KLK began as a plantation company in 1906 and today, palm oil and rubber development remains the Group's core business. Today, the Group is a global oleochemical producer with strategically located complexes in Malaysia, Indonesia, China and Europe.
FINANCIAL HIGHLIGHTS
In conjunction with the adoption of Malaysian Financial Reporting Standards (“MFRS”) framework by the Group, the information for FY2018 to FY2020 has been prepared in accordance with MFRS, while the information for FY2016 and FY2017 has been prepared in accordance with Financial Reporting Standards. ("FRS").
TOTAL ASSETS
TOTAL EQUITY & LIABILITIES
SIMPLIFIED GROUP ASSETS & LIABILITIES
TAN SRI DATO’ SERI LEE OI HIAN
M. ALIAS
PROFILE OF DIRECTORS
DATO’ YEOH ENG KHOON
DATO’ LEE HAU HIAN
QUAH POH KEAT
TAN SRI AZLAN BIN MOHD ZAINOL
LEE JIA ZHANG
ANNE RODRIGUES
Tan Sri Dato' Seri Lee was appointed as Group Chairman/CEO in 1993 and held this position until 2008. He joined KLK Group in 2010 and has since held various positions in the Oleochemical and Corporate divisions.
PROFILE OF KEY SENIOR MANAGEMENT
M. ALIAS Chairman
CHAIRMAN’S STATEMENT
M. ALIAS Pengerusi
Perniagaan teras Perladangan kami, yang mencapai harga yang lebih baik untuk produk sawit, menyumbang RM725.2 juta dalam keuntungan sebelum cukai, peningkatan 84% berbanding keputusan tahun lepas. Keuntungan sebelum cukai segmen hartanah daripada pembangunan tunggal kami di Bandar Seri Coalfields meningkat kepada RM54.0 juta.
KENYATAAN PENGERUSI
Di sebalik semua ketidaktentuan ini, Kumpulan kami berjaya mencatatkan keuntungan bersih yang lebih baik sebanyak RM772.6 juta bagi tahun berakhir 30 September 2020 (“TK2020”). Segmen pembuatan kami mencatatkan sumbangan yang bertambah baik sebanyak RM403.3 juta berbanding tahun lepas, yang hampir keseluruhannya dijana oleh bahagian Oleokimia.
MANAGEMENT DISCUSSION & ANALYSIS
Our Plantation segment recorded higher pre-tax profit of RM725.2 million in FY2020 due to higher palm oil prices. Consequently, our Plantation segment recorded higher pre-tax profit of RM725.2 million in FY2020, driven by higher palm oil prices.
FINANCIAL REVIEW
Foreign exchange gain of RM1.8 million (FY2019: gain RM55.1 million) on intercompany loans extended to foreign subsidiaries. This segment recorded a loss of RM56.3 million (FY2019: profit RM34.5 million), attributable to the following factors:-.
PLANTATION
TOTAL PLANTED AREA
223,964 HA PRODUCTION FACILITIES & CAPACITY
MALAYSIA
25 Rubber Factory 5
GROUP HIGHLIGHTS
INDONESIA
LIBERIA
LIBERIAMANAGEMENT DISCUSSION & ANALYSIS
Despite the challenges during COVID-19, we were able to maintain our CPO production cost at RM1,465 mt/ha. Oil Recovery Rate (“OER”) has stagnated at 21.87% producing 4.81 mt/ha CPO for FY despite efforts to improve maturity standards and drive towards productivity and efficiency.
AGE PROFILE OF PALMS AS AT 30 SEPTEMBER 2020
The areas replanted were mainly in the Lahad Datu (Sabah) region, Peninsular Malaysia, Riau, Belitung Island and North Sumatra, accounting for 96% of all replantings. Further improving the replanting process by strengthening GAP and re-emphasizing high replanting standards to achieve our first year yield target of over 20.00 mt/ha.
MANAGEMENT DISCUSSION & ANALYSISMANAGEMENT DISCUSSION & ANALYSIS
MANUFACTURING
OLEOCHEMICAL DIVISION
VISION
MISSION
OUR PRODUCTS ARE USED IN DIVERSE END-USE APPLICATIONS44
7 Countries
120 Countries
MIL MT PA
Despite initial business disruptions early in the global COVID-19 MCO period, our fatty acid and fatty alcohol units were largely able to continue operations as they are essential commodities. However, the business experienced increased demand for our sub-segment of pasta products intended for liquid detergent formulation.
