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2009 ANNUAL REPORT
INDSTRIAS ROMI S.A.
STRENGTH AND INNOVATION
TO OVERCOME THE CHALLENGES
OF AN ADVERSE SITUATION
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 3
2009 ANNUAL REPORT
4 Message from Management
6 Industry Profile
9 Organization Profile
12 Our markets
13 Machine Tools
14 Plastic Processing Machines
15 Rough and Machined
Cast Iron Parts
16 Operating performance
16 Net Operating Revenue
18 Margins
18 Net Result
19 Performance of Business Units
22 Distribution of Results
23 Investments
24 Corporate Governance
28 Capital Market
29 Fiscal Council
29 Internal Controls
29 Code of Conduct
30 Relationship with Stakeholders
30 Relationship with Employees
30 Relationship with Suppliers
31 Relationship with Investors31 Relationship with Customers
32 Relationship with the Community
34 Awards and Acknowledgments
37 Time line
45 Sustainability Indicators
80 Financial Statements
INDEX
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4
MESSAGE FROM MANAGEMENT
The changes in the economic scenario in the last months of 2008 demanded a great effort
from the Company in rationalization of processes and continuous search for improvement.
The current scenario is different from that, but our search for excellence is even still more
important due to the changes that the year 2009 imposed to the market, in terms of
competitiveness and quality.
This year of 2009 the Company reinforces its values of solidity (strength) and innovation,
even in an adverse scenario the Company made the following accomplishments:
(I) beginning of operation of the new foundry, in Santa Brbara dOeste, State of So Paulo,
Brazil, with capacity of 10 thousand metric tons; (II) beginning of operation of the new heavy
machine tools plant unit, diversifying the line of products of machine tools; (III) acquisition
of technology for manufacturing of PET blow molding machines (poli etilen tereftalat),
expanding the line of blow molding machines of plastic processing unit; (IV) acceptance
into the select group of companies with high commitment to sustainability and corporate
governance practices, comprising the portfolio of the So Paulo Stock, Commodities and
Futures Exchange (BM&FBOVESPA)s Corporate Sustainability Index (ISE).
SergioRoberto Novo
Chief FinancialOfficer
Hermes AlbertoLago Filho
Machine Sales& MarketingDirector
Williamdos Reis
Vice-President& IndustrialDirector
Jos CarlosRomi
R&DDirector
Luiz CassianoRando Rosolen
Controllerand InvestorRelations
Livaldo Aguiardos Santos
Chief ExecutiveOfficer
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 5
We believe that the scenario for 2010 is of resumption of economy
growth. Romi is prepared and already have developed new markets,
products and services, to maximize the results with the resumption
of such growth. As a consequence, we continue to be focused on the
search and use of better forms of work, more efficient processes and
reduction of costs and expenses, through continuous improvementof production and administrative processes, always keeping our
competitiveness. The year 2010 will also be a year of celebration,
since Romi will reach 80 years since its foundation, an expressive
figure that represents the Companys strength.
Our business, which stand out for its pioneering and innovation, has
been part of Brazils growth during these 80 years and, currently,
begin to mark global presence, through operations a manufacture unit
in Italy and also sales and technical assistance in several countries
in Europe and in the United States.
Our developmentis based on therespect to ourstakeholdersand the accurateunderstanding ofwhat the marketseeks in termsof excellence
of products andservices.
Livaldo Aguiar dos Santos
Chief Executive Officer
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The capital goods industry, in view of its cyclical characteristic and because it is correlated
with the investment level of other industries, is one of the first that suffers the impacts
of the demand drop and the returns to the normal levels is usually slowly. However,
the Company has noted a gradual recovery of its businesses since the second half of
2009, mainly due to the following reasons: (I) reduction of interest rate for fixed capital
investment by the BNDES (National Bank for Economic and Social Development) in July
2009, which has been extended to December 2010, (II) improvement of the industryconfidence level; and (III) inventory resupply in the economy.
The world economy downturn affected more the industrials than the service and trade
companies. Economy data for the fourth quarter of 2009 released by the IBGE (Brazilian
Institute of Geography and Statistics) indicated a positive variation of the Industrial GDP
(Gross Domestic Product), of 4.09%, and of the Gross Fixed Capital Formation (GFCF),
of 3.6%, after four consecutive quarters of strong negative variations, corroborating the
prospects of resumption of growth.
INDUSTRY PROFILE
GDP - INDUSTRIAL GDP - FIXED CAPITAL FORMATION
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 7
We analyzed the GFCF indicator together with the Installed Capacity Utilization
Rate (ICUR) prepared by Fiesp (So Paulo State Industry Federation), according
to the chart below. The main industries that demand our products suffered important
reduction in the utilization of their installed capacity during the last quarter of 2008
up to the second quarter of 2009.
From that moment on, we can already notice a recovery in these indicators and,in certain cases, at historical utilization rates. The Industrial GDP and the Gross
Fixed Capital Formation are important drivers of the Companys growth.
NUCI - INSTALLED CAPACITY USAGE LEVEL (FIESP)
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Romi Industrial ComplexSanta Brbara dOeste, SPBrazil
Romi Machine Tools Ltd.Erlanger, KY, USA
Romi Italia srlGrugliascoItaly
Romi Europa GmbHGross Gerau,Germany
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 9
We are the largest Brazilian manufacturer of machine tools and plastic
processing machines and market leaders, in terms of net operating
revenue, and we believe we are an important producer of rough andmachined cast iron parts in the country. We manufacture high quality
and last generation technology products, and we are continuously
investing in research and development of new products and production
processes. Operating since 1930, we have already manufactured and
sold more than 149,000 machines along our history, having exported
more than 28,500 machines. Our customers are from the most varied
industries, including, among others, manufactures and suppliers of
the heavy and light automotive chain, consumer goods in general,
agricultural machines and implements, and industrial machines and
equipment for energy, medicine and aerospace.
We currently have 11 manufacturing plants, in more than 150 thousand
m2 of built-up floor space, 9 of which in the city of Santa Brbara
dOeste, State of So Paulo, Brazil, and 2 in the region of Turin, Italy.
COMPANY PROFILE
(continues)
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(continuation) COMPANY PROFILE
As the machines we manufacture integrate the production line of our customers, we
believe that they play an essential role in the results of our customers and their growth
and success, as well as in the economic development of the country as a whole. We haveconsistently posted a growth above the Brazilian GDP: in 2007 and 2008 our consolidated
net operating revenue had an increase of 15.1% and 10.15%, respectively, in nominal
terms, whereas the Brazilian GDP grew, on average, 5.4% in the same period. In 2009,
in view of the world economic downturn that affected most industries of the global
economy, our business was also affected and there was no growth of revenue, as well as
there was no growth of the Brazilian GDP.
We have considerably invested in research and development of new products in the last
years, an average of 4.1% to 4.8% of the consolidated net operating revenue. Currently
we have a research and development team of around 223 highly qualified professionals,among engineers, designers and technicians.
New products andtechnology research
Design and manufacture ofhigher productivity machines
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 11
In 2007, 2008 and 2009, our research and development expenses totaled R$ 77.8 million,
with the purpose of developing new products and continuously improving and updating
the existing products, both in regard to technological advances and productivity gains,such as optimization of using of new materials and industrial processes. In 2007, 2008 and
2009, our net operating revenue from new products was approximately R$234 million,
R$270 million and R$299 million, accounting for, on average, 37.1%, 38.8% and 62.7%
of the net operating revenue, respectively, for the mentioned three year periods. We
considered as new products all those launched in the last 3 years prior to the year-end.
We have a increased our presence in the international market. Our exports totaled R$ 82
million, or 13% of our net operating revenue for the year ended December 31, 2007, R$
108 million, or 16% of our net operating revenue for the year ended December 31, 2008
and R$ 62.7 million, or 13% of our net operating revenue for the year ended December31, 2009.
Romi is the largest Brazilian manufacturer of machine tools and plastic processing machines,and also a major producer of rough and machined castings
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OUR MARKETS
MACHINE-TOOLS
R$ 310,7 MM*
65%
25%
10%ROUGH AND MACHINED CASTINGS
R$ 44,9 MM*PLASTICPROCESSINGMACHINES
R$ 119,8 MM*
*12M09 NET REVENUE
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 13
MACHINE TOOLS
We are in the machine tools market, more specifically in the market of machine tools with
chip-cutting capability. This category includes engine lathes, horizontal CNC lathes, turning
centers and medium-sized machining centers.
We also manufacture vertical lathes and extra-heavy duty lathes to order. The machine
tools we produce are used mainly by the industrial sector in the manufacture of metal
parts, such as shafts, gearboxes, wheels, transmission pulleys and parts of machines.
Our major customers are companies that provide machining services, manufacturers
of auto parts, capital goods and consumer goods. We held a share in the Brazilian marketof approximately 33% in 2009, in the segment of machine tools in which we operate.
