INTRODUCTION
9. STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE
5.0 CONCLUSION
The Board is of the view that the system of internal control in place throughout the year under review is sound and sufficient to safeguard the shareholders’ investment, the interests of customers, regulators, employees and the Group and to facilitate the expansion of its operations. Additionally, the Board regards the risks faced by the Group are within acceptable levels to the business environment within which the Group operates.
There were no material losses or fraud during the current financial year as a result of internal control failures and the Board and Management are continuously taking measures to improve and strengthen the internal control framework and environment of the Group.
This Statement is made in accordance with a resolution of the Board of Directors dated 26 June 2009.
The Group does not have a formal Corporate Social Responsibilities (“CSR”) Policy. However, as a socially responsible corporation, the Group supports and contributes positively to the sustainable development of the economy and the community where the Group operates. It places importance on its CSR and remains committed to care for the environment and employees, fostering strong relationships with business associates and supporting worthy community welfare causes as part of its business ethics and responsibilities.
Marketplace
The setting up of a palm oil mills at Sook-Keningau and Telupid in Sabah by our Group has spurred the economic activities in their respective surrounding areas. More locals are earning higher income by cultivating oil palm which is more profitable than the traditional crops. Our Keningau Mill now accepts FFB from more than 300 smallholders.
Workplace
Cognisant that a team of dedicated and motivated employees plays a crucial role in ensuring that the Group is well poised to meet present and future challenges, the Group continues to place emphasis on developing its human capital, the organisation’s most valuable asset. The Group had a total workforce of over 1,950 as at 31 January 2009.
The Group has also invested substantially on the construction of roads, employees housing, provision of free electricity and water supplies to them in the estates with the objective of providing better living conditions. Free/subsidised transportation is provided for school going children to the nearest school. We also provide recreational activities for the residents e.g., football field, volleyball and sepak takraw courts for the residents. Vegetable and fruit tree planting within the housing compound are promoted to enhance food sufficiency by way of provision of seeds and young plant. Annual kenduri was conducted to foster better relations between the staff and workers. The roads leading to the estates are properly maintained to facilitate the movements of vehicles. Some of our main roads have benefited the neighbouring villagers as they also use these roads to go to the nearest town.
The Group has carried out various activities to improve the workforce knowledge, quality of life and foster a sense of belonging, such as:
• Conducting in-house training for the staff on communication, legal, accounting, technical issues and management skills.
Where specialist training is required, the staff are sent for external training;
• Various staff activities including festival celebrations and sporting events through the In-House Sports Club;
• A partially subsidised company trip to Cambodia and Kota Kinabalu was organised for the staff and their family members;
and
• During the financial year, at the height of the rise of petrol prices, our employees were provided with a Special Relief Allowance to cope.
In accordance with its tradition in appreciation for the contributions of our staff, business associates and partners an annual dinner was organised at a five star hotel in Johor Bahru.
Community
Our Group has over the years placed great emphasis on enhancing the quality of life of the communities where we operate. This is evidenced by the Group’s wide-ranging contributions in areas of education, infrastructure, cultural and social development initiatives. It is the Group’s practice to create and offer priority in job opportunities to local villagers, either by way of direct employment or through the award of contract works. This policy has proven effective in improving their living standards.
The Group is involved in the development of land belonging to an orphanage into an oil palm estate under a joint venture agreement, providing good long term income and development fund to the Al-Yatama organisation for its charity work.
During the year, the Group has assisted trainees from various universities, institutes of higher learning and training centres to undergo their practical training. Suitable candidates have been offered employment after they have completed their training.
The Group also made several contributions and donations amounting to approximately RM170,000 to worthy causes and organisations including:
• Embassy of The People’s Republic of China for earthquake victims in China
• Rotary Club of Tebrau Foundation
• Various amounts were donated to governmental and non-governmental organisations to support their sports, cultural and welfare activities
• Donations to schools for building funds, sports day and Persatuan Ibu Bapa & Guru in Johor and Sabah.
Statement On Corporate Social Responsibilities
(cont’d)Environment
The Group supports conservation of the environment by actively managing its resources in a responsible manner by developing and implementing environmental-friendly practices such as zero burning, soil and water conservation measures and avoids practices that may harm the environment irreversibly in its estates.
The Group has successfully implemented the methane capture and power generation project which will reduce greenhouse gas emissions as well as supply low cost steam and electricity for milling operations and other downstream activities of the Group.
This is the first project in the world that is registered with the Clean Development Mechanism (“CDM”) Executive Board of United Nations Framework Convention on Climate Change (“UNFCCC”) on biogas generated from palm oil mill effluent. The sales of the Certified Emission Reduction (“CER”) generated by the project to third party will start in 2009.
These projects will contribute towards reducing the environmental impact and improve sustainability of the palm oil industry.
Annual Dinner
The Board of Directors of Kim Loong Resources Berhad is pleased to present the Report of the Audit Committee which lays out its activities held throughout the financial year ended 31 January 2009 and in compliance with Paragraph 15.16 (1) of the Listing Requirements of Bursa Securities.