This year’s theme highlights the steadfast execution and positive results reaped by MSM Malaysia Holdings Berhad’s (MSM) Turnaround plan during the year under review. MSM Group is focused on the execution of its turnaround plan through asset optimisation, staying resilient with strengthened income streams and building integration for sustainable performance, supported by the strength of the “Gula Prai” brand as the third most chosen fast-moving consumer goods (FMCG) brand in Malaysia for FY2020.
This cover reflects MSM’s leadership in Malaysia as the pioneering flagbearer of the sugar industry. The use of the Wau evokes a national feel and the upward trajectory, as indicated by the bird element, indicates clear focus and direction as MSM spreads its wings in the sugar business.
Illustrations of diverse stakeholders are rendered across the cover to depict MSM Group’s core commitment to serve and deliver sustainable value that will elevate lives.
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INTRODUCTION TO THE 11TH ANNUAL INTEGRATED REPORT (AIR)
MSM’s AIR for the year ended 31 December 2021 has been improved to meet all the principles of the International Integrated Reporting Framework (IIRF) developed by the International Integrated Reporting Council (IIRC). We also strive to continuously enhance the quality of information available to our stakeholders and reporting practices through adoption of the IIRF, in consonance with the recommendations in the Malaysian Code on Corporate Governance 2021 (MCCG 2021) on integrated reporting.
The report aims to provide our stakeholders with transparent, relevant and integrated information of our business strategy, performance, and future prospects in the context of Environment, Social and Governance (ESG), leading to the creation of stakeholder value over the short, medium and long-term. We are guided by our vision “To be a World Class, Cost-Efficient and High-Performance Organisation with a Sustainable Business Model and Diverse Portfolio in the Food-Related Business” and are resolute in our sustainable promise of “Sweet Sustenance in a Responsible, Sustainable and Mindful Way”. We intend to deliver this promise through enhancing our shareholder value, optimising growth and achieving a sustainable, balanced and integrated ESG performance by transforming our business model and reaping opportunities throughout the global food value chain.
Improvements of disclosure for FY2021 are evident in greater Investor Relations disclosure as described on page 108; update of our Business Model on page 94; and advancements in our Sustainability Journey “as a step towards meeting” the FTSE4Good Bursa Malaysia Index standards, expand our alignment to the core disclosures under the Global Reporting Initiative (GRI) standards as well as focus on promoting relevant United Nations Sustainable Development Goals (UN SDGs) into our strategies. The sustainability of our business shall continue to be strengthened as we review our ESG elements holistically across our business and operations.
This report covers our financial and non-financial performance during the period from 1 January 2021 to 31 December 2021. Our reporting encompasses all material developments concerning MSM up until the approval of the annual financial statements. It focuses on MSM as a Group and encompasses our operating subsidiaries, i.e. MSM Prai Berhad, MSM Logistics Sdn Bhd and MSM Sugar Refinery (Johor) Sdn Bhd.
This report has been compiled in accordance with the concepts, guiding principles and content elements contained in the IIRC framework. This framework employs a reporting approach to create short, medium and long-term value as well as the connectivity and interdependencies of the six capitals, namely human, natural, manufactured, financial, intellectual, and social & relationship capital. Information presented relates to the principal activities of MSM Group and all its subsidiaries, unless stated otherwise.
Through this report, MSM hopes to give a comprehensive and holistic overview of the matters that influence our ability to create value, including market challenges, risk management, strategies, governance, initiatives and key developments.
MSM Group’s focus on value creation is driven by the economic value we deliver and the sustainability of the communities that we serve. We relentlessly strategise on the mobilisation of our Six Capitals to coordinate, educate, support and collaborate with our stakeholders and monitor value creation outcomes to enhance resiliency. These capitals, as identified by the IIRC, have served as essential guides to help us achieve our strategic objectives. The capitals represent stores of value and each of them – Financial Capital, Natural Capital, Manufactured Capital, Intellectual Capital, Human Capital and Social & Relationship Capital – is important on how it impacts our business. MSM’s business strategies revolve around maximising positive outcomes within these capitals, being mindful of the trade-offs between capitals, and mitigating negative impacts.
By reporting according to the Six Capitals, our stakeholders will be better informed and have a broader view of how the business strives to create net positive value. This approach also allows for more concise understanding of our value creation over time.
Our value creation Business Model that shows the inter-relatedness and dependencies between our Capitals and other factors that drive our value creation journey is disclosed on pages 94 to 95.
MSM applies the principle of materiality to determine the content of our integrated report and defines materiality as matters that substantially affect MSM Group’s ability to create and sustain value over the short, medium and long-term. These matters were identified, prioritised and validated via a materiality assessment described in page 96. Subsequently, our key stakeholders were engaged throughout this process, and this has enabled MSM to incorporate their inputs into our business perspective. Our strategic responses to these material matters are presented in pages 96 to 101.
MSM’s forward looking statements are inclusive of MSM Group’s future direction, strategies, and potential opportunities for growth. These statements can be identified by key words such as “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, “plans”, “outlook” and other words of similar meaning in connection with a discussion of future operating or financial performance. These are based on various assumptions and are subject to a number of risks, uncertainties and contingencies, many of which are beyond the control of MSM. Unanticipated events and actual future events may differ materially from current expectations due to new business opportunities, changes in priorities by the Group and other factors.
To uphold report quality and ensure that the information presented in this report is reliable, consistent and complete, this report has been reviewed by the Executive Committee. The report has further been reviewed by the Audit Committee and together with the Audited Financial Statements 2021, submitted to the Board for its final approval.
MSM’s Board of Directors and Senior Management, has approved the contents of this Annual Integrated Report, guided by the requirements of the MCCG 2021, Companies Act 2016, the Listing Requirements of Bursa Malaysia and Sustainability Guidelines.
The financial report and statements have been audited by MSM’s appointed external auditors, PricewaterhouseCoopers PLT (PwC) and is approved free of qualifications. The Board acknowledges responsibility for ensuring the integrity recommendations of the Annual Integrated Report, following recommendation by the Audit, Governance and Risk Committee, responsible for oversight of the annual integrated report. The external auditors have also provided a limited assurance review on our Statement on Risk Management and Internal Control (SORMIC).
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