INSIDE THIS
Corporate Information

1

Basis of This Report2

1

WHO WE ARE AND WHAT WE DO

4CREATING SUSTAINABLE VALUE

About this Sustainability Statement182023 Key Sustainability Highlights & Achievements

19

Our Approach to Sustainability

20Awards and Certifications 2023

3

Generating Sustainable Economic Value

38

Corporate Structure

5Managing Our Environment Impact

48

Our Business Overview

6

Creating Value Through Social Engagement

61

Statement of Independent Assurance

94

Performance Data

97

Performance Data Table from Bursa Malaysia’s
ESG Reporting Platform

107

2

MESSAGE FROM OUR LEADERS

The Market and Trends that Shape Us

8

In Conversation with Chairman

9Management Discussion and Analysis

123

HOW WE CREATE VALUE

Our Value Creation Model

16

5

OUR GOVERNANCE

Directors’ Profile

109

Key Senior Management Profile

114

Corporate Governance Overview Statement

115

Statement on Risk Management and Internal Control

122

Audit Committee Report126

Creating Shared Values Through

44th
ANNUAL GENERALMEETING

DAY & DATE:
Thursday, 30 May 2024
TIME:
10.30 A.M.

Sustainable
Ecosystem

At KOSSAN, we strive to create shared value between sustainability and ourbusiness.
For example, by developing products in more resource-efficient ways, weare helping to protect the planet while reducing our cost base. Similarly, ourefforts to promote responsible employment practices across the industry
enhance our reputation and enable us to seize new growth opportunities
amongst international buyers.
This holistic approach to value creation is captured by the theme of thisyear’s report - Creating shared values through sustainable ecosystem –highlighting our efforts to integrate sustainability at the very heart of ourprocesses, technologies and partnerships. It is an approach that makes us
stronger today and positions us for greater success tomorrow.

REPORT
6

OUR PERFORMANCECORPORATE INFORMATION

Directors’ Responsibility Statement

129

Directors’ Report130

Statements of Financial Position

137

Statements of Profit or Loss andOther Comprehensive Income

139

Consolidated Statement of Changes in Equity

141

Statement of Changes in Equity

143

Statements of Cash Flows

144

Notes to the Financial Statements

149

Statement by Directors

202

Statutory Declaration

202

Independent Auditors’ Report

203

7

REGISTERED AND CORPORATE OFFICE
Wisma Kossan, Lot 782,
Jalan Sungai Putus,
Off Batu 3¾ Jalan Kapar,
42100 Klang, Selangor Darul Ehsan.
Tel: +603-3291 2657
Fax: +603-3291 2903
E-mail: kossan@kossan.com.my
Website: www.kossan.com.my

INVESTOR RELATIONS
E-mail: ir@kossan.com.my

COMPANY SECRETARIES
Chia Ong Leong (MIA 4797)

OTHER INFORMATION

Global Reporting Initiative (GRI) Content Index

207

List of Top 10 Properties

214

Additional Compliance Information

215

Statistics on Shareholdings

216

Notice of Annual General Meeting

220

Proxy Form•

(SSM Practicing Certificate No. 201908000832)

Chia Yew Ngo (LS 0001831)(SSM Practicing Certificate No. 202008000487)

PRINCIPAL BANKERSOCBC Bank (Malaysia) Berhad
Hong Leong Bank Berhad

SHARE REGISTRAR
Boardroom Share Registrars Sdn. Bhd.
11th Floor Menara Symphony,
No. 5 Jalan Prof. Khoo Kay Kim,
Seksyen 13, 46200 Petaling Jaya,
Selangor Darul Ehsan.
Tel: +603-7890 4700
Fax: +603-7890 4670
Website: www.boardroomlimited.com/my

STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
Stock Name: KOSSAN
Stock Code: 7153

Scan this QR code toview the online version
of Integrated Annual
Report 2023

AUDITORSKPMG PLT
Chartered Accountants
Level 10, KPMG Tower, 8, First Avenue, Bandar Utama,
47800 Petaling Jaya, Selangor Darul Ehsan.

2

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

WHO WE ARE AND WHAT WE DO

SECTION 1

Basis of This Report

DEAR STAKEHOLDERS,
On behalf of the Board of Directors of Kossan Rubber Industries Bhd (“KOSSAN”),
we are proud to present our Integrated Annual Report (“IAR”) 2023. This reportreflects our commitment to integrated reporting principles, offering a detailed andinterconnected analysis of our strategies and our progress towards sustainablevalue creation.
SCOPE AND BOUNDARIESThis IAR covers the reporting period from 1 January 2023 to 31 December 2023, encompassing the consolidated performance of
KOSSAN and its subsidiaries (“Group”). Extending beyond financial reporting, this IAR includes our non-financial performance, risk
and mitigation, outcomes associated with our key stakeholders and any other factors that may have a significant influence on ourability to create value.

REPORTING FRAMEWORKASSURANCEThis IAR is prepared in reference to local and international
standards and frameworks, namely:

This IAR has been prepared in accordance with good governancepractices. Our financial statements for the year ended
31 December 2023 have been audited by our external auditors,
KPMG PLT, and are disclosed in this report.

• International <IR> Framework• Main Market Listing Requirements of Bursa Malaysia
Securities Berhad• Malaysian Code on Corporate Governance 2021
• Companies Act 2016
• Malaysian Financial Reporting Standards• IFRS Accounting Standards• Global Reporting Initiative Standards

FORWARD-LOOKING STATEMENTS AND DISCLAIMER
This IAR contains certain forward-looking statements which
are contingent by nature and subject to changes based on
emergent risks or unforseen developments. Therefore, thesestatements are not guarantees or predictions of the Group’s
future outcomes. Readers are advised not to place undue
reliance on them.

BOARD APPROVALThe Board has collectively reviewed and endorsed this IAR,
affirming its integrity and fair representation of the Group's
financial and non-financial performance for the year underreview. Additionally, the Board is of the view that thereport effectively addresses all material issues and mattersrelevant to our operations and industry.
Approved and acknowledged on behalf of the Board by

MOHAMED SHAFEIIBIN ABDUL GAFFOOR
ChairmanTAN SRI DATO’
LIM KUANG SIAGroup Managing Director/
Chief Executive Officer

HOW TO NAVIGATE OUR REPORTOur Capitals

Our Stakeholders

Financial
CapitalIntellectual
Capital

Employees

Authorities &Regulators

Manufactured
CapitalSocial &Relationship
CapitalCustomers

Local Communities& Society

Human
CapitalNaturalCapitalShareholders,
Investors, Analysts &Bankers

Vendors/
Suppliers

Guides to more information within the IAR

Guides to online sources for additional information

WHO WE ARE AND WHAT WE DO

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

3

Awards and Certifications 2023

SECTION 1

AWARDS AND RECOGNITION

Graduates Choice
Award: 2023 Most
Preferred Graduate
Employers to Workfor Manufacturing(Rubber)Selangor Investor
Appreciation Awards The Highest
Investment in
Selangor by Domestic
Company (DDI) 2022

The Malaysia Book ofRecords - The first glove
manufacturer withBank Negara Malaysia’s
Strategic Partnership forGreening Value Chain
Programme to Small andMedium-sized Enterprises

Asia Corporate Excellence& Sustainability (ACES)Awards 2023: Green
Initiative Award

General Motors:
Supplier Quality
Excellence Award 2022

CERTIFICATIONSACCREDITED LABORATORY

Skim Akreditasi
Makmal (SAMM)
No. 464

International
Laboratory
Accreditation
Cooperation

KOSSAN Laboratory

Skim Akreditasi
Makmal (SAMM)
No. 1038

International
Laboratory
Accreditation
Cooperation

Skim Akreditasi
Makmal (SAMM)
No. 372

Analytical Services, R&D Centre

International
Laboratory
Accreditation
Cooperation

E-Lab Testing & Research Center

OCCUPATIONAL HEALTH AND SAFETY & ENVIRONMENTAL MANAGEMENT SYSTEMS

ISO 45001

ISO 14001 - ISO 45001

BSI Assurance
UK Limited

Lloyd’s Register Quality
Assurance Limited

ISO 14001

Lloyd’s Register Quality
Assurance Limited

ISO 14001

BSI Assurance
UK Limited

4

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

WHO WE ARE AND WHAT WE DO

Awards and Certifications 2023 (Cont’d)

SECTION 1

QUALITY MANAGEMENT SYSTEM

IATF 16949

ISO 9001

ISO 9001 & IATF 16949

ISO 9001

Lloyd’s Register Quality
Assurance Limited

Lloyd’s Register Quality
Assurance Limited

TUV Rheinland Malaysia
Sdn. Bhd.

TUV Rheinland Malaysia
Sdn. Bhd.

(EN 15129, EN 1337-3,
EN 1337-5 & EN 1337-7)
Certificate ofConstancy of Performance

ISO 13485 & EN ISO 13485

TZUS Cert.

BSI Assurance UK Limited

BSI Assurance UK Limited

BSI Group America Inc.

EU Quality Assurance
Certificate

UKCA Certificate

BRC Global Standard

Hazard Analysis and CriticalControl Point (HACCP)BSI Group The
Netherlands B.V.
Sterile Natural Rubber
Latex and Polyisoprene
Surgical Gloves
Sterile Nitrile andNatural Rubber Latex
Examination Gloves

BSI Assurance UK Limited
Sterile Natural Rubber
Latex Surgical
Sterile Nitrile
Examination Gloves

SGS United Kingdom Limited

SGS (Malaysia) Sdn. Bhd.

Medical Device Single Audit
Program (MDSAP)

ISO 9001

HALAL ACCREDITATIONMS 2636:2019

Jabatan Kemajuan Islam
Malaysia (JAKIM)

HAS 23000

Halal National Mark

Badan Penyelenggara Jaminan
Produk Halal (BPJPH)

United Arab Emirates Ministry ofIndustry & Advanced Technology

FOREST MANAGEMENT CERTIFICATION

Forest Stewardship Council (FSC)Standards Chain of Custody Certification

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

WHO WE ARE AND WHAT WE DO

5

Corporate Structure

100%
100%
83%
90%
90%
100%

SECTION 1

KOSSAN RUBBER INDUSTRIES BHD.

ASEPTAPAK (M) SDN. BHD.
CLEANERA (MALAYSIA)
SDN. BHD.
CLEANERA HK LIMITEDDOSHIN RUBBERPRODUCTS (M) SDN. BHD.

100%
100%

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

QUALITY PROFILE SDN. BHD.

HIBON CORPORATION SDN. BHD.
IDEAL QUALITY SDN. BHD.

33%
67%

100%

DONGGUAN CLEANERA CLEANROOMPRODUCTS COMPANY LIMITEDPREMIUM MEDICAL PRODUCTS
SDN. BHD.

KISB ASIA PACIFIC SDN. BHD.

KOSSAN CERAMICS SDN. BHD.
KOSSAN ENGINEERING (M)SDN. BHD.
KOSSAN GLOVES SDN. BHD.

KOSSAN INDUSTRIES SDN. BHD.
KOSSAN INTERNATIONAL SDN.
BHD.
KOSSAN LABUAN BHD.

KOSSAN SDN. BHD.

100%KISB HK LIMITED

99%
100%

PT. KOSSAN SETIA JAYA

1%

KOSSAN LATEXINDUSTRIES (M) SDN. BHD.

KISB LIMITED SHANGHAIKOSSAN MANAGEMENTSERVICES SDN. BHD.
KOSSAN RESEARCH &DEVELOPMENT SDN. BHD.

100%

KOSSAN SECURITYSERVICES SDN. BHD.
KOSSAN TRADING SDN. BHD.

PURESHIELD (SHANGHAI) HEALTHSCIENCE AND TECHNOLOGY CO.
LIMITEDKPH LOGISTICS, INC.

KPH (SAN FRANCISCO), LLC.

100%

PERUSAHAAN GETAHASAS SDN. BHD.

MALAYSIA

USA

100%

WEAR SAFE (MALAYSIA)
SDN. BHD.

CHINA

INDONESIAHONG KONG

6

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

WHO WE ARE AND WHAT WE DO

SECTION 1

Our Business Overview

ABOUT
US

OUR VISION
To be a respected global company byprotecting lives through purposefulrubber products.

KOSSAN was founded in1979 by Tan Sri Dato’ Lim
Kuang Sia who started thefirst company in Malaysia
to manufacture rubber
cutlass bearings for fishingboat propellers. In 1988,
KOSSAN then ventured
into glove manufacturingwith the establishment of
our first factory in Klang,Selangor, Malaysia.

OUR
MISSIONTo provide innovative andreliable gloves and engineeredrubber products in a sustainable
manner and with integrity.

Stretching limits since
1979, we have now
emerged as the world classmanufacturer of disposable
gloves and technicalengineered rubber
products with a broadbased global market reach.
Guided by our corporate
philosophy, our journeycontinues in delivering
long-term sustainablegrowth.

CORPORATE MILESTONES
Ventured
into glove
manufacturing

1979

1996
1988

Foundedby Tan Sri Dato’
Lim Kuang Sia(our Founder)

Ventured into
cleanroom
disposable
products

Ventured intohigh technicalinfrastructure
rubber products

2003
2001

Listed on theSecond Board of
Kuala Lumpur
Stock Exchange• Listed on the Main
Board of Bursa
Malaysia• Ventured into
surgical glove
manufacturing• Ventured into
rubber part tometal bonded parts
manufacturer

2015
2011
EstablishedYayasan KossanWHO WE ARE AND WHAT WE DO

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

7

INSPIRED

Life-changing achievements start out as unrealistic ideas. We deliverpassionately because we are inspired by vision and excellence.

RE VALU
R CO
ES
OU

CARINGOUR THREE MAIN
BUSINESS DIVISIONS

We
understand
and
care
about
people’sneeds
andcircumstances. So we take proud ownership of our responsibilities andrelationships.

INNOVATIVE

We believe in providing the best possibilities, so we keep taking
unbeaten paths toward unprecedented solutions.

HONOURABLE

Honesty and professional ethics are badges we proudly wear.

We are dedicated to every customer entrusted to us. We strive to make

COMMITTED our final product ideal, and the extra mile that we walk for them is

GLOVESTECHNICAL RUBBER PRODUCTS

imperative.

OUR GLOBAL PRESENCE

90

Our products are exported to over
CLEANROOM

countries

around the world meeting theneeds for protection and safety
in a wide variety of personal,
commercial, and industrial
applications.

2016

Awarded theworld’s first Halalcertified glove by
Jabatan Kemajuan
Islam Malaysia(JAKIM)2018

Included as constituents in the
FTSE4Good Bursa Malaysia
Index and FTSE4Good Bursa
Malaysia Shariah Index

2022

2019

2017
Launched thefirst patented
glove with
Low Dermatitis
Potential

The first Malaysia
glove company thatobtained the Indonesia
Badan Penyelenggara
Jaminan Produk
Halal (BPJPH) Halalcertification

Launched the firstprotection against
fentanyl nitrile
glove with U.S. FDA
510(k) clearance

Our products can be found in
our corporate website athttps://www.kossan.com.my/under the "Products" tab.

Founding
Member of
Responsible
Glove Alliance
(RGA)

2023
Rolled out theGreening Value Chain
Programme

SECTION 1

Our Business Overview (Cont’d)

8

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

MESSAGE FROM OUR LEADERS

The Market and Trends that Shape Us

OPERATING ENVIRONMENT
Continuing Macroeconomic Challenges

SECTION 2

As we step into 2024, the global economic landscape continues to pose challenges for industries worldwide. Global growth isexpected to slow to 3.0% in 2023 and 2.9% in 2024, well below the historical (2000-19) average of 3.8%1. Advanced economies,
which contribute the bulk of demand for rubber gloves, will bear the brunt of this decline, with economic growth expected toslow to 1.5% in 2023 and 1.4% in 2024 (compared to 2.6% in 2022)2.
This slowdown has been precipitated by policy tightening in response to heightened inflation, which peaked at 8.7% in 2022.
Although inflation is expected to fall to 6.8% in 2023 and 5.2% in 2024, these figures remain notably higher than the levels
observed over the past two decades3. Consequently, substantial monetary easing is unlikely, perpetuating a dampening effecton business investment sentiment. This, in turn, directly impacts the rubber glove industry and other manufacturing sectors.
On a positive note, previously elevated raw material prices – due largely to supply chain disruptions and geopolitical instability– have stabilised during 2023. Key inputs in glove manufacturing, such as global prices of nitrile butadiene and natural latex,
have undergone a relative normalisation in price. This shift provides a more favorable environment, offering improved
conditions for margin enhancement within the industry.

MARKET TRENDS
Changing Industry Dynamics

Increased Demand for Health and Hygiene Products

During the COVID-19 pandemic, the rubber glove industry witnessed
an influx of new entrants keen on capitalising on heightened Average
Selling Prices (“ASPs”). However, as countries gradually eased theirrestrictions and the immediate demand spike subsided, this resulted
in an oversupply of rubber gloves, subsequently exerting downward
pressure on the profit margins of established industry players.

The pandemic created awareness of the importance of hygiene
products, not only within healthcare institutions but in everyday
life. This is predicted to lead to long-term growth within therubber glove industry, with the impact of this trend already visible
in emerging markets which had proportionately lower use ofhygiene products prior to the pandemic.

Adding complexity to this scenario, the emergence of Chinese rubber
glove manufacturers has played a pivotal role in perpetuating theoversupply situation. Leveraging a substantial cost advantage –brought about by various factors including economies of scale andrelatively lower energy costs – Chinese manufacturers have beenable to maintain lower ASPs, exacerbating the competitive landscapefor existing players. This persistent oversupply dynamic has persisted
even as industry participants undergo capacity rationalization andconsolidation efforts in an attempt to adapt to changing market
conditions.

The growing long-term demand for hygiene products is supportedby the demographic shift towards an ageing global population,with life expectancy continuing to rise around the world. This
will place greater pressure on healthcare services, leading to asustained rise in demand for rubber gloves and other health andhygiene products.

The Weakening Ringgit
During 2023, the Malaysian Ringgit (“MYR”) experienced a significant
depreciation against major global currencies, reaching a low of
MYR4.78 for every USD1.00 in October 2023. Additionally, in an
unprecedented development, the MYR breached the RM3.50 markagainst the Singapore Dollar (“SGD”) for the first time in history.
The weakening of the MYR has had a mixed effect on Malaysian
rubber glove manufacturers. On one hand, the depreciation has
contributed to an increase in the cost of specific raw materials,
presenting a challenge for cost management. On the other hand,the sales of rubber gloves are predominantly denominated in UnitedStates Dollar (“USD”), translating into improved sales margins. Thishas, in turn, mitigated against the challenges posed by the oversupply
situation in the glove manufacturing industry.

Wider Glove Applications Across Industries
Rubber gloves have transcended their traditional role in healthcare,seeing expanded usage across diverse industries such as
pharmaceuticals, electronics, food and beverage and automotive.
This widespread adoption is propelled by a confluence of factors,
including increasingly stringent health, safety and product quality
regulations.
In pharmaceuticals, gloves are crucial for maintaining sterility andpreventing contamination during manufacturing. The electronics
industry relies on gloves to protect components and ensure a
dust-free environment. In food and beverage, gloves upholdhygiene and safety standards, preventing cross-contamination.
Meanwhile, automotive workers use gloves to safeguard against
oils and chemicals, amongst other applications.
Taken as a whole, the widening use of rubber gloves bodes wellfor the industry, laying the groundwork for sustained growth overthe next decade and beyond.

Source:
1&2
IMF: World Economic Outlook October 2023, https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023
3
IMF: World Economic Outlook, https://www.imf.org/en/Publications/WEO

MESSAGE FROM OUR LEADERS

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

9

Staying the
Course with
Resilience
Dear Valued
Stakeholders,
On behalf of the Board of Directors(“Board”), I am pleased to present the
Integrated Annual Report of Kossan
Rubber Industries Berhad (“KOSSAN”
or “the Group”) for the financial year
ended 31 December 2023 (“FY2023”).
Throughout the year under review, wehave remained focused on navigatinga challenging business landscapewhile upholding our core values andcommitments to all stakeholders.
Additionally, we made steady progressin the environmental, social, andgovernance (“ESG”) realm as we
strive to build a stronger and moresustainable KOSSAN for the future.

Mohamed Shafeii bin Abdul Gaffoor
Chairman

SECTION 2

In Conversation with Chairman

10

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

MESSAGE FROM OUR LEADERS

In Conversation with Chairman (Cont'd)

Weathering Unprecedented Challenges

SECTION 2

As Chairman, I am responsible for overseeing the longterm direction of the Group, with particular focus on
governance, sustainability and other non-operational
factors. However, any analysis of our performance inthese areas would not be complete without mention of
the unprecedented operating environment that we have
faced throughout the past two years.
In the wake of the COVID-19 pandemic, a slew of new
players entered the glove manufacturing market,
seeking to capitalise on heightened demand and higher
prices. However, as the world transitioned to endemicity,
demand for gloves dropped sharply and the market wasleft with a substantial supply-demand imbalance, leading
to persistently low Average Selling Prices (“ASPs”) thatseverely hampered our competitive stance. In parallel,a turbulent macroeconomic environment has resulted
in higher energy prices, increasing our production costs
and forcing us to press pause on our capacity expansion
plans.
Against this challenging backdrop, it fills me withpride to say that we have embraced a long-term
perspective towards growth, integrating sustainablethinking within our strategies. For example, our recent
decommissioning of four ageing plants did weaken
our balance sheet but also freed up financial capital
to invest in smarter and more efficient production
technologies within our existing facilities. This will
enable us to create more specialised products and also
reduce the environmental impact of our production
processes, thus driving our long-term competitivenessas a business. Similarly, the investment we made in
our energy management system has provided us with
data-driven insights into processes that could be mademore efficient using digital technology, thus guiding ourprogressive introduction of automation and robotics
solutions.
Simply put, by viewing sustainability – and the efficiency
it generates – as a key driver of our competitiveness, weare positioned to emerge from present challenges withthe tools to achieve greater business growth and drive
improved long-term value creation for our stakeholders.
Advancing Environmental Sustainability
As one of the world’s leading glove producers, we havemade sustainability a cornerstone of our business. To thisend, and in line with our L.I.V.E Sustainability Principles’
objectives of creating shared value through a sustainableecosystem, we undertook various sustainable initiatives
in FY2023.

FY2023REVENUE

RM1.59billionFY2022:RM2.34 billion

FY2023

PROFIT
BEFORETAX

RM34.54
millionFY2022:
RM213.52 million

As a highlight, we rolled out the Greening Value Chain (“GVC”)
programme in March 2023. The programme connects our suppliers
to capacity building opportunities, expert consultation and carbon
accounting software, enabling them to accurately measure theiremissions and drive progressive reductions to their carbon footprint.
During the year under review, 34% of our selected SME suppliers
participated in GVC training, with more than 70% of these suppliers
subsequently commencing their carbon reporting and tracking
journey with the adoption of the carbon accounting solution. Throughthe programme, these suppliers also gain access to Bank Negara
Malaysia’s RM2 billion Low Carbon Transition Facility, a source ofworking capital and capital expenditure funding to support their lowcarbon journeys.
During the year under review, we were also announced as constituentsof the FTSE4Good Bursa Malaysia Index and the FTSE4Good Bursa
Malaysia Shariah Index, a testament to our strong ESG practices
and adherence to shariah-compliant principles. Inclusion inthese indices reflects positively on our business, demonstrating
our commitment to sustainable and ethical practices while
potentially opening up opportunities for growth and investment.

MESSAGE FROM OUR LEADERS

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

11

In Conversation with Chairman (Cont'd)

As we take strides forward for the environment, we are equallycommitted to maintaining a safe, secure and rewarding work
environment where our employees’ needs come first. Thisaligns with our Workplace Health Programme (“WHP”), a
comprehensive initiative that promotes holistic employee
well-being across physical, mental and social dimensions.
Under WHP, we continued to deliver relevant workplace
health initiatives for employees, conducting 6 activities and
17 webinars aimed at raising awareness on important healthmatters during FY2023.

In 2023, all our directors completed the Mandatory Accreditation
Programme (“MAP”) Part II: Leading for Impact sessions organisedby the Institute of Corporate Directors Malaysia, underscoring ourcommitment to ongoing education and professional development
at the Board level.
Aside from these initiatives, key discussions at the Board level
during FY2023 centred on strategy and sustainability matters.
These deliberations underscore our proactive approach toaddressing emerging challenges and opportunities, particularly inthe context of our long-term sustainability objectives.
Dividends

Complementing the WHP, a spill-over programme addressing
mental health and hearing issues in the workplace wasintroduced in FY2023. This initiative involved collaboration
with independent professional entities, such as theInternational Psychology Centre and Occupational Health
Plus, to deliver standardised and centralised services. It aims
to create awareness and drive education on the importanceof mental health across our workforce while also providing
support to employees who are experiencing mental healthissues.
Employee training and development is another key areaof focus for us, and in FY2023 our employees completed
an impressive total of more than 122,000 training hours
completed across our workforce during the year, translating
to an average of 20.9 hours of training per employee.
Trainings included essential capability-building, knowledge
sharing and role specific modules, as well as one-to-one
informal coaching sessions to enhance individual functional
expertise.
Looking beyond our workforce, Yayasan Kossan (“YK”)
remains committed and consistently directed resources
towards improving the well-being of local communities inthe vicinity. In FY2023, YK funded a total of RM575,432.94 on
50 projects across Malaysia. Through collaborative efforts
with 36 schools and 41 non-governmental organisations(“NGOs”) or government bodies, YK’s philanthropic initiatives
yielded tangible results: 447 blood donors registered, 327
bags of blood donated and 20 sets of hand-me-down digital
devices delivered to six schools and three orphanages. These
contributions, along with others, positively impacted morethan 21,000 beneficiaries in FY2023.
Elevating Corporate Governance
As we diversify our business presence to new sectors andmore comprehensively embrace sustainability, it is vitalthat we maintain a stringent, standards-based approach tocorporate governance.