NON-OLECHEMICALS46
PROPERTY
DEVELOPMENT
Despite the MCO, KLK Land managed to complete Phase 2 of Hemingway Residences, consisting of 137 units of semi-detached and super link houses, ahead of schedule, with Vacant Possession (“VP”) delivered in June 2020. We were able to achieve encouraging results as Hampton Residences launched in September 2019, consisting of 108 units of super link houses, 56 units of semi-detached houses and 27 units of bungalows recorded 85% take-up rate.
SUSTAINABILITY
STATEMENT AND REPORT
SUSTAINABILITY STATEMENT AND REPORT
SUSTAINABILITY MISSION STATEMENT
MARKETPLACE
WORKPLACE
RESPONSE TO COVID-19
ENVIRONMENT
COMMUNITY
Certification Status
- Responsible Consumption and
- Clean Water and Sanitation
- Affordable and Clean Energy
- Climate Action Take urgent action to
- No Poverty End poverty in all its
- Quality Education
Raise awareness of KLK's policy and commitment to sustainable palm oil production and their role in this. Raise awareness of KLK's policy, supplier code of conduct, non-compliance protocol and commitment to sustainable palm oil production and their role in this.
PALM OIL MILLS
For KLK OLEO, traceability is defined as traceable to POM level for palm oil and palm kernel oil-based raw materials, excluding internal transfer within the KLK OLEO group of companies for fiscal year 2020. The percentages disclosed are tabulated based on the weighted average purchases of palm oil-related origin that are processed in participating operations centers in China, Europe, Indonesia and Malaysia.
REFINERIES AND KERNEL CRUSHING PLANTS
Should suppliers provide declarations of a certain percentage traceable to POM level, this was also used to represent traceability.
TRACEABILITY STATUS FY2020
TRACEABILITY (BY FEEDSTOCK) FY2020
TRACEABILITY (BY REGION) FY2020
KLK aims to reduce greenhouse gas emissions in all aspects of plantation development (upstream activities) and KLK OLEO (downstream activities). Measuring relevant greenhouse gas emissions data is used as a basis for an objective evaluation of our company's impact on the environment, which in turn provides essential guidance for formulating mitigation measures for implementation.
PLANTATION SEGMENT GHG EMISSION SOURCES
Measuring relevant data on greenhouse gas emissions is important as a basis for an objective evaluation of our company's impact on the environment, which in turn provides essential guidance on effective mitigation actions to take. The biogas plants have reduced greenhouse gas emissions from a POM and its supply bases by 60%.
Greenhouse Gas Management in Biogas Plants for Renewable Energy in the Plantation Segment Methane gas produced from POM ("POME") effluent is very potent, holding twenty-eight (28) times more heat than carbon dioxide per molecule. In addition to biogas power plants, we also installed FBP, a mechanism capable of reducing total GHG emissions from POM by 20%.
REDUCTION OF ENERGY CONSUMPTION (GJ)
We are committed to good energy management, which includes energy saving, green energy consumption and energy efficiency. Energy management at KLK OLEO is twofold: efficiency initiatives that reduce energy consumption, and continuous improvement of process systems for greater efficiency and sustainability.
PLANTATION SEGMENT SCHEDULED WASTE BREAKDOWN
SUSTAINABILITY STATEMENT AND REPORTSUSTAINABILITY STATEMENT AND REPORT
During the financial year, both BOD and COD levels are within the parameters set by the regulations of the countries in which we operate. KLK OLEO's solid waste generation intensity in the financial year was 0.012 mt/mt prod vol, higher than last year.
TOTAL WATER USAGE AT PLANTATIONS
Since the COVID-19 pandemic upended life around the world, single-use plastics have been making a comeback. During the financial year, KLK launched its Zero Single Use Plastic Campaign, aimed at avoiding single-use plastics.
