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Sustainability Report

1. Introduction
We are pleased to present our Sustainability Report which has been prepared in accordance with the Sustainability Reporting Guide issued by Bursa Malaysia Securities Berhad.

MFCB Group Sustainability Report 2018 reiterate our commitment towards developing global business investments in a sustainable and responsible manner. In a nutshell, this Report provides an overview as to how we operate sustainably, our strategy and how we manage our day-to-day business to address our sustainability commitments and evaluate our performance.

This Report should be read in conjunction with MFCB Group’s 2018 Annual Report to provide a clear and comprehensive representation of our annual progress in creating economic, environmental and social value by addressing the interests of our stakeholders.

The core businesses of MFCB Group comprise power, resources and property investment. The Group also engaged in other businesses such as manufacturing of label and packaging products, agricultural cultivation and development activities inter-alia.

The importance of business sustainability has not only aroused wide attention within the corporate world, but also society as a whole considering increasing demand on the Earth’s available (scarce) resources. Hence, it has never been more important for us to adopt smart, sustainable solutions to ensure that we can continue meeting the needs of the present while enhancing the ability of future generations to meet their own.

In view of that, we acknowledge our responsibility to address the requirements of most (if not all) stakeholders who are demanding for more information and our drive to benefit the community, environment and people.

Our commitment to operate a sustainable business makes a positive difference in the perception of all our stakeholders. As a corporate that operates across different countries with various business activities, we are mindful that our actions have an impact to the community, environment and people. A strong sustainability performance underpins a company’s ability to deliver consistent and superior business results, pursue profitable growth, and attract and retain talented people.

We are committed to be a responsible corporate citizen and make good business practices our top priority. By fulfilling our responsibilities as and when we move forward in our aspirations, we will ensure that we do not lose sight of matters that are of concern to our stakeholders and our business which allows us to manage our Group in a way that our stakeholders will be rewarded with sustainable value in the long run.

2. Scope
MFCB is a Malaysian-based conglomerate with overseas operations in Laos and Cambodia.

Due to the diverse nature of our Group conglomerate businesses, we are mindful of the topics that matter most to our stakeholders. Hence, the Group’s sustainability themes would vary across its diverse operations.

The Group’s first Sustainability Report would cover activities carried out by the two most significant operating units, namely Resources Division and Don Sahong Hydropower Project where there is readily available data in place.

Our focus this year has been to streamline our key sustainability risks and opportunities through a groupwide materiality assessment exercise to collate baseline data for relevant material issues that will chart our sustainability journey and use it to expand our scope into other divisions in future sustainability reporting.

In line with 2018 Annual Report, the information presented in this Report is in respect of the period beginning 1 January 2018 until 31 December 2018 (unless otherwise stated) and where applicable, comparative data from the preceding year(s) has been included.

3. Governance Principle & Structure

3.1 Governance Principle
Our Group’s governance principles and broadly described in the following phases:

(a) Strategy planning;
(b) Oversee the conduct of the Group’s business operations against the economic, environmental and social performance;
(c) Identify principal risks affecting the Group’s businesses and maintain a sound system of internal controls;
(d) Stakeholders engagement; and
(e) Review the adequacy and integrity of systems, policies and procedures in place.

3.2 Governance Structure
Sustainability is embedded in our organisation’s culture and is led from the top. The Group’s governance structure supports and drives the sustainable development journey. We are guided by our code of conduct and ethics established which promoting healthy corporate culture and conducting our various business activities ethically and sustainably.

Currently, our sustainability initiatives are led by the Executive Directors, who report directly to the Board and provide stewardship towards incorporating sustainability into the Group’s business strategies with the participation from management of respective divisions/business units, as illustrated below:

Governance Structure

4. Materiality Process
Our Management has sought to deliver value to our stakeholders through business strategies adopted and operational activities designed. In relation to this, an internal review and evaluation on key operations was carried out to gain feedback from heads of divisions/business units on how sustainability within the organisation can be better managed.