(continues)
METAL CHIPING
TURNING MILLING
ENGINELATHES
CNC LATHES
HEAVYWEIGHTMACHININGCENTERS
LIGHTWEIGHTTURNINGCENTERS
EXAMPLES OF PARTSPRODUCED IN OUR MACHINES
OUR CLIENTS BUSINESS SECTORS
MACHINING AND TOOLING SHOPS, PARTS MAKER FOR THE AUTOMOTIVE, AVIATION,OIL/ENERGY/SUGAR AND ALCOHOL INDUSTRIES, CAPITAL GOODS AND OTHER
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(continuation) OUR OPERATING MARKETS
PLASTIC PROCESSING MACHINES
We manufacture plastic injection molding machines and blow molding machines,
which are used in the manufacture of the most varied products, such as automotive lights,
motorcycle fenders, plastic chairs and buckets and mobile handset bodies, and among ourmajor customers are manufacturers of autoparts, consumer goods and packaging.
We believe that our share in the Brazilian market of plastic injection molding machines
where we operate is of approximately 30%.
PLASTIC PROCESSING MACHINES
INJECTION MOLDING BLOW MOLDING
INJECTION MOLDING MACHINES
EXAMPLES OF PARTSPRODUCED IN OUR MACHINES
OUR CLIENTS BUSINESS SECTORS
SERVICE PROVIDERS, PACKAGING MANUFACTURERS FOR THE FOOD, CLEANING AND CHEMICAL SECTORS, AMONG HOUSEWARES, FURNITURE,HI-TECH PARTS FOR THE AUTOMOTIVE AND CAPITAL GOODS, CONSTRUCTION SECTORS AND OTHERS
PLASTIC BLOWMOLDING MACHINES
PET BLOW MOLDINGMACHINES
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 15
We are an important Brazilian manufacturer of rough and machined cast iron parts,
holding a share of approximately 4% of the domestic market in the segments where we
operate. Our rough and machined cast iron parts are designed mainly for the heavy andlight automotive chain, wind power energy and capital goods industries.
ROUGH AND MACHINED CAST IRON PARTS
FOUNDRY
ROUGH CASTINGS MACHINED CASTINGS
PARTS PRODUCED OF GRAY, NODULARAND VERMICULAR IRON CAST
EXAMPLES OF PARTSPRODUCED
OUR CLIENTS BUSINESS SECTORS
PARTS FOR AUTOMOTIVE INDUSTRIES (CARS AND COMMERCIAL), ENERGY, AGRICULTURE AND CAPITAL GOODS, AMONG OTHERS
CNC MACHINING CASTS
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OPERATING PERFORMANCE
The consolidated net operating revenue in 2009 posted a 31.7%
decrease when compared with 2008, reaching R$ 475.4 million.
This decrease is a result mainly of the downturn of the industrial
activity in Brazil since the last quarter of 2008.
Sales in the foreign market accounted for 13% (US$ 32.2 million),
compared with the 16% (US$ 57.8 million) in the same period
of 2008. In 2009, Europe accounted for 62.7% (43.3% in 2008),
the U.S. accounted for 27.3% (41.9% in 2008), Latin America reached
8.7% (13.7% in 2008), and other countries 1.3% (1.1% in 2008).
NET OPERATING REVENUE
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 17
NET OPERATING REVENUE - (R$ MILLIONS)
NET OPERATING REVENUE - PARTICIPATION OF EXPORTS - 2009
EXPORT DESTINATION - 2009
EXPORTS (US$ MILLIONS) AND
PERCENTAGE ON NET OPERATING REVENUE
(continues)
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In 2009, the Companys gross margin posted a reduction in relation to 2008, reaching
31% against 40.2% in 2008. The operating margin in 2009 posted a reduction of 16.3
percentage points over the prior year, reaching 1.9% (18.2% in 2008). These reductions
resulted from the economic slump started in the last quarter of 2008, which caused a
lower export volume.
Nevertheless, the Company noted a gradual recovery of its margins during the year, and
has reached in the last quarter of 2009 an operating margin of 10.1%, 3.6 percentage
points higher than in the last quarter of 2008 (6.5%), mainly due to the increase in
revenue volume in the quarter.
In 2009, EBITDA reached R$ 29.1 million, with a margin of 6.1%.
MARGINS
NET RESULT
In spite of the world economic downturn faced by the Company, in 2009, net income
reached R$ 12.8 million. In the last quarter, with the gradual recovery of the economy,
net income was R$ 17.1 million, reversing the accumulated negative result of the first
nine months of 2009.
(continuation) OPERATING PERFORMANCE
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 19
EBITDA (R$ MILLION) AND EBITDA MARGIN (%)
NET INCOME (R$ MILLION) AND NET MARGIN (%)
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The Companys operations, products and services are organized into three Business
Units. The Machine Tools Unit, which includes the lines of Engine Lathes, CNC
(computerized numerical control) Lathes, Turning Centers, Machining Centers and Vertical
and Horizontal Heavy and Extra-Heavy Duty Lathes, is the Companys largest business
unit, accounting for 65.3% of the Net Operating Revenue in 2009.
The Plastic Processing Machines Unit, accounting for 25.2% of the Net Operating
Revenue, manufactures plastic injection molding machines with clamping forces from
40 up to 4,000 metric tons, in Brazil, and up to 5,500 metric tons in Italy, and blow
molding machines for parts of up to 100 liters.
The Rough and Machined Cast Iron Parts Unit has capacity to produce approximately
50,000 metric tons per year of gray, nodular or vermicular cast iron, with individual weight
of up to 25,000 kg, having contributed with 9.4% of the Net Operating Revenue in 2009.
PERFORMANCE OF BUSINESS UNITS
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 21
PLASTIC PROCESSING MACHINES - SECTORS
PACKAGING 26% 21%
SERVICE 13% 15%
AUTOMOTIVE 17% 22%
CONSTRUCTION 6% 8%
HOUSEWARES 11% 9%
OTHER 27% 25%
SECTOR
2009 2008
NOI - %
ROUGH AND MACHINED CASTINGS - SECTORS
AUTOMOTIVE (COMMERCIAL) 58% 38%
ENERGY 23% 15%
AGRICULTURAL 14% 14%
AUTOMOTIVE (CARS) 1% 24%
CAPITAL GOODS 4% 9%
SECTOR
2009 2008
NOI - %
HIGH
FLAT BED CNC LATHES
HEAVYWEIGHT CNC LATHES
MACHINING CENTERS
CNC COMBINATION LATHES
SLANT BED CNC LATHES
ENGINE LATHES
2009 NOI - MACHINE TOOLS 16% 12% 13% 4% 9% 5% 10% 31%
2008 NOI - MACHINE TOOLS 21% 17% 14% 7% 7% 6% 4% 24%
SERVICES
AUTOMOTIVE
CAPITAL
GOODS
HYDRAULIC
EQUIPMENT
TOOLING
AGRICULTURAL
EQUIPMENT
ENERGY
OTHER
MODERATE LOW
MACHINE TOOLS
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DISTRIBUTION OF RESULTS
IN 2009, THE COMPANY DISTRIBUTED
R$ 9.7 MILLION, REPRESENTING
A GROSS VALUE OF R$ 0.13 PER SHARE
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 23
Investments in property, plant and equipment in 2009 totaled R$ 51.8 million, a 58.0%
drop in relation to 2008 (R$ 123.3 million). These funds were used to conclude the
investment projects of Paradiso (specifically, to conclude the expansion of the heavy
machine unit) and Vulcano (implementation and start-up of the new foundry).
Investments in technology, research and development in 2009 amounted to
R$ 22.7 million (4.8% of the consolidated net operating revenue), evidencing that,
even with the world economic downturn, the Company remained committed with
innovation and new products development.
Net operating revenue from new products in 2009 was R$ 299 million, accounting
for an average of 62.7% of the consolidated net operating revenue.
INVESTMENTS
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CORPORATE GOVERNANCE
Good Corporate Governance practices are essential to keep the
interests of minority, controlling shareholders, and management aligned
and, thus, balancing the Companys control and management. In line
with this objective, the Company adhered to the Corporate Governance
of BM&FBovespa New Market in 2007 and amendment its by-laws, to
ensure to minority shareholders higher protection than that usual in the
Brazilian market or required by Brazilian corporate laws.
By adhering to the differentiated level of Corporate Governance
of the BM&FBovespa New Market, the Company joined a select group
of companies that committed to offering a free float above 50% of the
capital stock, a single class of shares, adhering to the BM&FBovespa
Arbitration Chamber regulation, and granting tag along of 100%, taking
part in the BM&FBovespas Diffentiated Tag Along Shares Index (ITAG).
