INTEGRATED ANNUAL REPORT 2022 www.ql.com.my Delivering Value, Advancing Sustainability
The QL Resources Berhad (QL) 2022 Integrated Annual Report addresses stakeholder information needs by providing a comprehensive illustration of the company’s value creation process. This report is the outcome of QL’s reporting process, which is governed by the Board, and describes QL’s ability to create and preserve, and minimise value erosion. about this report COV E R R AT I ON A L E Delivering Value, Advancing Sustainability Whilst it’s been a testing time for businesses, QL continues to deliver a diverse range of agro products for the benefit of all. We have adapted our operations and practices to evolve our business, remaining responsive to market environment and consumer needs. To further grow our business, we have enhanced and built efficiencies across our business pillars. And our focus on sustainability is reflected in our group-wide Environment, Social and Governance (ESG) initiatives. We continue to deliver value to our shareholders as well as advance growth and sustainability in our business. This Integrated Report is available at https://ql.com.my/investorrelations/annual-reports/ REPORTING PHILOSOPHY AND PRINCIPLES This Integrated Annual Report contains material information relating to the value creation strategy over the short, medium, and long-term, business model, operating context, risks and opportunities, stakeholder interests, performance and outlook, and governance. It presents QL’s historical, present and anticipated performances linked together in a continuous narrative that explains the operating context. QL’s financial statements are independently audited and prepared in compliance with the Malaysian Financial Reporting Standards (MFRS). REPORTING FRAMEWORK AND GUIDANCE • Main Market Listing Requirements of Bursa Malaysia Securities Berhad • Malaysian Code on Corporate Governance 2021 • International Integrated Reporting Council International <IR> Framework • Companies Act 2016 • Malaysian Financial Reporting Standards • International Financial Reporting Standards • Global Reporting Initiative Standards REPORTING SCOPE AND BOUNDARIES This Integrated Annual Report discloses QL’s strategic plans together with quantitative and qualitative outcomes of the activities during the financial period 1 April 2021 to 31 March 2022. This includes financial and nonfinancial achievements encompassing all QL subsidiaries, unless otherwise indicated. Where relevant and possible, the sustainability impact of QL’s initiatives as well as the way in which sustainability considerations affect QL’s stakeholders are disclosed. Additional information about our sustainability practices can be found in the Sustainability Statement on pages 33 to 78. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that are, by nature, contingent, regarding QL’s future performance and prospects. This includes future expectations and judgement at the time of preparing this report which may be materially changed by several emerging risks, uncertainties and other important factors that could adversely affect QL’s business and financial performance. Therefore, these statements should not be construed as absolute guarantees or predictions of QL’s future outcomes. Readers of this integrated report are advised not to place undue reliance on them. MATERIAL MATTERS This report discloses information about matters that significantly affect QL’s ability to create value. The materiality process identifies key material matters that are significant to QL’s stakeholders via a comprehensive engagement with both internal and external stakeholders. For more information about QL’s Material Matters as well as our Materiality Assessment process, please refer to pages 38 to 41 of this report. APPROVAL BY THE BOARD The board acknowledges its responsibi l ity and accountability in ensuring the integrity of this Integrated Annual Report. In the board’s opinion, this report addresses all material issues that affect QL’s ability to create, preserve and erode value and fairly presents QL’s integrated performance. The board is confident that the report was prepared to the best of our abi l ity in accordance with the International <IR> Framework and approved the report on 12 July 2022. Dr. Chia Song Kun Mr. Chia Song Kooi Executive Chairman Group Managing Director
w w w . q l . c o m . m y QL RESOURCES BERHAD INTEGRATED ANNUAL REPORT 2022 inside what’s QL AT A GLANCE sect ion 02 04 Principal Activities 05 Vision | Mission | Core Values 06 2022 Key Highlights 08 Our Presence ABOUT THIS REPORT sect ion 01 10 CHAIRMAN’S STATEMENT sect ion 03 SUSTAINABILITY STATEMENT sect ion 05 33 Overview & FY2022 Sustainability Highlights 37 Stakeholder Engagement 38 Materiality Assessment 42 Environmental Responsibility 51 Social Responsibility 71 Governance MANAGEMENT DISCUSSION AND ANALYSIS sect ion 04 14 Group Managing Director’s Review 16 Value Creation Business Model 20 Our Growth Strategy 24 Business Review 32 Group Outlook Chairman’s Message pg 10 LEADERSHIP & GOVERNANCE sect ion 06 79 Corporate Information 80 Board of Directors 97 Key Senior Management 98 C orporate Governance Overview Statement 106 Audit Committee Report 108 Statement on Risk Management and Internal Control 112 Additional Compliance Information 113 Statement of Directors’ Responsibility APPENDICES sect ion 08 234 List of Properties 236 Shareholders’ Analysis Report 239 D isclosure on Recurrent Related Party Transactions 244 Notice of Annual General Meeting Form of Proxy O U R C A P I TA L S S TA K E H O L D E R S O U R G R OW T H S T R AT E GY NAVIGATION ICON 25th ANNUAL GENERAL MEETING Broadcast venue at QL Training Hall No. 16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor MEETING PLATFORM TIIH Online website at https://tiih.online Tuesday, 30 August 2022 10:00 a.m. FINANCIAL STATEMENTS sect ion 07 115 Directors’ Report 121 Statements of Financial Position 123 S tatements of Profit or Loss and Other Comprehensive Income 124 C onsolidated Statement of Changes in Equity 126 Statement of Changes In Equity 127 Statements of Cash Flows 131 Notes to the Financial Statements 228 Statement by Directors 229 Statutory Declaration 230 Independent Auditors’ Report Regional Replication Strengthening Value Chain Downstream Integration Sustainably Enhancing Performance Integrating Technology Empowering Talents Investors and shareholders Customers Employees Vendors and suppliers Regulators and NGOs Community Media Manufactured Social Natural Intellectual Human Financial QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 A B O U T T H I S R E P O R T
QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 5 4 Q L AT A G L A N C E QL creates nourishing products from agro resources via value chains that are sustainable in both operations and growth. Our scalable business continuously strives to produce resource-efficient and nutritious protein sources and food to feed a growing population. QL’s operations in Malaysia, Indonesia and Vietnam are internationally certified, enabling our products to be marketed in Asia, Europe and North America in addition to local consumption. The value chains are streamlined into four business pillars. O U R V I S I O N To be the preferred global agro-based enterprise. O U R M I S S I O N We create nourishing products from agro resources, leading to benefit for all parties. activities principal Marine Products Manufacturing produces quality, convenient and nourishing marine-based products via its value chain of upstream and downstream activities. This includes aquaculture farming, deep-sea fishing, surimi and fishmeal production, and consumer foods. QL remains an industry leader as Southeast Asia’s largest producer of surimi and halal fish-based products in Malaysia. Marine Products Manufacturing (MPM) Introduced in 2016, the FamilyMart convenience store chain delivers quality and nourishing ready-to-eat as well as easily prepared food that meets the needs of a busy lifestyle. This direct to consumer channel was built on the konbini (convenience) concept. It extends QL’s existing food production and distribution portfolio. FamilyMart has grown to now include smart kiosks known as FamilyMart Mini, and ‘Food Superstore’ concept stores. Convenience Store Chain (CVS) QL is a leader in Integrated Livestock Farming activities in Malaysia, providing attainable sources of protein to consumers. Our activities span the entire value chain from feed and raw material trade, feed milling, layer farming to broiler integration. ILF employs biosecurity measures and optimum farming to consistently produce quality, nutritious and affordable protein sources. Integrated Livestock Farming (ILF) QL provides sustainable environmental solutions including in bioenergy, water treatment and renewable energy tailored towards the growing environmental, social and governance (ESG) needs of the market. This pillar also covers the palm oil value chain activities, which includes 16,000 hectares of oil palm estate holding and milling-as-a-service business to assist smallholders. Palm Oil and Clean Energy (POCE) 1 2 3 4 four business pillars O U R CO R E VA L U E S Personality • Progressive • Trustworthy • Initiative • Humility Values • Integrity • Win-Win • Teamwork • Innovative
billion million million Revenue 4 Business Pillars Profit Before Tax Profit After Tax and Minority Interests (PATAMI) RM5.24 RM321.21 RM217.35 Total Dividend Payout Ratio 39.2% Integrated Livestock Farming Marine Products Manufacturing Palm Oil and Clean Energy Convenience Store Chain 30 operating entities >700 FamilyMart halal certified products Master Franchisee 90 Fishermen Financial Assistance Scheme trained and equipped Orang Asli Programme Improved S&P Global ESG Score Maintained “BB” MSCI ESG rating 2-star ESG grading band in accordance with FTSE Russel ESG Ratings Methodology 4 out of 5 stars ESG rating by TA Securities 26,240 tCO2e in GHG emissions from Group’s renewal energy facilities 162 sites installation of clean energy solution billion Market Capitalisation RM12.22 Avoided Supported clients in fishermen assisted 914 QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 7 6 Q L AT A G L A N C E 2022 KEY HIGHLIGHTS
OUR PRESENCE MARINE PRODUCTS MANUFACTURING (MPM) CONVENIENCE STORE CHAIN (CVS) INTEGRATED LIVESTOCK FARMING (ILF) PALM OIL AND CLEAN ENERGY (POCE) 10 8 9 17 20 2 5 12 11 13 14 18 6 4 7 16 3 21 19 1 15 8 PT QL TRIMITRA JI. Sindanglaya, No. 100 Cipanas, Cianjur 43253, West Jawa-Indonesia. Tel : +62 263 515 100 Fax : +62 263 519 966 9 PT QL AGROFOOD JI. Pangkalan VI RT. 03/RW, 06 Kel. Ciketingudik, Kec. Bantargebang, Bekasi, Jawa Barat, 17153 Indonesia. Tel : +62 21 2296 7444 Fax : +62 21 3396 7437 10 QL VIETNAM AGRORESOURCES LIABILITY LIMITED CO. QL FEEDINGSTUFFS VIETNAM LIMITED LIABILITY CO. QL FARMS (TAY NINH) LIABILITY LIMITED CO. 18 Cong Hoa, Ward 4, Tan Binh District, Ho Chi Minh City (Warehouse No.6), Vietnam. Tel : +84 28384 25131/ +84 28384 28435/ +84 28384 28437 Fax : +84 28384 28434 URL : www.qlvietnam.com.vn 11 QL MARINE PRODUCTS SDN. BHD. QL AQUAMARINE SDN. BHD. QL FRESH CHOICE SEAFOOD SDN. BHD. QL DEEP SEA FISHING SDN. BHD. P.O.Box 502, 89208 Tuaran, Sabah. Tel : +6088 791 833/ +6088 791 866 Fax : +6088 791 822/ +6088 787 166 URL : www.qlmarine.com.my 12 QL ENDAU MARINE PRODUCTS SDN. BHD. QL ENDAU DEEP SEA FISHING SDN. BHD. QL ENDAU FISHMEAL SDN. BHD. RIKAWAWASAN SDN. BHD. No.11, Jalan Merlimau, 86900 Endau, Johor. Tel : +607 794 3814/ +607 794 4087 Fax : +607 794 4088 URL : www.qlendau.com.my 13 QL FIGO (JOHOR) SDN. BHD. HQ QUARTER: Lot 3627, Jalan Harmoni 1, Taman Harmoni, 81000 Kulai, Johor. Tel : +607 663 7388 Fax : +607 663 7366 14 QL LIAN HOE SDN. BHD. No.4, Jalan Penaga 9, Kawasan Perindustrian Kota Putri, 81750 Masai, Johor Bahru. Tel : +607 387 5745/ +607 387 5700 Fax : +607 386 1629 Email : sales@lian-hoefood.com.my URL : www.lian-hoefood.com.my QL RESOURCES BERHAD 1 QL FEEDINGSTUFFS SDN. BHD. QL FEED SDN. BHD. QL INTERNATIONAL PTE. LTD. No. 16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor. Tel : +603 7801 2288 Fax : +603 7801 2222 Email : freddieyap@ql.com.my URL : www.ql.com.my 2 PACIFIC VET GROUP (M) SDN. BHD. QL PACIFIC VET GROUP SDN. BHD. No.886-C8, Jalan Subang 9, Taman Perindustrian Subang, 47600 Subang Jaya, Selangor. Tel : +603 8024 9508 Fax : +603 8024 9634 Email : pvgmal@pacificvet.com.my 3 QL POULTRY FARMS SDN. BHD. Lot 1338/5, Pajam, 71700 Mantin, Negeri Sembilan. Tel : +606 758 7377 Fax : +606 758 7385 URL : www.qleggs.com 4 QL ANSAN POULTRY FARM SDN. BHD. Lot 2051, 2053, 2054, MK Sidam Kanan, Kg. Paya Union, 09400, Padang Serai, Kedah. Tel : +604 403 2526 Fax : +604 403 4534 5 QL AGROFOOD SDN. BHD. QL AGROVENTURES SDN. BHD. P.O.Box A158, Inanam, 88857 Kota Kinabalu, Sabah. Tel : +6088 422 604 Fax : +6088 421 943 6 QL AGRORESOURCES SDN. BHD. QL LIVESTOCK FARMING SDN. BHD. Tingkat 1, Sublot 2490 Fortune Land, Jalan Rock, 93250 Kuching, Sarawak. Tel : +6082 252 760 Fax : +6082 410 646 7 QL FARMS SDN. BHD. QL BREEDER FARM SDN. BHD. QL TAWAU FEEDMILL SDN. BHD. QL AGROBIO SDN. BHD. TB 50 & 51, Mile 5, Apas Road, 91000 Tawau, Sabah. OR P.O.Box 61651, 91026 Tawau, Sabah. Tel : +6089 917 711/ +6089 917 722/ +6089 917 733 Fax : +6089 912 045/ +6089 913 482 Email : qltawauhq@ql.com.my 15 QL FOODS. SDN. BHD. Lot 9120 & 9121, Jalan Tepi Sungai, 36400 Hutan Melintang, Perak. Tel : +605 641 5805/ +605 641 7954 Fax : +605 641 2257 URL : www.qlfoods.com 16 QL FISHMEAL SDN. BHD. Lot 164, 3314 & 2647, Jalan Tepi Sungai, 36400 Hutan Melintang, Perak. Tel : +605 641 2752 Fax : +605 641 1042 17 PT QL HASIL LAUT Jl. Raya Deansdles KM.81.25, Desa Sedayulawas, Kecamatan Brondong-Kabupaten, Lamongan 62263, Jatim-Indonesia. Tel : +62 322 662 828 Fax : +62 322 663 222 18 QL OIL SDN. BHD. QL BIOENERGY SDN. BHD. QL PLANTATION SDN. BHD. QL TAWAU BIOGAS SDN. BHD. TB 50 & 51, Mile 5, Apas Road, 91000 Tawau, Sabah. OR P.O.Box 61651, 91026 Tawau, Sabah. Tel : +6089 917 711/ +6089 917 722/ +6089 917 733 Fax : +6089 912 045/ +6089 913 482 Email : qltawauhq@ql.com.my 19 BOILERMECH HOLDINGS BERHAD HEAD OFFICE: Lot 875, Jalan Subang 8, Taman Perindustrian Subang, 47620 Subang Jaya, Selangor Darul Ehsan. Tel : +603 8023 9137 Fax : +603 8023 2127 URL : www.boilermech.com 20 PT PIPIT MUTIARA INDAH JI. Slamet Riady RT, 26/123, Tarakan, Kalimantan Utara. Tel : +62 551 24 328 Fax : +62 551 32 667 21 QL MAXINCOME SDN. BHD. QL KITCHEN SDN. BHD. No. 16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor. Tel : +603 7801 2288 Fax : +603 7801 2222 Email : freddieyap@ql.com.my URL : www.ql.com.my QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 9 8 Q L AT A G L A N C E