A list of sustainability matters was first generated with inputs from directors and key managerial personnel of Resources Division and Don Sahong Hydropower Project, with considerations of stakeholders’ expectations and regulatory framework. To identify matters that are most significant to our stakeholders and business operations, we conducted a materiality assessment during annual period ended 31 December 2018 using the following methodology:

(a) Step 1 Identification
A list of materiality matters was identified in accordance with Bursa Malaysia’s Guide. The following factors were also taken into consideration:
• Changing global and local trends
• The direction of the energy market
• Regulatory changes
• Our strategies and internal policies
(b) Step 2 Prioritisation
Material matters were prioritised by taking into account internal and external stakeholder opinions and their importance to our Group. Meetings and discussions with representatives from operational and corporate functional departments of each business division were conducted.
(c) Step 3 Validation
The list of prioritised material matters, was verified through discussions with management and/or relevant stakeholders on the subject matters.

Determining materiality helps us to identify and prioritise which issues to focus our efforts on. We define material issues as those that would be more likely to have a significant impact to the Group and are relevant to our key stakeholders.

Accordingly, list of sustainability matters which are relevant to our Group’s business operations have been systematically assessed based on their importance and material sustainability matters were identified as disclosed in Section 6 to this report.

We will continue conduct materiality assessment and engage with our key external stakeholders where the results/analysis will be updated in our next report.

5. Stakeholder Engagement
The management understand the complex groups of stakeholders exist within and outside the Group and the influence and importance each stakeholder has on our Group’s daily business operations as well as their needs and expectations of the Group as a whole. Hence, there is a need to strike a balance between that and addressing the issues that are not only material to MFCB but also to other stakeholders.

At MFCB, our key stakeholders, notably regulatory bodies, employees, customers, suppliers, investors, financial institutions and communities are the essential elements of our success. None of our business units can thrive without the equitable treatment of these important stakeholders, be it in commercial ventures or in sustainability efforts that require broader support and expertise.

As a conglomerate, we have a wide spectrum of stakeholders from different geographical locations, with broadly varying appetites and preferences. Staying committed to our philosophy of producing quality products and services at competitive prices means to serve our customers exceptionally and to treat our stakeholders with respect.

Engaging with our diverse stakeholder groups allows us to have meaningful conversation and build strong relationship with them over the years. In addition, it also enables us gather unbiased material feedbacks and better respond to their concerns, which in turn facilitate us in prioritising our material topics. Communication channels with stakeholders are listed below:

Stakeholder Engagement Methods Frequency Areas of Stakeholder Concern
Government and Regulators Official meetings and briefings
Compliance report
Site visits
Direct contacts
Industry events and seminars
Compliance with rules and regulations
Opportunities for business investment
Community investment
Financial Institutions Meetings and visits
Annual Report
Corporate website
Analyst briefing
Announcement to Bursa Malaysia
Media Release
Organisational growth
Economic performance
Business strategy and direction
Investor Shareholders’ Annual General Meeting
Corporate website
Analyst briefing
Announcement to Bursa Malaysia
Media Release
Business strategy and direction
Economic performance
Organisational growth
Employees Interview
Outreach programmes
Workplace health and safety
Reward and recognition
Training and career development
Welfare and benefits
Respect of human rights and ethics
Local Community Direct Contact
CSR programmes
Social welfare
Charitable contributions
Investment and development
Business activities carried out in an environmental and responsible manner
Suppliers Meetings and site visits
Evaluation form
Compliance with rules and regulations
Fair treatment of suppliers/business partners
Opportunities for business collaboration
Customers Website and social media
Direct contact Emails, phone calls
Products and services quality
Competitive pricing
Prompt delivery
Non-Government Environmental Report
Outreach programmes
Ongoing Environmental protection


6. Material Sustainability Matters
We have included throughout this Report of material sustainability matters which are of stakeholders’ concerns and with significant business impact. Material matters include:

(a) Economic
• Community Investment – Section 7.1
• Procurement Practice – Section 7.2
(b) Environmental
• Biodiversity – Section 8.1
• Emissions – Section 8.2
• Water – Section 8.3
• Materials – Section 8.4
• Waste and Effluents – Section 8.5
• Compliance – Section 8.6
(c) Social
• Occupational Safety and Health (“OSH”) – Section 9.1
• Labour practice – Section 9.2


7. Economic

7.1 Community Investment
Community development is a practice that is important to us. Our businesses set aside monetary aid to support the communities in which they operate in and to the best of our ability, we try to provide job opportunities to the local people.