The Companys financial statements are prepared and presented in
(1)Romi and Chiti Families
OWNERSHIP STRUCTURE
FNIX (1 ) ROMI/CHITIFAMILIES
FUNDAOROMI
FREE FLOAT
36,3% 9,2% 1,9% 52,6%
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 25
accordance with Brazilian (BRGAAP) and international (IFRS International Financial
Reporting Standards) accounting principles, and Romi was one of the first publicly-traded
companies in Brazil to publish full Financial Statements in IFRS. The Company was also
part of the select group of publicly-traded companies in Brazil that early adopted (in 2009)
the accounting pronouncements issued by the Accounting Pronouncements Committee
(CPC) in the preparation of the financial statements.
The Companys financial statements are audited by Deloitte Touche Tohmatsu, having been
audited with an unqualified opinion, and having received a favorable opinion of the Fiscal
Council. The auditors did not provide any non-audit service exceeding 5% of the amount
paid for the audit services.
(continues)
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(continuation) CORPORATE GOVERNANCE
AMRICO EMLIO ROMI NETO
CHAIRMAN
CARLOS GUIMARES CHITI
VICE-CHAIRMAN
PAULO ROMI
MEMBER
MNICA ROMI ZANATTA
MEMBER
BOARD OF DIRECTORS (1)
PAOLO GUGLIELMO BELLOTTI
MEMBER
(INDEPENDENT MEMBER)
PEDRO MADER MELONI
MEMBER
(INDEPENDENT MEMBER)
ALEXANDER BIALER
MEMBER
(INDEPENDENT MEMBER)
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 27
Note 1: Elected by the AGM (Annual General Meeting) of 03/24/2009, with term of office up to the 2010 AGM
Note 2: Elected by the AGM (Annual General Meeting) of 03/24/2009, with term of office up to the 2010 AGM
Note 2: Curriculum Vitae found on the Companys website www.romi.com
DIRECTORS (2)
LIVALDO AGUIAR DOS SANTOS
CHIEF EXECUTIVE OFFICER
WILLIAM DOS REIS
VICE-PRESIDENT &INDUSTRIAL DIRECTOR
JOS CARLOS ROMI
R&D DIRECTOR
SERGIO ROBERTO NOVO
CHIEF FINANCIALOFFICER
HERMES ALBERTO LAGO FILHO
MACHINE SALES &MARKETING DIRECTOR
LUIZ CASSIANO RANDO ROSOLEN
CONTROLLER ANDINVESTOR RELATIONS
ADVISORY BOARD (1)
CARLOS CHITI
CHAIRMAN
ROMEU ROMI
VICE-CHAIRMAN
ANTONIO CNDIDO DE AZEVEDO SODR FILHO
MEMBER
EINAR ALBERTO KOK
MEMBER
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CAPITAL MARKET
At the end of 2009, the Companys common shares (BM&FBovespa:
ROMI3) were quoted at R$ 11.73 and had a positive variation of 54.3%
in relation to the end of 2008. The Bovespa Index, in the same period,had a positive variation of 82.7%. The Companys market capitalization
at December 31, 2009 was R$ 877 million and the average daily trading
volume in 2009 was R$ 1.1 million.
The Company closed the year 2009 taking part in the following
BM&FBovespa Indexes: Itag (Differentiated Tag Along Index), INDX
(Industrial Sector Index), IGC (Differentiated Corporate Governance
Share Index) and ISE (Corporate Sustainability Index).
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 29
FISCAL COUNCIL
Irrespective of Management and External Audit, the Fiscal Council is composed by
three members, responsible for reviewing the managerial activities and the financial
statements, reporting their findings to shareholders. With a term of office of one year,
elected at an AGM (Annual General Meeting) held on 03 / 2009, the members of the
Fiscal Council cannot take part in the Board of Directors, Board of Executive Officers
or staff of the Company or of any other group company, nor can be spouses or relatives of
the Companys management.
The Company has an internal audit, reporting to the Chief Executive Officer and focusedon the Companys internal controls (financial and operations). The internal audit
is responsible for assessing the compliance with work standards and established policies,
and for monitoring the efficiency and operation of the adopted systems.
INTERNAL CONTROLS
The Companys businesses are driven by a set of values that adhere to the highest
ethical and moral standards, formalized in a Code of Ethics and Business Conduct. All
management, employees and trainees of Romi are responsible for disseminating these
values, in the conduct of the Companys businesses.
CODE OF CONDUCT
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RELATIONSHIP WITH STAKEHOLDERS
RELATIONSHIP WITH EMPLOYEES
The Company values the quality of life of its employees and the maintenance
of an increasingly motivating work environment. To ensure the fulfillment of this objective,
it monitors and deals with all aspects related to the assessment and maintenance
of a good work climate and satisfaction, through ongoing organizational climate survey.
With the purpose of aligning the interests of employees and the market, the Company
adopts a variable compensation policy that includes profit sharing, built to stimulate high
performance goals and to foster a culture of excellence in the business.
In 2009, the amount spent by the Company on salaries and benefits was R$ 191 million
against R$ 219 million in 2008.
RELATIONSHIP WITH SUPPLIERS
The Company seeks to develop solid medium and long-term relationship with suppliers.
The Company adopts a policy of supporting the development of suppliers, through
qualification in the requirements for each product and service in its supply chain.
In order to enable a continuous performance improvement and competitiveness increase,
the Company maintains a program for ongoing assessment of suppliers, analyzingcompanies in terms of quality, health, safety and environment. To assess
all these aspects, ISO 9001 and ISO 14000 certifications, as well as supply histories,
are considered.
The Company has 1,692 suppliers, and total purchases of products and services in 2009
amounted to approximately R$ 257 million.
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 31
RELATIONSHIP WITH INVESTORS
In 2009, the Company held public meetings organized Brazils major cities, as well
as quarterly conference calls to discuss its results, in order to promote a more
comprehensive dissemination of information to the market, standing out for their
quality and transparency. The conference calls and public meetings are disclosed in
the Companys Corporate Events Calendar, which can be accessed on the website.
(www.romi.com)..
The Company also participated in international conferences organized by financial
institutions, besides visits to investors in the United States and Europe.
RELATIONSHIP WITH CUSTOMERSThe Company seeks to strengthen the relationship with customers by identifying their
needs through its commercial organization, by means of ongoing surveys that point to
their perception of quality of the product and service offered.
(continues)
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Determined to be a social transformation agent, the Company develops initiatives
that foster the development of the community in which it is inserted.
The Company sponsors the Romi Foundation, a social organization that has the mission
of fostering social development through education and culture.
Since 2003, besides earmarking 1% of the Income Tax due for the Children and
Adolescents Fund (FDCA), the Company adopted an incentive program with its
employees so that they could also earmark the portion to which individuals are entitled.
The program has presented a praise-worthy result, and in 2009 the Companys employees
earmarked R$ 118 thousand for FDCA.
The Company, with its constant concern about the alignment of all employees to
the Companys objectives and strategy, within an ethical environment, of continuing
professional development aimed at and ensuring well-being and quality of life of
employees, provides a series of benefits.
RELATIONSHIP WITH THE COMMUNITY
(continuation) RELATIONSHIP WITH STAKEHOLDERS
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 33
ROMI - SOCIAL PERFORMANCE DATA - R$ THOUSAND 2009 2008 CHANGE %
NUMBER OF EMPLOYEES 2,296 2,896 -20.7%
PAYROLL AND RELATED CHARGES 152,163 191,644 -20.6%
TAXES AND CONTRIBUTIONS PAID 93,571 154,621 -39.5%
INVESTMENTS IN TRAINING 1,137 2,722 -58.2%
TRANSPORTATION, MEALS AND HEALTH CARE 9,391 11,721 -19.9%
EMPLOYEES ENTERTAINMENT 132 241 -45.2%
EMPLOYEES PENSION PLAN 3,369 4,999 -33.2%
ENVIRONMENT 1,622 1,082 49.9%
PROFIT SHARING 1,105 13,016 -91.5%
SOCIAL INVESTMENTS 501 1,660 -69.8%
EMPLOYEES DONATION - FUND FOR THE CHILDREN RIGHTS 118 157 -24.8%
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AWARDS AND ACKNOWLEDGMENTS
INCLUSION ON THE ISE PORTFOLIO
In 2009, the Company was included in the BM&FBovespas
2009/2010 ISE (Corporate Sustainability Index) portfolio, an indicator
composed of shares of companies with high level of commitment to
sustainability and corporate governance practices.
The ISE portfolio currently comprises 43 companies, and the Company
is the only one of the machinery and services industry.
PPR AWARD
For the sixth consecutive year, Romi was awarded the PPR -
Plsticos em Revista Top Equipamentos prize, in the category Injeo
Nacional, one of the most important in the industry. With this another
achievement, the Company reaches Top Fora de Srie, an award
granted to companies winning it for five prior editions. Romi also won
this year in the Sopro Nacional category.
