Kimlun Corporation Berhad Annual Report 2018

Annual Report 2018 26 SUSTAINABILITY STATEMENT • Mechanized construction method • Shortage of skilled workers • Inconsistency of quality of products and services • Cost control • Business expansion • Compliance with applicable laws and regulations • Waste management • Consumption of natural resources • Pollution • Workplace practices • Occupational safety and health • Contribution to local community Business / Economic Growth Evironmental Management Social Contribution Based on our assessment, the most significant MSM identified and categorised into three board categories as follows: Management of Sustainability Matters The construction industry is generally regarded as labour intensive, dangerous and polluting. Construction projects involve long periods of work and delivery, complicated processes and rely heavily on in-situ construction methods involving the use of formworks and a huge amount of wet trades. The main challenges faced by the industry players include shortage of skilled labour, quality of works, cost control as well as compliances with the laws and regulations in relation to safety, health and environment. Occupational safety and health is always a challenge as the industry has a high level of work site accident injuries and fatalities. Construction activities are also inherently harmful to the environment, impacting the environment with noise, dust, muddy run-offs, and significant amounts of waste. In addition, the industry is very competitive and its vibrancy depends on property development projects and public sector projects planned and launched by the respective project owners. The ability to deal with these challenges will have direct impact on the performance of the Group and its sustainability. Generally, our key operation processes are governed by approved policies and procedures to ensure amongst others, that our operations are conducted in an orderly manner for delivery of quality products and services, and in compliance with applicable laws and regulations. We have taken the following actions to deal with the challenges and MSM identified: Category Business Growth MSM to address • Mechanised construction methods • Shortage of skilled workers • Inconsistency of quality of products and services • Cost control Our actions • Adoption of industrialised building system (“IBS”) construction method • Quality control teams (“QC Team”) which check and review quality of our works and products, benchmarking against established standard such as the Quality Assessment System in Construction (QLASSIC) quality rating system, Construction Quality Assessment System (CONQUAS), and recommend ways to improve weaknesses identified • Active negotiation and co-operation with sub- contractors and suppliers, implementation of the approved policies and procedures governing the tendering process and project management process to achieve cost efficiency, service quality and reliability • Materials budgeting prior to the commencement of project and review the materials consumed against the budget • Engagement of sub-contractors based on clearly identified scope of works, performance and basis of price (cont’d)