As at 31 December 2018, the Group has spent cumulative sum of US$11.74 million on improving the infrastructure and livelihood of the local communities for Don Sahong Hydropower Project (“Project”):

2015 and before US$ 2016 US$ 2017 US$ 2018 US$ Total US$
Total spent on resettlement, livelihood restoration and community development 8,473,573 2,753,135 140,661 372,997 11,740,365

Initiatives, programmes and activities carried out by the Group for the abovementioned expenses are detailed in Sections 7.1.1 and 7.1.2 to this Report.

7.1.1 Infrastructure Development
Over the years, MFCB Group has supported various programmes that have benefited surrounding communities within the vicinity of Don Sahong Hydropower Project. It is our way of giving back, and represents one of our brand values for being a profitable and socially responsible organisation.

With the exception of a short section of access road (with length of about 750 meters) and the access bridge, the Project footprint is entirely within Sahong and Sadam islands.

Approximately 300 households within 6 villages are directly or indirectly affected by the Project. Of these households, only 14 households required to be resettled. The resettlement site for these households is 1km from their existing hamlet, and remains on the banks of the Xangpheuak channel.

For people affected by the Project, the first priority for lost assets will be like-for-like compensation. Along with compensation for lost assets and the Alternate Livelihood Program, various local infrastructure improvements undertaken or will be undertaken include:

  • Resettlement houses
  • Building of a bridge (linking Sahong and Sadam islands to the mainland) and upgrading of access roads to various villages. This has greatly improved the connectivity between remote villages and the mainland, enabling villagers to operate businesses, have access to wider job opportunities as well as access to basic healthcare and education.
  • New community health care centre
  • New secondary school buildings and upgrading of existing schools
  • New local market
  • Irrigation scheme to improve rice paddy security & agricultural produce
  • Construction of irrigation system on the 2 islands and on Khong Island
  • Donations to flood victims in Attapeu Province
  • Construction of forest temple

7.1.2 Livelihood Restoration Programme
The alternate livelihood program provides training, support, and opportunity to broaden and strengthen the range of activities that will contribute to more secure livelihoods for the local population within the vicinity of the Project.

While fishing activities provide main source of income and food for the locals, the increasing population has resulted in reduced household catches and highly intensified fishing efforts, especially during critical migration periods.

By providing a range of alternate means to provide food and generate income, it will be possible to reduce the current dependence on fishing activities and support the sustainability of the fisheries resource. In summary,

  • A range of alternate livelihood options and vocational trainings are made available, based on suggestions and abilities of the affected people
  • Overall aim to improve the livelihoods of affected people, while reducing exploitation of the fisheries resource to help improve fisheries sustainability

Accordingly, the design of alternative income and career restoration plans focuses on the following main aspects with the aim to provide people affected by the Project to earn income from stable jobs:

  • Appropriate irrigation projects suitable for the local condition was designed by the experts and irrigation system was constructed in Don Sahong and Don Sadam which covered the areas of rice planting, enable water supply and grass planting for feeding animals, organic vegetables and other cultivation activities;
  • Sustainable income project where it is focusing on agricultural activities, non-agricultural activities or services such as minimarts, restaurants, food processing, handicraft, Lao alcohol production and other tourism services;
  • Set up of village development fund for villages that want to have the micro-financing facility to be able to get a loan to improve their daily live; and
  • Supporting markets and the market mechanism on the aspects of how to market the products and services in a sustainable term in order to ensure that all products can supply to the market by having a market contract, skills and capacity building for the unemployed group to get higher possibilities to work in manufacturing sectors and so on.