QUANTITY OF WATER RECYCLED AND REUSED
There has been a huge increase in the production of face masks, protective suits, water bottles, visors, takeaway food containers, pre-packaged products and home deliveries wrapped in single-use plastic bags. To promote a good recycling habit among employees, our KLK operation centers are making efforts to reduce single-use plastics in the office by stopping the serving of bottled mineral water for meetings, removing disposable plastic utensils in meeting rooms, pantry and the like. .
RISK ASSESSMENT OVERVIEW - SABAH
The main purpose of this task force is to discuss the implementation of the new requirement set out in the revised RSPO P&C 2018 - Decent Living Wage. Introduce a clause to provide free transportation to the worker's home country upon completion of the contract.
OSH COMMITTEE REPRESENTATIVES FY2020
EMPLOYEE HEALTH AND WELL-BEING The health and safety of our employees is of vital importance to the company. During the period under review, workers are continuously reminded of their need to remain safe, and the company has provided tangible and intangible support to help everyone cope with the new challenges and be able to adapt to the new normal lifestyle.
TOTAL
Similar to our plantation segment, KLK OLEO also provides internal and external training for the improvement of our employees. The health and well-being of our employees and their families remains our top priority.
NUMBER OF EMPLOYEES
On our plantations, we provide housing with essential amenities such as water, electricity, kitchen with cupboard, medical facilities to our workers and their families. This dedicated week was designed to create awareness about health through various activities like health check-ups, health talks and blood donation drives.
TOTAL BLOOD DONATED
In addition to housing facilities, we aim to guarantee a conductive living environment by adding other infrastructure, such as sports facilities and places of worship. Prior to the movement controls, we were able to organize activities such as mountain hiking, karting, yoga, Zumba, badminton and swimming lessons.
TOTAL: 572
In Sabah, we work with the Humana Child Aid Society to provide basic primary education to the children of our workers and other children from villages near our plantations. In partnership with the Liberian Ministry of Education, we provide free education to 759 children of our workers and children from surrounding villages.
TOTAL STUDENTS: 17,45286
We believe in the power of education to transform lives and that every child should have the opportunity to learn. We have also employed teachers to provide secondary education to Indonesian children aged 13-15 at our Community Learning Centers to provide a seamless transition of their learning when they return to their home country.
433 scholars
As part of our efforts to improve the social inclusion of the communities surrounding our operational centers, we have launched a knowledge exchange program aimed at reducing poverty and vulnerability. Therefore, in addition to providing food for our workers on the property, the KLK Group also provides its employees with free soaps and face masks in order to prevent and suppress the spread of the virus as much as possible.
COVID-19 RELATED ExPENSES: RM6.6 MILLION
Face masks and soaps were provided to workers at all KLK operation centers. We have – and always will – put health,. To help alleviate the difficulties brought about by the pandemic, our colleagues from the Plantation segment ensured that the much-needed food supplies for all our workers on the plantations are available.
REACHING OUT TO MARGINALISED COMMUNITIES90
Through KLKCare, the Group has provided much-needed food and daily essentials to communities in need during the MCO period. Realizing the challenges that students and teachers may face after returning to schools, KLK has taken the initiative to contact 18 schools identified with the majority of students from B40 families in Negeri Sembilan, Perak and Selangor.
BASIC ESSENTIALS BENEFIT 7,800 STUDENTS
Distributing food and personal hygiene items to B40 family students at PPKI Sekolah Kebangsaan Telok Gadong in Klang, Selangor. The Group has incurred a total of RM6.6 million in expenses related to COVID-19, including the purchase of food, personal protective equipment (PPE), testing kits, sanitisers, disinfectants and essential medical supplies to combat the spread of the virus.
SUPPORTING FRONTLINERS TO COMBAT THE COVID-19 PANDEMIC
In addition to providing food and daily necessities, we have not forgotten the front lines who have worked tirelessly in their goal to fight the spread of COVID-19 as well as our frontline workers who have gone the extra mile to manage critical tasks to ensure supply. of raw materials which are essential for many of the essential products such as soaps, detergents and foods during the pandemic. 80% owned by Kompleks Tanjong Malim Sdn Bhd 100% owned by Palermo Corporation Sdn Bhd 60% owned by Scope Energy Sdn Bhd 100% owned by Selasih Ikhtisas Sdn Bhd.