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 35
CAR OF THE YEAR AWARD
Mr. Carlos Chitti, 95 years old, who together with Mr. Amrico Emlio
Romi, is the founder of Indstrias Romi, was one of the persons who
received homage in the 43th edition of the Carro do Ano (Car of The
Year) award, promoted by the magazine Autoesporte, on November
9, 2009, in So Paulo. Member of the Companys Board of Directors
and one of the pioneers of the Brazilian automobile industry, he was
responsible for presenting the Romi-Isetta, the first car manufactured
in Brazil, to Mr. Emlio, convincing him that Romi would be ready to
start the manufacture of the vehicle.
PARTNERSHIP WITH EESC-USP
On October 30, 2009, Romi announced the partnership with the
So Carlos Engineering School (EESC-USP) to develop a project for
integration of teachers and students of Production Engineering
post-graduate, masters degree and doctors degree courses, from the
University, and the teams of Romis Product Engineering Departments.
The purpose of the integration is to develop several studies with
the Romi D 800 High Performance Vertical Machining Center, which
produces 3D parts for multiple applications, from production and mold
and die machining to other specific applications
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SUSTAINABILITY INDICATORS
FINANCIAL STATEMENTS
The Companys Sustainability Indicators were produced based
on GRI (Global Reporting Initiative) guidelines, level B, and are
attached to this report.
The Companys Financial Statements for the year ended December
31, 2009 in accordance with IFRS (International Financial Reporting
Standard) are attached to this report.
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INDSTRIAS ROMI S.A. 2009 ANNUAL REPORT 37
You will know some of the most important
moments in the history of Romi.
The commitment to permanently invest
in research and development has lead the
company to bring to the market an updated
product and service portfolio along almost
80 years.
This has led Romi to become the largest
manufacturer of machine tools and plastic
processing machines Brazil and to reach
an important position in the production of
castings, which are supplied to the market
rough or machined.
ROMI. INNOVATION AND
PIONEERING SINCE 1930
TIMELINE
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1940
The Romi embryo, the GarageSanta Brbara was founded
on June 29
1930
Initiation of fabrication
of 22 models ofagricultural equipment
Inauguration ofthe first foundry
Presses,hammers, and
drills constructedfor own use
Pioneering spirit inthe use of electric
welding to manufactureagricultural equipment
New corporatename: MquinasAgrcolas Romi Ltda.
Romi builds a planer tomanufacture lathe bars
First Romi ImorModel TP-5 lathemanufactured
The Imor brandbegins to be usedon the machines
Three hundred TP-5s
Thousandth TP-5lathe produced
The first Imorlathe is exported
to Argentina
Sixty machine toolswere purchasedin an auction inthe United States,which were moreproductive andprecise, for thenew lathe models
1934
1935 1938
1941
1942
1943
19471944
1946
Launching of the NTPNand NTCN Imor lathe
models, many of whichstill operate today
Move to new facilities, at the currentAv. Prola Byington, 56 address, with
eight 12,000 m3 pavilions
RCN model launched, first Imorlathe with a Norton transmission
1,700 lathes of variousmodels produced
EIGHT DECADES OF INNOVATION AND PIONEERING SPIRIT
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Fabrication of theToro, first Braziliandesigned tractor
A further 50 machinetools bought inEngland, makingit possible to makemore precise lathes
Accumulated productionof 8,200 machines to date,
including 1,320 exported units
Launching of the Imorlathe model MIN,
of unheard of quality
Launching of the Imor
lathe model MVN, witha new productivitystandard, many
examples of which arestill in use today
Launching of theRomi-Isetta, thefirst Brazilian car
The couple, Amrico Emlio and Olmpia,
create the Fundao Romi to fomenthealth, education, and leisure
The Romi-Isetta assembly lineis established to produce 1,200
units/year
From November14 to 19, Romi
participated in the1st Mechanical Fair,
at Ibirapuera
First Imor TP-100heavy lathe delivered
Total accumulatedproduction of 22,000
machines to date,including 1,380exported units
1959
1957
19561951
195319491948
Evolution of the name
1930Garage Santa Brbara
1938Mquinas Agrcolas Romi Ltda.
1954
Mquinas Agrcolas Romi S. A.1962
Indstrias Romi S. A.
1962
New corporate name:Indstrias Romi SA
Manufactureof the Polimacrevolver lathe atthe old plant inSanto Andr (SP)
19611950 1960
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Romis new SoPaulo headquartersinaugurated at RuaCoriolano, 710
Indstrias Romido Nordeste SA
inauguratedin Recife
First 32 kb computerinstalled at Romi, theonly one in the region
Launching of the firstImor model U-30
universal milling machine
As of 1969,the Imor brand is
gradually substitutedby the Romi brand
Total accumulatedproduction of 41
thousand machines todate, including
5 thousandexported units
Launching of the first extraheavy UT-48 lathe, with an
electronic copying systemfor cylinder lamination
Launching of the HBXmodel Romi lathe, the
only one with continuousspeed variation
Confirming its pioneeringspirit, Romi delivers
lathe CN modelDCE-480, first in Brazill
Launching of the S Piloteand Transpilote lathes,first Brazilian typically copiersl
With the delivery of the firstRomi Reed model 300 TD
850 plastic injection moldingmachine, Romi enters the
plastics era
Launching of thenew logo, with theslogan The companythat already livestomorrow
The UT-50 first extra heavylathe is exported to the USA,
for cylinder lamination up to80 metric tons
Quality castings guarantee machinery durability,and the new foundry is inaugurated, the UF-10
Launching of the newRomi model ECN-40 lathe
Inauguration of the Plant Unit 11,to manufacture heavy and extraheavy machines
Launching of the
new line of Romi20/30/40 universallathes, styled by
Italian designerRodolfo Bonetto
Inauguration of the PlantUnit 15, to increase Romiplastic injection moldingmachie production
Total accumulated productionof 92 thousand machines
to date, including 14thousand exported units
Golden Jubilee 50years of struggleand development
Launching of the RomiCNC Galaxy PPL lathe
Romi becomesan open capitallimited liability
corporation, withstock negotiatedon the So PauloStock Exchange
1967
1968
1969
19661970
1972
1973 1974
1976
1978 19791980
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Initiation of fabricationof the CNC Mach for theCentur, ECN 40, Galaxylathes, and other models
Delivery of the Romi CNCCentur 20/30/40 lathe,sales success with morethan 4 thousand sold
In order toovercome the lack
of area techniciansin Brazil, the
Technical Institutefor Industrial
Electronics buildingwas inaugurated atthe Fundao Romi
Delivery of the firstRomi plastic injectionmolding machine using
CNC technology
Inauguration of the PlantUnit 14, to manufacture
CNC Mach electro-electronic panels
Commemoration of thefabrication of the 100,000thmachine an I-30 lathe,delivered to Liceu de Artese Ofcios de So Paulo
Launching of the CNCRomi Interact 4 milling
machine, pioneer in Brazil
Launching of theCosmos 10/20/30
turning centers
Inauguration of the totally climate-controlled Plant Unit 16,to manufacture turning and machining centers
Delivery of thethousandth CNC machine
Total accumulatedproduction of 121thousand machinesto date, including20 thousandexported units
Launching of the
Polaris machiningcenters
Launching of the Primax line ofplastic injection molding machines,
with a new productivity standard
Launching of the Discovery lineof vertical machining centers
Launching
and deliveryof the first
Romicron ,which currently
has dozens ofpatents
Launching of the Galaxy10/20/30/50 line
of turning centers
The Plant Unit10 achieved
ISO 9002certification
1981
1982
1984
1986
1987
19881990
1992
1993
1994
Delivery of the first Romi TGRline plastic injection moldingmachine, using Braziliantechnology
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ISO 9001certificate unifiedfor all Romi units
Launching ofthe Romi-Emag
VSC verticalpick-up
multitasktype lathes
Romi MachineTools, Ltd.activities
initiated inErlanger,
Kentucky, toprovide total
support forNorth American
dealers
Inauguration of the RomiTechnology Center for Tooling
Machines (CT-MF)
Total accumulated productionof 138 thousand machines
to date, including 25 thousandexported units
Romi 70 years, increasinglydeveloping cutting-edgetechnology
Romi Europe is inauguratedin Germany, to provide total
support for Europeanand Asian dealers
Launching of the Velox high-speedplastic injection molding machine series
Romis visual signature isrestyled to its current format
Launching of the Romi VTC 30 rapidand precise vertical threading center
Launching of the Eletramaxelectric plastic injection
molding machine, pioneer in Brazil,with lower power consumption
Launching of the Primax DPTwo Platen line of plastic
injection molding machines
Inauguration of the PlasticInjection Molding Machine
Technology Center (CT-IP)
Launching ofthe lathingcenter forthe Romi Eline, newproductivityparameter
Launching of the DiscoveryM&M line, for molds and dies
Creation of the PlantUnit 5, to produce the
Romicron high-precisionboring system
Inauguration of the CentroSenai-Fundao Romi
Formao de Formadores
1995
1997
1998 2001
2002
2003
20042000