In line with our commitment in rewarding shareholders, I am
pleased to announced that, for FY2023, the Group had paid aninterim single tier dividend of 2.0 sen per share, totalling RM51.03
million, on 8 April 2024.
In addition, the Board also recommended a final single tierdividend of 2.0 sen per ordinary share, subject to the approvalof the shareholders at the forthcoming AGM to be held on
30 May 2024. If approved, this will bring the total dividend pershare to 4.0 sen in respect of FY2023 amounting to a total payoutof RM102.06 million.
Acknowledgements
On behalf of the Board, I would like to extend our heartfelt
gratitude to the management and all our employees for theirunwavering support and resilience throughout this challenging
year. Their tireless efforts and contributions have been invaluable
in propelling us forward despite the obstacles we faced, and weare united in continuing this journey together, stronger and moredetermined than ever.
To our customers, business partners, associates, suppliers,
consultants and bankers, I would like to express my sincere
appreciation for your steadfast support and trust. Many of you
have been with us since the beginning, and we are deeply gratefulfor your continued dedication to our shared success.
As we weather through present-day business challenges, let us
not forget our rich potential to build a stronger KOSSAN that
advances community development, enriches the environmentand builds stronger business ecosystems for our suppliers andthe industry. By staying the course on these important matters,
we can unfold a much brighter future ahead.
Mohamed Shafeii bin Abdul Gaffoor
Chairman

SECTION 2

Empowering Our Employees and Communities

12

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

MESSAGE FROM OUR LEADERSSECTION 2

Management Discussion and Analysis

Turning the
Tide to Greater
Success
Dear Valued
Shareholders,
2023 marked a continuation of the challenges
that have beset the glove manufacturingindustry since the end of the pandemic. With
inventory levels already high, the entry ofand subsequent expansion by some market
players has exacerbated the existing supplydemand imbalance, placing significant
pressure on both our top and bottom line.
With that said, the obstacles that havestood in our way have also accelerated ourinnovation, make important investments
and transform the way we operate, putting
us in a position to rebound strongly. Throughproactive and decisive action, we are turning
the tide at KOSSAN and can start to lookforward to a brighter and more sustainable
future ahead.

Tan Sri Dato’ Lim Kuang Sia
Group Managing Director/Chief Executive Officer

MESSAGE FROM OUR LEADERS

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

13

Management Discussion and Analysis (Cont'd)

A Confluence of Challenges

Due in part to these factors, our revenue declined from RM2.34
billion to RM1.59 billion in FY2023, with our Profit Before Tax(“PBT”) falling from RM213.52 million to RM34.54 million. This isinclusive of a one-off impairment loss and write-off of plant andmachinery amounting to RM35.38 million and RM5.33 million
respectively, incurred due to our decision to decommission fourof our ageing production plant excluding which we remained
marginally profitable at an operational level.
More positively, we retain a strong balance sheet with total
assets of RM4.20 billion and total equity of RM3.86 billion,
ensuring our firm financial footing and providing us with thefunds to capitalise on suitable growth opportunities as theyarise.
Segmental Performance Review
Our business segments comprise the Gloves division, theTechnical Rubber Products (“TRP”) division and Cleanroom
division. The respective contributions of each division to ourGroup-wide financial performance are as follows:
Gloves Division
Our Gloves division is the largest contributor to our business interms of revenue, leveraging a strong network to export to keymarkets around the world including North America, Europe andthe Asia-Pacific region.
In 2023, the division delivered revenue of RM1.29 billion, a35.73% decrease compared to the year before, and sustained asegment loss of RM38.41 million, compared to a segment profit
of RM141.65 million in the preceding year. This was driven bylower sales volume, lower ASPs and higher natural gas costs
across the year. The division’s performance was also impacted
by the one-off impairment due to the decommissioning of fourof our plants and written off of plant and machinery as detailed
above.

Our TRP division manufactures and distributes hightechnical engineered rubber products that are used tomeet specialised applications across the infrastructure,
automotive and other sectors, exporting to customers inNorth America, South America, Australia and the Asia-Pacificregion.
Buoyed by the rebound in large-scale infrastructure projects,
the division secured an increased revenue of RM204.59
million – a 3.85% increase – in FY2023 while registering acommendable 67.72% rise in segment profit to RM33.65
million thanks to its manufacturing of higher-margin
products for the infrastructure sector.
Cleanroom Division
Our Cleanroom division produces and distributes cleanroom
gloves, face masks and wipes that meet the high hygiene,barrier and compliance standards of precision industries,
primarily serving the electrical and electronics industry but
also boasting a clientele in healthcare.
Mirroring the trend seen in the gloves market, the division
suffered from lower ASPs during the year under review,
leading to a decrease in revenue from RM145.16 million to
RM100.06 million and a 41.85% decrease in segment profit,
from RM5.55 million to RM3.23 million.
Our Competitive Edge
Our focus lies in developing new axes of strength where
we may possess a key advantage over our competitors.
One such area is the quality and variety of our products.
We leverage on our expertise in achieving compliance withrigorous standards, deliver assurance of protection andquality with relevant certifications in our product ecosystem,
and leading sustainability initiatives in our governance andsystems. We also diversify our product portfolios, tailoredwith industry-specific functionalities to cater to the broader
range of market needs.
We have launched our Low Derma™ range product withHigh Chemical Resistant Nitrile gloves that comply with theEuropean Union Personal Protective Equipment Regulation(PPER) Category III Type A claim for chemical resistanceand EN421 standards for protection against radioactive
contamination. Additionally, we have introduced medium
and heavy-duty industrial single-use nitrile gloves designed

SECTION 2

Technical Rubber Products Division
From raw material prices to geopolitical tensions, themacroeconomic challenges of 2023 have been well documented.
To us, these challenges have materialised most significantly inthe form of higher energy prices. In addition to the challengesof lower demand from excess inventory clearance postCovid-19 pandemic, we nonetheless, among the Malaysian
gloves industry, similarly, faced competition from Chinese glove
manufacturers who are riding on the lower energy prices to
employ aggressive price undercutting strategies to gain market
share. This combined effect is limiting the full utilisation of
production capacity for better efficiency.

14

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

MESSAGE FROM OUR LEADERSManagement Discussion and Analysis (Cont'd)

SECTION 2

for applications in food processing, industrial safety, chemicalhandling and automotive use. Both of our newly launched
products utilised our patented Low Derma™ formula,benefiting users with featured protection against potential
skin sensitivity issues that may arise from regular nitrile gloves.
We continue to explore new markets and global opportunities toexpand our cleanroom market space with our in-house brands.
We are confident that the Low Derma™ clean technology to be ourengine for future growth providing wider products diversification
across the many cleanroom segments and applications thatserved specialised needs.

REVIEW OF SEGMENTAL PERFORMANCE

Revenue

RM1.29billionGLOVESDIVISION

FY2022:RM2.00 billion

These achievements reflect our broader strategy of developing
products and solutions that meet niche industry applications.
Using Less to do MoreIn our competitive market landscape, operational efficiency has
become an imperative. With large-scale players that can capitaliseon larger factories and greater economies of scale, it is essentialthat we stay attuned to potential strategies and approaches thatcan give us an edge.
Operational efficiencies start with our inputs, which includes
energy. In 2023, we installed an energy management system
across our plants, providing decision-makers with real-time dataon how and where energy is consumed across our businessprocesses. With this enhanced visibility, we are now able to makebetter decisions on energy distribution and allocation, as well as
integrate automation technologies that can drive further costand energy savings.
In complement, our Enterprise Resource Planning (“ERP”)
system continues to be a vital resource, providing us with acentralised view of our end-to-end business activities, fromsourcing to distribution. The system enables us to channel our
focus towards our most efficient and effective processes, and toisolate processes where further efficiency gains can be realised,thus empowering a proactive, continual approach to operational
improvement.
In 2023, these systems, alongside the automation, robotics
and other digital technologies we have installed, helped drivea significant improvement to resource and energy usage while
also securing significant cost savings that directly impacted our
margin and level of competitiveness.
Beyond individual technologies and systems, we are also driving
the long-term transformation of our production lines. Throughthe decommissioning of four of our ageing production plant, wehave freed up funds to invest in the modernisation of our existing
plants. Our plan is to equip these plants with advanced machinery
for the manufacturing of highly specialised products, enabling us
to capitalise on growth opportunities once the market stabilises.

Revenue
TECHNICALRUBBERPRODUCTSDIVISION

RM204.59
millionFY2022:
RM197.01 million

Revenue
CLEANROOMDIVISION

RM100.06
millionFY2022:
RM145.16 million

Moving Towards Sustainable Success
Delivering long-term sustainable growth has always been at
the forefront of our minds and practices. Coupled with ourtechnologies that have helped us become leaner and morecost-efficient, we believe we can gain an even more compelling,
and lasting, competitive advantage by building a reputation as asustainable and responsible organisation.
As a founding member of the Responsible Glove Alliance (“RGA”),
we continue to be committed in responsible recruitment andemployment practices across our supply chain. The RGA is acollaborative initiative between glove buyers and suppliers
aiming to prevent, identify and remediate forced labour in theindustry.
Within the context of responsible manufacturing, we arepleased to report that all of our glove plants have earned theMESSAGE FROM OUR LEADERS

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

15

Management Discussion and Analysis (Cont'd)

In totality, the firm actions we are taking on sustainability havepositioned us as a trustworthy organisation in the industry,giving us a strong advantage in the portfolio of our existingclients and new business.
Receiving Awards and Accolades
During FY2023, we received a range of respected awards andrecognition that validate the strong progress we are making onsustainability, talent development and operational excellence.
In particular, Asia Corporate Excellence & Sustainability (“ACES”)
Awards 2023 awarded us the Green Initiative Award recognising
our sustainability efforts in embracing innovative solutions forenvironment conservation.
Reflecting our commitment to attracting and retaining graduate
talents, we were honoured by the Graduates’ Choice Award
2023 as one of Malaysia’s Most Preferred Graduate Employers
to Work For in the Manufacturing (Rubber) category. Winners
were selected based on the votes casted by over 1,250,000
university students across the nation.
Our dedication to operational excellence fronts continues toyield positive results, as evidenced by our receipt of the General
Motors’ Supplier Quality Excellence Award for the fourthconsecutive year in 2023. This achievement reflects the strong
relationship we have cultivated with this key client through ourconsistent delivery of quality solutions and our continuous
pursuit of improvement.
Last but not least, our subsidiary, Ideal Quality Sdn. Bhd., washonoured by the Selangor Investors Appreciation Awards for
The Highest Investment in Selangor by a Domestic Company
in 2022, validating our focus and contributions on driving
sustainable economic development in our home state.
Outlook
While we execute proactive investments in technology,
sustainability and operational excellence, we must also
recognise the reality of a glove market that will remainchallenging over the short-term.
With the existing supply-demand imbalance unlikely to correct
soon and the market undergoing consolidation and capacity
rationalisation, we expect that ASPs will remain relatively low

during FY2024. In response, we will continue to focus ourenergies on driving cost-efficiencies through the targeted
implementation of automation and digital solutions, continuous
human resources training and robust management system,
which will enable us to reduce our production costs andovercome existing manpower challenges. We will also strive
to take further steps on our sustainability journey, consciousthat social and environmental responsibility is increasingly
becoming a core consideration in the minds of our customers.
Looking further into the future, the long-term outlook for glove
demand remains optimistic, driven by increasingly stringent
compliance standards and heightened hygiene awareness –particularly in Asia and the Middle East – in both the medical
and industrial sectors, and our forward-thinking investments
position us strongly to capitalise. On an equally positive note,
our TRP division stands to benefit from the expected recovery
in global economic conditions, which will drive an uptick ininfrastructure spending and create greater demand for the
specialised products that we offer.
At the same time, our research and development activities
will continue apace with the goal of developing specialised
products and solutions that meet niche market demands. We
will continue to seek out mutually beneficial collaborations
that allow us to develop specialised solutions and exploit new
growth opportunities.
Acknowledgements
During the difficulties of the past two years, the strength andfortitude of our valued employees has truly come to the fore.
They have harnessed innovative minds and tireless strides tokeep us on track towards our goals as a company, and I owe
them a sincere thank you for all their efforts.
At the same time, we have been grateful for the continued
faith of our shareholders and business partners. Thank you forcontinuing to believe in our vision for KOSSAN – a vision that weare working hard to turn into reality.
I would also like to recognise the tireless contributions of ourmanagement team and Board of Directors, whom I rely upon for
astute vision and a laser-eyed focus on improvement. Together,
we have managed to weather the challenges that have comeour way while also moving forward on improvements that will
lay the groundwork for future success. Thank you for everything
you do.
As a united team, we are turning the tide on recent turbulence
and turning a page towards a better, brighter and moresustainable future ahead. Thank you for embarking on thisjourney with us.
Tan Sri Dato’ Lim Kuang Sia
Group Managing Director/Chief Executive Officer

SECTION 2

GOLD Certificate of Compliance from Worldwide Responsible
Accredited Production (“WRAP”), a globally recognised audit
and certification program. WRAP’s 12 Principles encompass
clear expectations in employment practices, workplace healthand safety, environmental practices and legal compliance. As
such, our certification recognised our efforts in ethical andsustainable glove manufacturing.

16

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

HOW WE CREATE VALUE

Our Value Creation Model

FINANCIAL CAPITAL
The funds we use to carry out
business activities and pursue growth
opportunities.

KEY INPUTS• Strong financial
track record.
• Effectivebalance sheet
management.
• Net cash position.

MANUFACTURED CAPITAL• Fully equipped,
technologicallyadvancedmanufacturing plants
across Malaysia.
• Efficient production
capabilities for gloves,technical rubber
products and cleanroom
products.

• Experienced Board andManagement with diversified
industry and corporate
knowledge.
• Ingrained, ISO-compliant
processes for workplacesafety.
• Comprehensive in-househuman rights governancepractices.
• In-house training centre andwellness centre.

SECTION 3

The physical infrastructure we use
to carry out production activities,
including our plants and equipment.

HUMAN CAPITALINITIATIVESMARKET TRENDS*

Our experienced workforce and thecompetencies, skills and knowledge
they use to create value for the Groupand our stakeholders.

INTELLECTUAL CAPITAL
Our established systems andprocesses, intellectual property andcollective know-how.

SOCIAL AND RELATIONSHIP CAPITAL
The collaborative, trust-based
relationships we have nurtured with
our stakeholders.

NATURAL CAPITAL
The natural resources we use to
produce our goods, and the processes
we have adopted to reduce ourenvironmental impact.

• Developing products
for specialised
applications thatoffer higher margins.
• Exploring new growth
opportunities inemerging markets.
• Undertaking strategic
cost optimisation
initiatives.

• Implementing an
auto dosing system toenhance efficiency inthe chemical dosing
process.
• Leveraging Enterprise
Resource Planningsystem to drive
operational efficiency.
• Progressively digitising
our manufacturing
processes.

*Notes:For more information on our Market Trends, please refer page 8 of this IAR.
For more information on our Risks and Opportunities, please refer to pages 28 to 35 of this IAR.

• Driving employees'
learning anddevelopment throughtailored and role-specifictraining programmes.
• Delivering impactfulprogrammes to enhance
our employees' physicaland mental health.
• Safeguarding our
employees throughcomprehensive
occupational health andsafety processes.

HOW WE CREATE VALUEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

17

Our Value Creation Mode (Cont’d)

OUTCOMES• More than 30 yearsof experience in glove
production.
• Experienced and specialised
research and development("R&D") team trained inadvanced analytical andtesting techniques.
• In-house R&D Centre
and independent testinglaboratory.
• In-house Quality Assurance
Department.

• Strong, collaborative
relationships withour customers andsuppliers.
• Yayasan Kossan("YK"), our foundation
for community
development.
• Longstanding
partnerships with
NGOs, schools andother communitybased organisations.

• Group-wide
Environmental
Management System
and Environmental
Policy.
• Systematic practices
across waste, water,energy and emission
management.

•
•
•
•
•

Revenue: RM1.59 billion
Profit Before Tax: RM34.54 million
Total assets: RM4.20 billion
Shareholders’ equity: RM3.84 billion
Total Dividend payout per share = 4.0 sen(for FY2023).
- Interim dividend: 2.0 sen per share(paid on 8 April 2024).
- Proposed final dividend: 2.0 sen per share(subject to shareholders' approval at theforthcoming Annual General Meeting).

RISKS AND OPPORTUNITIES*• 122,392 training hours with an averageof 20.9 hours per employee.
• 96% of our plants are certified with ISO
45001: 2018 for occupational health andsafety management systems.
• Zero work-related fatalities.

• Launched our Low DermaTM range productsof High Chemical Resistant nitrile gloves andmedium and heavy-duty industrial singleuse nitrile gloves.
• 54 patents granted in 15 countries to-date.
• Obtained the Forest Stewardship Council(FSC) Chain of Custody certification.

• Awarded the Malaysia Book of Records for
the GVC programme.
• Invested more than RM575,000 incommunity development, impacting the
lives of 21,368 beneficiaries.

• Digitising and automating
our processes.
• Introduced 270 e-Learning
modules.
• Building competitiveedge through patented
products and processes.
• Supports responsible
Forestry and is committed
to sustainable sourcing
to European Union
countries complying
to the European Union
Deforestation-free
Regulation (EUDR).

• Rolled out the Greening
Value Chain ("GVC")
programme.
• Continue to promoteresponsible practices
across the industry
as a member of the
Responsible Glove
Alliance ("RGA").
• Conducted communitybased events through YK.
• Launched YK Digital Aid,
programme to distributehands-me-down digital
devices.

• Adopting carbon
accounting system tocalculate and manage
our carbon footprint.
• Implementing energy
efficiency initiatives.
• Installing an additional
1.14MWp in solar
energy capacity.

• 78% of our plants are certified with
ISO 14001: 2015 for environmental
management systems.
• 11% reduction in Gloves Division’s Scope
1 and 2 emissions intensity compare to
FY2022.
• 94.5% of our packaging sourced fromrecycled or recyclable materials.
• Total installed solar energy capacity
increased by 36% to 4.3MWp.
• 13.5% of water used derived from reclaimed
water sources.
• 19% reduction in Gloves Division water
consumption intensity compared to FY2022.
• Planted 1,201 trees under the Low Derma#Staylow programme to-date.
• Included as constituents in the FTSE4Good
Bursa Malaysia Index and FTSE4Good Bursa
Malaysia Shariah Index.

SECTION 3• Increased operational efficiency of our
production activities.
• Gained clear oversight of our manufacturing
processes in order to carry out streamlining
in future.

18

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

About this Sustainability Statement

We are pleased to present our annual Sustainability Statement, covering theEnvironmental, Social and Governance (“ESG”) efforts and performance of
Kossan Rubber Industries Berhad (“KOSSAN” or “the Group”) during the year
ended 31 December 2023 (“FY2023”).
Reporting Scope & Boundaries
KOSSAN is one of Southeast Asia’s leading conglomerates
and is listed on the Main Market of Bursa Malaysia Securities
Berhad (“Bursa Malaysia”). The Group is headquartered in
Selangor, Malaysia.
The scope of this Statement covers KOSSAN’s Gloves andTechnical Rubber Products (“TRP”) divisions, the core
operations of which are both located in Malaysia and overwhich the Group has direct management control. These twodivisions collectively contributed 94% of the Group’s revenue
in FY2023.

It is also aligned with or referenced to:• The International Integrated Reporting Framework (“IIRF”)
principles• The United Nations Sustainable Development Goals (“UNSDGs”)• The Greenhouse Gas Protocol (“GHG Protocol”)• ESG rating tools (FTSE Russell ESG Ratings, Morgan
Stanley Capital International (“MSCI”) ESG Rating, S&P
Global Corporate Sustainability Assessment (“CSA”), CDP
guidance documents, EcoVadis ratings)
Assurance
External Assurance

SECTION 4

Reporting Period & Cycle
The reporting period of this Statement is from 1 January2023 to 31 December 2023, unless stated otherwise. Our
Sustainability Statement is issued on an annual basis and ourlast Statement was published in April 2023.
Reporting Alignment
This Statement has been prepared in accordance withthe following standards and guidelines:• Bursa Malaysia Main Market Listing Requirements• Bursa Malaysia Main Market Listing Requirements(Enhanced Sustainability Reporting Requirements:
Annexure A Practice Note 9)• Bursa Malaysia Sustainability Reporting Guide (3rdedition)• Malaysian Code on Corporate Governance 2021
• The Global Reporting Initiative (“GRI”) Standards

We recognise the value of independent verification inensuring the accuracy and integrity of this Statement. For oursustainability disclosures, we have sought external assurance
for the reporting year from KPMG PLT. This exercise wasconducted in accordance with Malaysian Approved Standard
on Assurance Engagements ISAE 3000 (Revised), Assurance
Engagements Other than Audits or Reviews of Historical
Financial Information for selected key performance indicators(“KPIs”). The Limited Assurance Report is available within thisreport from pages 94 to 96.
Internal Assurance
To ensure the accuracy and integrity of our disclosures, theInternal Audit Department has reviewed selected indicatorsin this statement and has been approved by the Audit
Committee.
The selected indicators are:
• Anti-corruption [C1(a), C1(b) & C1(c)]• Diversity [C3(a) & C3(b)]• Labour practices and standards [C6(a), C6(b), C6(c) &C6(d)]• Water [C9(a)]Statement Availability & Feedback
This Statement is available on our website. As part of our commitment to continuous improvement, we welcome any
comments, questions or suggestions related to this Statement, which may be directed to our Sustainability Department at
sustainability@kossan.com.my.

CREATING SUSTAINABLE VALUEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

192023 Key Sustainability Highlights & Achievements

Achieve
MSCI ESG Rating of
Incentivise andassist SMEs
to green theiroperations
via the GVC

A(on a scale of AAA-CCC)

Programme

Low Risk

Category for
ESG Risk Ratings
assessed by
Morningstar
Sustainalytics

Included as aconstituent in the
FTSE4Good Bursa
Malaysia Index and
FTSE4Good Bursa
Malaysia Shariah
Index in December
2023

StewardshipCouncil ("FSC")
Chain of Custody
Certification

Score improvement
for both CDP Climate
Change and Water
Security disclosures
to"C" in FY2023.

(scored "D" in FY2022)

Retained WRAP
Gold certification
across 100% Glovefactories

SECTION 4

Obtained
the Forest

20

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Our Approach to Sustainability

2016 – 2020

Adopting Compliance-based Reporting

Our
Sustainability
Journey• Adopted annual sustainability reporting based on Bursa Malaysia’s
Sustainability Reporting Guide• Engaged an external consultant to create the KOSSAN Sustainability
Framework

2021

SECTION 4

Building our Capacity

Over the past
eight years, wehave progressively
embeddedsustainability
across ourprocesses, thinking
and actions,strengthening ourcommitment to thecreation of sharedvalue between
our business andthe communities
and naturalenvironments that
we interact with.

• Took steps to enhance our data collection and reporting processes,
aided by the identification of areas of improvement in our approachto sustainability• Started tracking carbon emissions data across select business units
and products to enhance our sustainability reporting

2022

Putting Frameworks and Formal Processes in Place• Reviewed and upgraded the KOSSAN Sustainability Policy andFramework• Established the KOSSAN Sustainability Committee• Identified key focus areas and established sustainability initiatives
based on key prioritised areas and periodic reporting• Took steps to empower our people and improve our processes onsustainability• Established a Group-wide carbon accounting mechanism while
enhancing data collection and disclosure of Scope 1, 2 and 3
emissions2023 - 2024

Driving Transformation and Closer Business Integration• Launched the KOSSAN Sustainability Strategy and Blueprint• Improved our sustainability reporting mechanism through enhanced
tracking and monitoring processes• Establishing the KOSSAN Sustainability Centre of Excellence (“KSCE”)
to drive the adoption of best practices across our business• Introducing sustainability-related KPIs to incentivise positive impact
creation amongst management-level employees• Aligning with the recommendations of the Task Force on Climaterelated Financial Disclosures (“TCFD Recommendations”)

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

21

Our Approach to Sustainability (Cont’d)

EMBEDDING SUSTAINABILITY IN OUR BUSINESS PROCESSES
The 12 principles, in turn, sit under four key pillars, whichwere determined via a thorough analysis of various factors
including our business model, geographic locations, existingand emerging ESG issues and trends, and the perspectives ofour diverse stakeholders.

Sustainability has always been deeply ingrained in our DNA.
In looking ever forward to the future, we strive to strike aharmonious equilibrium between the imperatives of economic
growth, societal well-being and environmental preservation.
This aspiration is reflected in our comprehensive Sustainability
Framework, which enshrines our dedication to “Creating
Shared Values Through Sustainable Ecosystem” via our L.I.V.E
12 Sustainability Principles. Collectively, these principles detailthe outcomes we seek to achieve, empowering us to ensureongoing compliance and maximise positive impact whileremaining true to our values.

By aligning high-level strategic objectives to specific,
measurable goals and targets, the framework serves as a guidefor our people in driving impact, uniting us behind a sharedvision of what a sustainable future looks like at KOSSAN, as
expressed by our three desired outcomes.
2

Maximisationof financial
capital andstakeholders
interest

12

Digitalize andDigitize(Digitalisation)

Partnership&collaboration

4

Long Term
Value Creation

Responsible
corporate citizen

L.I.V.E

12
SUSTAINABILITY
PRINCIPLES

Innovative
Research &Development

Vibrant Human
Capital10
High
performance
cultureFair &
EthicalTreatment

Invest toGreen DNA

11

ExcellenceInnovation

Growing
intellectual
capital3Strengthen
governanceand integrity
management

Climate change
resilience5

Continuous
measure & improve
environmental
performance

6

Focus anddynamic humanresources

9

7
8

DESIRED OUTCOME

ENVIRONMENTSOCIAL

GOVERNANCE

Protecting environment andpreserve green ecosystem for
future generations

Responsible corporate citizen
fostering values throughaccountable actions

Uphold highest standard ofgovernance practices and ensurecompliance to laws and regulations topreserve the integrity of our brand andreputation

SECTION 4

1

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KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Our Approach to Sustainability (Cont’d)

As new policies, trends and technological developments emerge, and the needs of our stakeholders change, our framework
will evolve in step. At the same time, we will continue to provide regular updates on our progress, achievements andobstacles in driving sustainable impact via our annual sustainability reporting.
In FY2023, we attained the following outcomes under each of our L.I.V.E 12 Sustainability Principles:
KOSSAN Sustainability Principles

Strategy

Outcomes

Pillar 1: Long Term Value Creation

L

Maximisation of Financial Capital andStakeholders’ Interest

Consistently achieve our economic
performance targets• Revenue: RM1.59 billion• Profit Before Tax: RM34.54 million

Strengthen Governance and Integrity
Management

Uphold the highest integrity standards
while maintaining compliance withrules and regulations and adhering
to our zero-tolerance policy towards
bribery and corruption• Maintained zero reported cases of bribery and corruption for
FY2023

Partnership & Collaboration

Drive internal and external
collaborations towards creating andsharing good values and best practices• Maintained a high customer satisfaction rate of 94% in FY2023• Rolled out the Greening Value Chain ("GVC") Programme andachieved 34% participation rate from selected SME suppliers.