Dear Valued Shareholders, FY2022 presented businesses with unique challenges. Through it all, QL Resources Berhad (QL) continued to create shared value in the financial year under review of 1 April 2021 to 31 March 2022 (FY2022). DR. CHIA SONG KUN Executive Chairman The aftershocks of COVID-19 continued to be felt in FY2022. Economic and business recovery was slowed by a spike in infections caused by the Delta variant. Consequently, the Malaysian government implemented yet another Movement Control Order (MCO) to mitigate the spread of infection in May 2021. As a food producer, QL was allowed to operate during the lockdown under the guidelines set out by the government. By the third quarter, the National COVID-19 Immunisation Programme (PICK) had charted a clearer path towards endemicity, achieving a vaccination rate of 91.4% of Malaysia’s adult population in October 2021. Economic recovery regained its momentum, borders reopened and business activities set sail. Just as the MCO woes abated, costs of raw materials rose rapidly. Across QL’s value chain, costs remain escalated as inflationary pressures arising from recovering oil demand and geopolitical tensions led to near record high commodity prices. The price of corn and soybean has risen approximately 70% in the past year while Brent crude oil prices rose to a 10-year high in March 2022. Amidst the fast-moving business landscape, our risk management systems are in place to continuously identify, monitor and mitigate the risks that arise to achieve QL’s short-, medium- and long-term goal. Led by QL’s governance, we optimised and deployed resources with a core focus on value chain strengthening, regional replication, downstream integration, sustainably enhancing performance, technology integration and talent empowerment. QL remained steadfast and resilient despite the challenging business environment encountered. Employee health and safety is a continued priority. We facilitated the vaccination of the workforce, conducted mass testing when necessary and implemented standard operating procedures (SOPs) in line with government guidelines. statement chairman’s Our Response to COVID-19 – Putting Employees First In line with our culture of “No Harm”, we have put the safety of our employees at the forefront of the COVID-19 pandemic. We quickly transitioned our staff to work from home, and equipped our front line workers with personal protection equipment so they are enabled to work in a safe environment. Sustainability initiatives are central to QL’s strategy as we progress towards being the preferred global agro-based enterprise. Our economic, environmental and social impact is driven by our strategic thrusts which focus on Environmental, Social, and Governance (ESG), technology integration and talent management. These strategic priorities power QL’s ability to sus ain and thrive, creating and preserving value for the benefit of all. QL’s three-pronged strategy continues to yield success. The CVS business pillar is now reported separately as a standalone pillar. In just five years, CVS contribution to revenue has surpassed the 10% threshold outlined in MFRS 8. Further details can be found in the Business Review on CVS on pages 30-31 and Notes to the Financial Statements on pages 131-227. We have enlarged the 3C approach to include Cultivate, growing the strategic tool to 4C. We continue to navigate choppy waters while monitoring and conserving performing business pillars, constantly investing strategically and sustainably, as well as focusing on downstream integration activities. In addition, the Group’s ESG initiatives are led by the Sustainability Steering Committee, helmed by QL’s Group Managing Director. Strategies are planned and executed with the guidance of our materiality assessment process. To ensure the achievement of our sustainability objectives, we have developed a 3-year sustainability roadmap utilising the 4-step approach of identification, prioritisation, validation and reporting on QL’s material matters. STRATEGIC FOCUS Safeguarding operational activities and ensuring continuous production is of utmost importance to QL. We are committed to delivering nourishing products derived from agro resources contributing towards national food security, for the benefit of all. FINANCIAL PERFORMANCE FY2022 proved to be a challenging year as COVID-19 and the consequences of containment effects were an obstacle yet again. Compounding the volatile business landscape were operational disruptions, supply chain bottlenecks and labour difficulties. Geopolitical tensions between Ukraine and Russia and adverse weather conditions in South America further exacerbated the situation, affecting global commodity supply and ultimately, driving prices further upwards. Notwithstanding this, QL continued to advance forward. Directed by our strategies and core values, we showed resilience in our operations to meet the needs of consumers and deliver another year of uninterrupted revenue growth. Group revenue increased 19.6% year-on-year (YoY) to RM5.24 billion while profit before tax (PBT) decreased 25.7% to RM321.21 million. After excluding the one-off remeasurement gain for POCE in FY2021, PBT is lower by 9.1%, a clearer indication and comparison of the Group’s performance in FY2022. This is QL’s first dip after recording 21 consecutive years of earnings growth. The top-line growth is mainly attriutable to investments in technology integration for increased efficiency, and downstream integration that meets the needs of consumers including CVS. VALUE CREATION PERFORMANCE I am pleased to note that QL continues to be on the FTSE Bursa Malaysia KLCI reserve list and is a constituent of MSCI Global Index. In recognition of our sustainability advancements, QL received a two-star ESG Grading Band in accordance with FTSE Russell ESG Ratings Methodology. Our S&P Global ESG Score also improved and at the same time, we maintained a BB rating in the MSCI ESG rating. Additionally in FY2021, TA Securities awarded QL an overall 4 out of 5 stars ESG rating. These improvements of our ratings are an acknowledgement of the efforts across our business pillars as we strengthen our portfolio of brands, sustainability initiatives and value creation abilities. REVENUE RM5.24 b i l l i o n PROF I T BEFORE TAX RM321.21 m i l l i o n QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 1 1 1 0 C H A I R M A N ’ S S TAT E M E N T