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Launching of thePractical series
Launching of theRomi PH 400, version 2.0
Launching of the UT-2000ultra heavy CNC lathe
End of the expansion of the
Plant 16, totaling 24,100square meters
Fundao Romis
50th anniversary
Launching of the RomiPH 630 horizontalmachining center
Purchase of CNCService Ltda.,
a company specializedin the manufacture,
sales, and retrofittingof heavy CNC machines
The foundrys manualmolding line is expanded
Launching of the Primax1300 and Primax 1500heavy-duty plastic injectionmolding machines
Beginning of the EstaoCultural activities, aFundao Romi project
Indstrias Romi SA is listedin the ndice de Aes com
Governana CorporativaDiferenciada (IGV) Bovespa
portfolio [DifferentiatedCorporate Governancestock-rating portfolio]
Launching of the CNCCentur and UT line of
heavy and extra heavy lathes
Fifty-year anniversaryof the launching of theRomi-Isetta, firstautomobile producedin Brazil
At the 2006 InternationalAuto Show in So Paulo,
the Romi-Isetta marks itspresence at the FundaoRomi booth
Launching of theCentur 30D, version 3.0
2006
2007
The E 220 turningcenter is launchedat the Feimafe,with two headersand two towers
Launchingof the SW
Power Packand EZ Flex
Totalaccumulatedproduction of146 thousandmachines to
date, including27 thousand
exported units
ISO 14001, version2004 certification,for all of the SantaBrbara dOestecompanys activities
Romi celebrates its75 years with the
slogan A traditionof innovation
2005
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2009
Initiation of the expansionof machine tools and
plastics machinerymanufacture units in
Santa Brbara and theconstruction of a new
foundry and machining unitConstruction of new foundryand machinning units,in Santa Brbara dOeste
Total accumulated production
of 147 thousand machines todate, including 27,400 unitsexported
Purchase of SandrettoIndustrie srl equity, anItalian plastics blowermanufacturer
Announcement of investmentto expand the industrial
plants and increase
machinery production
Romi presented 13 newmachine models in the 2008
Mechanical Fair
Launching of the CNCCentur 35D lathe
Launching of the Romi VTCvertical threading centers
Launching of the PrimaxH plastic injection moldingmachine series
Launching of theRomi GL turning centers
Launching of the Romi Dvertical machining centers
Purchase of JAC IndstriaMetalrgica Ltda.,
manufacturer of plastic blowmolding machines
Creation of Romi Italia srl
2008
New UF 82 foundryoperations start-up,with yearly capacity
of 10.000 metric tons
Technology acquisition tomanufacture PET plastic blow
molding machines, expanding Romisplastic machinery portfolio
Beginning of activitiesof New heavy machine toolsplant UF-19, focused on largevertical and horizontal lathes
Romi Joins the select groupof companies with a highcommitment degree to sustainabilitypractices and corporate governance,comprising the portfolio of ISECorporate Sustainability Indexof the BM & FBovespa
License agreementwith Italian
company Lazzatito manufacture
the high capacityLazzati HBM 130Tmilling machines
in Brazil
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SUSTAINABILITY INDICATORS
Our Sustainability indicators were produced
based on GRI (Globall Reporting Initiative)
Level B guidelines.
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INDICATOR APPENDIX PERFORMANCE AREAS ASPECTS
EC1 Appendix 1 Economic (Economic Performance Indicators) Economic Performance
EC3 Economic Performance
EC5 Appendix 2 Market Presence
EC6 Appendix 3 Market Presence
EC7 Appendix 4 Market Presence
EN3 Environmental (Environmental Performance Indicators) Energy
EN8 Water
EN22 Emissions, Effluents, and Waste
LA1 Appendix 5 Social (Performance Indicators Related to Labor Practices & Decent Work) Employment
LA2 Appendix 6 Employment
LA4 Labor / Management Relations
LA6 Occupational Health and Safety
LA7
LA9 Appendix 7
LA10 Appendix 8 Training and Education
LA11 Appendix 9
LA12
LA13 Appendix 10 Diversity and Equal Opportunity
HR5 Human Rights (Performance Indicators Related to Human Rights) Freedom of Association and Collective Bargaining
SO1 Appendix 11 Society (Performance Indicators Related to Society) Community
SO3 Corruption
SO7 Anti-Competitive Behavior
SO8 Compliance
PR5 Practices related to customer satisfaction, including results of customer satisfaction surveys Product and service labeling
PR6 Product Responsibility (Performance Indicators Related to Product Responsibility) Marketing Communications
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INDSTRIAS ROMI S.A.
2009 SUSTAINABILITY INDICATORS, BASED ON GRI (GLOBAL REPORTING INITIATIVE) GUIDELINES
INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
EC1EconomicPerformance
Direct economic value generated and distributed, including revenues,operating costs, employee compensation, donations and other communityinvestments, retained earnings, and payments to capital providers andgovernments.
This corporate performance represents the economic valuegenerated by the Company and its related allocations anddistributions (employees, shareholders and others), as well as theaccumulation of value in the reported period or year. (Appendix 1)
EC3EconomicPerformance
Coverage of the organizations defined benefit pension plan obligations
Romiprev (Supplementary Pension Plan)
The amount spent on Supplementary Pension Plan by the Companyin 2009 was R$ 3,339,005.63 (company portion).
The percentage of employees participating in the pension plan,totally or partially funded by the Company, was 98.99%.
EC5 Market AspectRange of ratios of standard entry level wage compared to local minimumwage at significant locations of operation.
Allow readers to be informed of the Companys concern about theattractiveness and competitiveness of salaries offered, as well asthe contribution to the economic well-being of employees throughsalaries above the legal minimum wage. (Appendix 2)
EC6 Market AspectPolicy, practices, and proportion of spending on locally-based suppliersat significant locations of operation.
Allow readers to be informed of the Companys concern about theeconomic strengthening of companies from the region where thecompany is established. (Appendix 3)
EC7 Market AspectProcedures for local hiring and proportion of senior management hiredfrom the local community at significant locations of operation.
In 2009, of Romis total senior management positions, 84% werehired from the local community (Appendix 4).
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INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
EN3 EnergyDirect energy consumption byprimary energy source
119.612,24 GJ (gigajoule)Energy consumption considered was only electric energy consumption since it is the most representative one.In 2009, we had a considerable reduction in view of the low production.
EN8 WaterTotal water withdrawalby source
Well 104.044 m3
Public Water Network - 541 m3
Public water network is used only at the Head Office, for human consumption in drinking fountains. In 2009,
we had a considerable reduction in view of the low production and decrease of workforce.
EN22Emissions,Effluents,and Waste
Total weight of waster by typeand disposal method.
By Type
Non-Hazardous Waste 14,123.28 tons
Hazardous Waste 360.38 tons
Hazardous waste - Material contaminated with oil, chemical product, solvents, ink sludge, grinder sludge, quench salt,soluble oil and fluorescent lamps. Non-Hazardous Waste Foundry Sand, Common Trash, Biological Mud, Physical-Chemical Mud, Paper, Plastic, Metal, Glass, Slag, Refractory Items. Note: Civil construction material and tree andgrass pruning are not included.
Disposal Method
Landfill - 5,770.46 tons
External recycling 5,666.84 tons
Internal recycling - 3,807.44 tons
Other - 147.41 tons
Landfill - material sent to sanitary landfill or industrial landfill.
Foundry Sand, Common Trash and Asbestos Roofing Tile. 98% of the materials sent to landfill are foundry sand.
External recycling basically the material that has commercial value, which is sold by Romi. Plastic, Paper, CorrugatedPaper, Ferrous Scrap, Non-Ferrous Scrap, Powder Ink, Lubricating Oil.
Internal recycling - material used at the Foundry. Ferrous Scrap.
Other waste sent for co-processing, incineration, treatment, virtually the hazardous waste.
In 2009, we had a considerable reduction in view of the low production.
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INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
LA1 EmploymentTotal workforce by employment type,employment contract, and region
Total 2.296
The divisions of workforce by employment type, employment contract, and region are found in spreadsheetLA1. (Appendix 5
LA2 EmploymentTotal number and rate of employeeturnover by age group, gender, andregion.
The employee dismissal policy establishes that leaders should try to reverse low performance cases,dismissing only when there is no other possibility.
In 2009, there was an atypical change in the economic scenario, which demanded certain adjustments bythe company, including in its workforce. Additionally, there was the dismantling of a unit (UF-05 Romicron),which was sold to another company. Romi conditioned the transaction to job maintenancefor all the 62 employees. (Appendix 6)
LA4Labor /ManagementRelations
Percentage of employees covered bycollective bargaining agreements.
100%
All employees are covered by collective bargaining agreements.