Collaboration with Governments

We work closely with various with various line agencies of Governments, local residents and local communities for many of our initiatives. Specifically, we have seen an improvement in the quality of life of the communities around the project site in Laos as a result of our contributions. As at end of 2018, our Group has made cumulative contributions of US$5.88 million to GOL, as detailed below:

2015 and before US$ 2016 US$ 2017 US$ 2018 US$ Total US$
Fees and Contribution to Government of Laos 556,407 2,006,855 1,575,176 1,746,1456 5,884,583

The Group’s commitments and efforts to Laos are aimed at changing the lives of communities in a sustainable and responsible manner.

7.2 Procurement Practice
Fuel (i.e. Petroleum coke) is the major cost component used in the process of manufacturing Resources Division’s lime products and majority of it is sourced from the only single local supplier. The Division is currently exploring alternative source of fuel in order to reduce use of petroleum coke in the production process of lime products while continue sourcing for alternative suppliers to reduce risk dependency on major source of supply, as indicated below:

No of suppliers % of Annual Purchase
Year Local Overseas Local Overseas
2016 1 1 87% 13%
2017 1 2 44% 56%
2018 1 1 60% 40%

Besides, to ensure quality assurance of our product, a central laboratory was built at the main plant to ensure consistent quality of our quick lime products. The laboratory is operated by a team of professional and competent chemist and lab personnel.

8. Environmental
Global economic activities are all linked directly or indirectly with resources provided by the natural environment. With evidence of pressing environmental issues like climate change and the rapid extinction of species, natural capital across our planet is being depleted at an alarming rate.

As a Group with core business activities in the power generation and resources sectors, we recognised that our operations have an impact on the environment. We take environmental concerns very seriously and always ensure that our operations are in full compliance with the environmental laws and regulations governing the industries in the countries in which we operate.

Based on our recent sustainability materiality assessment, all material environmental indicators remain a top concern to our stakeholders, and we continue to do our best and consistently strive to reduce environmental impact throughout the entire product life cycle, from design to recycling, and ensure that we are up to date with the industry’s environmental best practices.

Since the signing of the MOU for the Don Sahong Hydropower Project, we have made great efforts to ensure the long-term sustainability of the surrounding environment. Numerous environmental studies have been undertaken and recommendations for improvement have been implemented. Environmental monitoring to identify risks to the environment is ongoing and will continue even after commercial operations with remedial action taken as soon as risks are identified.

8.1 Biodiversity – Protection and Restoration of Marine Habitats
Protecting biodiversity is important to us. We make conscious efforts to meet all regulatory requirements, minimise our environmental impact and take initiatives to safeguard biodiversity.

Don Sahong Hydropower Project is a run-of-river scheme situated in the middle reach of the Mekong River in Khong District, Champasak Province of Lao PDR. We are cautious of the potential impacts to the surrounding areas and have initiatives in place to conserve existing biodiversity along Mekong River.

Fisheries studies for the project were initiated at the beginning of 2009 and will continue even after commercial operations is achieved. An extensive amount of data has been collected to define the baseline fisheries status.

Over the years, we have carried out numerous initiative and activities in order to conserve existing biodiversity which include but not limited to the followings:

(a) A detailed Fisheries Monitoring and Action Plan (FishMAP) has been developed to ensure fish still can migrate through the Khone falls after Don Sahong dam is closed. FishMAP outlines the mitigation works, monitoring programs, obligations and targets to maintain fisheries sustainability.
(b) The monitoring activities included in the FishMAP are already well established, and will continue to evolve and be adapted as time goes by.

This includes Fish Monitoring Programme CPUE (Catch Per Unit Effort) sampling and Household Catch to monitor the quantity of fish. The daily catch weight and composition of 60 households from 6 villages at over 140 fishing locations in the project area have been recorded. In addition, location specific fish trapping, tag and recapture, and larval drift surveys have been undertaken. The combination of this data has given a strong understanding of the species and size composition, migration periods, accumulation zones, natural and artificial barriers to migration, and distribution in the various channels surrounding the site.

