MSM Malaysia Holdings Berhad Annual Report 2020

DETERMINING MATERIALITY The aim of MSM’s Annual Report is to provide a transparent, balanced and accessible narrative and analysis of our strategy, performance and prospects in relation to material, financial, economic, social, environmental and governance matters. Our reporting encompasses all material developments concerning MSM up until the approval of the annual financial statements. It focuses on MSM as a Group and encompasses our operating subsidiaries, i.e. MSM Prai Berhad, MSM Logistics Sdn Bhd and MSM Sugar Refinery (Johor) Sdn Bhd. Financial and non-financial data from our subsidiaries are consolidated for ease of reference. We have also included pertinent information that should assist stakeholders in making an informed assessment of MSM and how we are able to strategically create and sustain long-term stakeholder value. FEEDBACK MSM’s integrated reporting process is intended to move beyond compliance to generate meaningful and inclusive discourse with our stakeholders with the aim of informing our strategy and building trust. FORWARD LOOKING STATEMENTS Certain statements in this report regarding MSM’s operations may constitute forward-looking statements. These statements can be identified by key words such as “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, “plans”, “outlook” and other words of similar meaning in connection with a discussion of future operating or financial performance.These statements relate to the plans, objectives, FINANCIAL CAPITAL Our financial capital enables us to provide salaries for our employees, dividends for our shareholders and investment in communities while driving sustainable growth through reinvestments to maintain and grow our business. Our investors’ funds are wisely invested to increase our operational efficiency as well as to initialise operations in our plants. NATURAL CAPITAL Raw sugar and fuel are the natural capitals of our industry. We depend on reliable access to these to maintain smooth operations. Price of raw sugar has a great impact on our profit margin as we have no direct control on pricing. We build trusted relationships with raw sugar suppliers and exercise hedging strategies to optimise on better deals. We are mindful of our impact to the environment and are committed towards conducting business in an environmentally responsible and sustainable manner. We are guided by Environmental Management System by which we continue to record improvements in waste and greenhouse gases emissions as well as water and energy consumption through our investments in green technologies within our Penang and Johor plants. MANUFACTURED CAPITAL We produce the highest quality sugar with assured certifications. We also ensure availability of refined sugar through effective stock management. With the cessation of our refining operations in MSM Perlis Sdn Bhd following the consolidation of operation to our new MSM Sugar Refinery (Johor) Sdn Bhd plant, our current capacity decreased to 2.05 mil tonnes. However, the new plant has provided us with wider potential and prospect to maintain our market leadership, venturing into new market segments and expanding export footprint. HUMAN CAPITAL Our skilled employees and experienced management team are our greatest assets. We have 1,049 employees which are considered skilled industry experts who provide us a competitive edge in helping us maintain market leadership. Via training and skill enhancement initiatives such as Staff Mobility Programme, we seek to maintain a good quality talent pool within the Group. INTELLECTUAL CAPITAL Our strong brand, expertise, capabilities and established technologies steer our business success. We have over 50 years of industry expertise and our Gula Prai brand is a testament that its brand values are being passed on from one generation of Malaysians to the next. These have ensured our domestic market share dominance of 60%. Our production is anchored on quality certified management processes and systems. SOCIAL & RELATIONSHIP CAPITAL We were established to ensure national self-sufficiency in sugar, and have since become the flagbearers of Malaysia’s sugar industry. As such, our social and relationship capital are the relationships of trust we build with our stakeholders – our employees, customers, suppliers, investors, communities, regulators, the government, industry partners and the media. We contribute to national and community development through the payment of taxes and zakat, as well as create employment opportunities by maintaining profitable operations. The material matters and developments which are covered in the report were determined by taking into account the following considerations: • Quantitative and qualitative criteria and factors in relation to MSM’s business and operations • Matters critical to achieving our strategic objectives and creating long-term value for our stakeholders • Matters covered in reports submitted to the Board of Directors for discussion or approval • Material risks identified by our risk management process • Key stakeholders’ interests All material matters and developments thereof for the reporting year under review can be found within Shaping Material Matters on page 10 and Management Discussion & Analysis (MD&A) from page 23 onwards. goals, strategies, future operations and performance of MSM. Actual results and outcomes may differ materially from those projected in any forward looking statements due to various events, risks, uncertainties and other factors. We neither intend to nor assume any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. We value feedback and welcome questions or comments on our reports. To share feedback, please contact our Investor Relations unit at +603 2181 5018 or e-mail us at investor.relations@msmsugar.com.