LA6Healthand Safety
Percentage of total workforcerepresented in formal joint management-worker health and safety committees thathelp monitor and advise on occupational
health and safety programs.
Over 75%
Employees are represented in Internal Accident Prevention Committees (Cipas), maintained in each plant(Head Office, District and Foundry).
These committees are composed of employees from several hierarchical levels, appointed by the company
and elected by the workforce of each plant, under legislation, and have the mission of working actively inimproving the health and safety conditions in the work environment.
LA7Healthand Safety
Rates of injury, occupational diseases,lost days, and absenteeism, and totalnumber of work-related fatalitiesby region.
Health and Safety is one of the pillars of our integrated management policy, where Romi is committedto several aspects related to this topic.
INDSTRIAS ROMI S.A.
2009 SUSTAINABILITY INDICATORS, BASED ON GRI (GLOBAL REPORTING INITIATIVE) GUIDELINES
Continues
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INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
HR5
Freedom ofAssociation
and CollectiveBargaining
Operations identified in whichthe right to exercise freedomof association or collective
bargaining may be atsignificant risk, and actionstaken to support these rights.
All employees have the right to free association to trade unions, including with an agreement that allows thededuction of union dues from payroll.
We have various internal employee committees, for example CIPA (Internal Accident Prevention Committee),Employees committee for discussing and approving profit sharing, Committee of Jequitibanos (employees
working at the company for more than 30 years), among others.
The Trade Union, for example, can deliver gifts to its affiliates in the companys facilities.
We have Company employees holding managing positions in the Trade Union.
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INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
SO1 Community
Nature, scope, and effectiveness of any programsand practices that assess and manage the impactsof operations on communities, including entering,operating, and exiting.
Report (Appendix 11)
SO3 CorruptionPercentage of employees trained in organizationsanti-corruption policies and procedures.
All employees were trained when the standard was issued, and hired employeesare trained during the Integration.
SO7Anti-CompetitiveBehavior
Total number of legal actions for anti-competitivebehavior, anti-trust, and monopoly practices andtheir outcomes.
The Company is not aware of the existence of any legal action or administrativeproceeding regarding this or of the imposition of significant fines.
SO8 ComplianceMonetary value of significant fines and total numberof non-monetary sanctions for non-compliance withlaws and regulations.
The Company is not aware of the existence of any legal action or administrativeproceeding regarding this or of the imposition of significant fines.
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INDICATOR ASPECTS INDICATOR DESCRIPTION PERFORMANCE
PR5Productand ServiceLabeling
Practices related to customersatisfaction, includingresults of surveys measuringcustomer satisfaction.
2.1 Practices in place related to customer satisfaction evaluation:
In the organizations corporate process related to products Machine Tools and Plastic Processing Machines,the Company established the customer satisfaction evaluation in two moments of the product life cycle:
Satisfaction Survey 1 (PS1): an evaluation is requested 30 days after the customer receives the acquired product. Thisevaluation PS1 has the purpose of evaluating the processes: pre-sale, sale and technical delivery service. This surveyis made by the serial number of the product sold, that is, if the customer purchased three products, three evaluation
requests will be sent. This is necessary because each purchase may have a specific process, and the products may be ofdifferent models.
Satisfaction Survey 2 (PS2): an evaluation is requested from the customer 30 days before the expiration of the productwarranty period. This evaluation PS2 has the purpose of evaluating: the product (functionality, technology, resources,maintainability, among other attributes), post-sale processes (training, technical assistance, technical support andreplacement parts) and product institutional image. Like in the PS1, this survey is also performed by the serial numberof the product sold.
In both surveys, customers are requested to provide comments and suggestions. Such information is analyzed quarterly,translated into performance indicators, and later communicated within the organization. Both suggestions and thecomplaints detected in the surveys are submitted, for individual analysis by the involved areas. The suggestions may be,case by case, used in changes or improvements and the complaints are duly handled through a corporate processfor addressing customer complaints.
2.2 Results and conclusions:
In 2009, we closed the annual customer satisfaction survey period with the following results:
PS1: 1,058 customer satisfaction evaluation questionnaires were sent. There was a response rate of 43%, where thefinal result was 93% of satisfied customers. In this survey, the processes that had the lowest satisfaction rate were those
related to technical delivery and training.PS2: 1,867 customer satisfaction evaluation questionnaires were sent. There was a response rate of 38%, where thefinal result was 92% of satisfied customers. In this survey, the processes that had the lowest satisfaction rate were thoserelated to replacement parts and technical assistance.
PR6MarketingCommunications
In our advertisements, website, leaflets and catalogues, the Company adopts an informative posture, and not a convincingposture as with consumer goods, that is, it seeks to expose in a transparent manner who we are, our activities andthe technical qualities of our products and services. The customer makes the buying decision after comparisons andconclusions. We do not publish advertisements with emotional appeal or other appeals that could involve ethical issues.We adopt as guideline the Brazilian Advertising Auto-Regulation Code, which governs the ethical standards to befollowed by Advertisers and Advertising Agencies in the preparation of their advertisements.
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APPENDIX 1 (INDICATOR EC1)
DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED, INCLUDING REVENUES, OPERATING COSTS, EMPLOYEE COMPENSATION, DONATIONSAND OTHER COMMUNITY INVESTMENTS, RETAINED EARNINGS, AND PAYMENTS TO CAPITAL PROVIDERS AND GOVERNMENTS.
ECONOMIC VALUE GENERATED AND DISTRIBUTED (Amounts expressed in thousands of reais - R$)
2008Ajusted
2009
Direct economic value generated 734,115 499,807a) Revenues 734,115 499,807
Economic value distributed 675,376 468,170
b) Operating costs 372,559 258,484
c) Employee wages and benefits 219,523 191,235
d) Payments to providers of capital 45,397 11,459
e) Payments to government (1) 36,237 6,491
f) Community investments (2) 1,660 501
Economic value retained (economic value generated less economic value distributed) 58,739 31,637
Accounting standard used: IFRS
(1) Brazil 35,818 6,313
Uruguay 5 5
Italy 414 199
Spain - 38Germany - (64)
(1) Only income tax, does not include indirect taxes (ICMS, PIS-COFINS, IPI)(2) Includes in 2008 R$
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The Companys activities are composed of three business units:
Machine Tools (machines and equipment to work metal by metal cutting), specifically
CNC Lathes, Engine Lathes and Machining Centers;;
Plastic Processing Machines (machines and equipment for plastic injection and blow molding);
Gray, nodular and vermicular cast iron parts, supplied rough or machined.
The Company adopts the same compensation policy for all business units, based on technicalcriteria widely used by the market. In order that the compensation may be attractive andcompetitive, the Company performs periodically comparative surveys between the compensationit offers and the market compensation, covering all regions where it operates.
Romi floor exceeds the National MW* by 90,11%
Romi floor exceeds the State MW* by 66,79%
The compensation offered is compatible with the position complexity and individual performance.In addition to wage and other benefits offered, employees receive a variable compensation basedon the Companys productivity and profitability goals and individual performance. Basedon historical data from the last years, the amount paid as variable compensation has been higherthan the one paid by other companies in the industry.
The lowest wage offered by the Company was at least approximately 67% higher than the legalminimum wage paid in each location, in the period covered in this report, as shown below.
2008 2009
* Minimum Wage
APPENDIX 2 (INDICATOR EC5)
RANGE OF RATIOS OF STANDARD ENTRY LEVEL WAGE COMPARED TO LOCAL MINIMUM WAGE AT SIGNIFICANT LOCATIONS OF OPERATION.
National MW* State SM* Romi floor
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APPENDIX 3 (INDICATOR EC6)
POLICIES, PRACTICES, AND PROPORTION OF SPENDING ON LOCALLY-BASED SUPPLIERS AT SIGNIFICANT LOCATIONS OF OPERATION.
The Company, located in Santa Brbara dOeste, State of So Paulo, is located in Campinas Microregion together with themunicipalities: Americana, Campinas, Cosmpolis, Elias Fausto, Holambra, Hortolndia, Indaiatuba, Jaguarina, Monte Mor,Nova Odessa, Paulnia, Pedreira, Sumar, Valinhos and Vinhedo.
The Campinas Microregion, located in the interior of the State of So Paulo, has a total area of 3,082,952 km2, with a populationof 2,530,029 inhabitants (2006), Gross Domestic Product of R$ 67,590,000 thousand (IBGE 2007), high average HDI (human
development index) 0.832 (PNUD/2000).The Company adopts a policy for purchase of goods from companies located in this microregion, it currently has 469 companiesproviding items and/or services from this microregion.
Romis relationship with suppliers is strategic, seeking to develop the businesses of these suppliers, making them competitive,and to create close bonds for continuous improvement and long-lasting relationship.