As at 31 March 2022, QL’s market capitalisation decreased to RM12.22 billion with a closing share price of RM5.02. In spite of the turbulent business environment, QL decided to reward our loyal shareholders with a proposed final single tier dividend of 3.50 sen per share. This amounts to a total dividend payout of RM85.18 million representing a 39.2% dividend payout ratio, higher than FY2021’s 27.3%. KEY ACHIEVEMENTS QL continued to deliver value by advancing our core operations sustainably. Quality Nutritious Food QL provides quality, safe and nutritious food that comply with local and international standards and certifications. Standards, processes and controls are perpetually monitored and enhanced to ensure food quality and safety. To this end, we formalised the Health and Nutrition Statement and also established the Health and Nutrition R&D team. We are pleased to note that our Customer Satisfaction Survey conducted in FY2022 showed increased Excellent rating for two main products – QL Eggs and QL Mushroom brand with an almost 100% rating of Fair to Excellent. Sustainability Highlights GHG intensity reduced by 24.5% Water withdrawal intensity reduced by30.2% of non-hazardous waste diverted from landfills 97.0% increase in employee training hours 36.2% more suppliers accepted QL’s Suppliers and Business Associates Code of Business Ethics 126.0% Complementing QL’s environmental initiatives, we reduced water withdrawal intensity by 30.2% due to optimised water usage at the ILF and MPM business pillars. We improved water management systems at several sites and increased usage of rainwater harvesting tanks. Going forward, QL plans to set a reduction target for water withdrawal intensity. We also ramped up waste management initiatives, which are elaborated in our Sustainability Statement. Our planned collaboration with Wetlands International as part of our biodiversity initiative has sprouted, with the planted mangrove seedlings recording 99% survival rate after three months. Social Socially, we created employment opportunities, emphasise a conducive and safe work environment, and doubled the training hours YoY to develop and upskill employees. In FY2022, QL trained 90 Orang Asli across the various business pillars, equipping them with skills for employment. At the same time, our flagship Fishermen Financial Assistance Scheme (FFAS) continues to help local fishermen build, upgrade and improve their fishing capabilities. This year, QL’s FFAS distributed RM20.81 million, benefitting 914 fishermen. Governance QL adopts a zero-tolerance policy on bribery and corruption. The Suppliers and Business Associates Code of Business Ethics was successfully signed by 2,988 suppliers. Operational continuity remains a focus in an environment of elevated costs and volatile market conditions. Leveraging our core competencies, QL managed a strong performance with top-line growth. The Group will continue to monitor market conditions and strategise tactically, adapting to the dynamic business landscape. CORPORATE GOVERNANCE QL’s governance is directed by the tone set by the Board and management via purpose-driven leadership. Together with the values and culture embedded within the Group, the top leadership continuously drives and enables capabilities required to manage and thrive in this volatile environment. Continuing our journey to provide stakeholders with increased integrity and transparency of disclosures, this year represents our second Integrated Annual Report. The report contains information regarding how QL creates, preserves or erodes value over time. We aim to continuously improve the disclosures to better communicate our value creation abilities, capital utilisation and sustainability initiatives to stakeholders. QL is strengthening our risk management and internal control system by building a dedicated team comprising experienced personnel with diverse competency. The Board reviews its Corporate Governance (CG) practices annually to ensure alignment with the practices prescribed by the Malaysian Code on Corporate Governance (MCCG) 2021. The Board has conducted a comprehensive review of the CG practices in July 2022 and conducted a Gap Analysis to identify departures. As at 31 March 2022, QL applied 42 out of the total of 48 recommended MCCG practices. In accordance with the comply or explain approach set out by MCCG 2021, details on the departures are disclosed in the CG Report available at https://ql.com.my/corporate-governance/. The Board understands its fiduciary duty to stakeholders to promote business prosperity and corporate accountability. We are committed to continuously enhance QL’s governance structure with the ultimate objective of creating and preserving value for our stakeholders. More details about QL’s CG practices can be read on page(s) 98-105. PROSPECTS Being an agro-based food producer is QL’s reason for being. And, food is a basic need. No matter the situation, everyone needs to eat. Despite the robust demand, protracted supply chain disruptions, high commodity prices and inflationary pressures will pose a challenge for QL in the coming financial year. Compounding it, is the risk of recession. As we continue our responsibility to provide Malaysians with nourishing and affordable protein sources, cost pressures will only narrow margins. The Russia-Ukraine war heightened inflationary environment, driving the cost of logistics, fertiliser and energy upwards. The performance of QL in FY2023 is reliant on the extent of the disruption caused by the war and the severity of its impact on commodity flows. The increased costs will only cascade onto soybean meal and corn production which are the main feed for livestock. Ultimately, the high prices of corn and soybean will be at the mercy of volatile input prices (fertiliser and energy), adverse weather patterns (La Nina) and macroeconomic uncertainties. QL remains assured that our governance, strategy and policies will guide us to achieve positive results. Our risk management policies and procedures assist the business to identify, monitor and respond to key risks, allowing us to capture opportunities when they arise. In the face of adversities, our strategies will navigate the way forward as prospects remain positive. ACKNOWLEDGEMENTS AND