Annual Report 2020

RISKS AND CHALLENGES The hallmark of triumphant businesses is having foresight and the ability to recognise challenges on the horizon. Management must be able to look into the distance while having ears to the ground to take necessary measures to find opportunities in challenges, or at least minimise exposure. QL’s track record speaks for itself as testimony of our ability to do just that. We remain mindful and vigilant of how our operations may be affected by various factors, both in the ordinary course of business and in extraordinary circumstances. Sustainability Initiatives Being an agro-based producer of nourishing products, ensuring sustainability of business is interwoven into the very fabric of our operations. Our processesundergo regular reviews from internal audit department, independent external parties and regulators. Flock health and biosecurity is strictly upheld through good farm management practices including farming efficiency ratios, and in compliance with MyGAP. Led by QLPCOE and a dedicated lab which are staffed by veterinarians, microbiologists and nutritionists, and supportedby key personnel, rigorousbiosecuritymeasures are strictly implemented across all our farms and resource sites. We regularly invite theDepartment of VeterinaryServicesMalaysia toaudit our farms. Thehealthof flock and fry are protected via proper feed, nutrition, and clean water. Among the stringent controls, good hygiene and animal husbandry stood out as QL prioritises the wellbeing of both human handlers and animal. In Food Safety and Quality, we diligently endeavour to keep food safe for consumption, fromfarmto table.Wemanufacturequality products that provide convenience to consumers by conscientiously adhering to industry best practices fromthe farming, processing,manufacturing, transporting, storage, distribution, selling, preparing, to the serving of the food. Upholding the strictest of compliance in food safety standards, QL subject ourselves to regular reviews by internal audit and independent external parties, including regulators. The ensuing result is a recognition of QL’s stringent quality controls, as attested by various certifications from local and international bodies. Wealsoconductedmarket study tounderstandconsumer patternsand requirements and are happy to report that QL Eggs has consistently achieved total scoreof 95% in thepast two years, witha fair toexcellent ratings given by consumers. Meanwhile, our key seafood products receivedanalmost perfect rating, withsignificant increase inCustomer Careline Support for year 2020. Overall, QL products scored well amongst consumers, withpositive ratingsacrossboard in termsof food quality and taste, freshness, hygiene, packaging and foodhealthiness. Our sustainability initiatives take cognisance of the impact of climate change. The value chains of our businesses start with the source and as such, changes in weather will have an impact on our operations. We are constantly looking for ways to improve our operations in this respect. This year, we added biodiversity and water security into our materiality matrix. Policies onbiodiversity,wastesecurity, greenhousegas (GHG) emissions, andwastemanagement have been established and are continuously being improved on. Among others, QL has started to track andmonitor GHG Scope 1 and Scope 2 emissions towards setting a reduction goal in the coming year. QL has a human rights and fair labour policy that respects therightsanddignityof all people. Thispolicywill becommunicated internallyand externally foreffective implementation.Wealso have a Group Occupational Safety, Health & Environmental (OSHE) Policy that emphasises safe, secureandhealthyworkingconditions for all. QL encourages the employment of locals and actively contributes to the communities. With creating value for all being a top priority at QL, our corporategovernance isestablished on upholding integrity. Strong emphasis is placed on maintaining probity and taking an uncompromising standagainst unscrupulous behaviour that may tarnish QL’s hard earned reputation. As QL grows our operations we continuously identify and engage with our stakeholders to address areas of concern. We hope to increase the quality of our disclosures and better communicate to our stakeholders as we continuously look for innovative ways to improve our sustainability efforts. Further detailed reading can be found in our Sustainability Statement on pages 38 to 73. Pandemic Being an agro-based food producer, QL’s businesses are classifiedas essential service. Throughout ouroperations,QLemphasisessafe workingconditions forall staff. Additional safety protocol isadoptedacrossall ouroperationsand sites, and personal protective equipment are providedandworkarrangements restructured. Inour focus toassuresufficient foodsupplies for customers, wealsomonitor thedevelopments of our stakeholders in order to be able to quickly mitigate the impact from disruption to the supply and operation chain. Annual Report | 2020 QL Resources Berhad 36 Management Discussion & Analysis