The quality of the products developed by the Company also depends on the quality of the products of our suppliers and, therefore,we are in constant contact so that we can seek a continuous development that may result in the delivery of high quality productsto our customers.
The Company classifies its suppliers by the application of items / services acquired and segments where they operate:
Suppliers of items / services applied to products: Manufacturers of Mechanical, Electrical, Hydraulic and Pneumatic Items,Providers of Machining, Deburring, Painting, Superficial Treatment, Calibration and External Transportation Services, amongothers.
Suppliers of items / services not applied to products: Suppliers of Office Materials, Auxiliary Materials, Civil ConstructionMaterials, EPIs (personal protective equipment), Direct Debts, among others
Suppliers of items / services applied to automotive products: Suppliers of items / services designed for items sold to theautomotive industry.
In 1997, the Company developed a program named PDF Supplier Development Program, which had as main purposes:Productivity increase; Cost and expense reduction; Possibility of higher investments in strategic areas; Management more focusedon core activities. Under this program, companies were developed, mainly in the city of Santa Brbara dOeste, to supply Machinedand Cast Iron Parts, Sheet Metal Parts and Packaging. This program was extended along the years to other cities of theCampinas Microregion and is still in place.
Currently, the policy for assessing new suppliers, items and/or services applied to products gives privileges to companies that havethe ISO 9001:2008 Certification or that are in process of implementation. These companies must also be regularized with the Stateenvironmental agency. Our assessment goes beyond financial and legal analyses, taking into consideration aspects such as: suppliertransparency/image and respect to environment, for example.
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INDSTRIAS ROMI S.A.
2009 SUSTAINABILITY INDICATORS, BASED ON GRI (GLOBAL REPORTING INITIATIVE) GUIDELINES
APPENDIX 3 (INDICATOR EC6)
POLICIES, PRACTICES, AND PROPORTION OF SPENDING ON LOCALLY-BASED SUPPLIERS AT SIGNIFICANT LOCATIONS OF OPERATION.
2008
% of purchase expenditures in Brazil (*) = 74.4%
% of purchase expenditures in Campinas Microregion (**) = 20.0%
% of purchase expenditures in Campinas Microregion vs. Brazil (***) = 26.9%
2009
% of purchase expenditures in Brazil (*) = 71.5%
% of purchase expenditures in Campinas Microregion (**) = 23.0%
% of purchase expenditures in Campinas Microregion vs. Brazil (***) = 32.2%
Calculation formula
(*) Total purchase expenditures in Brazil divided by total purchase expenditures multiplied by 100
(**) Total purchase expenditures in Campinas Microregion divided by total purchase expenditures multiplied by 100
(***) Total purchase expenditures in Campinas Microregion divided by total purchase expenditures in Brazil multiplied by100
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APPENDIX 4 (INDICATOR EC7)
Procedures for local hiring and proportion of senior management members hired from the local community at significant locations of operation.
In 2009, of Romis total senior management positions, 84% (*) were hired from the local community, since the skills required for management positions are more specific.
We used as senior management positions the positions of managers and directors, who have under their responsibility Manufacturing Units, Service Units or Departments.
(*) The indicator calculation was considered local, the Campinas Metropolitan region, where Romi is established.
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APPENDIX 5 (INDICATOR LA1)
TOTAL WORKFORCE BY EMPLOYMENT TYPE, EMPLOYMENT CONTRACT, AND REGION
GRI INDICATOR LA1 2008 2009
NUMBER OFEMPLOYEES
%NUMBER OFEMPLOYEES
%
LA1 Employment (monthly working hours) Full-Time 2,888 99.72 2,291 99.78
Part-Time 8 0.28 5 0.22
TOTAL 2,896 100 2,296 100
LA1 Employment (employment contract) CLT (LABOR CODE) UNDEFINED TERM 2,874 99.24 2,274 99.04
CLT (LABOR CODE) DEFINED TERM 0 0 2 0.09
EXECUTIVE OFFICERS / BOARD OF DIRECTORS 22 0.76 20 0.87
TOTAL 2,896 100 2,296 100
LA1 Employment (region) Outside Santa Brbara dOeste-SP, Brazil 181 6.25 154 6.70
In Santa Brbara dOeste-SP, Brazil 2,715 93.75 2,142 93.30
TOTAL 2,896 100.00 2,296 100
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APPENDIX 6 (INDICATOR LA2)
TOTAL NUMBER AND RATE OF EMPLOYEE TURNOVER BY AGE GROUP, GENDER, AND REGION.
GRI INDICATOR LA2 2008 2009
TermGend/
Total TermTotal
GenderTerm. Gend /Total Gend
TermGend/
Total TermTotal
GenderTerm. Gend /Total Gend
LA2 Turnover (gender) Female 75 11.40% 347 21.61% 102 12.86% 282 36.17%
Male 583 88.60% 2,549 22.87% 691 87.14% 2,014 34.31%
TOTAL 658 100% 2,896 22.72% 793 100% 2,296 34.54%
Term Group/Total TermTotal
GroupTerm. Group/Total Group Term
Group/Total Term
TotalGroup
Term. Group/Total Group
LA2 Turnover (age group) below 30 years 286 43.47% 1,115 25.65% 308 38.84% 836 36.84%
over 50 years 98 14.89% 373 26.27% 81 10.21% 359 22.56%
between 30 and 50 years 274 41.64% 1,408 19.46% 404 50.95% 1,101 36.69%
TOTAL 658 100% 2,896 22.72% 793 100% 2,296 34.54%
TermRegion/
Total TermTotal
RegionTerm. Region/Total Region
TermRegion/
Total TermTotal
RegionTerm.Region/Total Region
LA2 Turnover (region)Outside Santa BrbaradOeste-SP, Brazil
32 4.86% 181 17.68% 26 3.28% 154 16.88%
In Santa BrbaradOeste-SP, Brazil
626 95.14% 2,715 23.06% 767 96.72% 2,142 35.81%
TOTAL 658 100% 2,896 22.72% 793 100% 2,296 34.54%
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APPENDIX 7 (INDICATOR LA9)HEALTH AND SAFETY TOPICS COVERED IN FORMAL AGREEMENTS WITH TRADE UNIONS.
GRI Indicator LA9
Collective Labor Convention Clauses
2008
CLAUSE DESCRIPTION
28 Potable water
49 Brest feeding52 Accredited network medical services
25 Medical and dental certificates
11 Nursery allowance
59 Funeral allowance
27 CIPA (Internal Work Prevention Committee)
51 Pension plan allowance supplementation
62 Work-related accident communication
61 Medical plans
29 Supplementary medical examinations35 Provision of working uniforms and clothes
57 Guarantee to employee on leave of absence for illness44 Employment guarantee to employee victim of work-related
accident46 Temporary employment guarantee to employee with professional
or occupational disease
56 Indemnity for death or disability24 Protect ion measures
36 Hygienic needs
43 On-site medical clinics
31Prevention of accidents with mechanical pressesand metalworking machines
30 Occupational safety and medicine professionals
32 Transportation and meal
INDSTRIAS ROMI S.A.
2009 SUSTAINABILITY INDICATORS, BASED ON GRI (GLOBAL REPORTING INITIATIVE) GUIDELINES
GRI Indicator LA9
Collective Labor Convention Clauses2009
CLAUSE DESCRIPTION28 Potable water
49 Brest feeding
52 Accredited network medical services25 Medical and dental certificates
11 Nursery allowance
59 Funeral allowance
27 CIPA (Internal Work Prevention Committee)
51 Pension plan allowance supplementation
62 Work-related accident communication
61 Medical plans
29 Supplementary medical examinations
35 Provision of working uniforms and clothes
57 Guarantee to employee on leave of absence for illness
44 Employment guarantee to employee victim of work-relatedaccident
46 Temporary employment guarantee to employee with professionalor occupational disease
56 Indemnity for death or disability24 Protection measures
36 Hygienic needs
43 On-site medical clinics31 Prevention of accidents with mechanical presses
and metalworking machines30 Occupational safety and medicine professionals
32 Transportation and meal
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APPENDIX 8 (INDICATOR LA10)AVERAGE HOURS OF TRAINING PER YEAR PER EMPLOYEE BY EMPLOYEE CATEGORY
GRI INDICATOR LA10 2008 2009
EMPLOYEE CATEGORY HOURS OFTRAINING 2008 NUMBER OFEMPLOYEES HOURS OF TRAINING/YEAR / EMPLOYEE HOURS OFTRAINING 2009 NUMBER OFEMPLOYEES HOURS OF TRAINING/YEAR / EMPLOYEE
Administrative Areas 11,970.83 272 44.01 4,478.53 202 22.17
Sales Areas 16.600,54 295 56.27 8,386.94 275 30.50
Production Areas 81,557.11 2,117 38.52 30,515.49 1,513 20.17
Technology Areas 11,809.62 212 55.71 8,917.26 306 29.14
Total 121,938.10 2,896 42.11 52,298.22 2,296 22.78
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APPENDIX 9 (INDICATOR LA11)
PROGRAMS FOR SKILLS MANAGEMENT AND LIFELONG LEARNING THAT SUPPORT THE CONTINUED EMPLOYABILITY OF EMPLOYEESAND ASSIST THEM IN MANAGING CAREER ENDINGS
LA11 PROGRESS OPPORTUNITY PROGRAM (POP)
All job vacancies are disclosed internally, before being disclosed externally to the public, and selection is made among employees and interns that voluntarily apply for the vacancies.