APPRECIATION QL will continue to persevere and adapt, executing our plan with the support of our hard working and committed pool of talent, key leadership and solid fundamentals. Quan li, our philosophy of creating value for all, is deeply rooted into the DNA of QL and drives us to continue delivering growth and value creation for stakeholders. This is supplemented by our focus on sustainability and values of integrity, transparency and accountability. On behalf of the Board of Directors, I would like to express our gratitude to all stakeholders including customers, suppliers, partners and shareholders for their patience and faith. We sincerely appreciate the support given to us during this challenging period. Additionally, I extend my sincerest appreciation to my fellow Board members, Management, and all employees for your faithfulness, dedication and loyalty. In FY2022, Chia Lik Khai transitioned to an Executive Director position and we also welcomed Madam Tan Ler Chin (Cindy) onto our Board as an Independent Non-Executive Director. Her wealth of experience in compliance and risk management will add depth to our risk management and internal control systems. With her addition, QL’s Board comprises 38% female representation. “IN THE FACE OF ADVERSITIES, OUR STRATEGIES WILL NAVIGATE THE WAY FORWARD AS PROSPECTS REMAIN POSITIVE.” Environmental As an agro-based enterprise, we understand the importance of our impact on the environment and climate change, and vice versa. With greenhouse gas (GHG) emission reduction targets set in FY2021, we increased solar panel installations at our farms. Our ongoing efforts generated positive results with GHG intensity reduced by 24.5% against base year FY2020 and avoided over 26,240 tCO2e in GHG emissions. QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 1 3 1 2 C H A I R M A N ’ S S TAT E M E N T CHAIRMAN’S STATEMENT (CONT’D)
Dear Shareholders QL kept focus on our mission and strategy in FY2022 as economies continued to navigate through rough seas that tested the mettle of the business community. It was a period of emerging new COVID-19 variants that led to cautious response to contain infection and save lives that resulted in prolonged disruptions on a global scale. review group managing director’s THE GROUP REMAINS FOCUSED ON OUR STRATEGIC INITIATIVES TO DELIVER SUSTAINABLE LONGTERM GROWTH MR. CHIA SONG KOOI Group Managing Director Prospects began to improve as global vaccination initiatives progressed and economies reopened. This also held true in Malaysia as the national vaccination rate continued on an uptrend. Economic activities resumed in earnest with the Movement Control Order (MCO) lifted in phases as Malaysia transitioned to endemicity towards the close of our financial year. In tandem with this, our FY2022 was halved into two distinct periods of marked difference in performance. The waves of uncertainty tested QL’s acumen and exactitude of our strategic focus and fundamental priorities. Against such a backdrop, QL delivered 19.6% top-line year-on-year (YoY) growth to post a revenue that stood at RM5.24 billion in FY2022. This was achieved in a year marred by disrupted operations, high cost of doing business and erratic demand as well as geopolitical developments towards the end of our financial year. These factors weighed on our profit before tax (PBT). A PBT contraction of about 9.1% (without the one-off remeasurement gain of FY2021) to RM321.21 million is a clear reflection of the utmost challenging business environment that QL sailed through in FY2022. The environment is discussed further in our sections on operational review. Accordingly, profit after tax and minority interests (PATAMI) stood at RM217.35 million. Throughout such challenging situations, QL continued to prioritise employee well-being. QL heightened health and safety awareness among employees, encouraging opt-in for vaccination under the PICK or via our participation in the Private-Public Partnership COVID-19 Industry Immunisation Programme (PIKAS) and Program Vaksin Selangor (SelVAX). Routine Rapid Test Kit (RTK) testing was also proactively carried out. The Crisis Management Plan (CMP) which was established in FY2021 guided our business units in responding to disruptions and on resuming critical business operations in a timely and effective manner. QL is trained on producing convenient, attainable and nourishing sources of protein for the benefit of customers. This fidelity to delivering quality products has enabled us to achieve consistent performance in creating shared value throughout the years, regardless of market dynamics. Having established ourselves as a trusted agro-food producer, we are now enabling sustainability efforts with an established clean energy and environmental technology specialist in Malaysia in our business portfolio. This is in addition to being the preferred poultry egg producer, benchmark-raising CVS (FamilyMart) operator, Malaysia’s largest fishmeal producer, largest surimi producer in Southeast Asia and top 10 surimi-based producer in the world. Further analysis about our business performance and operational outlook can be read in the Business Review on pages 24 to 31. PRODUCED 1.20 BILLION s t a n d a r d p r o t e i n s e r v i n g s i n 2 0 2 2 2021 2020 5,236.05 4,378.80 4,155.94 2022 2021 2020 321.21 432.56 306.94 2022 REVENUE (RM mi l l ion) PBT (RM mi l l ion) As anticipated, the first half of FY2022 was an overall tough period as waves of challenges buffeted businesses. Operations across our complementary business pillars of Marine Products Manufacturing (MPM), Integrated Livestock Farming (ILF), Palm Oil and Clean Energy (POCE) and Convenience Store Chain (CVS) were not spared. A surge in number of COVID-19 infections and the spread of the Delta variant led to the return of stringent government-imposed restrictions. This resulted in a weaker market, and severe operational disruptions, such as fishing vessels remaining grounded, which in turn had a consequential effect on the downstream value-add processing activities of MPM. The situation was also exacerbated by the limited workforce permitted on-site at any one time in compliance with standard operating procedures (SOPs). Collectively, production output was hampered. Similar operations cause and impact situations were experienced in ILF and POCE. The POCE business pillar also had the additional challenge posed by wet weather conditions, affecting oil extraction rate (OER). M A N AG E M E N T D I S C U S S I ON A N D A N A LY S I S QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 1 5 1 4