Responsible Corporate Citizen

Produce sustainable and eco-friendly
products that minimise harm to theenvironment, biodiversity and local
communities• 94.5% of packaging sourced from recycled or recyclable
materials.
• 78% of our plants are ISO14001 certified• Planted 1,201 trees under the Low Derma #Staylow
programme to date

Climate Change Resilience

Drive our readiness to achieve carbon
neutrality• 11% reduction in Glove Division's Scope 1 and 2 emission
intensity compare to FY2022.
• Increased solar energy capacity by 36% to 4.3MWp• 19% reduction in Gloves Division's water consumption
intensity compared to FY2022• 58% of waste generated was recycled and diverted fromgoing to landfill

Continuously Measure and Improve
Environmental Performance

Deliver high performance levels inenvironmental stewardship• CDP Climate Change and Water Security disclosures score
improved from 'D" to "C" in FY2023.

Focused and Dynamic Human
Resources

Nurture a work culture that drives
high performance levels and embraces
diversity, translating into positive
results• Workforce Breakdown: 77% Male; 23% Female• 100% return to work rates for employees who take parental
leave

Fair & Ethical Treatment

Be a responsible and caring employer• 100% of glove factories are WRAP GOLD certified.
• 96% of our plants are ISO45001 certified.
• Maintain zero work-related fatalities.

High Performance Culture

Nurture high performing employees
who align with our vision and mission• Recorded 20.9 average training hours per employee in FY2023
compared to 18.9 hours in FY2022

I

SECTION 4

Pillar 2: Invest to Green DNA

V

Pillar 3: Vibrant Human Capital

E

Pillar 4: Excellence Innovation
Innovative Research & Development

Leverage new competitive advantages
to lead the market in the right direction• Launched High Chemical Resistant nitrile gloves, which offer
enhanced protection against radioactive contamination.
• Launched medium and heavy-duty industrial single-use nitrile
gloves with wide-ranging applications across industries.
• Obtained the Forest Stewardship Council ("FSC") Chain of
Custody Certification

Digitalise and Digitise (Digitalisation)

Drive transformation to create
excellent strategies that meet industrial
revolution demands• Digitalising stand-alone operating system into an integrated
monitoring system• Implemented a cloud-base system to monitor and review
environmental performance• Implemented auto-dosing system

Growing Intellectual CapitalStrengthening and protecting ourintangible values• 54 patents in 15 countries to date
• 171 product trademarks to date

CREATING SUSTAINABLE VALUEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

23

Our Approach to Sustainability (Cont’d)

SUSTAINABILITY GOVERNANCE
To drive progress against our sustainability aspirations, we have implemented a structured governance framework that clearly defines
the roles and responsibilities of key parties within the Group. The structure reflects our belief that sustainability should be ingrainedat and led from the highest levels in order to create lasting impact.

BOARD OF DIRECTORSGROUP MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICERKOSSAN SUSTAINABILITY COMMITTEECORPORATE SUSTAINABILITY DEPARTMENT(Human Resources Business Partner (HRBP), Social
Risk Task Force, Corporate SHE, Digital Transformation,
Research & Development, KOSSAN Engineering, Legal,
Risk Management, All Plants)

CORPORATE SOCIALRESPONSIBILITY (“CSR”) UNIT
Yayasan Kossan

BOARD OF DIRECTORS (“BOARD”)

CORPORATE SUSTAINABILITY DEPARTMENT (“CS”)• Deliberating on and approving our sustainability strategy
and pathway• Overseeing the implementation of our sustainability
strategy and performance against set targets• Supporting the KSC in embedding sustainability within
business operations by identifying existing gaps andcoordinating with heads of departments to develop
and implement suitable remediation measures• Monitoring the development and implementation ofsustainability initiatives• Leading the materiality assessment and stakeholder
engagement processes• Monitoring sustainability trends and sustainability
risks and opportunities

GROUP MANAGING DIRECTOR / CHIEF EXECUTIVEOFFICER (“GROUP MD/CEO”)• Leading the formulation of sustainability strategies,
priorities and targets• Ensuring that sustainability is fully considered in thedecision-making process

KOSSAN SUSTAINABILITY COMMITTEE (“KSC”)(CONSIST OF EXECUTIVE DIRECTORS OF THE GROUP)• Managing sustainability risks and opportunities• Overseeing the implementation of sustainability
strategies• Providing input and direction as necessary on
sustainability-related matters

CORPORATE FUNCTION, BUSINESS UNITS & CSR UNIT
To ensure effective sustainability-related communicationand efficient data collection, we have appointed
Sustainability Champions within our corporate function,
our various business units and our CSR unit – Yayasan
Kossan. These champions play a crucial role in executing
sustainability initiatives and are also empowered to
identify process improvement opportunities and drive
process reengineering initiatives that align with our
Sustainability Action Plan, thus enabling us to accelerate
our sustainability progress even further.

SECTION 4

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Our Approach to Sustainability (Cont’d)

ENGAGING OUR STAKEHOLDERS
Our approach to sustainability and business as a whole is guided by the input of our stakeholders, who are defined as individuals orgroups whose interests are impacted or potentially impacted by our activities. By listening closely to their input, we gain a clear pictureof the positive and negative ramifications that our operations have on them. This enables us to develop strategies and initiatives thatcreate shared value, reinforcing our social legitimacy and positioning ourselves for long-term prosperity.

EMPLOYEESCUSTOMERS

Why They Are Important

Why They Are Important

The well-being and continuous professional development of
our employees is crucial to maximising productivity, driving
innovation and maximising our growth potential.

Understanding the changing needs and concerns of ourcustomers enables us to foster strong, lasting relationships
and develop purpose-fit products and solutions, increasing ourlong-term economic potential.

Key Areas of Concern• Remuneration and benefits• Career development andtraining opportunities• Work-life balance• Career advancement

Key Areas of Concern• Occupational safety, healthand wellbeing• Healthy and conducive
workplace environment• Human rights and fair labour
practices

SECTION 4

Engagement Method & Frequency• Product and service quality
and timely delivery• Pricing• Human rights and labour
practices• Sustainability efforts• Ethical business conduct• Data privacy

Engagement Method & Frequency

Employee engagement survey

Corporate announcements

Performance appraisal

Media announcements

Volunteer programmes

General meetings

Recreational events

Company website

Wellness programmes

Trade shows

Company intranet

Customer satisfaction survey
Social compliance audits

Our Response

Our Response• Providing competitive remuneration and benefits• Availing employees of health and wellness talks andprogrammes• Strengthening workplace safety measures• Providing employees with training and upskilling programmes• Upholding zero tolerance for discrimination by race, religion,
gender, age, disability, culture, social origin, cast, sexual
orientation, marital status, political opinions etc.
• Respecting and protecting human rights and labour rights• Ensuring high product quality• Practising strategic pricing• Upholding both human rights and labour rights• Continuously enhancing ESG practices and widening
implementation• Adhering to our Social Compliance Policy and undertaking auditsof our compliance to the policy• Upholding zero tolerance towards bribery and corruption• Rigorously protecting customer data

Link to Material Matters

Link to Material Matters• Human Rights & Labour Practices• Diversity & Inclusivity• Workplace Safety• Health & Wellness• People Development• Cyber Security & Data Privacy• Product Quality & Safety• Ethical Business• Partnership & Collaboration• Cyber Security & Data
Privacy• Environmental Compliance• Combating Climate Change

ENGAGEMENT FREQUENCY

As needed

OngoingAnnually• Waste Management• Water and EffluentsManagement• Human Rights & Labour
Practices• Workplace Safety

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Our Approach to Sustainability (Cont’d)

Why They Are Important

Why They Are Important

Our suppliers and vendors play a crucial role in ensuring
the uninterrupted flow of materials and services required
for the seamless operation of our businesses. By fosteringstrong relationships with them, we are better able to meet thedemands of our customers and drive our long-term growth asa business.

Fostering the trust and confidence of our shareholders,investors, analysts and bankers enables us to secure thefinancial capital that powers our expansion and growth.

Key Areas of Concern

Key Areas of Concern• Payment terms• Contract terms and conditions• Business continuity• Product specifications and quality expectations• Ethical business practices• Financial performance and growth prospects• Dividends• Compliance to regulatory requirements• Sustainability efforts• Good governance and ethical business• Human rights and fair labour practices

Engagement Method & Frequency

Engagement Method & Frequency

Meetings and briefings

General meetings

Social compliance audits

Financial reporting
Annual report
Corporate announcements
Investor conference & analyst briefings
Media release and interview
Company website

Our Response

Our Response• Ensuring our suppliers and vendors understand our businessneeds and quality expectations• Clearly communicating our stance on integrity, labourand human rights, inclusivity, health and safety, andenvironmental protection• Clearly communicating and driving enforcement of ourVendor Code of Conduct• Availing our suppliers of resources to drive theirdecarbonisation journey through the Greening Value Chain(“GVC”) programme• Providing timely updates on our performance• Maintaining a dividend policy that prioritises shareholder
rewards• Upholding good governance practices and policies• Continuously enhancing ESG practices and widening
implementation• Investing in automation and digitalisation

Link to Material Matters

Link to Material Matters• Ethical Business• Partnership & Collaboration• Product Quality & Safety• Cyber Security & Data Privacy• Combating Climate Change• Human Rights & Labour Practices• Ethical Business• Product Quality & Safety• Environmental Compliance• Combating Climate Change• Human Rights & Labour Practices• Workplace Safety• Diversity & Inclusivity• Partnership & Collaboration

ENGAGEMENT FREQUENCY

As needed

OngoingAnnually

SECTION 4

SHAREHOLDERS, INVESTORS,ANALYSTS & BANKERS

SUPPLIERS/ VENDORS26

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AUTHORITIES &REGULATORSPRESSURE GROUPS/NGOs

Why They Are Important

Why They Are Important

Why They Are Important

By maintaining strong relationships withauthorities and regulators, we remain
abreast of regulatory changes, enabling
us to proactively adapt and minimise risks
associated with non-compliance.

By maintaining strong relationships withpressure groups and non-governmentalorganisations (“NGOs”), we are able to stayabreast of socio-economic and environmental
changes, leading to the creation of initiatives
that deliver shared value for our business andlocal communities.

As a leading conglomerate, we have a
responsibility to take the lead in driving
positive social and economic impact for local
communities, whether through environmental
protection, community investments or theemployment opportunities we provide.

Key Areas of Concern

Key Areas of Concern

Key Areas of Concern• Adherence to regulatory requirements• Adherence to government policies• Record in economic performance andjob creation• Record in addressing key environmental
and labour issues• Human rights and fair labour practices• Environmental impact• Economic well-being of local
communities• Employment opportunities provided tomembers of local communities• Environmental impact of businessactivities

Engagement Method & Frequency

Engagement Method & Frequency

Engagement Method & Frequency

General meetings

Correspondences

Corporate social responsibility
programmes

Industry associations meetings

SECTION 4

LOCAL COMMUNITIES& SOCIETY

Company website

Reporting on regulatory
requirements and compliance

Local council meetings

Site inspections and visits
Correspondences
Our Response

Our Response

Our Response• Maintaining stringent compliance toapplicable local and international laws,
legislation and standards• Integrating ESG within our business• Advocating for ESG integration acrossour supply chain• Upholding zero tolerance fordiscrimination by race, religion,
gender, age, disability, culture, social
origin, cast, sexual orientation, marital
status, political opinions etc.
• Upholding human rights and labour
rights• Maintaining our Zero Cost Recruitment
Policy• Providing access to a third party
grievance mechanism• Integrating ESG within our business• Advocating for ESG integration acrossour supply chain• Driving community development
through financial assistance, charity
programmes and the sponsorship ofrelevant initiatives through Yayasan
Kossan• Providing employment and careerdevelopment opportunities to
Malaysians

Link to Material Matters

Link to Material Matters

Link to Material Matters• Ethical Business• Environmental Compliance• Waste Management• Water and Effluents Management• Human Rights & Labour Practices• Diversity & Inclusivity• Workplace Safety• Health & Wellness• Combating Climate Change• Human Rights & Labour Practices• Diversity & Inclusivity• Workplace Safety• Partnership & Collaboration• Community Welfare• Waste Management• Water and Effluents Management

ENGAGEMENT FREQUENCY

As needed

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Our Approach to Sustainability (Cont’d)

SUSTAINABILITY MATERIAL MATTERS

At the core of our sustainability strategy lie our material matters, which are defined as economic,
environmental and social issues that hold the greatest significance for our stakeholders and have thepotential to impact our ability to create both financial and non-financial value over the short, medium,and long-term. By identifying and actioning strategies to deal with these issues, we can minimise the riskof financial, legal or reputational damage to our business and maximise value creation .
Our last full materiality assessment was undertaken in FY2020. Therefore, we have conducted a high-level review – guided by Bursa
Malaysia’s Sustainability Reporting Guide (3rd Edition) and the GRI Standards – in FY2023 to validate whether the material mattersidentified remained relevant to our business, with this process also aimed at aligning our material matters to relevant UN SDGs.
MATERIALITY VALIDATION PROCESS

2

4
Management
Discussion
Material matters wereprioritised through focus
groups, meetings andinterviews, leading to ashortlist of matters readyfor validation andapproval

Local &
Global Alignment
Matters were mapped
against local andglobal standards andbenchmarked against
industry peers

1

3

Validation& Approval
The KSC and our GroupMD/CEO validated andapproved the material
matters prioritised, verifying
their continued relevanceamidst evolving global
trends, risk themes andeconomic changes

Following our review in FY2023, we identified 14 key material matters that are most relevant to us and our stakeholders. This list
remained largely the same as our material matters in FY2022, with a few minor changes, as detailed below.
Legend:KOSSAN Materiality Matrix

High

ClimateChangeHuman rights and labour
practices (Social Compliance)
Environmental Compliance

People Development

MediumDiversity & Inclusivity
Employment Opportunities

Health & Wellness

Waste Management

Water & EffluentsManagement

Cybersecurity and Data Privacy

Community Welfare
Product Quality & Safety

Partnership & Collaboration

Review, analyse and prioritise• Topics that require an actionplan• Medium-term planning to beundertaken and target to beestablished (3-5 years)• Implementation will be good forbranding and brand recognition• If an issue arises, no penalty will
be imposed but there is potential
for reputational damage
Manage and monitor• Less critical topics• No monetary impact• Good for branding• Long-term planning and target(>5 years)

Low

Overall Significance to Stakeholders

Ethical Business
Workplace Safety

Strategic material matter to beembedded into operations• Topics that align closely to ourstrategic direction• Failure to comply will result in
financial losses or reputational
damage• High priority and attention fromstakeholders• Very material to the Group forthe next 2-3 years

Low

MediumOverall significance to KOSSAN’s BusinessHigh

EconomyEnvironment
PeopleSECTION 4

Current State Review
Our current matrix andtopic list was evaluated basedon internal factors andthe current businessenvironment to pinpoint
any gaps and areas forenhancement

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Overview of Changes in Material Matters:
New Material Matter

Cyber Security and Data Privacy – Included as a resultof the digitalisation transition taking place across theGroup, which exposes us to a wider range of cyber risks
and necessitates the implementation of robust measures
to ensure the security of our stakeholders’ data and ourintellectual property

Revised Names and Scopes
Social Compliance & Labour Practice renamed as
Human Rights & Labour Practice
Employment Opportunity renamed as
Diversity & Inclusivity

Human Rights & Labour Practices

Description
Treating our people and those that work with us fairly and ensuring
their fundamental rights are safeguarded and respected.

Importance to the GroupOur employees play a crucial role in our operations. Therefore, itis essential that we adopt measures to ensure that their rights anddignity – with particular emphasis on our migrant workforce – arerespected in a non-discriminatory manner, in alignment with local
labour laws, international requirements and globally recognised
best practices.
Importance to Our Stakeholder Groups
Failure to comply with labour laws may result in sanctions,potentially leading to the disruption of the delivery of goods to ourcustomers or even the revocation of market access by authorities.

Risk

Updates In Importance

SECTION 4

MANAGING OUR MATERIAL MATTERS

Workplace Safety – Positioned slightly higher in FY2023
due to our growing efforts to address and enhance ourworkplace safety practices
Diversity & Inclusivity – Positioned slightly higher in
FY2023 to reflect our efforts to build a diverse talent poolin order to drive value creation and foster workplaceinnovation
Community Welfare – Positioned lower in FY2023 due
to most key concerns having already been addressed
through constant engagement with local communities

MANAGING OUR MATERIAL MATTERS
The details of how we manage our 13 material matters areelaborated herein:• Non-compliance with laws and regulations may impact our ability
to market our products and attract and retain clients• Non-compliance may also lead to legal ramifications, thus
damaging our reputation.

Opportunity
By maintaining strong human rights practices, we can reinforce
our reputation as a responsible employer and improve ourcompetitiveness.

Our Response• Establishing a task force to regularly monitor and ensurecompliance across our operations• Committing to the fair and ethical treatment of all employees• Remaining alert and adaptive to changes to or the introduction of
new regulations• Ensuring staff are kept abreast of new regulations and thepotential impacts of non-compliance• Playing an active role in driving responsible practices in theindustry as a founding member of the Responsible Glove Alliance(“RGA”)

Legends
Employees

Authorities & Regulators

Customers

Pressure Groups/NGOs

Suppliers/ Vendors

Local Communities& Society

Shareholders, Investors,
Analysts & Bankers

Link to
Stakeholder Groups Affected

Supporting SDGs

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Our Approach to Sustainability (Cont’d)Environmental Compliance

Ethical Business

Description

Description

Adhering to applicable environmental laws and rules andconducting business in a responsible fashion.

Ensuring that ethical business practices are adhered to by all people
working for and with the Group.

Importance to the Group

Our commitment to environmental compliance empowers us toembrace sustainable practices, leading to enhanced operational
efficiency, reduced costs, an enhanced brand image and meetingcustomers' requirement.

Amidst growing scrutiny of business conduct, it is crucial to ensurethat our business practices and processes meet the highest
standards of ethics, thus maintaining the trust of our stakeholders
and strengthening our reputation.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

Our degree of compliance to environmental laws and regulations
directly impacts our reputation and propensity to be subject to legal
proceedings, with such negative outcomes reflecting poorly on our
stakeholders.

Setting forth unambiguous ethical criteria and enforcing employee
accountability can diminish the occurrence of fraud, corruption
and unethical behaviour within the Group. This safeguards theinterests of all stakeholders and helps to drive our sustainability as
a business.

Risk

Risk

As environmental regulations evolve in step with changing norms
and expectations around environmental protection, any incidents
of non-compliance could result in the suspension of operations,financial penalties and reputational damage.

Unethical business conduct may result in financial losses due topenalties in addition to negative impacts on our reputation, thus
affecting our business prospects.

Opportunity

Opportunity

By adhering to environmental laws and regulations, we can reduce
our environmental footprint and make a greater positive impact
on natural environments surrounding the areas where we operate,
earmarking ourselves as a responsible organisation.

By promoting and upholding the highest standards in integrity, we
can enhance our reputation as a trustworthy company amongst our
stakeholders.

Our Response

Our Response• Introducing and maintaining relevant policies, practices andprocesses across our operations that strictly comply to all
relevant national, local and industry-specific environmental
regulations• Obtaining and retaining ISO 14001 certifications for ouroperations• Adopting key policies and procedures to govern ethical businessconduct and ensure ongoing compliance with laws andregulations• Conducting regular review of the effectiveness and efficiency ofour policies and procedures• Conducting regular risk assessments to identify corruption risks
across our business• Implementing reasonable and appropriate control measures toaddress corruption risks• Conducting trainings to instill awareness of ethical businesspractices amongst our employees

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

SECTION 4

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Combating Climate Change

Water & Effluents Management

Description

Description

Addressing climate-related risks and opportunities across our value
chain while taking steps to minimise our emission of greenhousegases (“GHG”) into the atmosphere.

Adopting sound water management strategies and maintaining
responsible effluent discharge practices across our operations.

SECTION 4

Importance to the Group

Importance to the GroupAs a leading conglomerate, we have a responsibility to set a strong
example in carbon emissions reduction and contribute to thecountry's objective of becoming carbon neutral by 2050.

Clean water is a key input in our manufacturing processes and,given its current scarcity, enhancing our efficiency in water
consumption and integrating water recycling methods into our
production processes is not only a responsibility but an imperative
for the long-term vitality of our business.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

Climate change has emerged as a paramount global concern,and the climate initiatives we undertake have become a crucial
factor considered by our customers, shareholders, government
authorities and the media when undertaking assessments of ourbusiness.

Our environmental management strategies play a crucial role inshaping the impression and outlook of our stakeholders. Amongthese strategies, the management of water and effluents holds
significant importance.

Risk

Risk

• Potential inefficiencies in carbon reduction efforts could lead tofinancial and reputational damage• Inadequate adaptation to climate-related challenges may impact
our ability to achieve our business goals, including our expansion
plans, in future

Poor water management may lead to higher costs and wastage ofthis precious resource, resulting in increased water scarcity.

Opportunity

Opportunity• By taking sustainable actions to reduce the carbon emissions
generated by our operations and respond to extreme weather
events, we can drive long-term value for our business and theenvironment• Through effective climate mitigation and adaptation strategies,
we can ensure business continuity and drive significant cost
reductions

Efficient water management and the promotion of water
conservation behaviours across our workforce can drive reduced
operational costs and enhance our image as an organisation.

Our Response

Our Response• Implementing our Climate Mitigation Action Strategy to reduce
our carbon emissions• Implementing renewable energy initiatives at our factories• Introducing a comprehensive carbon accounting system anddatabase• Adopting a water recycling strategy and optimising our usage ofwater through the promotion of water conservation behaviours• Introducing a Group-wide water management strategy• Continually exploring alternative water sources to reduce our
impact on municipal water

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

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Our Approach to Sustainability (Cont’d)Workplace Safety

Cyber Security & Data Privacy

Description

Description

Minimising exposure of our employees to hazards at work andtaking steps to prevent work-related injuries and diseases.

Ensuring the security and confidentiality of our business andstakeholders' data and our intellectual property in an increasingly
complex and challenging cyber threat landscape.
Importance to the Group

Ensuring the safety of our people is of utmost importance. Any risks
related to occupational safety and health not only pose a threat
to our valuable workforce but also have the potential to cause
accidents that could harm our reputation and result in financial
consequences.

As we accelerate our adoption digital technologies across theGroup, it is imperative that we ensure safe data storage andmanagement.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

Government authorities and regulators, and our customers are
adopting a more rigorous approach towards workplace hazards as
they recognise the importance of ensuring occupational safety andhealth standards.

With the worldwide migration to digital systems and ways ofworking, cyber security and data privacy is becoming a key concern
for stakeholders and a core consideration in their assessments ofcompanies.

Risk

Risk

Workplace accidents and injuries may lead to productivity loss, legal
repercussions and reputational damage.

Any cyber attacks and breaches that occur within our systems could
lead to significant business disruptions and undermine the trustand confidence of our stakeholders.

Opportunity

Opportunity

By maintaining a strong safety culture, we can improve overall
employee well-being and drive increased productivity while
maintaining our reputation as a responsible and trustworthy
organisation

By maintaining robust cyber security and improving our data
management practices, we can protect the critical data of our
stakeholders and safeguard our reputation as a trustworthy
organisation.

Our Response

Our Response• Implementing a comprehensive range of safety and healthpolicies and practices across the Group• Strict adherence to all applicable safety and health laws andregulations• Attaining ISO 45001 certifications for the occupational safety andhealth management systems we utilise in our factories• Installing appropriate security solutions such as firewalls andantivirus software• Housing our equipment in secure facilities with robust physicalprotection• Utilising sophisticated backup systems to mitigate against dataloss
• Adopting policies and procedures while driving IT security
awareness

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

SECTION 4

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Our Approach to Sustainability (Cont’d)People Development

Product Quality & Safety

Description

Description

Offering work environments that facilitate continuous upskillingin areas relevant to our employees’ professional and personal
development.

Providing high quality and safe products and solutions that firmlyalign with market needs and the ever-evolving expectations of ourcustomers around the world.

SECTION 4

Importance to the Group

Importance to the GroupThe quality of our human capital directly impacts our efficiency as
an organisation, thus affecting our competitiveness and capacity to
attract customers and drive investments.

Our ability to deliver high quality and safe products that meet theever-changing demands of the market and the expectations of ourcustomers sets us apart and fortifies our resilience as a business.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

Learning and development opportunities are a major factor
considered by potential employees when choosing an employer,
and the availability of relevant upskilling resources may lead existing
employees to choose to remain at KOSSAN instead of continuing
their career elsewhere.

Our ability to maintain product quality and safety directly influences
our customers’ risk of harm and is thus a key determinant of thetrust that our stakeholders have in us.

Risk

Risk

Inadequately trained employees are more likely to deliver poor
job performance, suffer injuries and cause issues related to noncompliance, each of which lead to increased business costs.

Non-compliance to or shortfalls against product quality and safety
standards may result in financial penalties and potential operational
disruptions, which would in turn impact our reputation in key
markets.

Opportunity

Opportunity

By delivering effective learning and development programmes, we
can drive long-term employee satisfaction and improve our ability
to attract and retain top quality talent.

By consistently delivering to high quality and safety standards thatmeet the needs and expectations of the market, we can forge astrong competitive edge and drive long-term business value.

Our Response

Our Response• Regularly reassessing training needs while implementing rolespecific learning and development programmes• Fostering a culture of continuous learning, in line with evolving
market trends• Providing opportunities for career advancement and professional
development, and thus empowering our employees to reach
their full potential• Implementing quality management systems in line withlocal, national and industry-specific standards, international
requirements and customer requirements• Maintaining stringent quality control systems covering all productmanufacturing phases to ensure that product quality, safety andperformance requirements are met

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

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Our Approach to Sustainability (Cont’d)

Waste Management

Partnership & Collaboration

Description

Description

Ensuring the safe disposal of hazardous and non-hazardous wastefrom our business operations.

