Procurement Practices MSM is committed to ethical procurement practices that ensure a sustainable value chain to improve traceability of raw materials sourced, utilised and distributed. The Group Procurement Policy sets out procurement principles based on efficiency, effectiveness, transparency and accountability, internal control, best value, vendor performance, open competition and smart partnership. We register our vendors, under the system managed by the FGV Group Procurement, based on their commitment to responsible practices and employment rights, safety, quality and sustainability. We monitor the performance of our vendors and business partners via the vendor performance evaluation process to assess their performance at a standard level and maintain a strong vendor base with competitive price and high quality service levels. However, purchase of raw materials or commodities for production of goods sold (for example: raw sugar, refined sugar, cocoa) are excluded and are not managed through this vendor registration system. All our vendor relationships are based on principles of good governance without conflict of interest and zero tolerance towards bribery and corruption. Our procurement process supports fair and equal treatment of all suppliers and business partners and separation of technical and commercial assessments. This is accompanied by clear communication on any new policies, guidelines and disclosures to our vendors and business partners to ensure smooth collaboration. Where possible, MSM employs locally based vendors and suppliers to play our national role in supporting a stable local economy. Procurement expenses from local vendors was RM329 million in FY2021, an increase from FY2020. The data tracked on the local suppliers and the local procurement expenses referred to in the above diagrams apply to suppliers in Malaysia only. It excludes the raw materials procurement for the production and items or services related to the supply chain. 2020 2021 2019 Local Procurement Expenses (RM million) 2019 2020 2021 Total Local Suppliers (%) 96.7% 294.4 98.0% 253.7 98.7% 329.3 SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 145
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