Natural QL exercises responsible consumption to ensure sustainable long-term value creation • 53,061 GJ Renewable Energy Generated (FY2021: 41,504 GJ)* • 26,240 tCO2e GHG Emissions Avoided (FY2021: 27,272 tCO2e)* • 24.5% GHG Emission Intensity Reduction (FY2021: 4.2% increase)* • 594.5 m3/mil RM Revenue of Water Withdrawal Intensity (30.2% reduction; FY2021: 851.5 m3/mil RM Revenue)* • 4,033m3 Rainwater Harvested (FY2021: 86m3)* • Recycled over 174,850 tonnes of non-hazardous waste (FY2021: 181,600 tonnes)* • Diverted 97.0% of non-hazardous waste from landfills (FY2021: 97.3%)* • Composted 95.3% of chicken manure to organic fertiliser (FY2021: 84.5%)* • Planted 1,000 mangrove seedlings with a 99% survival rate Manufactured QL develops, implements and utilises automation, technology and best practices to continuously produce safe, quality and nourishing sources of protein • RM5.24 billion revenue (FY2021: RM4.38 billion) • 2.45 billion eggs (FY2021: 2.16 billion), 120,000 metric tonnes of fish (FY2021: 150,000 metric tonnes) • 18.72 million broilers (FY2021: 17.77 million) • Over 700 quality halal certified products Intellectual QL’s business growth, brand and trusted reputation are attributable to its deep pool of knowledge, experience, and robust systems • Over 10 accepted and trusted brands (FY2021: 10 brands) • Holds halal and international certifications • Export to more than 10 countries (FY2021: 10 countries) • Formalised a Health and Nutrition statement • Established a Research and Development (R&D) team to improve food nutrition Human An established personal and career development path complements a safe conducive working environment to nurture an inclusive and competent workforce • RM465.41 million paid in salaries and wages • 136,008 upskilling and training hours (FY2021: 99,845) • 357 employees underwent Leaders Enhancement and Development (LEAD) Programme • Commenced 3rd batch of Accelerated Learning Process Programme with a total of 28 participants • Established Internal HR Social Compliance and Audit Checklist Social QL builds and maintains its relationship with stakeholders across operational locations playing its part in socio-economic development via its Corporate Philanthropy • Enhanced the livelihoods of 914 fishermen through the FFAS (FY2021: 974) • Impacted over 13,200 lives via over RM980,000 invested in Corporate Philanthropy initiatives (FY2021: RM570,000) • 90 Orang Asli trained and equipped with skills for employment • 10,800 locals employed at our operation sites (FY2021: 10,300) • 2,988 suppliers signed QL’s Suppliers and Business Associates Code of Business Ethics Financial Produce uninterrupted long-term shareholder value by optimising financial resources including equity and debt • Resilient business performance, PATAMI: RM217.35 million (FY2021: RM311.91 million) • Total proposed dividend payment: RM85.18 million (FY2021: RM85.18 million) • Cumulative shareholder return since listing in year 2000: 10,900% ROI (FY2021: 13,000%) • Total finance cost: RM51.72 million (FY2021: RM56.43 million) VALUE CREATION BUSINESS MODEL CAPITAL INPUTS Natural • 775,345 GJ energy consumed* • 2,425,386m3 water consumed* • Kicked off the Mangrove Conservation Programme Manufactured • More than 30 operating entities • Operating in 3 countries Intellectual • Quality and halal certified products • Certification and best practices • QL Poultry Centre of Excellence Human • An inclusive and diverse workforce of over 13,100 employees across 4 business pillars • Nurture and upskill employees through training and development programmes Social • Distributed near 1% of net profit to support the community at large • Open communication channels and dialogues between QL and stakeholders, ensuring a mutually beneficial relationship Financial • Total equity: RM2.55 billion • Total borrowings: RM1.39 billion OUTPUTS MARINE PRODUCTS MANUFACTURING (MPM) INTEGRATED LIVESTOCK FARMING (ILF) PALM OIL AND CLEAN ENERGY (POCE) CONVENIENCE STORE CHAIN (CVS) BUSINESS PILLARS CORE VALUES Integrity Teamwork Win-Win Innovative We create nourishing products from agro resources, leading to benefit for all parties. OUR MISSION OPERATIONAL ENVIRONMENT Read more on page 24-31. MATERIAL MATTERS Read more on page 40-41. RISK & OPPORTUNITIES Read more on page 18-19. STAKEHOLDER ENGAGEMENT Read more on page 37-38. GOVERNANCE Read more on page 79-113. OUTLOOK Read more on page 32. STRATEGIC BUSINESS GROWTH STRENGTHENING CORE COMPETENCIES Downstream Integration Regional Replication Strengthening Value Chain Sustainably Enhancing Performance Empowering Talents Integrating Technology To be the preferred global agro-based enterprise. OUR VISION 1Based on average protein serving of 26g(recommended average daily protein intake by USDA Dietary Guidelines), computed using production volume for MPM and ILF businesses. 2Based on average 2,000 calories per meal per day (recommended daily calories intake by the Ministry of Health Malaysia), computed using CVS meal production. *Information pertains to subsidiaries reported within the Sustainability Statement. OUTCOMES 99% score of “Fair to Excellent” for QL Eggs and QL Mushroom brand in Consumer Satisfaction Survey Produced 1.20 billion standard protein servings1 (FY2021: 1.12 billion) Produced 16.67 million meals for Malaysians2 (FY2021: 12.43 million) M A N AG E M E N T D I S C U S S I ON A N D A N A LY S I S QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 1 7 1 6
CAPITALS KEY FOCUS RISKS AND OPPORTUNITIES Human • Maintain a safe and conducive working environment • Foster professional and personal development through merit-based career progression and upskilling • Emphasis on an inclusive work environment and fair labour practices Risks • Labour shortages and changes to labour law • Non-compliance to regulatory requirements • High turnover of employees • Workplace accidents that could result in injuries or fatalities • Epidemic and pandemic Opportunities • Preservation and enhancement of safety and health precautions to prevent occupational illnesses or injuries • Attract, develop and retain talent via workplace policy and practice improvements • A continuous pipeline of talents via strategic partnerships Social • Mutual growth via socioeconomic development • Assist and develop local communities • Create job opportunities for locals • Contribute to food security through uninterrupted production Risks • Reputational damage amongst the community • Loss of goodwill arising from diminished trust in products and brand • Negative consumer perception and impact of processed or unhealthy food • Potential lawsuits and damages Opportunities • Contribute to the community through strategic and targeted initiatives • Cont inuous engagement and communicat ion wi th stakeholders Financial • Deliver effective and transparent stakeholder communication • Sustainable business performance to generate long-term growth for stakeholders Risks • Forex, interest rates and credit risks • Fiscal policies (tax, incentives, etc) • Share price not reflective of the intrinsic value of the company Opportunities • Enhanced and more transparent external communications • Effective financial management strategies to capitalise on growth opportunities RISKS AND O PORTUNITIES EY F C S QL is committed to value creation in pursuit of ‘Benefit for All’. We are guided by our philosophy enshrined in the initials of Quan Li (全利) to create long-term shared value for our stakeholders and society. Prudent management and allocation of key resources and capital inputs are necessary in our ability to create, preserve, enhance or erode value across our entire value chain spanning four complementary business pillars. This involves multi-capital management centred around material issues that affect the capitals managed by QL. Material matters for QL are skewed towards natural and manufactured capital in our endeavour to be the preferred global agrobased enterprise. We strive to produce nourishing protein products readily available to the masses while preserving the environment. CAPITALS KEY FOCUS RISKS AND OPPORTUNITIES Natural • Manage QL’s carbon footprint by monitoring and minimising GHG emission intensity • Increase usage of renewable energy sources • Water security management and responsible disposal of waste • Preserve and manage biodiversity to maintain a balanced ecosystem Risks • Negative impacts on the environment due to operations, especially our impact on climate change • Scarcity of natural resources may impact our operations Opportunities • Utilise technology for efficient use of natural resources • Clean Energy business pillar with the competency to build and implement environmental solutions internally and externally Manufactured • Promote greater production efficiency by continuously improving and streamlining operational processes • Implement automation and technology for consistent output and quality • Biosecurity measures supplemented by robust controls, audit and monitoring • Produce high quality, safe and nutritious agro foods that meet the needs of consumers Risks • Unable to build competitive advantage due to inefficiency and technology obsolescence • Production output and quality disrupted by disease outbreaks • Compromised cyber security leading to business disruptions and data breaches • Supply chain disruption driving up cost of business, and high inflation Opportunities • R&D to enhance food safety, quality and nutrition • Investment in digitalisation, automation and technology integration resulting in enhanced data insights for targeted improvement plans • Identify and tap new markets to capture growth opportunities Intellectual • Heighten and maintain QL brands’ presence amongst customers and the public • Acquire and maintain relevant certifications and licenses to operate and for quality assurance Risks • Inferior products and safety issues that affect goodwill and brand reputation • Loss of market share due to slow adaptation to market trends and disruptions • Non-compliance with regulations impacting our license to operate Opportunities • Meet the needs of consumers by offering enhanced customer experience, increased customer touchpoints and innovative products • Online channels to grow brand awareness and widen reach M A N AG E M E N T D I S C U S S I ON A N D A N A LY S I S QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 1 9 1 8
The world population is projected to exceed the 8 billionth person mark this year. Countries are in the race not just to feed the world, but to feed them with nutritious food. Such increasing demand exerts pressure on natural resources. It is into this scenario that QL builds our strategy to deliver value with a focus on sustainability. We take due care in the allocation of resources to optimise efficiency across our businesses. In FY2022, we refined our strategies into two components with sustainable growth in mind. STRATEGIC BUSINESS GROWTH In driving growth, QL established the long-term strategies of regional replication, value chain strengthening and downstream integration. This foundation laid in 2010 served QL well and continues to do so in creating shared value. QL management uses the 3C approach to evaluate and identify opportunities across our value chain, taking into consideration external environment. Factors such as macroeconomy, geopolitical tensions, climate change, and consumer lifestyle are among the determining factors. Channeling investment at over 4% of our FY2022 revenue, we continued to reinforce our Core Focus areas while Continue the business activities that align with our mission, and Conserve the others to power QL’s growth. Key performance indicators are monitored and reported against goals set. Under this 3C approach, we have commenced the divestment process of the Sabah Palm Oil Mill 2 and its surrounding estates, and increased focus in Clean Energy in POCE. At the same time in MPM, we are solidifying our aquaculture venture and continue our deep-sea purse seine fishing. To guide on new areas of business that hold potential, a fourth strategic tool, Cultivate, was introduced. Going forward, this 4C approach will continue to be a barometer of business activities and QL is open to M&A opportunities to accelerate growth. STRENGTHENING CORE COMPETENCIES Central to our strategies is meeting customer needs at their convenience. As we do so, we are conscious of the larger ecosystem of our business value chain. From planting mangroves to caring for and developing employees, our initiatives are guided by our belief of creating value for all. Sustainably Enhancing Performance QL is accelerating our ESG initiatives. Climate change is not a buzzword to QL. We experience its impact on our business activities. Likewise, we are acutely conscious of the impact of our activities on the environment. Striving to return sustainable performance, we dedicate attention to the six capitals. For example, QL increased our audits of operations in FY2022. According priority to our top revenue generator, QL conducted 16 biosecurity audits across 12 poultry farms despite travel challenges during the MCO. Animal care is of utmost importance. The QL Poultry Centre of Excellence (QLPCOE), which is staffed by experienced veterinarians is tasked with further improving farm management practices. At the same time, the ISO 45001 (Occupational Safety and Health Management System) certification journey that started last financial year is in the final stages; we are now in the project pilot phase for the Pajam poultry farm. This will add to our existing recognised accreditations and certifications. As an agro-based food producer, QL holds ourselves accountable for the safety and quality of our products. We walk the talk. The Health and Nutrition Committee established last year formed a R&D team to improve our food nutrition in accordance with nutritional guidelines. This culminated in the formalisation of a Food and Nutrition