Driving sustainable local economic development through strategic
partnerships with suppliers, schools, reputable NGOs and othercommunity-based organisations.
Importance to the GroupThe waste we generate from our production processes has a major
impact on our overall environmental impact and, as a consequence,
our risk of financial, legal and reputational repercussions.

Through strategic partnerships, we are better positioned to adapt toemerging trends and capitalise on new growth opportunities.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

In addition to the increasing importance ascribed to environmental
impact by our existing and potential clientele, any waste that is
improperly disposed of may lead to negative impacts on the qualityof life of local communities, in addition to harming their ability togenerate economic value.

Improved understanding and collaboration between the Group andour business partners empowers innovation and growth, driving
shared, long-term value.

Risk

Risk

Non-compliance with environmental regulations pertaining towaste may result in regulatory action from authorities, while also
negatively impacting local communities.

The undertaking of activities that negatively impact local
communities directly influences the impression that important
stakeholders form on our business.

Opportunity

Opportunity

Through the implementation of effective waste reduction andresource efficiency strategies, we can drive long-term cost savings
while simultaneously meeting our environmental protection goals.

Through collaboration with like-minded partners, we can promoteenhanced value chain resilience and create shared benefits acrossthe industry.

Our Response

Our Response• Continuously monitoring our consumption of resources while
employing a 4R strategy to drive more systematic and effective
waste management• Implementing detailed tracking of our waste management
performance, in line with ISO 14001 certifications for ouroperations• Driving internal and external collaborations towards creating andsharing good values and best practices• Undertaking impact assessments and due diligence on potential
partners• Strengthening our supply chain partners through purpose-fit
capacity building programmes

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

SECTION 4

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Health & Wellness

Diversity & Inclusivity

Description

Description

Uplifting workforce fitness and well-being to drive productivity andunlock sustainable business growth.

Embracing diversity and inclusivity by creating a culture of
acceptance and belonging, thus cultivating work environments thatare geared to drive innovation and improved value creation.

SECTION 4

Importance to the Group

Importance to the GroupBy driving improved health and wellness across our workforce,
we can harness our employees’ untapped capabilities, unlocking
increased productivity and fostering a culture of innovation.

Having a workforce composed of individuals from different
backgrounds and with varied experiences enables a broader
spectrum of perspectives to be considered, ultimately leading to
the development of more robust business strategies that support
sustainable growth and value creation.

Importance to Our Stakeholder Groups

Importance to Our Stakeholder Groups

By investing in employee health and wellness, we can position
ourselves as an employer of choice, enhancing our performance intalent attraction and retention.

The significance of diversity as a pivotal gauge of a company's
progressive and sustainable nature is increasingly being
acknowledged by stakeholders. Furthermore, stakeholders
recognise the importance of cultivating an environment where
employees can truly feel a sense of belonging in their work.

Risk

Risk

Ineffective health and well-being initiatives, or any unintended
consequences arising from such initiatives, may lead our employees
to form a less positive impression of the Group, leading to talentattrition.

Any instance of discriminatory employment practices may lead toconflicts, taiting working relationship, impact the wellbeing of ouremployees, and significantly damage our reputation.

Opportunity

Opportunity

Through the implementation of comprehensive health and wellbeing initiatives, we can drive improved employee satisfaction andretention, leading to long-term productivity gains.

By nurturing workplaces that value and promotes diversity, equity
and inclusion, we can establish ourselves as a fair and responsibleorganisation.

Our Response

Our Response• Providing regular health screenings and wellness programmes• Encouraging employee feedback to assess programme
effectiveness• Promptly addressing any gaps in employees well-being• Improving accessibility to healthcare resources and facilities

Continually monitoring our non-discrimination practices to maintain
diverse, equitable and inclusive workplaces across the dimensionsof race, religion, gender, age, disability, culture, social origin, cast,sexual orientation, marital status, political opinions etc.

Link to
Stakeholder Groups Affected

Supporting SDGs

Stakeholder Groups Affected

Supporting SDGs

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Our Approach to Sustainability (Cont’d)Community Welfare
Description
Creating positive and lasting impacts through voluntary community
engagements and support.

Importance to the GroupBy undertaking actions and initiatives that drive sustainableeconomic development, we can enhance our standing in local
communities and amongst our stakeholders while unlocking
improved employee morale.

Importance to Our Stakeholder Groups
Local communities stand to benefit from development and support
initiatives through improved quality of life and greater economic
opportunities.

Any activities that negatively impact local communities may leadto significant reputational damage, harming our ability to forge
partnerships, expand our client base and reach our business goals.

Opportunity
Through effective planning of community-based initiatives, we canmaximise our impact on local economic development and build along-term reputation as a caring and responsible organisation.

Our Response
Established Yayasan KOSSAN to conduct a range of initiatives that
benefit local communities

Link to
Stakeholder Groups Affected

Supporting SDGs

SECTION 4

Risk

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Our Approach to Sustainability (Cont’d)

SUPPORTING THE UNITED NATIONSSUSTAINABLE DEVELOPMENT GOALS

Our commitments and measures
are only meaningful if they
contribute to addressing greater
challenges. To this end, we
have aligned our Sustainability
Framework with key UN SDGs,
placing particular focus on“Decent Work and Economic
Growth” (SDG8), “Responsible
Consumption and Protection”(SDG12), and “Climate Action”(SDG13).

SECTION 4

Generating Sustainable Economic Value

8.2

8.8

Maintaining a healthy work
culture and implementing
practices that protect andrespect human rights, support
career advancement, value
innovation and enshrine ethicalpractices across the Group andour supply chain

9.5

16.3

Ensuring that our products meetinternational quality and safety
standards to drive shared value forour business and our customers

16.5

Driving accountability throughrigorous cyber security and data
privacy practices while enforcing
ethical business practices across ouroperations

17.4

Working with our customers andsuppliers to develop sustainable
solutions and accelerate climatefriendly transitions

Material Matter

Material Matter

Human Rights & Labour Practices

Ethical Business

Water & Effluents Management

Environmental Compliance

Combating Climate Change

Workplace Safety

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Our Approach to Sustainability (Cont’d)Managing Our Environment Impact

6.3

6.4

6.5

Stewarding water
responsibly byimplementing water saving
strategies, enhancing theefficiency of our processes
and reducing the volume ofeffluents discharged

7.2

11.6

12.4

13.1

Driving energy efficiency
by investing in modern
production equipment andprogressively implementing
green energy within ouroperations

Cultivating effective waste
management practices that
promote circularity andreduce waste-to-landfill

Implementing resourceefficient practices across ouroperations while retaining
strict compliance toenvironmental regulations

13.2

Reducing our carbon
footprint by adopting
renewable energy, driving
energy efficiency andrigorously monitoring ourGroup-wide emissions

Material Matter

SECTION 4

Creating Value Through Social Engagement

1.4

Providing financial
support to underserved
communities throughthe long-term initiatives
spearheaded by Yayasan
Kossan

3.8

4.4

4.5

Creating a culture ofPrioritising the healthcontinuous learningand safety and wellthrough purpose-fit
being of our workforce
through comprehensive employee development
programmes andpolicies and frameworks
while looking after their modules delivered at ourstate-of-the-art KOSSAN
holistic physical andTraining Centre
mental well-being

8.5

8.7

10.2

10.3

16.2

8.8

10.4

Strictly upholding
human rights and fairlabour practices forall employees andenhancing their safety
while at work

Fostering work
environments where
every individual
feels valued andrespected, supported
by recruitment,
remuneration
performance evaluation
process that are rooted
in equality

16.3

Aligning withinternational norms
and standards in
employment practices
and driving positivechange across theindustry

Material Matter

Cyber Security & Data Privacy

Product Quality & Safety

Partnership & Collaboration

Diversity & Inclusivity

People Development

Waste Management

Health & Wellness

Community Welfare

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Generating Sustainable Economic Value

Integrity is a fundamental valuethat guides every decision we make,and our business is founded on
the principles of upholding highstandards of governance with theutmost honesty, transparency andaccountability.

SECTION 4

This means conducting ourselves in themanner expected of respected global company
by enforcing ethical business practices,
ensuring exceptional product quality andsafety, protecting against cyber threats anddeveloping meaningful partnerships andcollaborations. Ultimately, these actions enable
to not only safeguard our reputation as acompany but generate sustainable economic
value far beyond our operations alone.

ETHICAL BUSINESSWHY IT MATTERS
Upholding high standards in business ethics is imperative as this lays the groundwork for stronger relationships with ourcustomers and collaborators, enhanced employee loyalty and improved relations with authorities and regulators. Ultimately,
through ethical business conduct we enhance reputation as a responsible and future-ready organisation , driving long-term
success and value creation.
OUR COMMITMENT
We demonstrate utmost respect for ethical principles and are committed to leading by example in our industry through ethicalbusiness conduct and by implementing effective governance practices across our operations.
OUR APPROACH
Maintaining a Robust Framework of Codes and Policies
To drive ethical business conduct across our business footprint, we have developed a comprehensive set of codes and policies
that are applicable to all business units with the Group. These codes and policies are communicated to all employees andstakeholders, including third-party vendors, with all personnel expected to fully comprehend and comply with the rules andregulations stipulated within while carrying out their responsibilities. To ensure their continued relevance and effectiveness,
all our codes and policies undergo periodic reviews.

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Generating Sustainable Economic Value (Cont’d)

OUR LIST OF POLICIES IS OUTLINED AS FOLLOWS:CORPORATE POLICIES:
•
•
•
•
•

SUSTAINABILITY POLICIES:

Anti-Bribery and Corruption (“ABC”) Policy
Whistleblowing Policy & Procedure
KOSSAN Code of Ethics and Conduct (“KCEC”)
Remuneration Policy for Directors and Senior
Management
Director’s Fit and Proper Policy

•
•
•
•
•

Group Sustainability Policy
Environmental Policy
Safety and Health Policy
Human Rights-related policies (Child Labor Policy,
Forced Labor Policy, Zero Cost Recruitment Policy)
Vendor Code of Conduct

Our firm commitment to ethical business practices is underpinned by a zero-tolerance stance towards any form of unethicalbehaviour, with this principle applied throughout the Group hierarchy, from top management to non-executive level employees.
Meanwhile, we stay informed about relevant local, international, and industry-specific regulations, with any gaps detected
promptly addressed to ensure our continued compliance.

In addition, we have set out our Anti-Bribery and Corruption Guidelines (“ABC Guidelines”) and our Gifts, Hospitality andEntertainment Guidelines (“GHE Guidelines”) to provide further guidance to all directors, officers and employees of KOSSAN
in maintaining high ethical standards. As we strive to inculcate a culture of integrity across the Group, our Corporate Legal
department facilitates training on these two guidelines, delivering anti-bribery and corruption training for 746 employees during
FY2023. All attendees completed individual assessments at the end of each training session, providing us with insight into theeffective of the training in driving understanding of the guidelines.
The breakdown of attendees for anti-bribery and corruption training sessions is as follows:

5

4
31

19

339

AttendeesbyDesignation
Level

Attendeesby Gender
223

407

Top Management

Middle Management

Senior Management

Executive

Upper Management

Non-Executive

FemaleMaleSECTION 4

In FY2021, we formulated our Anti-Bribery and Corruption Framework (“ABC Framework”) and adopted our No Gift Policy,
establishing clear parameters and practices to prevent the occurrence of bribery and corrupt practices within our business. The
ABC Framework stipulates that political donations are strictly prohibited and that the Group’s resources should not to be used
for this purpose.

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Generating Sustainable Economic Value (Cont’d)Moreover, we continue to roll out our anti-bribery and corruption initiatives to enhance understanding and awareness throughvarious platforms such as our corporate website, internal portal, KCEC, induction programmes and interactive e-learning
modules. Supporting this, our “Say NO to Corruption” posters are available in five different languages and distributed across
our premises.
Meanwhile, we foster a culture of trust and transparency through our dedicated whistleblowing channel, which is accessible
to all employees and stakeholders. The channel provides them with a safe avenue to voice any concerns pertaining to
misconduct or ethical breaches without fear of retaliation.
Conducting Regular Corruption Risk Assessments
Complementing these wide-ranging efforts, our Risk Management department conducts monthly corruption risk
assessments across our operations to identify potential risks and drive the implementation of effective controls. The
department also consolidates risk registers from all process owners on a quarterly basis, presenting consolidated risk
ratings to the Risk Management Committee for further consideration and action.
The corruption risk assessment conducted in FY2023 found that our business has a low risk of bribery and corruption. Thisis reflected in the zero reported cases of bribery or corruption recorded during the year.

SECTION 4

Our PerformanceCases of Bribery and Corruption
In FY2023, we maintained our record of zero reported
cases of bribery or corruption in FY2023 (FY2022: 0,
FY2021: 0).

Employee Awareness on ABC
100% of our new hires in FY2023 acknowledged our
ABC Policy.

MOVING FORWARD
Looking forward, we will remain committed to upholding good governance and ethical practices across the Group. To this end,
we will continue to proactively review our governance framework, with a view to introducing enhancements that further solidify
our actions.

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Generating Sustainable Economic Value (Cont’d)

CYBER SECURITY AND DATA PRIVACY
WHY IT MATTERS
In order to stay ahead in a rapidly evolving market and industry environment, it is essential that we embrace digital and Fourth
Industrial Revolution (“IR 4.0”) technologies. However, while this approach unlocks greater productivity and efficiency, it also
exposes us to an increasingly challenging threat landscape, requiring the implementation of robust cyber security and data
privacy measures.
OUR COMMITMENT
We are fully committed to enhancing our cyber security and data privacy protocols by adopting industry best practices andimplementing cyber protection strategies, thus securing the confidential data of our stakeholders and our own intellectual
property.
OUR APPROACH
Harnessing Expertise and Collaboration

Our dedicated IT team form the backbone of our efforts. Leveraging extensive experience, they are entrusted with developing
and implementing cyber security and IT infrastructure to safeguard crucial data, systems, networks, and intellectual property.
Our Board of Directors, meanwhile, drives our agenda from a risk management point of view, complemented by the work of
the Risk Management and Sustainability Committee, which conducts periodic evaluations of our risk profile and performance,
including cybersecurity risks. The coordinated action of these key teams enables us to identify emerging threats and implement
effective mitigations in a timely manner, thus minimising the risk of cyber or data breaches.
Establishing a Strong Policy Framework
To enforce high cyber security and data privacy standards across our operations, we have implemented a range of essential
IT policies that are specifically designed to promote safe and secure usage of our IT resources. These include our:

Email
PolicyInternet
PolicyPassword
PolicyComputer &Infrastructure
PolicyIT
Security
PolicyEmployees are made aware of these policies and are reminded of the importance of ensuring continuous adherence to theirrecommended practices. To facilitate this, the policies are published on our intranet portal for easy, anytime access.
Implementing Effective Controls
We have implemented the following
key measures to protect our IT
environment and digital resourcesfrom cyber security threats, preventing
critical and confidential information ordata from being accessed and leakedby unauthorised internal or external
parties.

Robust Access Protocols
All our servers, systems, and applications are shielded with stringent user
credentials and access permissions. Users are granted access solely upon
authentication with the appropriate credentials, with their access further
restricted to specifically assigned permissions.
To further bolster access security, we enforce strong password requirementsthat require users to create complex passwords, with passwords changed
every 90 days for additional security. We have also adopted Multi-Factor
Authentication (“MFA”) as an extra security feature, requiring users to provide
additional verification in addition to their username and password.

SECTION 4

To drive data security and privacy amidst the fast-evolving cyber threat environment, we leverage the collective expertise of
our teams, each of whom play specific roles within our overall threat protection approach.

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Generating Sustainable Economic Value (Cont’d)External Threat Protection
Our IT environment is protected from any external cybersecurity harms or threats through the deployment of various
enterprise class solutions. To protect from external cyber threats, we deployed firewalls as a first layer of protection fromexternal intrusion, and to filter & block malicious activities. Efforts have also been initiated to mitigate cyberattacks byfurther segmenting internal network to prevent the spread of cybersecurity threats within the internal networks.
In addition to our firewall, all our servers have been "server hardened" to limit user access to essential services, with accessto non-essential services blocked. Servers are further protected with the use of trusted and up-to-dateservice components.

SECTION 4

To protect information and data in cloud storage from being leaked to third parties, cloud-based services such as SharePoint
are only allowed to be accessed from within the company premises, with employees unable to access SharePoint fromoutside of the company, such as from their home or a cybercafe.

Antivirus Protection

Training and Backup

All computers and servers are protected with Antivirus
endpoints to detect and remove malicious or known
viruses. Our email solution is protected by Email Security
Gateway ("ESG") that automatically filters out emails
suspected of phishing, ransomware, fraud, malicious
software and viruses, preventing these threats fromarriving into the mailbox of users. Email links are also
actively checked and verified to be safe by the ESG before
allowing the links to be accessed.

We strive to inculcate a culture of awareness on cyber risks
and data protection through email awareness messages
and newsletters that are frequently disseminated to
employees. Relevant articles are also posted in internal
portals, educating employees on the harms of email
threats and the appropriate actions to be undertaken in
the event of such incidents.

In 2023, we engaged a third-party expert to perform an
IT security and penetration assessment. We leveraged on
the outcome by taking proactive measures to enhance
our application and infrastructure as well as to prevent
cyberattacks.

To protect against loss of server information due tounforeseen events, critical servers are actively backed up
on a daily, weekly and monthly basis, with backup storage
stowed off-site so they can be used to recover data in theevent of a disaster.

PDPA Compliance
Our Group strictly adheres to the regulations set forth in the Personal Data Protection Act 2010 ("PDPA"). It is imperativethat all employees handle clients' personal and confidential information with the utmost care and confidentiality. Third
parties we collaborate with are also bound by a Non-Disclosure Agreement ("NDA") to ensure the protection of sensitive
information. Furthermore, all service agreements with third parties include a standard personal data clause for added
security.

Our Performance
In FY2023, we successfully maintained our track record of zero recorded incidents of identified leaks, theft or loss ofcustomers and employees data (FY2022: Zero recorded incidents).

MOVING FORWARD
The Group will focus on ramping up cybersecurity training and engagement programs for our staff to promote heightenedawareness and vigilance across the Group. Simultaneously, we will continuously enhance our cybersecurity infrastructure andadopt recognised best practices to improve breach prevention and address the rapidly changing nature of cyber threats.

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Generating Sustainable Economic Value (Cont’d)

PRODUCT QUALITY & SAFETY
WHY IT MATTERS
Delivering safe and high quality products is central to our customer promise, enabling us to enhance trust in our company anddifferentiate ourselves in a competitive market. At the same time, we are cognisant of the significant reputational, legal andfinancial impacts that could arise from any instances of non-compliance and take thorough precautions to minimise such risks
within our operations and supply chain.
OUR COMMITMENT
Conscious of the vital importance of product quality and safety, we commit to consistently meeting and exceeding laws,
regulations and standards across our markets of operation while remaining attuned and responsive to evolving market demands
and customer expectations pertaining to protection, safety and other product attributes.
OUR APPROACH
Attaining International Standards in Quality and Safety

Supported by our QMS, we have attained the following international and country-level certifications:
•
•
•
•
•
•
•
•
•

ISO 13485:2016 and EN ISO 13485:2016
MDSAP
ISO 9001:2015
CE 2797
UKCA 0086
MS 2636:2019 (JAKIM)
Malaysia MPPHM 2020, and MHMS 2020
Indonesia HAS 23000-1
UAE Halal National Mark, UAE.S 2055-4:2014

•
•
•
•
•
•
•
•
•

BRCGS CP Issue 4
MS 1500:2019
MS 2200:2013 Part 2
MDR (EU) 2017/745
PPER (EU) 2016/425 Module D
Forest Stewardship CouncilTM (FSC) Chain of Custody
BS EN 681: Pt. 1
EN 15129, EN1337-3, EN1337-7
IATF16949:2016

Furthermore, our gloves continue to meet the key country and region-level product quality and safety standards including theAmerican Society for Testing and Materials (“ASTM”) standards (USA), European Standards (“EN”) (Europe), the Australian/New
Zealand(“AS/NZ”) standards (Australia & New Zealand), the Japanese Industrial Standards (“JIS”) (Japan) and the Guobiao (“GB”)
standards (China). They are also aligned with the ISO 13485 quality system for quality management systems in the productionof medical devices.
In addition, our gloves comply with relevant regulations governing quality management systems and medical devices including
the US Food and Drug Administration Quality System Regulation (“QSR”), Europe Medical Devices Regulation (EU) 2017/745,
Canada Medical Device Regulation (SOR/98-282), Malaysia Medical Device Act (Act 737), Japanese Pharmaceutical Affairs Law(J-PAL), Australian Therapeutic Goods (Medical Devices) Regulations 2002, and the UK Medical Devices Regulations 2002.
To ensure that the QMS is effectively implemented across our production activities, we hold annual management review
meetings and internal quality audits, with gaps identified duly recorded and addressed by the relevant department. Followups are then carried out to ensure that the identified issue has been rectified.
Implementing Effective Quality and Safety Controls
Supporting the QMS, we adhere to stringent inspection and testing procedures, enabling us to promptly identify and preventthe distribution of any products that do not meet our quality or safety standards. Moreover, we have in place dedicatedregulatory assurance and quality assurance teams which are charged with ensuring that all quality, safety and performancerequirements are met before products are distributed to customers.

SECTION 4

In ensuring that our quality standards meet global regulatory requirements, we are guided by our Quality Management System(“QMS”). The system mandates specific practices to undertake across the production cycle, from incoming raw materials
to the development of finished products, and governs our research and development processes. Specifically, it details thecorrect sampling plans, testing procedures and acceptance and rejection criteria to adhere to, while also providing tools for
detection, segregation and verification. This ensures that quality and safety is considered across all processes undertaken in
the development of gloves and TRPs.

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Generating Sustainable Economic Value (Cont’d)

At the outset of our production process, incoming materials
undergo rigorous inspection to ensure compliance with
our standards. Packaging materials are inspected to verifyalignment with customer-approved artwork, while chemicals
and raw materials undergo laboratory testing to ensure
they meet regulatory requirements, including the strict
standards of the European Union's Registration, Evaluation,
Authorisation and Restriction of Chemicals (“REACH”)
regulations and the Substances of Very High Concern (“SVHC”)
list. We also adhere to established procedures for handlingand controlling incoming materials, such as packaging,former and chemicals, to ensure their integrity and safety.

SECTION 4

Throughout the manufacturing processes, we maintain akeen focus on monitoring process parameters to ensure thatour products consistently meet their intended specifications.
We conduct inspections according to detailed quality
plans outlined in our in-process inspection and testingprocedure. Pre-packing inspections are also carried out
to verify that product packs for customer shipments meet
specific requirements, including those related to customer
specifications and regulatory standards.
At the completion of the manufacturing process, a further
series of comprehensive inspections and tests are carriedout to verify quality and safety levels.
Finally, prior to shipment, our finished goods undergo a final
round of inspection to ensure that they meet customers'
regulatory and specification requirements. By adhering tothese stringent pre-shipment protocols, we strive to ensurehigh quality products are delivered to our customers.
All testing takes place at in-house and external laboratories.
Our in-house laboratory offers the necessary equipment
to carry our detailed testing of material designs and endproducts, thus enabling the delivery of products that meetinternationally recognised technical quality standards. For
clinical trials, we work with accredited and experienced
external laboratories, with risk and impact assessments
conducted and participant consent obtained prior to thecommencement of the trial in question. These trials aremonitored by our regulatory assurance team to ensure theymeet the ethical standards of the World Medical Association’s
Declaration of Helsinki.
Adding a further level of control, all stakeholders areprovided with avenues to report any product quality andsafety concerns, which are then promptly investigated. In theevent of a product safety or quality incident, investigation will
be carried out by a cross-functional team and, if necessary,
perform corrective actions. These may include carrying out
recalls of the affected products, formulating preventive
actions and procedures to avoid future incidents andperforming other actions to address the issue in question.

Ensuring Accurate Product Labelling
We have established a comprehensive process to ensure
accuracy when labelling our products, with practices in fullcompliance with the regulatory and safety requirementsof our importing countries. Our dedicated regulatory teamverifies all information featured on primary package labelsand outer cartons, ensuring that vital details are accurately
displayed. Furthermore, they authenticate any productclaims added to labels to ensure their accuracy.
Standing Against Animal Cruelty
We commit to not undertaking animal testing except wherelegally required to. Where animal testing is necessitated,
we ensure that all processes are cruelty-free and utilise an
external laboratory to regulate the maintenance of highstandards. Throughout such tests, we continuously monitor
procedures undertaken and promptly raise and address any
issues that arise.

Our Performance
Compliance with Product Quality and Safety
Regulations
In FY2023, we recorded zero incidents of noncompliance with regulations and/or voluntary
codes concerning the health and safety impactsof our products.

Compliance with Product Information andLabelling Regulations
In FY2023, we recorded zero incidents of
non-compliance with regulations and/or
voluntary codes concerning product and service
information and labelling.

Compliance with Marketing Communications
Regulations
In FY2023, we recorded zero incidents of noncompliance with regulations and/or voluntary
codes concerning marketing communications,
including advertising, promotions andsponsorships.

MOVING FORWARD
As we strive to expand our business presence across newmarkets and strengthen relationships with existing buyers,
the quality and safety of our products will continue to be avital consideration. To this end, we will maintain strong andconsistent oversight of the evolving regulatory requirementwith a view to enhancing our QMS and implementing additional
quality and safety practices across our production processes.