(c) Market survey to monitor fish selling in local markets to ensure better understanding on fish species caught from time to time and also market trend.

Fish passage improvements had been done at many locations in the adjacent channels to the Sahong river. For instances, no artificial fish ladders or fish ways have been proposed to mitigate the blockage of the Sahong channel. Instead, the existing natural channels adjacent to the Sahong channel had been modified (prior to the closure of Hou Sahong for construction in January 2016) to ensure year-round upstream migration pathways for fish, using the existing conditions of Sahong channel as a model. Monitoring results of the trial pathways have provided prove of concept and strongly support the feasibility of larger scale fish pathway improvements.

As a result, cumulative amount of US$2.4 million was incurred by the Group as at 31 December 2018 to fund the above initiatives and activities:

2015 and before US$ 2016 US$ 2017 US$ 2018 US$ Total US$
Fishery Monitoring & Fish Passage Costs 1,342,392 692,845 123,721 247,246 2,406,204

Moving forward, our Group is committed to undertake the following activities, in fulfilling its corporate social responsibility to further improve fisheries activities surrounding Don Sahong Hydropower Project:

  • Development, monitoring and construction of alternate upstream migration pathways will be one of our top priorities;
  • Low speed bulb turbines will be used, which are recognised as the most fish friendly type of turbine;
  • Develop alternate livelihoods and implementing fisheries management programs based on existing Lao fishing regulations to reduce fishing pressure in the area;
  • Adaptive management and monitoring of the fisheries mitigation measures for a minimum period of 10 years into project operation; and
  • Improvement of more natural fish pathways in the future to ensure the effectiveness of these fish migration pathways.

8.2 Emissions – Dust/Atmospheric
The quality of air emissions at sites and plants are of paramount importance to our business operations, not just for compliance purposes, but also for the benefit of our employees, the communities nearby and the natural environment.

Resources Division has 8 kilns as at end of 2018. Other than Kiln 8 where relevant stack emission data is unavailable as it merely commissioned in the month of December 2018, all the 7 kilns are complied with current environmental quality regulations that Resources Division falls into.

Resource Division has complied with the air emission limits set by local authority during the year under review. Similarly, all the Division’s plants continue to monitor their air emission quality closely through improvements in manufacturing facilities and operational procedures to ensure that the national air quality standards are consistently met. Specifically, air pollution control system (or commonly known as bag filter/house) in the production line are installed, regularly checked and maintained as a usual practice to ensure dust emission compliance.

Accordingly, the following improvements were noted since 2016 (base year) for efforts made by the management in monitoring the results of Total Suspended Particles (“TSP”) emitted to the air:

Year % of Improvement from TSP (in mg/m3) Emitted to Atmosphere
Kiln 1 Kiln 2 Kiln 3 Kiln 4 Kiln 5 Kiln 6 Kiln 7
2016 Base Year na na
2017 40% 51% 52% 40% 34% na na
2018 78% 72% 68% 30% 26% 91%# 92%#

# based on average emission of Kilns 1 to 5 recoreded in 2016

Apart from the above, our Group also continues monitor emissions of other greenhouse gases (such as Sulphur Oxides or “SOx”, Nitrogen Oxides or “NOx”), Sulphuric Acid Mist and particulates through installed chimneys and other monitoring systems. Quality of stack emissions has achieved 100% compliance to the local standards, as summarised below:

Year Results of Average Emission SOx, Nox, Sulphric Acid Mist in mg/m3
Kiln 1 Kiln 2 Kiln 3 Kiln 4 Kiln 5 Kiln 6 Kiln 7
2016 Passed Passed Passed Passed Passed na na
2017 Passed Passed Passed Passed Passed na na
2018 Passed Passed Passed Passed Passed Passed Passed

Moving forward, Resources division will continue improve on the above monitoring process to ensure that it complies with the new environmental regulations (which shall enforce from 4 June 2019 onward).