statement. Our increasing focus on clean energy has translated into more solar solutions being implemented at our operating sites. At the same time, this also gave us the opportunity to help other businesses adopt clean energy technology, becoming a business activity of its own. We also pay heed to two important components of QL’s growth – our network of vendors and the community in which we operate. To promote governance within and without, QL requires vendors to uphold transparency and business best practices. We endeavour to increase the number of vendors signing on to the QL’s Suppliers and Business Associates Code of Business Ethics. The FFAS is more than just a social exercise. QL never forgot where we came from. Our business is still closely intertwined with our roots and supporting these communities is more than just ensuring a sustainable supply of fish. The FFAS helps the fishermen improve income and is a means of survival for their families. Our Sustainability Statement on pages 33-78 provides further reading on our initiatives. DRIVEN FROM THE TOP, EVERY BUSINESS PILLAR HEAD ACROSS OUR OPERATIONS ARE TASKED WITH SPECIFIC ACTIONABLE PLAN FOR EACH OF THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE INITIATIVES. FROM TRANSITIONING TO CLEAN ENERGY, WASTE WATER MANAGEMENT, SAFETY AND HEALTH TO CODE OF CONDUCT AND ANTI-BRIBERY POLICY, THE PLAN CASCADES THROUGH TO OUR BUSINESS PILLARS. GOALS ARE COMMUNICATED, AND REGULAR STATUS REPORTS ENSURED PROGRESS AND THAT POTENTIAL SITUATIONS ARE ADDRESSED EARLY. “WE FORMALISED A FOOD AND NUTRITION STATEMENT” Clean Energy Waste Water Management Safety and Health Code of Conduct and Anti-Bribery Policy Regional Replication Strengthening Value Chain Downstream Integration STRATEGIC BUSINESS GROWTH Sustainably Enhancing Performance Integrating Technology Empowering Talents STRENGTHENING CORE COMPETENCIES M A N AG E M E N T D I S C U S S I ON A N D A N A LY S I S QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 2 1 2 0 OUR GROWTH STRATEGY
Integrating Technology The pandemic drove home the importance of technology adoption for businesses to survive and thrive. The Information Technology (IT) blueprint put in place since 2019 and increasing transition to automation helped QL deliver strong sets of financial results amidst business disruptions and upheavals. Technology enabled greater targeted data collection in a timely manner and with improved accuracy to be analysed for improvement initiatives. Processes are enhanced as a result. QL undertook better data-driven improvement initiatives to boost operational efficiency, which is reflected in our report this year. This rang true in our MPM and ILF business pillars in particular, with the investment into advanced automation and new technology equipment and tool. Increased data visibility has also enabled us to introduce welltimed innovative products such as the ready-to-eat packaged food, new touchpoints & channels as well as identify strategic CVS locations. CVS led the utilisation of e-commerce during the pandemic and QL is expanding this further. To grow our cloud computing and e-commerce capability, we acquired Axrail Pte Ltd, an Amazon Web Services partner. This paves the way for QL to onboard merchants onto our existing e-commerce solution. We will continue to extend the use of data analytics and artificial intelligence to strengthen our core competencies, and concurrently strengthen our supply chain and performance management. In the plan is the migration of our daily management activities onto an Enterprise Resource Platform (ERP) system to integrate and organise key business information from all our business pillars onto a dashboard view. This will help us employ resources more effectively to gain efficiency, increased productivity and support business growth. Empowering Talents QL is driven by our philosophy, mission and values. Delivering on our mission are our employees who embody the corporate values of integrity, innovation, team work and win-win. To achieve a motivated and high-performance culture, QL nurtures employees through talent development and well-being programmes that empower them. Enlarging the conducive and inspiring workplace focus, QL notes and responds to changing work environment. In an accelerated work and life pace, QL introduced employee well-being programmes. In addition to participation in after-hours on-site exercise programme, there are Mental Health Awareness and Diabetes Awareness programmes. Policies such as Whistleblower Policy and Grievance and Harassment Policy provide a safe channel to voice concerns and discontentment wi thout repercuss ion. I t also promotes accountability and transparency. EMPLOYEE WELL-BEING TALENT ATTRACTION & RETENTION Recognition and rewards are key components of attracting talent. QL’s reward scheme is a structured approach based on financial performance and individual performance. Appreciating contribution of talents, QL endeavours to upkeep its annual salary increment. This held true even through the years headlined by the pandemic. Of note, over 30% of QL’s workforce have recorded over five years of service. 50% of the total employees with under five years of service are from CVS, understandably so as this downstream integration was established in 2016. Having a healthy pool of young talent with dynamic senior management providing guidance and coaching will help propel QL towards our vision. At over 50% of our workforce under 30 years of age and over 40% in the 30- to 50-year-old bracket, QL is developing the next generation of leaders. This is complemented by internship placements and Orang Asli employment opportunities. TALENT PIPELINE & ON-THE-JOB COACHING The focus to increase training hours per employee is measured by set targets. By setting a moving goalpost, the upskilling is a continuous process as we al ign approach, mindset and skillset to evolving consumer lifestyle. Dedi cated ski l l s enhancement and management training initiatives in the form LEAD and Accelerated Learning Programme nurture high-potential employees and equip them to make critical business decisions. The initiatives provide clarity on career progression. TRAINING, UPSKILLING & CAREER PROGRESSION QL WILL HOLD STEADFAST TO OUR STRATEGIES AND ADJUST OUR SAILS ACCORDING TO THE WIND TO CREATE A PURPLE OCEAN OF OUR OWN. THIS LONG-TERM GROWTH FOUNDATION HELPED US KEEP COURSE IN A HORRID YEAR. WE WILL CONTINUE TO TAKE COGNISANCE OF DEVELOPMENTS. WE WILL CONTINUE TO INVEST TO GROW AND HAVE SET SIGHT ON A LOW TEEN COMPOUND ANNUAL GROWTH RATE (CAGR) IN OUR EFFORTS TO DELIVER VALUE BY ADVANCING SUSTAINABILITY. OUR GROWTH STRATEGY (CONT’D) M A N AG E M E N T D I S C U S S I ON A N D A N A LY S I S QL Resources Berhad INTEGRATED ANNUAL REPORT 2022 2 3 2 2
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