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Generating Sustainable Economic Value (Cont’d)

PARTNERSHIP & COLLABORATION
WHY IT MATTERS
Collaborations with our business partners and suppliers are crucial to achieving our goals as they allow us to access a bigger
pool of knowledge, resources and perspectives, while also enabling us to promote responsible practices across our supply chain.
At the same time, we approach our customer relationships as partnerships as this enables us to understand their needs morethoroughly and develop tailored products and experiences to meet their needs.
OUR COMMITMENT
We are dedicated to building strong connections both internally and externally and to forging mutual benefit through thesepartnerships. To us, this means sharing best practices with our partners while accessing knowledge, insights and tools that
contribute to our long-term business strength and sustainability.
OUR APPROACH
Enhancing Customer Experience and Engagement

Beyond sustainability, we work collaboratively with our customers to understand their business requirements, utilising
the insights we gain to develop personalised products and solutions. To aid this process, we maintain regular contact andcommunication via email, phone calls, face-to-site visits, exhibitions and roadshows, actively seeking feedback on our solutions
and discuss areas for improvement.
Our customer collaborations are reinforced by our efforts to ensure timely responses to customer enquiries and concerns,
including those related to social responsibility and environmental sustainability. We actively solicit such input through surveys,
reviews, and feedback forms, valuing our customers’ input as a crucial driver of improvement.
During FY2023, we maintained a high customer satisfaction rate of 94%, with our customer satisfaction survey covering four
key areas: product quality, product innovation, services and regulatory compliance. Respondents of the survey contributed to
80% of accumulative sales during the year, a 1% improvement compared to the preceding year.
Harnessing Value in Our Supply Chain
The practices of our business partners have a direct impact on our standing as an organization. With this in mind, we have
implemented our Vendor Code of Conduct, which establishes key principles that all suppliers, contractors and service
providers are obligated to acknowledge and uphold across all activities involving the Group. The code details requirements
in social compliance and anti-forced labour, health, safety and environmental compliance as well as ethical conduct including
anti-bribery and corruption.

SECTION 4

Our customers are placing increasing emphasis on sustainability, making it imperative that we adopt best practices across the
ESG spectrum. Through ongoing engagements, we gain a clear picture of the issues that are most important to them, guiding
our committed efforts to innovate products, solutions and approaches that balance business needs with the imperative ofsustainable social and environmental impact. This extends to maintaining a rigorous approach to reporting, through which we
provide our customers with transparent disclosure of our efforts in sustainability, forging greater trust.

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Generating Sustainable Economic Value (Cont’d)

In line with our commitment to uphold business ethics and ESG across our supply chain, we carry out risk-based pre-assessments
for new and existing suppliers. These assessments serve to identify any negative environmental and social impacts that may
arise through our relationship with the supplier in question and include the supplier’s approach to recruitment, harassment,
discrimination, forced labour, child labour, working hours, freedom of association, remuneration and health and safety in theworkplace as well as covering supplier practices in environmental and waste management.
In addition to this pre-assessment, we evaluate our existing business partners on a regular basis – across the same environmental
and social metrics – to confirm their ongoing compliance and performance against our standards. Where any issues are identified,
we collaborate with suppliers to implement of corrective and preventive actions (“CAPA”) to drive compliance across all issues
identified.
Driving Decarbonisation Through Strategic Partnerships
Recognising the challenges brought about by the ever-changing business environment, including heightened expectations
around sustainability and climate action, we are taking action to strengthen the resilience of our supply chain and achieve asustainable ecosystem. In FY2023, we rolled out the Greening Value Chain ("GVC") programme, created by Bank Negara Malaysia(“BNM”) in partnership with our solution provider and other strategic partners, for our suppliers. The programme provides themwith free education and technical assistance on climate-related topics plus access to a carbon accounting software that they can
use to accurately measure and understand their emissions, thus empowering them to accelerate their climate action journeyand enhance their competitiveness. As a participant, they also gain access to BNM’s RM2 billion Low Carbon Transition Facility(“LCTF”), a source of low-cost financing to support their adoption of climate-friendly practices and technologies.

SECTION 4

In complement to the programme, we delivered ESG training sessions for our suppliers in FY2023, with topics including an
introduction our ESG Policy, the basics of climate change and greenhouse gases, a guide to carbon accounting and associatedtools, and green financing. Meanwhile, 34% of our selected SME suppliers participated in the training offered under the GVC
programme, with 70% of participants going on to adopt GVC’s carbon accounting solution.
As a whole, the programme achieved significant success, earning us recognition from the Malaysia Book of Records for being thefirst glove manufacturer in Malaysia to establish a strategic partnership with the central bank.

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Generating Sustainable Economic Value (Cont’d)

Our Performance
Customer Satisfaction
In FY2023, we maintained a high customer
satisfaction rate of 94%, as measured by ourcustomer satisfaction survey.

Anti-competitive Behaviour
In FY2023, we were involved in zero legal actions,and incurred no legal repercussions or penalties,
regarding anti-competitive behavior or violationsof anti-trust and monopoly legislation.

Supplier Social and Environmental Assessments
During FY2023, we carried out detailed assessments of our suppliers’ social and environmental impacts
through virtual evaluations, on-site visits and self-assessments, as detailed below:

Number%Existing primary suppliers assessed(based on all active existing primary Tier 1 suppliers)

88

100%

New primary suppliers assessed(based on all new primary Tier 1 supplier)

0

N/A*

Primary suppliers assessed for social andenvironmental impacts

76

86%

New primary suppliers that were screenedusing social and environmental criteria

0

N/A*

Number of site audits conducted

37

42%

* No new primary suppliers during the year.

Proportion of Spending on Local Suppliers
In line with our commitment to supporting the local business ecosystem, 62% of our procurement spend in
FY2023 went to local suppliers.

Procurement Spending on Local Suppliers

2021

2022

2023

40%

56%

62%

MOVING FORWARD
Effective and trust-based partnerships will continue to be vital to our evolution and growth within a fast-changing businesslandscape. By working closely with our customers, we will strive to stay a step ahead of the innovation curve and develop
solutions that meet their business and sustainability requirements. Meanwhile, we will take further steps to drive the adoption of
responsible and sustainable practices across our supply chain, cognisant of the impact this has on our own business prospects.

SECTION 4

Category

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CREATING SUSTAINABLE VALUEManaging Our Environment Impact

At the core of our operations lies adependence on the Earth's natural resources.
To ensure the long-term sustainability ofour business, we thus recognise the criticalneed to safeguard natural resources andoptimise their consumption. Furthermore, asa global entity, we embrace our duty to theinternational community and are cognisantof growing expectations from regulatory andgoverning bodies.

SECTION 4

Accordingly, we spearhead a wide range of initiatives
aimed at amplifying our environmental stewardship,
placing emphasis on ensuring compliance, improving
waste and water management, and taking action to
mitigate the impacts of climate change.

ENVIRONMENTAL COMPLIANCE
WHY IT MATTERS
As a responsible manufacturer, we acknowledge the profound and extensive impacts our operations may exert on natural
ecosystems and resources across land, air, water and soil. Our pledge towards upholding environmental compliance is rooted
in our duty to conduct business ethically. Accordingly, we consistently prioritise the minimisation of our environmental
footprint with the primary goal of safeguarding our planet and its resources for the well-being of future generations.
OUR COMMITMENT
We remain committed in adhering to all national and local environmental regulations that pertain to our industry andmaintaining rigorous alignment of our practices with global standards and norms. Our steadfast commitment to strict
compliance ensures that our operations consistently meet all relevant standards of environmental protection andsustainability.
OUR APPROACH
Adopting a Stringent Approach to Environmental ComplianceIn our pursuit of unwavering compliance with the requirements set forth by the Department of Environment (“DOE”) and otherinternational standards, we have embraced a holistic approach guided at the highest level by our Group-wide Environmental
Management System (“EMS”) Framework. This framework, crafted in alignment with the Plan-Do-Check-Act Model specified
in the ISO 14001 Environmental Management System standard, comprises six integral components that collectively drive arobust approach to managing our environmental impacts.

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Managing Our Environment Impact (Cont’d)

1

2

3

4

5

6

Group-wide
Environmental
PolicyClear
Environmental
Objectives &Targets

Experienced
Environmental
Competent
Persons

Comprehensive
Environmental
Assessments

Environmental
AuditsRegularEnvironmental
Training &Awareness

1

Group-wide Environmental Policy
Our overarching policy is designed to embed environmental sustainability within the Group, offering employees a vital tool towork together towards achieving our environmental goals and targets. The policy is shared and communicated with all employees,
vendors and other relevant stakeholders, outlining best practices in key areas, including:• Undertaking environmental protection actions• Responsible consumption of natural resources and energy• Strategic emissions and waste management• Accurate measuring and monitoring environmental indicators• Transparent reporting and resolving environmental issues• Nurturing an environmentally conscious culture

2

Clear Environmental Objectives & Targets
Through the findings of regular environmental data assessments and reviews, we establish targeted environmental goals toenhance our performance. The progress made towards these goals is monitored by Environmental Departments at the plant levelthat directly report to plant-level Management, who then share the results with Top Management at the Group level.

3

Experienced Environmental Competent Persons
Licensed competent persons have been assigned across all our factories to ensure the effective management of industrial effluentsand hazardous waste in accordance with the environmental laws established by the DOE.
The competent person assigned to oversee industrial effluents diligently monitors and assesses real-time data, taking necessary
measures to ensure that the discharged quality meet the standards outlined in the local environmental regulations. Similarly, thecompetent person responsible for hazardous waste management closely monitors the waste disposal processes, ensuring that they
are carried out safely and in strict accordance with local environmental regulations.

4

Comprehensive Environmental Assessments
Regular Environmental Aspect and Significant Impact ("EASI") assessments are carried out to identify any environmental issues
and evaluate the environmental impacts of our operations. Outcomes of these assessments are utilised to better develop relevant
environmental mitigation strategies and set appropriate targets.

5

Environmental Audits
Both internal and external parties conduct routine environmental monitoring audits to verify adherence to applicable laws andregulations. Following all audits, we take prompt action to address any shortfall. In FY2023, 17 external audits and 30 internal audits
were carried out to ensure our strict adherence to related laws and regulations, as well as internationally-recognised standards

6

Clear Environmental Objectives & Targets
We uphold a schedule of role specific training and engagement events to educate our staff on current industry standards andenhance our collaboration with association members and regulatory bodies. This includes:• Chemical Safety Management & Spillage Control training and drills• Schedule Waste Management training• Industrial Effluents Treatment System training• Course for Certified Environmental Professionals in the Operation of Industrial Effluent Treatment Systems• Course for Certified Environmental Professionals in Sewage Treatment Plant Operation• ISO14001 Awareness training

In addition to our robust EMS framework, our employees are guided by established Standard Operation Procedures (“SOP”) andWork Instructions (“WI”) that outline steps to responsibly handle and manage effluents, chemicals and hazardous waste. Thismeasure not only protects the safety of employees but also upholds stringent standards for compliance and environmental
protection.

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KOSSAN Environment Management Framework

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INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)Tracking the Environmental Impact of our Operations
Mindful of our responsibility to manage and mitigate negative environmental impacts, we leverage robust data tracking toeffectively monitor our environmental performance with the aim of identifying opportunities for improvement. In line with
this, we have embarked on a journey to digitalise our stand-alone operating system into an integrated monitoring system,
while enhancing our maintenance monitoring platform to facilitate faster rectification actions and pinpoint new process
improvement opportunities. Complementing these efforts, we have implemented a cloud-base system to monitor and review
environmental performance across various aspects. At the operational level, regular inspections are carried out to detect
potential leakage points, with precautionary measures taken to avoid spillage and liquid stagnant.

Our Performance
As a testament to our efforts, we recorded zero incidents of non-compliance with environmental laws and regulations
during FY2023. Furthermore, 78% of our factories are ISO14001 certified, underscoring our dedication to environmental
excellence and sustainable practices.

MOVING FORWARD

SECTION 4

We remain committed to safeguarding the environment and enhancing our environmental performance, with an immediate focus
on achieving ISO14001 certification across 100% of our factories. In tandem, we will continue to diligently monitor our operations,ensuring the implementation of sound practices that foster long-term shared value.

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51

Managing Our Environment Impact (Cont’d)

COMBATING CLIMATE CHANGE
WHY IT MATTERS
Climate change stands as a paramount concern on a global scale, with its impacts extending to businesses, their value chains
and the lives of people worldwide. In light of these challenges, urgent climate action is imperative and it is incumbent upon all
nations and industries to collectively adopt environmentally friendly business approaches for decarbonisation. This imperative
has also become an integral factor in our clienteles’ procurement decisions, making proactive climate action vital in ensuring
the sustainability of our business activities.
OUR COMMITMENT
We remain steadfast in supporting the national climate agenda to become a carbon neutral country by 2050, as well as
Malaysia’s Nationally Determined Contribution ("NDC") to the Paris Agreement, which has set the target of achieving a 45%
reduction in Greenhouse Gas ("GHG") emissions by 2030. Recognising that climate action plays a crucial role in safeguarding
long-term business continuity, the Group has placed strategic focus on reducing emissions and embracing the transition to a
low carbon manufacturing.
OUR APPROACH

Maintaining a Robust Monitoring System
In the pursuit of streamlining carbon management, werecognise the need for a more advanced and efficientapproach to diligently monitoring and managing our carbon
footprint. In response, we have digitalised our emissions
tracking capabilities, leveraging cutting-edge technologies toenhance accuracy, timeliness and overall effectiveness.
Through the implementation of a Carbon Intelligence System,
we have significantly improved our accuracy in calculating ouremissions data. Automated emissions calculations are donein accordance with the Green House Gas (“GHG”) Protocol,
leveraging scientifically validated emission factors stored
within the database, including those from the United States
Environmental Protection Agency (“EPA”), United Kingdom
Department for Business, Energy, and Industrial Strategy(“BEIS”) and Malaysia Energy Information Hub (“MEIH”). With
data validation and error detection mechanisms integrated,
the likelihood of inaccuracies has reduced, enhancing thecredibility of our reporting.

technology, we are not only meeting current environmental
challenges but also positioning ourselves for a moresustainable and resilient future.
Taking Steps to Improve Energy Efficiency
With the majority of our emissions derived from the natural gas
and electricity we utilise, our strategy for addressing climatechange revolves around enhancing the energy efficiency of
our operations.
Over the past year, we conducted comprehensive energy audits
and energy methodology research across our manufacturing
facilities to identify opportunities for improvement. These
assessments empowered us to recognise operational areas
with the greatest energy consumption and implementtargeted optimisation strategies.
In exercising and promoting responsible energy consumption,
we actively participate in initiatives such as the lights-out
Earth Hour and conduct energy awareness training sessions.
We also practice energy-saving measures like switching off
lights during break times and optimising air-conditioning unit
temperatures. Additionally, we have installed digital timers
to better regulate the running time of office space and street
lamps within our premises. Furthermore, we are progressivelytransitioning the lighting in our manufacturing plants to moreenergy-efficient LED lights.

Our integrated approach had led to accurate pinpointingof emission sources across our operations, facilitating theeffective implementation of strategic measures and adequate
allocation of resources towards areas that contribute most to
our overall carbon footprint.

To further enhance energy efficiency, we have invested
in cutting-edge technologies designed to streamline
manufacturing processes. Through the integration of
automation, advanced sensors, and real-time monitoring
systems, we aim to minimise energy wastage and enhanceoverall operational efficiency.

The digitalisation of emission tracking represents a pivotal
step in our sustainability journey. By harnessing the power of

One notable example of this initiative is the installation

SECTION 4

Aligned with our Climate Mitigation Action 3S Strategy,
we have been diligently undertaking urgent measures tomitigate our environmental impact. Our efforts span a broad
spectrum, focusing on enhancing energy efficiency, embracing
renewable energy sources and exploring additional solutions
to reduce our emissions.

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CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)of a high-performance rotary screw compressor and acomputerised compressed air management system at our
production line. This system estimates future compressed
air demand by analysing historical air consumption patterns.
Leveraging this demand projection, alongside the technicalcharacteristics of the components and our understandingof the system’s behaviour, we employ a simulation-based
optimisation process to forecast the most efficient switching
operations. Similarly, we have installed inverters on ourchiller system, enhancing the unit’s accuracy in maintaining a
constant temperature while reducing energy wastage.

SECTION 4

Concurrent with the implementation of these technologies,
we take steps in reengineering our production processes
to optimise our energy efficiencies. Our ongoing initiatives
encompass a spectrum of measures, including:• Conversion of chiller
refrigerant gas toenhance energy
performance• Optimisation of burner
gas supply pressure• Optimisation of oventemperatures andimprovement of air
profiles• Optimisation of thermal
oil heater temperatures• Identification anddeactivation of
redundant processes in
the manufacturing line
• Adjustment andreinstallation ofequipment to maximisefunctionality• Tailoring equipment
parameters according
to plant utilisation rates

Further to this, we conduct timely preventive maintenanceto ensure our machineries and equipment are maintainedin optimal condition, a vital aspect in safeguarding energy
efficiency.
Expanding Renewable Energy Use
Acknowledging the substantial role we can play in mitigating
concerns surrounding climate change, we remain committed totransitioning towards sustainable energy sources. In this regard,
we recognise the significance of embracing solar energy as analternative, clean and renewable energy source that mitigatesharmful greenhouse gas emissions and reduces our carbon
footprint.
In line with this commitment, we have intensified our relianceon renewable energy by integrating solar panels into ourmanufacturing facilities. As of 31 December 2023, we haveinstalled solar panels with a total installed capacity of 4.3MWp,
representing a noteworthy increase of 1.14MWp compared tothe preceding reporting year.
To this end, we will continue to explore the feasibility of installing
solar panels at other factories, identifying it as a key area of focus
in reducing our dependency on non-renewable energy sources.
In doing so, we aim to lower our Scope 2 GHG emissions andreaffirm our commitment to environment sustainability.

Transitioning to Electric Vehicles
While energy efficiency and renewable energy represent
significant avenues for emission reduction, we are committed
to maximising our contribution to the green agenda,
particularly through our non-road and road vehicles. In ourefforts to minimise emissions, we have replaced a portion of
our conventional forklifts with electric counterparts acrossour manufacturing plants. By transitioning to electric forklifts,
which produce zero emissions during operation, we are able
to substantially reduce our total emissions and reduce ourenvironmental footprint.
Giving Back to Nature
Rooted in our firm belief that improving lives and preserving
nature is equally important, we have leveraged on ourinnovation of Low Derma (“LD”) Technology™ to support
human health as well as the environment.
Since 2022, we have launched #StayLOW, a sustainability
initiative under our LD Technology™, with a dual focus on
reducing health risks through hand protection innovations
and mitigating environmental impact by giving back to nature.
While our technology continues to advance in enhancing handprotection through nitrile gloves, we are also extending ourefforts to contribute to nature.
The #StayLOW programme is a collaborative endeavour
involving our partners, glove users and technology
teams worldwide, aimed at contributing towards carbon
sequestration through reforestation programmes. For every
thousand pairs of LD Technology™ gloves sold, USD 5 centsare contributed to the project fund. As of 31 December 2023,
this programme has facilitated the planting of 1201 trees,
estimated to remove 223.03 tonnes of carbon dioxide fromthe atmosphere.

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Managing Our Environment Impact (Cont’d)

Our Performance
In FY2023, our Group-wide, combined Scope 1 and 2 emissions declined by 29%, from 421,567.65 tonnes CO2e to298,953.09 tonnes CO2e, largely due to the lower production rate of our Gloves division during the year.
Despite this lower output level, Gloves division’s Scope 1 and 2 emissions intensity has improved, dropping from0.026 tonnes CO2e/1000pcs gloves to 0.023 tonnes CO2e/1000pcs due to our continuous efforts to enhance energy
efficiency. Reduced consumption intensities for natural gas and purchased electricity were the main contributors tothis improvement, declining by approximately 12.5% respectively.
Meanwhile, the Scope 1 and 2 emissions intensity of our TRP division decreased from 2.74 tonnes CO2e/1000kg rubbercompounded to 2.46 tonnes CO2e/1000kg rubber compounded.
Emissions
Scope 1
2021

Stationary
Combustion(tonnes CO2e)
Mobile Combustion(tonnes CO2e)
Scope 1 Total

2022

2023

Gloves

TRP

Total

Gloves

TRP

Total

GlovesTRP

Total

382,028.27

N/A

382,028.27

292,572.26

2,329.61

294,901.87

209,814.46

2,363.04

212,177.50

N/A

N/A

N/A

474.36171.17645.53399.92165.17565.09382,028.27

N/A

382,028.27

293,046.62

2,500.78

295,547.40

210,214.38

2,528.21

212,742.59

2021

2022

2023

Gloves

TRP

Total

Gloves

TRP

Total

Gloves

TRP

Total

Purchased Electricity(tonnes CO2e)130,997.74

N/A

130,997.74

115,116.57

10,903.68

126,020.25

78,013.34*

8,197.16*

86,210.50*

Scope 1 and 2 Total

513,026.01

N/A

513,026.01

408,163.19

13,404.46

421,567.65

288,227.72

10,725.37

298,953.09

Scope 3
2021

2022

2023

Total (Gloves & TRP)

Total (Gloves & TRP)

Total (Gloves & TRP)

Waste Generated in
Operations(tonnes CO2e)

N/A

N/A

1,826.32

Business Travel(tonnes CO2e)

N/A

28.45

70.00

EmployeeCommuting(tonnes CO2e)

N/A5,222.04

3,408.66

Scope 3 Total

N/A

5,250.49

5,304.98

513,026.01

426,818.14

304,258.07

Scope 1, 2 and 3 Total

Note:• Scope 1 Stationary Combustion emissions cover emissions from natural gas and diesel consumption at our production facilities, with the emission factors usedsourced from UK BEIS and US EPA.
• Scope 1 Mobile Combustion emissions cover emissions from gasoline and diesel consumption and emissions from the mileage incurred by company vehicles.
The emission factors used are obtained from US EPA.
• Scope 2 emissions cover purchased electricity from our production facilities and hostels, and is calculated using the location-based method based on theemission factors of MEIH 2019 Grid Emission Factor (GEF) (Source: https://meih.st.gov.my/documents/10620/384e8c1-b782-49a1-8dff-74c836b3a3f7)• Scope 3 Business Travel emissions cover all vehicles except trains. Emissions from air travel by our migrant workers are not accounted for in this year’s
calculation, and steps will be taken to include this information in our next Sustainability Statement. Emission factors used are sourced from UK BEIS, US EPA andFrance ADEME.
• Scope 3 Employee Commuting emissions cover all employee commuting activities, with the emission factor used sourced from UK BEIS.
• Tracking of Scope 3 Waste Generated in Operations emissions commenced in FY2023, covering both scheduled and non-scheduled waste, with emission factors
used sourced from UK BEIS and US EPA.
• The Scope 1 emission of our TRP division in FY2022 has been restated due to the reclassification of energy consumed from LPG gas consumption to natural gas
consumption.
• "*" indicates that the data have been subject to external assurance.

SECTION 4

Scope 2

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CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)Emissions

Energy Consumption

Scope 1 & 2
Emission Intensity

Natural Gas
Consumption Intensity

Purchased Electricity
Consumption Intensity

Gloves Division(tonnes CO2e/ 1000pcs gloves)

Gloves Division(MMBtu/ 1000pcs gloves)

Gloves Division(kWh/ 1000pcs gloves)

0.024

0.026

0.023

2021

2022

2023

TRP Division(tonnes CO2e/ 1000kg rubbercompounded)

SECTION 4

N/A

2021

2.74

2022

0.33

0.36

0.32

7.78

9.40

8.23

2021

2022

2023

2021

2022

2023

TRP Division(MMBtu/ 1000kg rubbercompounded)

2.46

TRP Division(kWh/ 1000kg rubbercompounded)

N/A

9.46

10.18

N/A

2860.032,476.84

2021

2022

2023

2021

2022

2023

Total

Gloves2023(Note: The Scope 1 & 2 emission
intensity of our TRP division in
FY2022 has been restated due to thereclassification of energy consumed from
LPG gas consumption to natural gas
consumption.)

2021

Gloves

2022

TRP

2023

TRP

Total

Gloves

TRP

Total

Solar Energy
Consumption (kWh) 3,066,789.00

N/A 3,066,789.00 2,834,791.00

N/A 2,834,791.00 3,849,183.40 * 229,000.00 * 4,078,183.40 *Installed Capacity
(MWp)

N/A

N/A

2.61

2.61

3.16

3.16

3.82

0.48

4.30

Please refer to the Appendix on pages 98 to 99 for more data on our energy consumption.
"*" indicates that the data have been subject to external assurance.

MOVING FORWARD
We are committed to enhancing our future environmental disclosures through the adoption of Task Force on Climate-Related Financial
Disclosures ("TCFD") recommendations in the near future. This will provide us with a deeper understanding of the climate-related risks
and opportunities we face, empowering us to proactively fine-tune our practices and strategies to mitigate against potential operational
disruptions while embracing emerging opportunities. We are also embarking on the undertaking of product lifecycle assessments,
representing a proactive measure to enhance our reporting through the tracking of additional Scope 3 emissions categories.

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Managing Our Environment Impact (Cont’d)

WATER & EFFLUENTS MANAGEMENTWHY IT MATTERS
Water and effluent management are critical aspects of environmental stewardship and sustainable development. With accessto clean water for drinking, sanitation and agriculture being fundamental to human health and well-being, we are committed
to ensuring responsible water management practices to safeguard these essential needs. In a similar vein, we recognise theimportance of managing our effluent discharge in a conscientious manner to prevent pollution of water bodies and protect
aquatic ecosystems.
This need is heightened by the water scarcity faced in many regions of the world due to climate change, making it imperative
for us to set a positive example through our practices.
OUR COMMITMENT
Recognising the crucial role of water in our manufacturing processes, we place significant emphasis on effective water andeffluent management as part of our Climate Mitigation 3S Strategy. Our objective is to improve our water footprint andminimise the environmental impact of effluent discharged from our business activities. Through these efforts, we strive toensure accessibility to clean water and sanitation, thus contributing to the well-being of both people and the environment.

Undertaking Robust Monitoring and Oversight
Water conservation is an integral component of our sustainable
manufacturing approach. With the objective of reducing water
consumption and enhancing water efficiency, we consistently
evaluate our production processes and implement innovative
approaches to maximise water consumption efficiency
whenever feasible. Regular monitoring is carried out to keep
track of water withdrawal and consumption intensity, andour operational teams also conduct scheduled inspections topromptly identify any potential water leakage.
To complement our efforts, we have integrated a magnetic
flowmeter within our real-time monitoring system. This
enables us to accurately monitor water flow rate, dosing
and pressure, further enhancing our ability to manage water
resources effectively.
Driving Water Conservation Initiatives
Recognising that holistic water management enhances
the long-term value of our business, we have consistently
implemented water conservation initiatives across ourbusiness. Examples of these ongoing efforts include theoptimisation of our plant processes and our use of an auto
dosing system to enable precise dosing and reduce our water
consumption. Meanwhile, in our efforts to reduce extractionof clean water, we reuse tank water in our manufacturing line
and treated water from our waste water treatment plant forvarious purposes, such as latex waste treatment and generalhouse keeping.