On Don Sahong Hydropower Project, the following environmental results were observed:

Year Enviromental Monitoring Results For
Noise Blast vibration Dust
2017 No major issue No major issue No major issue
2018 No major issue No major issue No major issue

In order to comply with all relevant environmental regulations (including environmental water monitoring as described in Section 8.3.2 to this Report, the Group has incurred cumulative compliance costs of US$1.73 million:

2015 and before US$ 2016 US$ 2017 US$ 2018 US$ Total US$
Fishery Monitoring & Fish Passage Costs 1,360,884 120,551 110,156 141,839 1,733,430

8.3 Water
Water availability brings stable economic growth and human security. However, with increasingly extreme weather events induced by climate change, water scarcity has become more severe accompanied by the rapid rise in the global population.

8.3.1 Water Flow
As Don Sahong Hydropower Project is a run of river scheme, no water is consumed, added, or diverted to or from the Mekong River. A localised redistribution of flow between Sahong and Phapheng channels will occur, but there will be no change in the total Mekong River flow downstream.

A hydrological data collection program was run since 2008 whereby extensive bathymetric survey were extended upstream and downstream of the project site which was then used to understand the complex hydraulic characteristics within the project area.

The survey has covered and measured flows at 16 different locations in the project area over the full range of Mekong River flow conditions so that modelling could confirm the extent of backwater and downstream effects. This data was analysed and used to develop the hydraulic model which covers wide-ranging flow conditions that are experienced in Mekong River.

8.3.2 Water Quality – Monitoring and Control
Besides, water quality monitoring has been carried out at various locations and flow conditions to provide comprehensive baseline data for the water quality monitoring program.

Part of the responsibility of the dedicated environmental monitoring team will be the monitoring of construction activities with regard to possible risks to water quality. The objective is to proactively identify and address risks prior to any negative impacts. Accordingly, the environmental monitoring results recorded by Don Sahong Hydropower Project are summarised below:

Environmental Monitoring Results For
Waste Water Portable water Surface water
2017 No major issue No major issue No major issue
2018 No major issue No major issue No major issue

The water quality monitoring program will continue during the operation phase to ensure any risks to water quality are identified and remedied throughout the life of the project.

At Resources Division, water quality in the vicinity of our plants is assessed and monitored periodically. For their plants and quarry sites, groundwater, river water and/or general water quality analysis is conducted every three months by an accredited external consultant approved by Department of Environment Malaysia (“DOE”). Accordingly, the following results were achieved by the Division for its water discharge conditions:

Year Results of Environmental Monitoring for Water as Discharge Effluent
Discharge from Outfall Discharge from Outfall Discharge from Outfall
Sedimentation Discharge to Sedimentation Discharge to Sedimentation Discharge to
Pond Stream Pond Stream Pond Stream
2016 Passed Passed Passed Passed Passed Passed
2017 Passed Passed Passed Passed Passed Passed
2018 Passed Passed Passed Passed Passed Passed
TSS – Total Suspended solids test: to measure the amount of silt, clay and sand in the water
BOD – measure consumed oxygen by microorganisms to decompose organic pollutant
COD – determine amount of oxygen required to degenerated all pollutant.

Our Group is committed to manage water resources effectively across our businesses.

8.4 Material
Limestone is the key raw material for Resources Division’s lime products. The Division owns and operates multiple limestone quarries (within vicinity of our manufacturing plants) ensuring a sustainable supply of raw kiln feed supported by 8 modern world-renowned kilns. Through our own limestone reserves we guarantee our customers consistent supply and quality.

The Division is constantly sourcing and acquiring limestone reserves to secure continuous supply of good quality limestone feedstock in the long-term. As at end of 2018, the Group has sufficient limestone reserve for the long term.

Another point to note, our lime products are environmentally friendly and contribute in reduces emissions of CO2 to the atmosphere owing to the nature of limestones.

