values are articulated in the following principles

• Code of conduct and business ethics

Our Group adopts a Code of Conduct and Business Ethics that stipulates the principles of our conduct and business ethics that apply to all of the Group's employees. This Code covers areas such as conduct in workplace, business conduct, protection of the Company's assets, confidentiality of information and conflict of interest.

We have also established a whistle-blowing mechanism to aid in the reporting of corporate misconducts. We do not engage in child labour or take unethical means, directly or indirectly, to provide business services in our day-to-day

operations. By "indirectly", we are saying that we do not engage in business with partners, suppliers or third party manufacturers that are known to use unethical means in their business processes.

• Health, safety and the environment

  Management of health, safety and the environment is high on our list of priorities. We continuously seek to minimise the impact of our activities through water and energy conservation, as well as having a robust workplace safety management programme.

  Please refer to the section on Corporate Social Responsibility on Page 36 of our FY2016 Annual Report.

• Employees

  We believe in engaging and developing our staff to their fullest by providing opportunities for development and growth.

  Please refer to the People Report on Pages 38 - 41 of our FY2016 Annual Report.

• Community

We believe in giving back to the society through supporting various charitable initiatives and community projects.

Please refer to the section on Corporate Social Responsibility on Pages 36 our FY2016 Annual Report.

It should be pointed out that while the financial statementsinthe Reportareauditedbyindependent auditors, we rely on our internal process to verify the accuracy of the ESG performance data and information presented in this Report.

A PDF version of the full Report will be available for download at our investor relations pages of our website - hotelroyal.listedcompany.com, or at the SGX website.

STAKEHOLDERS HOTEL ROYAL'S COMMITMENT

INVESTORS Maximise shareholder value through our corporate strategies and business fundamentals

CUSTOMERS Maximise customer satisfaction through delivering quality service and products EMPLOYEES Maximise the full potential of our people resources through continual employee

development and training

PARTNERS Build strong partnerships with regulatory and non-governmental organisations in the pursuit of the best in environmental, health and safety standards in our operations

COMMUNITY

Minimise environmental impact and contribute to the communities where we

operate in

The following Materiality Matrix maps out the environmental, economic, social and governance factors that impact or potentially impact our business and operations, based on our own sensitivity analyses and risk management profile, as well as insights gained from our interactions with our stakeholders.

This Matrix is helpful in focusing attention on the values that are critical to the success of our business as well as delivering value to shareholders.

The Group has adopted the following Materiality Matrix approach to identify and prioritise key sustainability issues. Feedback was gathered from its stakeholders who formed the basis for determining the Matrix.

HIGH

SHAREHOLDERS' PRIORITIES

We review our Materiality Matrix from time to time, taking into account the feedback that we receive from our engagement with a wide variety of stakeholders, broader sustainability trends and the issues facing the hospitality industry. Issues that are material to Hotel Royal are reviewed on an ongoing basis as the company continues to grow.

For the purpose of this Report, we have limited the scope to our Singapore assets, namely, Hotel Royal

LOW

HIGH

Singapore and Hotel Royal@Queens. Along the

way, we hope to include our assets in Malaysia, Thailand and New Zealand progressively.

HOTEL ROYAL'S

PRIORITIES

Based on feedback from our various stakeholders, we have shortlisted 11 material factors based on valuable insights that we have gained from our stakeholder engagement efforts, as well as factors that Management deems to have potential material impacts to our business operations.