We have also introduced a series of educational and training
initiatives to drive awareness on the importance of water
conservation amongst our employees. These programmes
provide employees with actionable strategies to adopt intheir day-to-day practices, thus embedding sustainable water
usage within our organisational culture.
Reducing Our Reliance on Municipal Water Sources
To reduce our dependence on municipal water supplies, wehave been steadily increasing our use of reclaimed water
since FY2021. Doing so demonstrates our dedication to
responsible water management and contributes to improved
water security at the national level. Currently, municipal water
makes up approximately 86.5% of our total water use, with theremaining 13.5% derived from reclaimed water sources.
Mitigating Water Risks
Recognising the critical importance of water to our businessactivities, we have implemented robust measures to enhancewater security. Leveraging science-based tools such as the
Aqueduct Water Risk Atlas provided by the World Resources
Institute (“WRI”), we systematically evaluate water risks
associated with our business. Using this assessment, wedevelop preventive measures and take proactive actions to
mitigate potential risks. The insights we gain also aid ourefforts to situate our operations in regions and areas thatare not susceptible to water stress.

SECTION 4

OUR APPROACH

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CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)

The most recent survey undertaken indicates that all ouroperations are located in areas with a low to medium water
risk. Nevertheless, we have installed reservoir tanks acrossour facilities to ensure a reliable supply of water during
water crises. Further to this, our main water storage tanks
are equipped with an automatic water level control systemthat adjusts the operation of the water pump based on waterlevel information, and we have installed alarm systems to
notify us of low water levels within our storage tanks.
In our efforts to mitigate the impacts of flood damage to
our operations, our premises are constructed at an elevatedlevel. As part of our emergency preparedness measures,
equipment including mobile and portable generators areplaced on standby, ready to be deployed as necessary.
Furthermore, our employees receive comprehensive flood
response training to ensure their ability to effectively manage
emergencies.

water monitoring and carry out test at our onsite laboratory
to ensure that water discharge quality parameters – such astemperature, pH value, biological oxygen demand (“BOD”),
chemical oxygen demand (“COD”), total suspended solids(“TSS”), ammoniacal nitrogen and free chlorine – are met at
our wastewater treatment plant. This allows us identify any
shortfalls and take prompt measures to resolve such issues.
In addition, we engage third party laboratories to undertake
comprehensive analysis on a weekly basis across a wider
range of parameters, providing an extra layer of control overthe quality of our wastewater treatment processes.
We have also made considerable investments in upgrading
the equipment used in our wastewater treatment plant,
including:• Upgrading our Dissolved Air Flotation (“DAF”) Systemwith a new design that enables enhanced solidsupernatant separation, resulting in lower COD
concentration in DAF supernatants• Incorporating new waste water technology such as
Anoxic treatment and Moving Bed Biofilm Reactor(MBBR) process to drive quality improvements• Installing screw press to complement the existing filter
press to enhance dewatering efficiency• Upgrading our cooling towers to improve efficiency inmaintaining discharge temperature

SECTION 4

Maintaining Responsible Effluent Management Practices
To minimise adverse environmental impacts, we ensure that
our wastewater is appropriately treated and discharged.
In doing so, we strictly follow the guidelines outlined in
the Environmental Quality (Industrial Effluent) Regulations
2009 (Standard B) established by Malaysia's Department ofEnvironment ("DOE") and all regulations pertaining to thejurisdictions of our operations.
Our water discharge management processes are guided
by our EMS Framework and are in accordance with therequirements of ISO14001. Through licensed competentpersons and relevant internal teams, we diligently monitor
the quality of our discharge on a regular basis by referring
to real-time data. Further to this, we conduct daily waste

Through our continuous efforts, we have maintained ouradherence to Standard B for water discharge quality as
defined by the Environmental Quality (Industrial Effluent)
Regulations 2009, meeting all the necessary parameters
related to BOD, COD and TSS.

Our Performance
Water Consumption
As a testament to our ongoing efforts to optimise water usage, our overall water consumption fell to 2.139 million
m³ in FY2023, a 36% reduction from 3.352 million m³ in FY2022. Accordingly, the water intensity of our Gloves
division has also improved.
2021

GlovesWater Consumption 2,586,719.75(m3)
Intensity*

0.12

2022

TRP

Total

GlovesN/A 2,586,719.75 3,273,230.25
N/A

0.21

2023

TRP

Total

Gloves

78,851.28 3,352,081.53 2,068,430.07
16.13

0.17

TRP

Total

70,896.12 2,139,335.19
16.24

Note:
• Water consumption data covers the production facilities and hostels of both divisions.
• Water withdrawal and consumption data relating to our TRP division in FY2022 was restated due to the use of the wrong unit of measurement in last year’s
report. As a result, the figures presented for overall water withdrawal and overall water consumption in FY2023 is 55,520m3 lower than in last year’s report.
* The unit of measurement for the intensity of Gloves and TRP Divisions are m3/1000pcs of gloves and m3/1000kg rubber compounded respectively.

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57

Managing Our Environment Impact (Cont’d)Water Withdrawal
In FY2023, we recorded total water withdrawal of 5.582 million m³, with municipal sources comprising approximately
86.5% of the total and approximately 13.5% stemming from reclaimed water sources. This marks a 27% decrease
compared to the 7.607 million m³ in water withdrawn in FY2022, with this reduction mainly attributable to our productionlines operating at a lower capacity.
Water Discharge
In FY2023, our water discharge decreased by 19%, from approximately 4.255 million m³ to 3.442 million m³, due to our
production lines operating at a lower capacity.
2021

2022

2023

GlovesTRP

GlovesTRP

GlovesTRP

5,041,067.97

N/A

4,254,787.46-

3,442,221.36-

5,041,067.97

N/A

4,254,787.46-

3,442,221.36-

Subsurface / Well

-

N/A

-

-

-

-

Beneficial / Other Use

-

N/A

-

-

-

-

Ocean

-

N/A

-

-

-

-

Off-site Water Treatment

-

N/A

-

-

-

-

5,041,067.97

N/A

4,254,787.46-

3,442,221.36-

Discharge to a Third Party
Without Treatment

-

N/A

-

-

-

-

Discharged to the Natural Environment
Without Treatment

-

N/A

-

-

-

-

Primary Treatment Only

-

N/A

-

-

-

-

Secondary Treatment

4,654,634.61

N/A

3,658,074.96-

3,095,560.56-

Tertiary Treatment

386,433.36

N/A

596,712.5-

346,660.80-

5,041,067.97

N/A

4,254,787.46-

3,442,221.36

-

0.233

N/A

0.271

-

0.275

-

Treated Water Discharged (m3)
Total Discharged

Surface Water

Total Treated Water Discharged
By level level of treatment:

Total Treated Water Discharged
Treated Water Discharged Intensity*

Note:* The unit of measurement for the intensity of Gloves and TRP Divisions are m3/1000pcs of gloves and m3/1000kg rubber compounded respectively.

MOVING FORWARD
We remain focused on decreasing our reliance on municipal water sources at our facilities, driving awareness on water saving strategies
amongst our employees and explore opportunities for water recycling. Concurrently, we will strive to enhance water efficiency across
our production processes and increase the effectiveness of our wastewater treatment facilities.

SECTION 4

By destination:

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KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)

WASTE MANAGEMENTWHY IT MATTERS
As a manufacturing entity, waste management constitutes a fundamental aspect of our Climate Mitigation 3S Strategy.
We are cognizant that sustainable waste management and resource conservation is crucial for addressing the ongoingchallenges associated with landfills, including land contamination and heightened carbon emissions. The significance of
our endeavours is magnified by the global push towards a circular economy, which serves as a cornerstone in mitigatingclimate change.
OUR COMMITMENT
To minimise our environmental impact stemming from this aspect, the Group is determined to minimise waste generated
by our production processes and improve circularity throughout our operations to address the prevalent issues associatedby landfills.
OUR APPROACH

SECTION 4

Cultivating Good Waste Management Practices
Adhering to sound waste management practices is essential for meeting the stringent requirements stipulated by the DOE
and fulfilling our duty of care. Our waste management endeavours are fortified by a resilient Group-level EMS Framework,
which has been aligned with ISO 14001 standards. To propel our sustainable waste management approach, we have adopted
the 4R Strategy of Reengineering, Reducing, Recycling, and Reusing. This comprehensive waste management hierarchy
prioritises our efforts in handling waste generated by our activities, guiding our primary focus towards reengineering ourprocesses and products to proactively prevent waste generation.

Reengineer

ReduceReuse

RecycleAcross our operations, we utilise computer-generated weighing chits to track andanalyse the waste we generate, and identify areas for continuous improvement.
Waste is classified into two main categories: scheduled waste and non-scheduled
waste. Scheduled waste primarily consists of latex lumps and sludge, which is aby-product of waste water treatment, while non-scheduled waste encompasses
a wide range of materials, including general waste, food waste, paper packaging,plastics, rubber dust, rejected gloves and broken formers.
Our strategy for efficient waste management centres on improving waste
segregation and labelling at the source, considering the distinct types of waste(scheduled and non-scheduled) and further classifying them into specificcategories. This ensures that scheduled waste is securely stored in a location
separate from our manufacturing facilities and offices. Complementing thisapproach, we have implemented 3R colour bins across all our facilities to serve
as visual reminder encouraging recycling practices.
Aware that the nature of our manufacturing processes leads to scheduled waste
generation, we have appointed dedicated licensed competent persons at eachof our operational sites. These individuals are responsible for overseeing ourwaste management practices and processes, ensuring that disposal is carriedout safely and in a timely manner via approved and accredited collectors instrict accordance with the DOE’s Environmental Quality (Scheduled Wastes)
Regulations 2005. Additionally, the scheduled waste we generate is reported anddisclosed through the government’s Electronic Scheduled Waste Information
System (“eSWIS”) portal to maintain compliance and transparency.

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Managing Our Environment Impact (Cont’d)Promoting Innovation and Driving Resource Efficiencies
The integration of innovative solutions and resource
optimisation initiatives across our operations constitutes
pivotal elements within our waste management
initiatives. Specifically, within our glove divisions, we have
implemented solutions at our wastewater treatment plant
to diminish the volume of sludge produced. Additionally,
we have transitioned from using spill kits with ash to spill
kits with cotton rags, effectively curtailing the generationof ash waste necessitating incineration. These cotton rags
are recoverable and reusable subsequent to being used,further enhancing our sustainability efforts.
In line with our automation endeavours, we have established
an automated dosing system within our production line.
The innovative auto doser can be programmed to dispense
exact quantities of chemicals or substances at specificintervals to mitigate the risk of human error and ensuring
precise dosing. This has significantly optimised resource
consumption while reducing reliance on manual labour,
resulting in heightened productivity and cost savings.

Meanwhile, within the TRP division, we have introduced
auto-coating machines to replace manual adhesive coating.
This upgrade not only reduces our chemical usage but also
eliminates manual application.
Embracing Resource Efficiency
Embracing the concept of waste circularity, rejected gloves
find new life through transfer and repurposing in our
TRP division, culminating in the creation of eco shoes.
Moreover, we repurpose acid waste from our production toclean formers and use it as a pH adjuster in our waste water
treatment plant.
Committing to a closed-loop system, we actively collectand return reusable plastic waste to our suppliers forfurther utilisation, advocating our stance on minimising
environmental impact and adopting sustainable practices.
In our pursuit of sustainable manufacturing, we strive tominimise environmental impact and combat deforestation
by utilising sustainable packaging solutions and reducing
our reliance on plastics. Presently, 94.5% of our packaging issourced from recycled or recyclable materials, reflecting ourcommitment to environmental sustainability. We remain
dedicated to exploring sustainable packaging crafted from
eco-friendly or Forest Stewardship Council (“FSC”) certified
packaging materials to further decrease our environmental
footprint.
To end this, we maintain a vigilant oversight of our overall
resource consumption, particularly focusing on primarymaterials such as latex and nitrile in the gloves division,
alongside natural rubber, synthetic rubber and metalcomponents in our TRP division.

Our Performance
Waste Generated
There were no recorded incidents of non-compliance in relation to waste management in FY2023, with no waste
either imported or exported.
During the year under review, waste generated intensity within our gloves division increased from 0.62kg/1,000pcs
gloves to 0.70kg/1,000pcs, largely attributable to the non-schedule waste generated during the decomissioning ofold factories. Through stringent monitoring and mitigation efforts, our schedule waste generated has decreased by
25% in FY2023 to 5,036.93MT, compared to 6,722.72MT in FY2022.
Meanwhile, the total waste generated in our TRP division has increased by 3.3% from 804.43MT in FY2022 to 831.02MT
in FY2023, coupled with an increase in intensity from 164.58kg/1000kg rubber compounded to 190.33kg/1000kg
rubber compounded. This increase within the TRP division is due to a shift in our product mix.
Overall, approximately 57.7% of our waste generated from operations was managed through recycling, reuse orother recovery processes in FY2023, compared to approximately 66.6% in FY2022. The decrease was primarily
attributed to unrecyclable waste generated from the decomissioning of old factories, which mainly consisted ofaggregate and concrete contaminated with paints, fasteners, adhesives, wall coverings, insulation and dirt.

SECTION 4

To ensure our employees are well-equipped to carryout their responsibilities, we organise various training
and awareness sessions to raise their knowledge andcompetencies on key topics such as identification of waste,
waste management and handling, recycling awareness.
SOPs and WIs are in place to provide clear instructions on
how to responsibly handle and manage waste, with annual
refreshers conducted to place these guidelines at the top of
their minds.

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KOSSAN RUBBER INDUSTRIES BHD.
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CREATING SUSTAINABLE VALUEManaging Our Environment Impact (Cont’d)2021

Waste Generated Intensity

2022

TRP

TRP

TRP

Gloves(kg/ 1000pcs
gloves)(kg/ 1000kg
rubbercompounded)

Gloves(kg/ 1000pcs
gloves)(kg/ 1000kg
rubbercompounded)

Gloves(kg/ 1000pcs
gloves)(kg/ 1000kg
rubbercompounded)

0.50

N/A

0.62

164.580.70

190.332021

Scheduled Waste (MT)

2023

2022

2023

GlovesTRP

GlovesTRP

GlovesTRP

7,598.22

N/A

6,722.72

7.22

5,036.93

19.89

Non-Scheduled Waste (MT)3,094.53

N/A

2,984.22

797.21

3,655.12

811.12

Total Waste Generated (MT)10,692.75

N/A

9,706.94

804.43

8,692.05

831.01TRP

GlovesTRP

GlovesTRP

N/A

2,941.60

565.563,200.28

825.982021

GlovesWaste disposal through incineration (withor without energy recovery), landfilling,other disposal operations (MT)10,692.75

Waste Recycled/ Recovered/ Reused (MT)Total Waste Generated (MT)10,692.75

2022

2023

N/A

6,765.34

238.87

5,491.77

5.03

N/A

9,706.94

804.43

8,692.05

831.01SECTION 4

Resource Consumption
2021(MT/ 1000pcs gloves)2022(MT/ 1000pcs gloves)2023(MT/ 1000pcs gloves)

Latex consumption intensity

0.010

0.010

0.014

Nitrile consumption intensity

0.008

0.008

0.011

Raw material (Glove Division)

The increase of latex and nitrile consumption intensity in the gloves division during the year was due to a change in our
product mix, which featured a greater proportion of specialised products.
2021(kg / 1000kg rubbercompounded)2022(kg / 1000kg rubbercompounded)2023(kg / 1000kg rubbercompounded)

Natural Rubber & Synthetic Rubber Consumption Intensity

N/A

424.90461.87

Metal Components Consumption Intensity

N/A

815.99776.73

Raw material (TRP Division)

The increase of natural rubber and synthetic rubber consumption intensity from 424.90kg/1000kg rubber compounded
to 461.87kg/1000kg rubber, alongside the decrease of metal component consumption intensity, is similarly attributable
to the change in our product mix.
Note: The Metal Components Consumption Intensity of our TRP division in FY2022 was restated due to recognition of a calculation error.

MOVING FORWARD
In our pursuit of a greener future, we remain focused on taking significant steps towards improving our waste management practices
and maximising resource utilisation efficiency. Moreover, we will continuously explore innovative recycling solutions as an essential
component of our sustainable manufacturing approach. Through these proactive measures, we actively address waste management
challenges and contribute to a more sustainable world.

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Creating Value Through Social Engagement

Our people are our most valuable
resource, and we have a responsibility
to look after their best interests
by providing workplaces that aresupportive, inclusive and, above all,safe. At the same time, we strive to bring
the best out of our employees throughpurpose-fit training programmes andholistic health and wellness initiatives,in the knowledge that a productive andloyal workforce directly impacts ourpotential to create value as a business.

HUMAN RIGHTS AND LABOUR PRACTICESWHY IT MATTERS
We believe that upholding fair labour practices and respecting human rights are not only moral obligations but fundamental
to driving our sustainability as an organisation and empowering long-term success across our value chain. As such, we haveingrained these considerations deeply within our values, driving action to safeguard the dignity of our workforce, enhancetheir safety and ensure the protection of their fundamental human rights at all times. This unlocks improved employee
satisfaction, loyalty and productivity, while also enhancing the trust of our stakeholders and our reputation as an organisation.
OUR COMMITMENT
We commit to continuously advancing our efforts in tackling human rights risks across our own operations and supply chain
while upholding a fair, sustainable and inclusive workplace for all, in line with established international standards.
OUR APPROACH
Robustly Governing Social Compliance
Our approach to upholding human rights is underpinned by a robust social governance structure, spearheaded by our
Executive Directors and the involvement of key internal stakeholders at all levels of the Group. This allows us to make wellinformed decisions and implement suitable policies and practices that drive long-term value for our people and our business.

SECTION 4

Beyond our four walls, we embrace our role as adriver of sustainable development, developing
community-based programmes that deliver
long-term benefits for communities and theenvironment.

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CREATING SUSTAINABLE VALUE

Creating Value Through Social Engagement (Cont’d)• Providing strategic direction to our social compliance efforts• Overseeing the implementation of social compliance strategies andkey policies• Reviewing our social compliance performance

Executive
Directors• Implementing social compliance strategies and key policies acrossthe Group• Conducting internal audits and assessments across our operations• Overseeing external social audit programmes• Making appropriate recommendations for improvements andestablishing corrective action plans

SocialComplianceDepartment

Comprising key internal stakeholders• Staying abreast of global trends and relevant regulatory changes• Assessing key social compliance risks and identifying opportunities
for improvement• Engaging with key stakeholders on issues pertaining to our social
compliance practices

Social Risk
Task Force

Each operational site’s SPT comprises key management representatives, key
departmental personnel and worker representatives

SECTION 4

SocialPerformanceTeams• Executing action plans• Acting as a conduit for communication and mutual understanding
between management and workers• Regularly monitoring site-level human rights and labour practices• Ensuring that operational activities adhere to all relevant laws,
regulations and standards

Upholding Decent Labour Practices
We strictly abide by all applicable local and international laws and standards pertaining to labour practices. In demonstrating
our maturity as a responsible enterprise and building trust with our stakeholders, we have established our Social Accountability
Management System & Policy Roadmap, which is aligned to the following regulations and standards:
•
•
•
•
•
•

Employment Act 1955 (2022 amendment)
Industrial Relations Act 1967 (2020 amendment)
SA 8000
ISO 26000
ISO 20400
The International Labour Organisation’s (“ILO”) 11
indicators of forced labor

•
•
•
•
•

Ethical Initiative Trading (“ETI”) Base CodeThe amfori Business Social Compliance Initiative (“BSCI”)
Code of Conduct
The Worldwide Responsible Accredited Production(“WRAP”) 12 Principles
Sedex Member Ethical Trade Audit (“SMETA”) guidelines
UN Guiding Principles on Business and Human Rights

The system and roadmap clearly outlines the standards that govern our practices and is instrumental in driving our conformanceto the priorities and demands set forth by our internal and external stakeholders such as eradicating debt bondage, ensuring
reasonable working hours, safeguarding freedom of association, respecting the right to collective bargaining and prioritising
occupational health and safety. Our commitment to these social imperatives is evidenced by our prohibition of forced labor,
bonded labour, modern slavery and child labour across our operations. In addition, we adhere to a thorough verification
process to prevent the hiring of individuals under the age of 18, as stipulated by our Recruitment Policy.

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Creating Value Through Social Engagement (Cont’d)

We commence our recruitment process for migrant workers
by collecting proposals from licensed recruitment agencies
that hold certifications in ethical human capital resourcing.
These agencies are then subjected to a due diligenceassessment, conducted jointly with an independent auditor,
which evaluates their:

Social Accountability Management System& Policy Roadmap
▷
▷
▷
▷
▷
▷
▷
▷
▷
▷
▷
▷

Policy on Forced Labour and Modern Slavery
Child Labour Policy
Prevention of Abuse Policy
Policy on Right of Workers to Hold Their Own
Passport
Policy on Deduction from Wages
Zero Cost Recruitment Policy
KOSSAN Code of Conduct
Policy Against Workplace Harassment &Discrimination
Grievance Procedure
Occupational Safety & Health Policy
Recruitment Agency Code of Conducts
Vendor Code of Conduct

These key policies, and our Employee Handbook, aretranslated into the native languages of our workforce. They
are communicated via awareness sessions and distributed toall employees, in addition to being accessible via our intranet
portal.
Upholding Responsible Recruitment Practices
We firmly uphold fair and ethical recruitment practices
that aim to mitigate the risk of human trafficking. This
encompasses paying all costs incurred in enabling migrant
workers to undertake work with the Group, including
passport fees and travel, as detailed in our Employer Pay
Recruitment Policy, and conducting rigorous due diligence
audits on recruitment agents to ensure that workers are notsubjected to recruitment fees, travel costs and other preemployment expenses during the hiring process.

Recruitment
practices

Recruitment
costs

Track
recordBusinesslegality

Relevant
certifications
from social
compliancebodiesUse of agrievancemechanism

Further to this, all recruitment agencies that we work with arerequired to sign a commitment indicating their willingness toabide by our Recruitment Agency Code of Conduct.
To oversee the recruitment process, representatives fromour Human Resources and Social Compliance departments
travel to source countries along with representatives froman independent auditor. Once there, translators andindependent legal representatives are present throughout
the recruitment process to facilitate communication
with potential candidates and brief new hires on theiremployment contracts, our Employer Pay Recruitment Policy
and social compliance practices. Furthermore, interviews are
conducted at multiple stages of the recruitment process toensure that no recruitment fees have been paid. Should fees
be discovered to have been paid, immediate remedial action
is taken.
Standing Against Forced Labour and Modern Slavery
We stand resolutely against forced labour and enforce azero-tolerance policy against such practices in all forms. To
this end, we adhere to the following practices:
•
•
•

•

Enabling migrant workers to retain full control of theirpersonal documents and belongings
Offering personal storage options in our hostels for
migrant workers to safeguard their belongings
Upholding the right of our migrant workers to resign
without facing any repercussions or repatriation cost. The
length of notice provided to our employees is compliancewith Malaysian Employment Act 1955, should there are
any implementation of significant operational changes
Providing migrant workers with transparent employment
terms, in their own language, that clearly outline theobligations stated above

SECTION 4

The system and roadmap encompasses the following key
policies:

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CREATING SUSTAINABLE VALUE

Creating Value Through Social Engagement (Cont’d)These practices are clearly articulated throughout our

We utilise purpose-fit digital tools to accurately track andoperations and supply chain via our Supplier Code ofmanage working hours, and our plants’ respective Human

Conduct, Prohibition of Forced Labor Policy and Zero Cost

Resources departments diligently monitor their employees’

Recruitment Policy.

weekly working hours to ensure that they remain within
the 60-hour limit. Further to this, monthly reports on

In FY2023, we recorded zero substantiated complaints

working hours are prepared and reviewed by our Social

concerning human rights violation.

Compliance department to ensure our compliance towards
ILO regulations.

Prohibiting Child Labour
Upholding the Right to Freedom of Association and
We strictly prohibit the employment of child labour andCollective Bargaining

young workers who are under the ages of 15 and 18
respectively across our operations and value chain. To

We respect our employees’ right to participate in any

this end, our Human Resources Department (“HRD”) andassociation. We do not interfere, restrain or coerce ourrecruitment agent verify the age of potential candidates

employees concerning the exercising of their fundamental

during the recruitment process. In the event that a worker

right to form, assist in the formation of or join a trade union

under the age of 18 is discovered within our operations

and participate in its lawful activities, in accordance with thedue to oversight, misrepresentation, false identification

Trade Unions Act 1959 and the Industrial Relations Act 1967.

documents or any other reason, our Child Labour
Remediation Procedure is duly implemented and we assume

In line with our efforts to maintain inclusive workplaces, allresponsibility for ensuring the safety and protection of the

our plants have workers representatives who are elected bychild.

their fellow employees, with all nationalities represented.

SECTION 4

These representatives participate in monthly meetings
Our stance against child labour and the practices outlinedorganised by the Social Committee, providing a platformabove are clearly set out in our Child Labour Policy and Supplierfor them to voice the needs, concerns and feedback of ourCode of Conduct. In any instance of non-compliance within

employees directly to Senior Management.

our supply chain, the relevant supplier or sub-contractor isrequired to implement Corrective and Preventive Actions

Respecting Freedom of Movement(“CAPA”) which include undergoing training to enhance theirunderstanding of their responsibilities and minimise the

We respect and uphold the right of our employees to freedomrisk of such an incident reoccuring. Failure to address theof movement without imposing any constraints.

issue promptly or repeated instances of non-compliance willlead to the immediate termination of the supplier or sub-Employees are not required to obtain permission to leave

contractor’s business relationship with the Group.

their workplace or hostel outside of working hours.

During the year under review, we maintained our record of

Furthermore, we do not impose any restrictions on thezero reported cases of child labour.

movements of migrant workers who choose to return totheir home countries either before or after fulfilling their

Upholding Reasonable Working Hours
In accordance with the Employment Act 1955 andinternational standards, we commit to providing all
employees with reasonable working hours and maintaining
overtime limits that are below statutory requirements.
Specifically, we adhere to a 60-hour work week that
includes a weekly mandatory rest day, with overtime work
undertaken on a voluntary basis and paid at the overtime
rate as specified by the Act.

contracts.