8.5 Waste and Effluents

8.5.1 Sediment
Extensive sediment sampling has been conducted by Don Sahong Hydropower Project to establish the baseline conditions. To gain the best understanding of sediment distribution in the waterways both point integrated suspended sediment, and bed-load samples have been collected in 6 locations over the full range of flow conditions. The results of the sediment sampling have been used to develop sophisticated 3D sediment model that has been used to simulate sediment transport during operation of the Project.

The results of the simulation, backed up by additional sediment sampling results, indicate that between 2-4% of the total annual Mekong River sediment load will settle within the Project head-pond during the first two to three years of operation. Once this initial period of deposition has occurred a new equilibrium condition is achieved in the head-pond after which no net additional deposition will occur.

From that time on, all sediment entering the head-pond is routed through the turbines under normal turbine operation. As the sediment equilibrium can be re-established without negatively impacting the plant operation, no periodic sediment flushing is required. After the first few years of operation no further net deposition of sediment will occur and there will be no significant change in seasonal sediment concentrations.

8.5.2 General Solid Waste and Hazardous Waste
Waste management is an indispensable element of effective resource stewardship.

Waste oil categorised as hazardous is widely used in Don Sahong Hydropower Project and it is recycled by authorised vendors for proper disposal or subsequent usage. Non-hazardous wastes are reused where possible.

In 2018, lower general solid waste and hazardous waste of 39,424kg (2017: 41,852kg) and 5,000 (2017: 7,600kg) litres were generated by Don Sahong Hydropower Project as compared to 2017. Details please refer to table below:-

Waste Management
2017 2018
General solid waste produced (kg) 41,852 39,424
Hazardous waste produced (litre) 7,600 5,000
Hazardous waste reycled(litre) 7,200 4,000

8.6 Compliance
We comply with all regulatory requirements to ensure business continuity. Failure to do so may result in the revocation of licences that are required to carry out our core business activities. This would undermine our ability to operate as a going concern, thereby lowering investors’ confidence in our organisation.

Ensuring environmental regulatory compliance is a responsibility that we do not compromise on. In achieving it, our internal systems and processes help to track and monitor all applicable regulatory requirements. In addition, engagement with regulators helps us to better understand these requirements. We did not incur any significant fines and non-monetary sanctions for non-compliance with laws and regulations in 2018.

9. Social
We recognised that our employees are our greatest assets and our ultimate success and achievements are a result of their high-performance and commitment. Hence, managing talent and staff retention is our key priority.

In achieving the above, our Group promote and foster conducive work culture that supports diverse talent to contribute positively to the growth and productivity in line with our Group’s vision and mission. At the most basic level, we treat our employees fairly and help them develop their talents. We believe to ensure a good work-life balance for our employees as well as to create a healthy and safe workplace for all.

9.1 Occupational, Safety and Health (“OSH”)
Health and safety will always be on top of our agenda. Our Group advocates a workplace culture that emphasises the importance of OSH in the daily operations. This is achieved through a combination of risk assessment, identification of occupational hazards, safety trainings, development and communication of OSH policies, as well as effective implementation of OSH standard operating procedures (“SOP”).

Periodic health and safety awareness campaigns and training sessions are carried out to provide review and update on health and safety matters. These updates aim to educate and form part of the induction process for new employees as well as to act as refreshers for existing employees on potential occupational hazards to instil a sense of responsibility for their own safety and that of others.

In the past 2 years, zero fatalities were reported by Resources Division and the management will continue to increase our efforts to better manage safety and eliminate potential risks while at work. In 2018, Resources division has recorded an accident rate of 14%, improved from 20% recorded in 2017, as presented below:

Safety Indicators
2017 2018
Death Rate 0% 0%
Frequency or Accident Rate # 20% 14%
# – Based on formula set by the Department of Occupational Safety and Health Malaysia which is calculated as “Number of accidents x 1,000,000 / total man hours worked”

Resources Division also required employees who work in high dust exposure area to go for health screening annually for noise, spirometry tests (lung function) and dust exposure. Test result in both 2018 and 2017 reveals that none of the employees expose to any medical condition.