PROPERTY DEVELOPMENT
GROUP CORPORATE STRUCTURE
INVESTMENT HOLDING
JOINT VENTURESASSOCIATES
GOVERNANCE
CORPORATE GOVERNANCE OVERVIEW STATEMENT
PRINCIPLE A
- BOARD RESPONSIBILITIES Board Leadership
- BOARD COMPOSITION
- REMUNERATION
- Total Executive Directors
Details of the Group's Anti-Corruption Policy are available on the Company's website, www.klk.com.my. Details of the Group's Whistleblowing Policy are available on the Company's website, www.klk.com.my.
PRINCIPLE B
AUDIT AND RISK COMMITTEE
RISK MANAGEMENT FRAMEWORK Risk Management and Internal Controls
The Group has also improved its various policies, procedures and codes of conduct as part of its anti-bribery and anti-corruption system. Through policies and procedures and third-party assessments, the Group's principles against bribery and corruption are extended to the Group's agents, contractors, associates, business partners and its supply chain.
PRINCIPLE C
COMMUNICATION WITH STAKEHOLDERS
Corporate Disclosure Policy and Procedures The Company and the Group are committed to a policy that provides accurate, balanced, clear, timely and complete disclosure of corporate information to enable informed and orderly market decisions by investors. The objectives of the corporate disclosure policy and procedures are to:. a) confirm in writing KLK's existing disclosure policies, guidelines and procedures and ensure a consistent approach to the company's disclosure practices throughout the company;.
CONDUCT OF GENERAL MEETINGS Shareholders’ Participation at AGMs
In view of the limitations inherent in any system of risk management and internal control, the system is designed to manage rather than eliminate the risk of failure to achieve the Group's policies, objectives and objectives. The framework is also designed to ensure proper management of risks that could hinder the achievement of the Group's objectives.
STATEMENT ON RISK MANAGEMENT
This Statement does not cover associates and joint ventures where risk management and internal control are managed by the respective management teams. The Board of Directors reaffirms its overall responsibility for maintaining a sound risk management and internal control system at KLK to protect the interests of shareholders, customers, employees and the Group's assets.
The Board is supported by the Group Risk Management Committee (“GRMC”), chaired by the Chief Executive Officer (“CEO”) in overseeing risk management efforts within the Group. BDHs review risks related to the Group's strategic objectives and overall risk appetite to ensure that all key risks are adequately addressed by the RMUs.
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
In addition, the board of directors is timely and regularly informed about the group's activities and operations. The Board is kept up to date with the Group's anti-corruption initiatives and compliance programs through regular reports.
AUDIT AND RISK COMMITTEE REPORT
2020 Unaudited fourth quarter results for the period ended September 30, 2020 and the Group's unaudited results for the financial year ended September 30, 2020 on December 7. The total costs incurred for the Group's internal audit function for the financial year ended September 30, 2020 amounted to RM5.14 million.
AUDIT AND RISK COMMITTEE REPORT AUDIT AND RISK COMMITTEE REPORT
AUDIT AND NON-AUDIT FEES. i) The amount of audit fees paid or payable to the External Auditors, Mr BDO PLT and its subsidiaries, for services rendered to the Company and the Group for the financial year ended 30 September 2020 was RM2,000 and RM13,000 respectively RM. .
ADDITIONAL COMPLIANCE INFORMATION
BDO PLT, for services rendered to the Company and the Group for the financial year ended September 30, 2020 amounted to RM295,000 and RM837,000 respectively. ii) The amount of non-audit fees paid or payable to the external auditors, gentlemen. The details of the RRPTs entered into by the Company and its subsidiaries during the financial year are set out in Note 39 to the annual accounts on pages 177 to 179.
STATEMENTS
123 Consolidated equity statement 124 Changes in the company's equity 125 Consolidated cash flow statement 128 The company's cash flow statement 130 Notes to the financial statements.
REPORT OF THE DIRECTORS
STATEMENTS OF PROFIT OR LOSS
STATEMENTS OF OTHER COMPREHENSIVE INCOME
STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CHANGES IN EQUITY OF THE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS OF THE COMPANY
NOTES TO THE FINANCIAL STATEMENTS