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65

Creating Value Through Social Engagement (Cont’d)

Providing Decent Housing

Strengthening Human Rights AwarenessOur migrant workers’ accommodation fully complies withIn order to cultivate a strong awareness of human rights andthe Workers’ Minimum Standards of Housing and Amenities

social compliance across our workforce, we avail them of(Amendment) Act 2019 (Act 446). Hostels are equipped withvarious training programmes. In FY2023, these programmes

various amenities to enhance their comfort and quality ofincluded:life, including laundromats, canteens, refrigerators, prayer
rooms, and various recreational facilities, providing them•with easy access to daily necessities.

Training workshops on the ILO Indicators and the
Employment Act 1955 for manager-level employees
across the Group, totalling 270 training hours

Maintaining Robust Grievance Mechanisms•

35 awareness sessions on the WRAP 12 Principles,
totalling 778 training hours•

Awareness training on our social compliance-related

taking their concerns seriously is vital to fostering desirable

policies and commitments, our industrial relations

working environments. To this end, we have established aframework, our grievance mechanism, the WRAP 12

comprehensive externally managed Suara Kami helpline.

Principles and amendments to the Employment Act 1955,

Throughprovided to 3,275 employees and totalling 4,013 training

thismechanism,

employees

may

raise

any

hours

complaints or concerns related to unfair treatment, unethicalpractices, disrespect, harassment or workplace safety•

Our annual roadshow briefings, with key topics covered

through multiple channels such as QR codes, WhatsApp, andincluding our external grievance hotline, the ILO

phone calls. By providing them with these diverse reporting

Indicators and the Employment Act 1955, reaching 2,113
employees and totalling 4,226 training hours

options, we aim to create an environment where they feel
comfortable and empowered to speak up on any suspected
breaches of their human rights or labour practices.

•

Externally-provided training on human rights, totalling 64
training hours

In our efforts to foster direct communication with our

In addition, we developed posters to drive awareness of ouremployees,

Management

stance against harassment and discrimination, with theseby Walking Around (“MBWA”) programme. Under thisposters disseminated across the Group for employees’

programme, representatives from HRD conduct walkabouts

understanding and adherence.

we

have

implemented

theof our factories and floor operations every two weeks,
engaging with employees at a personal level and listening

Undertaking Social Compliance Audits

to any concerns that they may have. The insights gatheredfrom these interactions are then compiled and submitted

To ensure ongoing compliance across our operations, ourto Corporate HRD or Social Compliance Department for a

Social Compliance department proactively conducts internal

thorough review, facilitating the implementation of actions

audits on a frequent basis. These audits enable us to identify

to address the issues raised.

and mitigate potential risks and progressively enhance theeffectiveness of our procedures and policies. They also

A total of 48 grievances were lodged in FY2023 through Suara

ensure that we are adequately prepared for external audits

Kami, our external helpline. Grievances received consisted

as mandated by local and industry-level regulations.

of matters relating to hostel, discrimination, verbal abuse,
repatriation, safety hazards and others. 43 of these cases

In FY2023, 29 internal social compliance audits were carried

have since been resolved, with the remaining 5 cases pendingby the department. During this time, our operations wereverification of actions taken by the Group.

also subjected to 29 external audits, covering 100% of our
glove operations, including the audit programmes of SMETA,
WRAP and our customers. To this end, we have maintained
our Sedex membership.

SECTION 4

We firmly believe that listening to our employees and66

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CREATING SUSTAINABLE VALUE

Creating Value Through Social Engagement (Cont’d)Driving Change Through the Responsible Glove Alliance
We are one of the seven founding members of the Responsible Glove Alliance (“RGA”), which was launched in March 2022. The
purpose of the RGA is to enable collective efforts between all glove suppliers and buyers towards reducing the risk of forced
labour within the industry.
As a member, we adhere to the following Membership Commitments:
Code of Conduct

Cascading Commitments••

SECTION 4•

Members will commit to the principles and standards
outlined in the Freely Chosen Employment of the
Responsible Business Alliance (“RBA”) Code of
Conduct
These provisions align with the ILO Forced Labour
Indicators, and prohibit all forms of forced, bonded(including debt bondage) or indentured labour,
involuntary or exploitative prison labour, slavery andtrafficking in persons••

Members will commit to cascading thesecommitments within their supply chains
Minimum requirement will be to ensure immediate/
next tier suppliers acknowledge and implement the
principles and standards set in the Freely Chosen
Employment section of the RBA Code of Conduct
Members will be obligated to take measures tomonitor supplier adherence to the principles

Continuous Improvement

Transparency and Accountability••

Members commit to undertaking continuous
improvement measures, which include but are
not limited to conducting assessments and social
compliance activities and implementing corrective
actions

Members will commit to transparency and fostering
accountability

Our Performance
Human Rights and Labour Practices-related Certifications
In FY2023
100% of our glove manufacturing plants maintained their WRAP Gold certifications

MOVING FORWARD
In addition to ongoing efforts to improve our human rights and social compliance practices, we shall continue to play an activerole across the industry as a member of the RGA. Our primary focus here will be on developing comprehensive, industrywide standards by collaborating with relevant stakeholders including buyers, manufacturers and international labour rights
organisations. Through these partnerships, we shall aim to enhance the sustainability of the glove manufacturing supply
chain, thus safeguarding the industry’s long-term vitality.

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67

Creating Value Through Social Engagement (Cont’d)

WORKPLACE SAFETY
WHY IT MATTERS
Workplace safety is of the utmost importance to us as it directly impacts the well-being and livelihood of our employees, ourrisk of accidents and injuries and our ability to ensure the uninterrupted flow of our business operations. Beyond these tangible
impacts, we view workplace safety not only as a legal and ethical obligation but a fundamental responsibility towards our
employees, customers and communities. By building a culture that prioritises safety, we can solidify our reputation as a socially
responsible organisation.
OUR COMMITMENT
We commit to safeguarding our workforce by prioritising safety at every level of the organisation and fostering a safety-centricculture – endowing each employee with the responsibility to identify hazards, implement preventive measures and promote
safe practices amongst their colleagues and within their workplace.
OUR APPROACH

Our approach to workplace safety is guided by our Occupational Health & Safety Management System (“OHS Management
System”), which encompasses a wide array of policies and procedures and is aligned with ISO 45001 – Occupational Safety and
Health Management System.
In implementing our OHS Management System, we are supported by our competent staff – trained in health and safety
standards – who operate within a well-established structure and system that is designed to promote accountability on safety
at all levels. The key role within this structure is played by our Corporate Safety, Health and Environment (“CSHE”) unit, whichis responsible for formulating safety and health targets, developing relevant initiatives, undertaking risk assessments andensuring our compliance to local occupational safety and health (“OSH”) standards and guidelines. The CSHE unit reports
directly to the Group Managing Director/Chief Executive Officer.
The CSHE unit governs the Safety, Health and Environment Committees (“SHE Committees”) of our business units, each ofwhich are chaired by Senior Management personnel of the business unit in question and comprise of safety and healthofficers and representatives from various departments. These committees are charged with driving the development of safety
and health rules and measures that address the specific risks faced by their workplaces. In striving to maximise business unitlevel performance, they also undertake regular reviews of the safety and health performance of each site and of all safety andhealth programmes launched.

SECTION 4

Implementing a Comprehensive OHS Management System

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CREATING SUSTAINABLE VALUE

Creating Value Through Social Engagement (Cont’d)

The overall structure used to govern safety and health across the Group is detailed below.

Group MD/ CEO

Corporate
SHE

Business
Unit SHE
Committee

Business
Unit SHE
Committee

Business
Unit SHE
Committee

Business
Unit SHE
Committee

Business
Unit SHE
Committee

Operational
SeniorManagement

SECTION 4

Safetyand Health
Officers

Department-level
Representatives

Establishing our OSH Framework
Placed at the very core of ouroperational decision-making practices,
our Occupational Safety and Health
Framework (“OHS Framework”) stands
as a testament to our unwavering
dedication to safeguarding the safety
and well-being of our employees. The
framework encompasses a range ofpolicies and procedures and is alignedwith ISO 45001, driving strict andongoing compliance with all relevant
regulatory requirements.
The framework details clear processes
and best practices across the following
areas:

Group-wide
Safety and
Health Policy
Safety and
HealthOfficers

Emergency
Readiness

Safety and
Health Training
and Awareness

KOSSAN
Occupational
Safety and HealthManagement
Framework

Safety and
Health Audit

Safety and
Health Objectives& Targets

Safety and
HealthAssessment

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Creating Value Through Social Engagement (Cont’d)Our Safety and Health Policy is geared towards
safeguarding the well-being of all individuals within
our organisation, including external parties suchas our suppliers, vendors and contractors. Acting
as a guiding compass, it details clear practices
and expectations in maintaining safe workplaces,
empowering employees to take ownership of theirsafety and the safety of those around them.
As a whole, the policy empowers us to:
Adopt preventive measures to minimise the riskof injuries, mitigate health hazards and limit therisk of property damage
Drive proactive safety awareness throughcomprehensive and transparent communication
with our employees, contractors and otherstakeholders
Comply with all OSH rules and regulations
Undertake continuous monitoring of relevant
safety and health indicators
Conduct thorough investigations and implement
remediation or compensation plans for any
incidents that occur
This policy is communicated to and shared with all
employees, vendors and other stakeholders of theGroup, thus ensuring that all personnel involved inour business are fully aware and equipped to support
our commitment to safety and health.

Safety and
HealthOfficers

Our framework is backed up by certified safety andhealth officers who oversee safety operations at allof our operational sites. These individuals ensure
rigorous compliance to local regulations set forth by
the Department of Safety and Health (“DOSH”) andindustry standards by:
Developing and implementing safety and healthprocedures and safe systems
Conducting regular inspections of workplaces
to ensuring that they comply with relevant
regulations and safety protocols
Conducting thorough risk assessments acrossall our operations and developing risk mitigationplans in response to issues identified
Recommending
corrective
actionsandamendments to our safety policies to managementlevel personnel
Analysing patterns related to incidents, nearmiss accidents, dangerous occurrences andoccupational health issues
Leading comprehensive training programmes that
equip employees with the skills needed to navigate
their roles safely
Should a safety incident occur, our safety andhealth officers promptly undertake an investigationin adherence with DOSH protocols, disseminating
the findings of the investigation to both Senior
Management and the DOSH through detailed reports.
Actions to rectify the incident and prevent future
incidents are then swiftly devised and implemented.

SECTION 4Group-wide
Safety and
Health Policy

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Safety and
HealthAssessment

SECTION 4

We undertake regular safety and health assessments
to identify potential hazards in our workplaces andguide the implementation of appropriate measures
to both eliminate these hazards and mitigate
their associated risks. This systematic approachis ingrained across the Group and is guided by ourHazard Identification, Risk Assessment and Risk
Control (“HIRARC”) procedure, which is based on the
Guidelines for Hazard Identification, Risk Assessment
and Risk Control issued by DOSH.
In carrying out these assessments, we start bydeconstructing work activities into individual tasks
and identifying the potential risks associated witheach task. These risks are then evaluated and assigned
a risk rating based on the level of risk, likelihood andseverity. Based on the risk rating, appropriate control
measures are implemented, with reviews of thesecontrol measures and assessments of remaining risks
conducted regularly, thus enabling adjustments andimprovements to be made progressively. The resultsof all assessments are thoroughly documented forGroup-wide understanding and alignment on safety
and health issues.
Further to the assessment outlined above, we
also conduct ergonomics risk assessments (“ERA”)
across our operations to identify ergonomics risks –including those related to musculoskeletal disorders– present at our workplaces and particularly in
our production line activities. Identified risks areevaluated and control measures are put in place, withthese measures regularly evaluated to drive continual
improvement.

Safety and
Health Objectives& Targets

We develop thorough safety and health objectives
and targets aimed at preventing fatalities, reducing
the incidence of workplace accidents and mitigating
against the risk of occupational diseases. These
objectives and targets are crafted in alignment with
our Safety and Health Policy and are informed by
the outcomes of safety and health assessments andaudits.

Safety and
Health Audit

During FY2023, all our operational sites underwent
rigorous internal audits aimed at ensuring strict
compliance with our established safety protocols
and procedures. Additionally, external audits wereconducted by DOSH, our clients and reputable thirdparty certification bodies.
These external audits served as an additional layerof validation, affirming our unwavering dedication tocontinuous improvement and accountability in safety
and health, thus further strengthening our reputation
as a responsible and reliable industry leader.

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Creating Value Through Social Engagement (Cont’d)

We conduct regular safety and health training
sessions and workshops to enhance our employees'
overall safety awareness and build their proficiency inFirst Aid and emergency response readiness.
Our approach includes providing specialised training
on correct procedures when undertaking highrisk activities such as chemical handling and fire
safety management, equipping our team memberswith the expertise needed to manage emergencies
involving hazardous materials. Furthermore, throughinitiatives like personal protective equipment (“PPE”)
training, basic firefighting training and Organisasi
Keselamatan Kebakaran (“OKK”) training, weemphasise the importance of wearing PPE and impart
crucial fire safety knowledge to our employees,
cultivating a workforce that is prepared to handle any
emergencies that occur. We also offer annual safety
and health refresher trainings and weekly safety
toolbox briefings to drive awareness on safety issues
and hazards amongst on-site workers.
Further to this, we undertake to provide all employeeswith purposeful communication around safety
and health issues. To this end, CSHE disseminates
weekly safety newsletters through our intranet portal
and develops hazard signages and posters which
are displayed in multiple languages to ensure that
our employees – of all nationalities – are aware of
workplace hazards and our safety measures.
During FY2023, 2,374 employees underwent safety
and health training, totalling 14,039 training hours.

Emergency
Readiness

The bolster our emergency preparedness, weinvested in firefighting training and in conducting
comprehensive
emergency
evacuation
drillsin FY2023. This adds to the capabilities of ourdedicated Emergency Response Team (“ERT”),
which is responsible for leading our response to
any unforeseen incidents or emergencies that arise
across our operational sites.

Implementing Appropriate Safety and Health Controls
We have implemented a comprehensive array of control
measures and practices aimed at detecting and minimising
unsafe behaviours at the workplace. These initiatives include
the establishment of a Work Unit Management System(“WUMS”), whereby safety and health inspections are carriedout by the person-in-charge of each department, and theimplementation of detailed standard operating procedures(“SOP”) and work instructions (“WI”) that outline the steps
each employee must take to perform their tasks in a safemanner. These SOPs and WIs encompass the compulsory
use of PPE at all times during working hours.
To mitigate noise-related health risks, we carry out noise test,
provide audiometric test and hearing conservation training
and implement workplace risk controls through our hearing
conservation programme. The programme drives awarenessof the adverse effects of prolonged noise exposure and theimportance of utilising protective measures, encouraging
proactive self-care against these risks by our employees.
Cognisant of the danger posed by hazardous chemicals
and waste, we ensure that these are properly labelled andstored at designated areas, which are clearly indicated byappropriate cautionary signs. In the case of spillages orleakages, we adhere to a clear protocol, with our ERT teamprepared to respond promptly and decisively.
Adhering to Comprehensive Reporting Procedures
All work-related safety and health incidents are investigatedand reported according to standardised procedures.
Investigations are led by the relevant process owner andthe SHE Committee of the business unit affected, withappropriate corrective actions determined by following
the hierarchy of controls – which includes elimination,
substitution, engineering controls, administrative controls
and PPE. The implemented corrective actions are thenmonitored to prevent the reoccurrence of similar incidents.

SECTION 4

Safety and
Health Training
and Awareness

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All incidents are reported to CSHE on monthly basis for the department’s review. In addition, we diligently compile monthly
Safety Health Observation Reports (“SHOR”) and Safety Health Equipment Reports (“SHQR”), which analyse our Group-wide
performance against safety regulations and standards. The insights of these reports inform the ongoing improvement of ourpractices, empowering the safe operation of equipment across our departments and operational sites.
Uplifting Standards Across Our Business Partners
The safety and health track record of our business partners impacts our standing as an organisation, and we take seriously
our responsibility to ensure that our standards are mirrored across our supply chain. Our approach here includes:••••

Mandating that vendors and suppliers strictly conform to our Supplier Code of Conduct, which encompasses clear ethicalstandards and HSE protocols
Requiring vendors and suppliers to obtain the relevant work permits and carry out job hazard analysis procedures prior
to commencing work within our facilities
Providing vendors and suppliers with comprehensive safety and health SOPs that outline best practices in safety andhealthConducting detailed toolbox briefings to discuss site-specific safety and health risks and hazards

SECTION 4

Our Performance
Safety and Health Certifications

Work-related Injuries and Fatalities

As a testament to our commitment to excellence insafety and health , 96% of our plants have attained theISO 45001:2018 certification.

During FY2023, we maintained our safety record withzero fatalities amongst both employees and nonemployees.

2021
Suppliers/
Employees
Vendors/
Contractors

2022
Suppliers/
Employees
Vendors/
Contractors

2023
Suppliers/
Employees
Vendors/
Contractors

Fatalities

-

-

-

-

-

-

Fatality Rate

-

-

-

-

-

-

Percentage of employees
covered for LTIFR (%)

100

N/A

100

-

100

-

Lost Time Injury Frequency
Rate (“LTIFR”)

1.34

N/A

1.48

-

1.07

-

DOSH Work-related Recordable
Cases (Including Fatalities)

27

N/A

30

-

17

-

MOVING FORWARD
Moving forward, we will strive to further enhance our safety and health performance by strengthening our safety protocols andintroducing more effective training initiatives, while taking steps to embed a culture of safety consciousness more deeply across ouroperations. At the same time, we will remain committed to achieving and maintaining 100% compliance with ISO 45001 standards,
thus setting a benchmark for excellence in health and safety within the manufacturing industry.

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PEOPLE DEVELOPMENT
WHY IT MATTERS
The development of human capital is essential to our
success as it serves a pillar of our growth, innovation andsustainability. Through ongoing training, mentorship, andcareer advancement opportunities, we strive to foster aculture of continuous learning and improvement, ensuringthat our employees are equipped with the knowledge, skills
and capabilities needed to adapt to evolving market demands
and emerging industry trends. This, in turn, lays a strong
foundation for our long-term growth and prosperity.
OUR COMMITMENTOUR APPROACH
Fostering a Culture of Continuous Learning
To promote a strong learning culture within the Group, we have established KOSSAN Training Centre (“KTC”), an in-housetraining facility that is managed by our Group Learning & Development department. This facility serves as a dedicated hub
for employee development, offering a wide range of specialised classroom training programmes, from technical skills training
to leadership development initiatives, and providing a conducive environment for hands-on learning, interactive workshops,
knowledge sharing and other modalities of learning.
Supported by the resources of KTC, we have introduced a range of training initiatives that are tailored to meet the evolving
needs of our employees across various departments and job roles. In addition, we offer non-work-related workshops covering
topics such as mitigating unconscious biases and other issues that are vital to building responsible and sustainable work
environments.
To this end, we strive to promote fun and engaging learning culture, encouraging our employees to continuously acquire newskills and expand their knowledge while at KOSSAN.

SECTION 4

We are committed to continuously nurturing the potentialof our people through impactful training and development
initiatives, thus supporting their career aspirations andbuilding a pipeline of future leaders who are equipped to carryforth our strategies far into the future.

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Creating Value Through Social Engagement (Cont’d)Upskilling our Factory Workers
To drive continuous on-the-job learning, we provide
our factory workers with production floor management
training which includes KOSSAN On-Job-Training (“KOJT”)
and One-Point Lesson (“OPL”) modules structured aroundthe 5W1H model (what, who, when, where, why, and how).
These modules are designed to equip our employees withpractical and easy-to-understand skills and knowledge thatempower them to carry out hands-on tasks with precision.

SECTION 4

Digitalising Learning and Development
With the increasing demand for “anywhere, anytime”
access, we have taken the opportunity to extend ourtraining programmes beyond traditional mediums withthe creation of a comprehensive collection of digitallearning resources. The 270 e-Learning modules we havecreated thus far cater to the specific challenges faced by
employees in job functions across our operations, covering
a wide range of critical topics including our company
policies, environmental compliance, social compliance,
workplace safety, human rights and labour practices, andwaste management. Each module is accessible throughour eLearning Library, providing our employees with themeans to continually enhance their knowledge, skills andproficiency in their respective roles, wherever they choose
to learn.

Providing Pathways for Growth and Career Advancement
Beyond role-specific training, we drive the developmentof our people by providing them with fair and equitable
opportunities to advance in their careers. Throughtwice-yearly performance reviews, employees engage inconstructive, two-way conversations on their career growthobjectives, aiding our Senior Management in crafting
pathways for advancement that suit their skills and areasof interest.

In FY2023, 75 employees were promoted across the Group.
For more information on our employment practices andapproach to performance evaluation, please read theDiversity & Inclusivity topic on pages 81 to 88.
Fostering Talent through Academic Collaborations
In FY2023, we participated in career fairs hosted by
reputable institutions including Institut Kemahiran Mara(“IKM”) and the German-Malaysian Institute (“GMI”). These
events provided us with the invaluable opportunity toconnect with talented individuals who are seeking toembark on a career in manufacturing, enabling us to
showcase our unique company culture, strongly-heldvalues, industry-leading practices and the rewarding career
paths we offer.
In FY2023, we also invited a group of Chemical Engineering
students from Universiti Tunku Abdul Rahman (“UTAR”)
to visit our facilities. This industrial visit provided thestudents with a first-hand glimpse into our manufacturing
processes, technologies and industry practices, while
also giving them the opportunity to interact with ourexperienced professionals and gain valuable insights into
the applications of chemical engineering in a real-world
manufacturing setting.
By taking part in career fairs and partnering with leading
academic institutions, we are positioning ourselves as
an catalyst for the growth of Malaysia’s next generationof manufacturing professionals while simultaneously
strengthening our long-term talent pool, thus safeguarding
the sustainability of our business.

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Our Performance
Training Hours
Our efforts to drive continuous employee development is evidenced by the total of 122,392 man training hours
completed by our workforce during FY2023, translating to an average of 20.9 hours of training per employee.
Total and Average Training Hours
2021 > 89,806

11.5 hours

2022 > 127,736

18.9 hours

2023 > 122,392

20.9 hours

Total Training Hours by Employee Category (FY2023)

Total Training Hours by Gender and Employee
Category (FY2023)

248

Male > 72,781
59%

Upper
Management

20,97238,851

61,985

Executive

Non-executive

Female > 49,611

MiddleManagement
Total Training Hours by Theme (FY2023)
Anti-Bribery and Corruption
Environmental
Human Rights and Labour Practices
Soft Skills, Professional Certifications & Others
Quality
Technical and Functional
Safety and Health303

SeniorManagement

Total Training Hours by Type (FY2023)
903
6,170

e-Learning

On-the-Job
Training

Classroom/
Virtual

2,715

36,697

82,98011,882
9,540
4,818
75,041
14,039MOVING FORWARD
In the face of an fast-evolving industry landscape, the quality of our human capital will become more mission-critical than ever. To
stay ahead of the competition, we will continue to invest in comprehensive skills training, mentorship and leadership development
initiatives, empowering our workforce to unleash their full potential. By fostering a culture of continuous learning, we are poised tomeet the challenges of tomorrow and build a brighter future for our employees and our organisation.

SECTION 4

41%

33

Top
Management

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HEALTH & WELLNESS
WHY IT MATTERS
We view employee health and wellness as crucial tomaximising our potential as an organisation. Healthier
employees equate to safer work environments, reduced
healthcare costs and improved productivity. At the sametime, employees who feel cared for by their employers arelikely to feel a greater sense of satisfaction with their work,
resulting in greater employee loyalty and retention.
OUR COMMITMENT
As a responsible employer, we commit to safeguarding thehealth of our employees holistically across the physical, mental
and social dimensions. From health screenings to wellness
workshops, fitness activities to awareness programmes on
key health issues, our actions are geared towards fostering aculture that puts our people and their well-being first.

SECTION 4

OUR APPROACH
Providing Comprehensive Medical Support
Our commitment to employee health begins with the onsite medical support we provide to all employees. Managed
in collaboration with ASP Medical Group, KOSSAN Wellness
Centre is our in-house outpatient clinic, offering a range of on-demand medical services to address any health issues that ouremployees encounter. The centre is strategically located near all our plants for easy employee access, with shuttle services
provided to migrant workers requiring medical attention, and is also accessible by dependents of employees at a special
promotional rate with consultation fees waived.
Each of our operational site has a fully-equipped first-aid room enabling us to address urgent medical situations in a timely
manner. Furthermore, we provide our employees with optometric tests, audiometric tests and health screenings. Led byqualified healthcare professionals, these screenings provide employees with valuable insights into their current healthstatus and enable the identification of potential risk factors or underlying health concerns. This results in personalised
recommendations, enabling our employees to take proactive steps in improving their health and reducing their risk of chronic
diseases.
All employees are also availed of group personal accident and group hospitalisation and surgical insurance, providing themwith protection for any workplace accidents or healthcare issues that occur. At the same time, we aim to reduce such risks at
the source by distributing personal protective equipment (PPE) face masks and self-test kits to all employees at our operationalsites.

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Creating Value Through Social Engagement (Cont’d)Offering Diverse Health
Programmes

We strive to support our employees in balancing work duties with their family
responsibilities, cognisant of the challenges that parenthood, taking care of elders
and other duties entail.
As a basis, all employees are entitled to marriage leave and maternity/paternity
leave, with 76 qualified female and 122 eligible male employees who availed
themselves of their maternity and paternity benefits returning to work in FY2023.
In addition, we have established nursing rooms across our operational sites,
providing new mothers with a private and conducive space to express milk or
attend to their infant’s needs while at work. This provides them with the assurance
that they can return to full-time work without sacrificing the quality of care they
provide to their loved ones.
We also understand the challenges expectant mothers may face when commuting
to work, especially during the later stages of pregnancy. To alleviate their concernsand enhance their safety and convenience, we provide reserved parking spaces
located close to the entrance of our facilities, allowing them to access our premises
with ease and minimal physical exertion.
In times of loss, we extend a bereavement benefit to the immediate family membersof deceased employees as a goodwill gesture, alleviating the financial burdens they
may be facing and providing a firmer footing for them to move forward.
Digitising Healthcare Management
Our newly-launched healthcare mobile app represents the next step in our efforts
to enhance employees welfare. The innovative app functions as a central hub for all
healthcare matters, enabling employees to conveniently access their claim records
and medical histories, request guarantee letters, consult with doctors online andfind nearby panel clinics and hospitals. The app also includes a round-the-clock
helpdesk, ensuring that our valued staff members receive support whenever ahealthcare issue arises.