Employees from Resources Division are also required to carry out audiometric testing based on listed criteria. For those who met the criteria and went for the medical test, the test results are reproduced below:

Audiometric Test Results
2016 2017 2018
Diagnosed with hearing impairment:
(a) None 42% 75% 70%
(b) Mild ^ 46% 14% 20%
(c) Moderate ^^ 12% 11% 8%
(d) Severe # 0% 0% 2%
100% 100% 100%
^ – not subject to repeat audit metric testing as hearing conditions are acceptable
^^ – Hearing conditions improved after repeated audit metric test within 3 months
# – Cause of hearing loss conditions not due to work related condition as per audiologist assessment

9.2 Labour Practice

9.2.1 Embracing a Diverse and Vibrant Workforce

We recruit candidates based on their abilities as well as their overall suitability for the job and organisation. In terms of talent development, management takes a keen interest in all employees and ensure that all employees are equipped with the necessary skills and knowledge to perform their job function through various training programmes.

We also cultivate our employees with the professional mind-set of doing what is best for the Group as a whole. In terms of staff retention, we implement remuneration practices that are market competitive and employees can expect to progress to more senior and challenging roles within the Group that commensurate with their effort, performance and contributions.

As the millennial generation grows in the workforce, we understand the need to develop new engagement models to bridge the generational differences. This young, technology savvy and socially interactive workforce is driving our ground operations in multiple sectors. Being new to the working environment, this segment of the workforce provides new ideas and perspectives to the Group’s businesses and assist middle-aged generation employees who helps our Group to stay grounded with responsible decision making and strategies.

To grow sustainably means that we must continue to evolve our current workforce to keep driving a strong work ethic, be nurtured and mentored to uphold and further drive growth of our Group.

9.2.2 Succession Planning and Career Advancement
We recognise that a systematic approach is necessary in ensuring leadership continuity. Hence, we constantly engage our employees to set higher performance standards and assume bigger roles and responsibilities.

We encourage employees and their superiors to have regular conversations about their work performance. Our performance review takes place on a yearly cycle for all employees. This enables our employees to identify their performance gaps and development needs. Managers are not only responsible for coaching their people to succeed in their current positions, but also to help them grow towards their future aspirations.

We also continuously review our succession planning strategy to identify and develop high potentials to ensure sufficient talent pool for future succession and leadership needs.

9.2.3 Education and Training
Employees form an integral part of our Group and we remain committed to human resource development. Thus, instilling learning as part of our culture is fundamental to growing our Group’s businesses to the next level. Every year, employees receive regular performance and career development reviews. Through reviews like this, the Group will customise training programmes that suit the needs of individual employees whilst ensuring they are aligned with the Group’s direction.

Our Group encourages continuous learning for our employees to broaden their knowledge, skills and competencies for their current and future roles and committed to providing in-house training and giving opportunities to our employees to attend other external training programmes. The relevant statistic pertaining to Resources Division is presented below:

Year 2016 2017 2018
No of employees attended training 98 80 121

10. Moving Forward
This is our first Sustainability Report. Although we have made some progress towards formalising sustainability within our businesses, we acknowledge that there are always rooms for improvement in terms of initiatives undertaken and our current reporting structure. The management will continue measuring sustainability matters that are material to our businesses and move towards benchmarking our progress against international standards of reporting.

As we continue on our sustainability journey, our ultimate goal is to build a sustainable business for generations to come. It is the Group’s intention to grow its Power Division via investment in clean renewable sources of energy and Don Sahong Hydropower Project is our first project in this initiative. Besides, we are exploring the option of generating our own green electricity by installing wind turbines or solar panels on our plantation project site in Cambodia as well as venturing into other renewable energy projects when opportunities arise.

As we look to the future, it is our Group’s vision to continue creating value for our stakeholders, investing in communities and be an environmentally responsible organisation that people are proud to be connected to, partnering with and working for.

This Sustainability Report has been approved by the Board on 26 March 2019.

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