TRAINING AND DEVELOPMENT POLICY
The Training and Development Policy is based on professional education and development principles that generate results for the business. Annually the training needsof all employees are identified, and they attend training as required.
Total hours of Training (2008): 121,938 hours (42h / employee / year)
Total hours of Training (2009): 52,298 hours (23h / employee / year)
Total invested in Training (2008): R$ 2,722,000.00
Total invested in Training (2009): R$ 1,137,000.00
INTERNEE PROGRAM
In this program semi-trained professionals are developed, providing employee hiring alternatives and contributing to the professional education of high school and college students.They receive specific training in their operating areas as required. In addition to education supplementation, the company offers benefits such as On-Site Medical Services, Country Club,Transportation, Meal and Personal Accident Life Insurance.
Number of interns on 12/31/2008: 31Number of interns on 12/31/2009: 3
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TRAINEE PROGRAM
Aimed at the professional education of talent young in the last year of Mechanical, Production, Metallurgical, Materials, and Electric and Electronic Engineering courses, from the bestcolleges of the State of So Paulo, to reinforce even further the Product Engineering, Methods and Processes, Quality Assurance, Sales Engineering, Technical Assistance and Productionareas of all Manufacturing Units. Hired as employees, they undergo intensive three-year training. In the first stage of the program, still in the last graduation year, Trainees know allManufacturing Units, having a complete view of the process. As from the second year of the program, they are assigned for the preparation of specific projects in their operating areas.
Number of Trainees on 12/31/2008: 17
Number of Trainees on 12/31/2009: 23
OPERATIONAL PROFESSIONAL EDUCATION PROGRAM (WAS NOT INCLUDED) According to page 67 of the prior report
Aims to identify candidates for professional operating training, with theoretical and practical training in order to use them in future production opportunities.
It is held in partnership with SENAI Santa Barbara dOeste, and has lectured at SENAI and the Company
Number of people trained by the program (2009): There were no people trained
Amount invested in the Professional Training Program Operational (2009): There was no investment in the program
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APPENDIX 10 (INDICATOR LA13)
COMPOSITION OF GOVERNANCE BODIES AND BREAKDOWN OF EMPLOYEES PER CATEGORY ACCORDING TO GENDER, AGE GROUP,MINORITY GROUP MEMBERSHIP, AND OTHER INDICATORS OF DIVERSITY
2008 2009
GENDER QT % QT %
LA13 Diversity and equal opportunity-Gender Administrative areas F 97 35.66 60 29,70
Administrative areas M 175 64.34 142 70,30Total 272 100.00 202 100,00
Sales areas F 44 14.92 39 14,18
Sales areas M 251 85.08 236 85,82
Total 295 100.00 275 100,00
Production areas F 177 8.36 152 10,05
Production areas M 1.940 91.64 1.361 89,95
Total 2.117 100.00 1.513 100,00
Technology areas F 29 13.68 31 10,13
Technology areas M 183 86.32 275 89,87
Total 212 100.00 306 100,00
Total F 347 11.98 282 12,28
M 2.549 88.02 2.014 87,72
2.896 100.00 2.296 100,00
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2008 2009QT % QT %
LA13 Diversity and equal opportunity-Ethnic Group * Administrative areas YELLOW 1 0.37 1 0.50Administrative areas WHITE 252 92.65 184 91.09Administrative areas DARK 15 5.51 13 6.43Administrative areas BLACK 4 1.47 4 1.98
Total 272 100.00 202 100.00
Sales areas YELLOW 4 1.36 3 1.09Sales areas WHITE 271 91.86 253 92.00Sales areas BLACK 20 6.78 19 6.91Total 295 100.00 275 100.00
Production areas YELLOW 5 0.24 5 0.33Production areas WHITE 1,714 80.96 1,269 83.87Production areas DARK 291 13.75 174 11.50Production areas BLACK 107 5.05 65 4.30Total 2,117 100.00 1,513 100.00
Technology areas YELLOW 2 0.94 2 0.65Technology areas WHITE 198 93.40 279 91.18Technology areas DARK 8 3.77 19 6.21Technology areas BLACK 4 1.89 6 1.96Total 212 100.00 306 100.00
Total WHITE 2,435 84.08 1,985 86.46YELLOW 12 0.41 11 0.48
DARK 334 11.53 225 9.80BLACK 115 3.97 75 3.27
2,896 100.00 2,296 100.00
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* Definition given by Administr ative Rule 1740, of October
26, 1999, from the Labor Ministry, for informative data on
race and color of employees, and for the classification used
by the Brazilian Institute of Geography and Statistics (IBGE).
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2008 2009
QT % QT %
LA13 Diversity and equal opportunity-PhysicallyDisabled Persons (PDP) Administrative areas Not PDP 233 85.66 193 94.77
Administrative areas PDP 39 14.34 9 5.23
Total 272 100.00 202 100.00
Sales areas Not PDP 287 97.29 269 97.82
Sales areas PDP 8 2.71 6 2.18
Total 295 100.00 275 100.00
Production areas Not PDP 2,053 96.98 1,445 95.51
Production areas PDP 64 3.02 68 4.49
Total 2,117 100.00 1,513 100.00
Technology areas Not PDP 200 94.34 290 94.77
Technology areas PDP 12 5.66 16 5.23
Total 212 100.00 306 100.00
Total Not PDP 2,773 95.75 2,197 95.69
PDP 123 4.25 99 4.31
2,896 100.00 2,296 100.00
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2008 2009
QT % QT %
LA13 Diversity and equal opportunity Age GroupAdministrative areas
below30 years
88 32.35 53 26.24
Administrative areasover
50 years 53 19.49 50 24.75
Administrative areasbetween 30
and 50 years131 48.16 99 49.01
Total 272 100.00 202 100.00
Sales areasbelow
30 years87 29.49 79 28.73
Sales areasover
50 years32 10.85 40 14.55
Sales areasbetween 30
and 50 years176 59.66 156 56.73
Total 295 100.00 275 100.00
Production areas below30 years 843 39.82 584 38.60
Production areasover
50 years262 12.38 220 14.54
Production areasbetween 30
and 50 years1,012 47.80 709 46.86
Total 2,117 100.00 1,513 100.00
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2008 2009
QT % QT %
Technology areas
below
30 years 97 45.75 120 39.22
Technology areasover
50 years26 12.26 49 16.01
Technology areasbetween 30
and 50 years89 41.98 137 44.77
Total 212 100.00 306 100.00
Totalbelow
30 years1,115 38.50 836 36.41
over50 years
373 12.88 359 15.64
between 30
and 50 years 1,408 48.62 1,101 47.95
2,896 100.00 2,296 100.00
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Romi Foundation
The operations in the communities are carried out through Romi Foundation and has as priority
focus the community of Santa Brbara dOeste, State of So Paulo, Brazil, municipality where thecompany is established.
Romi Foundation, a philanthropic social assistance institution recognized by the CNAS (NationalCouncil of Social Assistance) and declared of state and federal public utility, was founded in1957 by married couple Amrico and Olmpia Romi and has been supported by the Companysince 1969. Currently, the institution has revenues other than from the supporter. In 2009, thecompanys contribution totaled R$ 454,061.00, accounting for 15.25% of Romi Foundationsoperating expenses, of R$ 2,978,176.00 in the same year.
Annually Romi Foundation presents an action plan for the following year and a report on theactivities developed in the reference year. The information is the same as the one contained inthe accountability to the Public Prosecutor of Foundations, Federal Revenue, Ministry of Justice,CNAS (National Council of Social Assistance), INSS (National Institute of Social Security), andMunicipal Council of Social Assistance. It is also included in the balance sheets audited byindependent auditors.
In the action plan, the institution describes the bases on which its projects were devised, itsobjectives and the strategies adopted. The purpose is to reduce social vulnerability and risksto which the population is exposed, starting from the understanding that social vulnerability
derives from various phenomena, with distinct causes and effects, among them schooling,and particularly in Brazil today, the quality of education and cultural education. Its educationalprojects are intended to allow the access of students from the municipality of Santa BarbaradOeste with such vulnerability to a quality education that stimulates them to a higher schoolinglevel and, consequently, to a greater insertion in the labor market and social mobility.
Studies, references and indicators from the Government itself, as well data from the internationalknowledge evaluation proofs point to a poor pu