SECTION 4

Being a Family-friendly Organisation

We believe in prevention than cure. We
review monthly outpatient medical
records of all our subsidiaries. Carryout program and activities monthly byreferring to our employee outpatient
medical record and customary designawareness physical and webinar
program to remind and educate
our employee the importance of
healthy living habits. Through our
Workplace Health Programme, we
provide our employees with a diverse
range of tailored health initiatives
ranging from educational workshops
to fitness challenges and wellness
seminars, striving to empower themwith the knowledge, resources andsupport they need to prioritise theirhealth and thrive both personally andprofessionally.

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In FY2023, initiatives offered included:

Fix Your Posture Day @ KOSSAN Wellness Centre
Our "Fix Your Posture Day" initiative aimed to raiseawareness on the importance of proper posture for longterm spine health. Held at KOSSAN Wellness Centre, theevent engaged employees through a series of activities
and information sessions led by experienced healthcare
professionals. Employees accessed valuable insights,
practical tips and ergonomic techniques to improve their
posture and mitigate their risk of spine-related issues.

Zumba @ KOSSAN Training Centre
To encourage physical activity amongst our employees,
we held a series of Zumba sessions at KOSSAN Training
Centre. Zumba is a fun and energetic workout that caters toindividuals of all fitness levels, providing our employees withan enjoyable way to stay active, reduce stress, and improveoverall well-being that they can incorporate within their own
fitness routines. The sessions also contributed to fostering agreater sense of community and camaraderie amongst our
workforce.

SECTION 4

lowresURTI Awareness Programme
We conducted an awareness programme on Upper
Respiratory Tract Infections (“URTIs”), focusing on thecommon cold. Led by qualified healthcare professionals,
the programme educated our employees on the causes
and symptoms of URTIs, their potential health impact andpractical strategies they can adopt to prevent and manage
such infections.
Specifically, employees gained access to valuable insights
on the importance of maintaining good hygiene practices,such as regular handwashing and proper respiratory
etiquette, and learned about the significance of a healthy
lifestyle, including adequate rest, hydration and nutrition,in supporting their immune system. They also had thechance to undergo a health assessment that determined
their susceptibility to URTIs, empowering them to takeproactive steps to protect their health.

Mind Your Health Programme
Spanning four days, our comprehensive "Mind Your Health"campaign aimed to drive awareness on key topics andissues pertaining to mental and physical well-being. Throughan engaging mix of interactive workshops and wellness
challenges, as well as expert-led seminars, our employees
learned about healthy habits and wellness practices they can
incorporate into their daily routines. This was followed up by
the distribution of informational handouts and guides after
the campaign to support ongoing lifestyle changes.

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Campaign on Ergonomic Issues at the Workplace
A pivotal yet often overlooked aspect of workplace well-being is ergonomics. Recognising its importance to long-term
health, we launched the “Ergonomic Issues at Workplace: The Proactive Approach” campaign at several of our facilities
during the past year, raising awareness amongst our employees on risks associated with workplace ergonomics.
Through interactive workshops, employees were provided with practical guidance on ergonomic adjustments they
can make to their workstations to reduce strain and discomfort. Additionally, they had the opportunity to participate
in ergonomic assessments, receiving personalised recommendations they could implement to improve their work
environment.
Monthly Wellness Talks and Programmes
Through our partnership with ASP Medical Group, we organised a range of online health webinars addressing diverse
health issues including stress management, nutrition, fitness, mindfulness, work-life balance and personal development.
Through interactive presentations, Q&A sessions and hands-on demonstrations, employees gained valuable knowledge
and skills that they can put to use in improving their overall well-being and quality of life.
Webinars across the following topics were provided to our employees in FY2023:-

Prevention of Heart Disease (ASP x Prince Court
Medical Centre)
Do you need the Second Booster for Covid-19?
Gastrointestinal & Liver Diseases
Special Raya Nutrition Talk: Healthier Body, Healthier
Soul
Vertigo & Its Treatments
Prevention of Heart Disease-

Are you having Fertility Issues?
Common Digestive Disorders
Mind Your Mind: Mental Health Talk
Learn and Prevent Influenza
Is Obesity The New Normal?
The Infamous Three HighsA Deep Dive into Tuberculosis

In addition to our Workplace Health Programme, our dedicated Sports and Recreational Committee organises a range ofsports and recreational activities to improve employee well-being promote a healthy work-life balance. All activities are
fully funded by the Group.

SECTION 4

Creating Value Through Social Engagement (Cont’d)

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Our Performance
Our efforts to foster a supportive work environment are evidenced by our continued achievement of 100% return to work
rates for employees who take parental leave.
2021*

2022

2023

Male

FemaleMale

FemaleMale

FemaleTotal number of employees
entitled to parental leave

N/A

N/A

2,237

2,539

2,314

2,866

Total number of employees who
took parental leave

N/A

N/A

121

111

122

76

Total number of employees who
returned to work in the reporting
period after the end of parental
leave

N/A

N/A

121

111

122

76

Return to work and retention ratesof employees who took parental
leave

N/A

N/A

100%

100%

100%

100%

SECTION 4* No breakdown data for FY2021.

MOVING FORWARD
Moving forward, we will continue to adopt a proactive approach to employee health and well-being that extends beyond regulatorycompliance alone. Our efforts will focus on extending the reach and efficacy of our health screenings, innovating digital healthcare
solutions and providing more comprehensive support to expectant mothers and other employees facing specific challenges andcircumstances. We will also strive to enhance the resources we provide across the mental and emotional aspects of health, with theaim of supporting our employees through about any issues they may be facing, regardless of whether such issues are personally or
professionally-related.

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DIVERSITY & INCLUSIVITY
WHY IT MATTERSOUR COMMITMENT

We believe in fostering a diverse and welcoming work
environments where every individual is valued, respected
and empowered to thrive. Doing so provides us with accessto a broader range of perspectives and ideas, fuellinginnovation and enabling us to adapt to ever-changing market
realities and customer needs.

We commit to upholding inclusivity and equality by
maintaining a zero-tolerance stance against discrimination
based on race, religion, gender, age, disability, culture,social origin, cast, sexual orientation, marital status, politicalopinions, etc. across all aspects of our programmes, activities
and employment practices. Specifically, we commit tofostering inclusive workplace that empower our people toachieve their fullest professional potential.

Establishing a Comprehensive Policy Framework
We are dedicated to maintaining diverse, equitable andinclusive workplaces across the dimensions of race, religion,
gender, age, disability, culture, social origin, cast, sexual
orientation, marital status, political opinions, etc. anchoredin a culture that enshrines the fair and ethical treatment of
all employees.
The values of diversity, equity and inclusion are enshrinedin our Code of Ethics and Conduct as well as our Employee
Handbook. Meanwhile, our Prohibition of Workplace
Harassment and Discrimination Policy and Prevention of
Abuse Policy outline our commitment to maintaining work
environments that are free from harassment, discrimination
and any form of abuse or misconduct, articulating our zerotolerance stance towards behaviours that undermine thewell-being, dignity or rights of our employees, contractors
or visitors. These policies are firmly embedded within the
KOSSAN Code of Conduct (“KCEC”), serving as a clear andcomprehensive guide for all employees on acceptable
standards of behaviour. The code clearly defines what
constitutes harassment and discrimination, provides
examples of prohibited conduct and outlines the correct
procedures for reporting concerns or incidents.
Through this comprehensive, policy-based approach, we
strive to ensure that every employee understands their rights
and their responsibilities towards maintaining respectful andinclusive workplaces. This demonstrates our commitment
to fostering a culture of accountability, transparency andmutual respect across the Group.
Adopting an Objective Performance Evaluation Process
With the aim of ensuring that all our employees have an
equal opportunity to achieve their career advancement
goals, we have implemented standardised criteria for
performance evaluations across all departments and levels

within the Group. The criteria used covers various aspectsof performance including job-specific competencies,
key performance indicators (“KPIs”) and the employee’s
behavioural record, with this criteria regularly reviewed toensure alignment with our organisational goals and values. By
adopting this objective approach, we ensure consistency andtransparency in the evaluation process, minimise the risk ofbias and subjectivity, and promote a culture of fairness. This,in turn, drives greater employee satisfaction and retention.
Standing Against Harassment and Discrimination
We strictly prohibit any form of discrimination and harassment
against employees, regardless of whether such incidents
occur inside or outside company premises, and within or
beyond working hours. Our standards and expectationsin this regard are communicated via our Harrassment andDiscrimination Policy, Sexual Harassment Policy and ourgrounds and processes for disciplinary actions, which areaccessible for all employees through our Employee Handbook
and company intranet portal. In addition, harassment anddiscrimination prohibition posters are disseminated acrossthe Group to drive employee awareness.
In FY2023, we addressed and reviewed four incidents
concerning harassment and discrimination within theGroup. Two of the incidents concerned allegations of sexual
harassment and the other two concerned allegations of
discrimination. Following established protocols outlined in
our industrial relations framework, each case was subjectedto thorough investigation and management procedures
including the initiation of formal a domestic inquiry aimed
at gathering evidence and establishing facts. Identity of
employees are obscured to prevent retaliation during theprocess.
The domestic inquiry process commenced with theappointment of a dedicated panel, followed by the issuanceof notices of the inquiry to both the accused and the victim,

SECTION 4

OUR APPROACH

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Creating Value Through Social Engagement (Cont’d)thus providing both parties with the opportunity to secure representation. During the proceedings, the panel read out the
charges of the case and allowed the accused and the victim to present supporting evidence. The panel then deliberated on the
merit and credibility of the evidence presented. Ultimately, guided by the principle of fairness, the panel reached the following
conclusions:•••

One case of alleged sexual harassment resulted in the accused being found guilty, with the person’s contract immediately
terminatedFollowing thorough investigation, two cases of alleged discrimination were closed due to insufficient evidence to support
the claim. Explanation and counseling were provided to the complainants
One case of alleged sexual harassment was closed as the accused resigned during the domestic inquiry process

We implemented case-specific remediation plans to support all victims and claimants, including those whose cases had not yet
been resolved, providing regular counselling sessions to address any emotional or psychological impacts from the incident.
Superiors were advised to closely monitor their mental health and offer any further support that may be required, and thevictims and claimants were advised to lodge a police report concerning the case in question. In the aftermath of these actions,
positive improvement has been observed among the majority of the victims and claimants.
To minimise the risk of further incidents occurring, we conducted additional training sessions on abuse, improper language,and Harassment and Discrimination Policy and our stance against sexual harassment across all operational sites. 2,880
employees participated in these sessions, totalling 2,906 hours of training.

SECTION 4

Upholding Equality in Employment Practices and Remuneration
We commit to upholding equality across all our employment practices. This begins with evaluating potential employees fairly
during the recruitment process, with hiring decisions made purely based on the potential employee’s capabilities, suitability
for the role in question and level of experience. There is no difference in the salary packages we offer to male and female
employees.
Employees hired are availed of a comprehensive range of work benefits designed to support better quality of life and fulfil
their diverse needs. From competitive compensation packages and healthcare coverage to professional development
opportunities, we are committed to ensuring that our team members feel valued, supported and empowered to thrive both
personally and professionally during their time with the Group.
All employees are compensated at a level not lower than the minimum wage rate established by the local labour laws. Theirwage, benefits and statutory deductions are detailed and itemised clearly within their payslip, and their overall remuneration
package is clearly outlined in their native language within their employment contract, with the package – and their employment– subject to mutual agreement between themselves and the Group. Further to this, we promote pay transparency by disclosing
the salary range of each job grade through our intranet portal.
In order to maintain a competitive remuneration structure, we regularly review our remuneration packages against local
guidelines and industry benchmarks.
We recognise and reward the contributions of our permanent employees through performance-based bonuses andincrements, with these rewards based on their achievement of previously assigned KPIs. In evaluating employee’s
performance against their KPIs, we carry out regular performance reviews of permanent employees which include employee
self-assessments and subsequent evaluations by their direct superiors and Senior Management. This approach ensuresthat bonuses and increments are allocated in a fair, transparent and meritocratic manner, incentivising high performanceand encouraging continuous improvement.
In addition to our competitive remuneration and rewards, we provide our permanent employees with a range of careerdevelopment opportunities, irrespective of gender.

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83

Creating Value Through Social Engagement (Cont’d)Further to these practices, we strictly adhere to ethical labour practices and refrain from undertaking salary deductions,withholdings or monetary penalties for any form of misconduct. In addition, employees with a monthly salary of below
RM4,000 who work overtime or exceed normal working hours are provided with overtime pay in accordance with Malaysianlabour laws, while employees working on rest days are granted replacement leave to maintain work-life balance. In FY2023,
75 employees were promoted within the Group.

Board Diversity Breakdown
Board Diversity by Gender2021

8 (89%)

1 (11%)

2022

7 (78%)

2 (22%)

2023

7 (78%)

2 (22%)

Male
FemaleBoard Diversity by Age Generation
2021

1 (11%)

5 (56%)

3 (33%)

2022

1 (11%)

5 (56%)

3 (33%)

2023

1 (11%)

5 (56%)

3 (33%)

Generation Y, born 1981-1995
Generation X, born 1961-1980
Baby Boomers, born 1945-1960

2021 1 (11%)

SECTION 4

Board Diversity by Ethnicity
8 (89%)

2022 1 (11%)

7 (78%)

1 (11%)

2023 1 (11%)

7 (78%)

1 (11%)

IndianChineseMalay

Workforce Profile
Total Employees
2021

7,818

2022

6,758

2023

5,848

Employee Breakdown by Gender2021

6,297 (81%)

2022
2023

5,345 (79%)
4,527 (77%)

1,321 (23%)

1,413 (21%)

1,521 (19%)

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CREATING SUSTAINABLE VALUE

Creating Value Through Social Engagement (Cont’d)

Leadership Breakdown by Gender (Manager-Level and Above)
2021

257 (67%)2022

126 (33%)

2023

Male

133 (34%)

264 (66%)

Female127 (36%)223 (64%)

Employee Breakdown by Age Group
2021
2022
2023

2,394 (31%)

4,452 (57%) 950 (12%)

22 (<1%)

3,819 (57%) 842 (12%) 22 (<1%)

2,075 (31%)

3,213 (55%) 696 (12%) 19 (<1%)

1,920 (33%)

Generation Z,
born after 1995
Generation Y,
born 1981-1995
Generation X,
born 1961-1980
Baby Boomers,born 1945-1960

Employee Breakdown by Ethnicity Local only
2021

2,516 (67%)

2022

2,257 (66%)

SECTION 4

2023

1,970 (65%)

587 (16%) 24 (10%)

653 (17%)622 (18%)535 (18%)

Chinese510 (15%) 25 (10%)

490 (16%)

Malay

IndianOthers27 (10%)

Employee Breakdown by Job Category
4 (<1%)
10 (<1%)5 (<1%)

6 (<1%)
24 (<1%)11 (<1%)10 (<1%)25 (<1%)345 (4%)24 (<1%)311 (5%)355 (5%)557 (10%)635 (9%)671 (9%)

2021

2023

2022
4,941 (84%)

6,764 (87%)

5,726 (85%)

Top Management

Senior Management

Upper Management

Middle Management

Executive

Non-Executive

Note: 100% of our Top Management and Senior Management team members are Malaysian.

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Creating Value Through Social Engagement (Cont’d)

Employee Breakdown by Nationality Group
2021

3,780 (48%)

2022

4,038 (52%)

3,414 (51%)

2023

Malaysian

3,344 (49%)

3,022 (52%)

Non-Malaysian

2,826 (48%)

Employee Breakdown by Employment Type
Permanent Employees by Gender2022

2,071 (61%)

2023

1,754 (59%)

1,307 (39%)

Male
Female1,214 (41%)

Temporary Employees by Gender3,274 (97%)

2023

2,773 (96%)

107 (4%)106 (3%)

Male
FemalePermanent Employees by Nationality Group
2022

3,378 (100%)

2023

Malaysian
Non-Malaysian

2,968 (100%)

Temporary Employees by Nationality Group2022

36 (1%)

2023

54 (2%)*

No breakdown data for FY2021.

3,344 (99%)
2,826 (98%)

Malaysian
Non-Malaysian

SECTION 4

2022

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Creating Value Through Social Engagement (Cont’d)Profile of New Hires
New Hires
2021

1,886

2022

1,692

2023

1,326

New Hires by Age Group
2021

1,127 (60%)

2022

679 (36%)

1,104 (65%)

2023

840 (63%)517 (31%)451 (34%)

1 (<1%)

79 (4%)
4 (<1%)

Generation Z, born after 1995
Generation Y, born 1981-1995
Generation X, born 1961-1980

67 (4%)
1 (<1%)

Baby Boomers, born 1945-1960

34 (3%)New Hires by Gender2021

1,365 (72%)

SECTION 4

2022

1,005 (59%)

2023

915 (69%)521 (28%)Male

687 (41%)

Female411 (31%)

New Hires by Nationality Group
2021

1,708 (91%) 178 (9%)

2022

1,655 (98%)

2023

1,012 (76%)

37 (2%)

Malaysian
Non-Malaysian314 (24%)

New Hires by Job Category
2021
2022
2023

1,654 (88%)

232 (12%)498 (29%)129 (10%)

1,194 (71%)
1,197 (90%)

Executive and Above
Non-Executive

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Creating Value Through Social Engagement (Cont’d)

Employee Attrition
Attrition Rate
2021

31%
39%

2022
2023

35%

Attrition by Job Category
9%

10%

2021

12%

2023

2022

91%

90%

88%

Executive and above

Non-Executive

18%

29%

2021

22%

2023

2022

82%

SECTION 4

Attrition by Gender

71%

78%

Male

FemaleAttrition by Age Group<1%<1% 6%

7%

51%

42%

2021

42%

<1%

47%

2023

2022

52%

8%

45%

Baby Boomers, born 1945-1960

Generation X, born 1961-1980

Generation Y, born 1981-1995

Generation Z, after 1995

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Creating Value Through Social Engagement (Cont’d)

Attrition by Nationality Group

28%

37%

45%

2021
55%

2023

2022

72%

Non-Malaysian

63%

Malaysian

Our Performance

SECTION 4

Ratio of Basic Salary and Remuneration of Women to Men
Demonstrating our commitment to pay equality, we maintained a consistent 1:1 ratio in basic salary andremuneration for male and female employees at all job grades throughout FY2023. Additionally, the ratio of
our standard entry wage by gender in relation to the local minimum wage was maintained at a balanced 1:1.
Employee Performance and Career Development Reviews
During the year, 100% of our confirmed permanent employees underwent regular performance and careerdevelopment reviews, resulting in 75 employees being promoted.

MOVING FORWARD
As a socially responsible organisation, we will continue to prioritise the advancement of diversity, inclusion and equality within all
our workplaces. Building upon our established Prohibition of Workplace Harassment and Discrimination Policy, we will also invest ininitiatives geared towards ensuring that all employees feel safe, respected and valued.

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Creating Value Through Social Engagement (Cont’d)

COMMUNITY WELFARE

We believe that the value we create as a business should contribute to the sustainable development of society. In doing so,
we not only fulfill our mandate as a responsible corporate citizen but build stronger relationships with local communities
and our stakeholders at large, contributing to our reputation and long-term business success.
OUR COMMITMENT
We commit to advancing community development by:• Creating equal education opportunities, particularly within underserved communities• Enhancing the welfare of local community members, with a focus on underprivileged or neglected children, seniorcitizens, vulnerable individuals and people with disabilities• Supporting environmental conservation and preservation• Supporting the development of the arts and culture
OUR APPROACH
Our community outreach efforts are primarily channelled through our foundation, Yayasan Kossan (“YK”). Establishedwith the objective of funding and supporting philanthropic activities, YK focuses on four pillars: Medical, Arts and culture,
Education and Environment.

EDUCATION
Guided by its vision of “Making Life Better for All”, YK’s priority is to provide direct aid to the needy and the underprivileged
within local communities.

SECTION 4

WHY IT MATTERS

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Creating Value Through Social Engagement (Cont’d)Highlights of our Efforts in FY2023
During FY2023, YK conducted a range of initiatives across its four pillars, including:Blood donation campaigns
In collaboration with the Pusat Darah Negara (“PDN”) blood
donation drive, YK collected a total of 202 packs of blood
across two donation campaigns, with each pack of blood is
estimated to save three lives.

One-off medical donations
YK distributed donations of RM500 each to 16 beneficiaries,
with the donations contributing to improving their quality oflife and mobility.

SECTION 4

YK volunteers and nurses from PDN at the blood donation
campaign held on 15 November 2023.

Donation to Love & Care Charitable Association Selangor
The Love & Care Charitable Association Selangor is a non-governmental organization (“NGO”) that focuses on providing foodassistance to needy communities in Klang. To support their efforts, YK made a donation of RM50,000 towards purchasing a
Convotherm Combi Oven that will enhance the NGO’s efficiency in prepararing food for their beneficiaries.

YK Health & Safety Carnival 2023
YK disseminated valuable tips to enhance everyday health and safety through this annual two-day event, benefitting 827 local
community members from Klang, Selangor.

Zumba session (left) and group photo (right) at the Health & Safety Carnival 2023.

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Creating Value Through Social Engagement (Cont’d)Highlights of our Efforts in FY2023 (Cont'd)

Festive giveaways
YK brought festive cheer to welfare homes for senior citizens, children and people with disabilities during
Chinese New Year, Hari Raya, Deepavali and Christmas, reaching more than 700 beneficiaries.

Christmas Giveaway at Grace Home for the Destitute.

“Let's Read” by Sin Chew Daily
YK continued to support Sin Chew Daily’s efforts to nurture a culture of reading amongst young people bysponsoring the purchase of 26 sets of the newspaper for 166 days to encourage reading amongst schoolchildren.
EDUCATION

Group photo at the launching event at SJKC Pui Ying.

Media extract from Sin Chew Daily on the initiative,
dated 12/4/2023.

SECTION 4Hari Raya Giveaway 2023 at SK Sungai Kapar Indah.

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Creating Value Through Social Engagement (Cont’d)Highlights of our Efforts in FY2023 (Cont'd)

YK Bright Classroom 2023
YK refurbished a classroom at SK (2) Tengku Bendahara Azman, benefiting 181 schoolchildren.

YK Kids Get Ready to School 2023
YK provided basic educational necessities to 450 children from 16 schools, easing the financial burden facedby their families.

Group photo with students from SJK (T) Vallambrosa (left) and SK Kampung Jawa 2 (right) under the YK Kids Get Ready to School
programme.

SECTION 4

YK Digital Aid
Through
thisnewly-launchedprogramme, YK provided refurbisheddigital devices to those in need,including schools, orphanages andunderprivileged families, enhancing
educational outcomes through thepower of technology.
Launching event at SK Meru Jalan Tap.

Beach cleaning, Coastal clean-up, and Plant a Tree activities
A total of 99 volunteers participated in YK’s environmental programmes in FY2023, contributing to thepreservation of vital ecosystems and natural environments.

Beach cleaning at Pantai Remis, Jeram.
Our volunteers managed to collect a
total of 101.41kg of rubbish, equivalent
to the weight of 10 car tires.

Coastal cleanup at Pulau Perhentian
Kecil, Terengganu in conjunction with
the International Coastal Cleanup Day.
Volunteers (including members of ourteam) collected a total of 172kg of
rubbish from the land and 37.5kg ofdebris through diving activities.

YK volunteers planted a total of 130“Bakau Kurap” mangrove trees at
Taman Rekreasi Paya Bakau Sijangkang,
contributing to biodiversity preservationand climate change mitigation.

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Creating Value Through Social Engagement (Cont’d)

Our Performance
In FY2023, YK conducted a total of 50 events and invested more than RM575,000 impacting the lives of 21,368 beneficiaries.
The breakdown of YK's investment for FY2023 is as follow:

RM

10,285.83

RM

11,889.05

MEDICALEDUCATION

RM

355,937.78

RM

RM

RM

ENVIRONMENT

ART & CULTURE

OPERATION COST

24,904.09

WELFARE

50,232.99

122,183.20

TREES
PLANTEDVOLUNTEERSSCHOOLSSERVEDBENEFICIARIESASSOCIATIONS

1,637

3,080

105

129,392

82

Further details about YK’s projects, events and programs can be found on its website at https://yayasankossan.com.my/.

MOVING FORWARD
Through YK, we will continue to contribute to the sustainable development of local communities through impactful initiatives thatmeet the needs of the underserved and underprivileged. Guided by our responsibility to be a pillar for society, our efforts will befocusing on improving the efficacy of our existing programmes and establishing partnerships that enable us to extend our reachfurther.

SECTION 4

Contribution to date:

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Statement of Independent Assurance

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SECTION 4

Statement of Independent Assurance (Cont’d)96

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Statement of Independent Assurance (Cont’d)

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Performance Data

Indicator
Emissions
GHG Emissions
Scope 1Company Stationary Combustion (Glove Division)Company Mobile Combustion (Glove Division)Company Stationary Combustion (TRP Division)Company Mobile Combustion (TRP Division)

Total Scope 1

Unit of Measurement

2021

2022

2023

tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O
tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O
tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O
tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O
tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O

382,028.27
381,634.12
7.19
0.71
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
382,028.27
381,634.12
7.19
0.71

292,572.26
292,271.70
5.51
0.55
474.36471.630.02
0.10
2,329.61
2,327.20
0.04
0.00
171.17170.650.01
0.00
295,547.40
295,241.18
5.58
0.66

209,814.46
209,577.14
3.95
0.40
399.92397.880.01
0.01
2,363.04
2,360.36
0.04
0.00
165.17164.790.00
0.00
212,742.59
212,500.17
4.00
0.41

tonnes CO2e
tonnes CO2
tonnes CO2e
tonnes CO2
tonnes CO2e
tonnes CO2

130,997.74
130,997.74
N/A
N/A
130,997.74
130,997.74

115,116.57
115,116.57
10,903.68
10,903.68
126,020.25
126,020.25

78,013.34*
78,013.34
8,197.16*
8,197.16
86,210.50*
86,210.50

tonnes CO2e
tonnes CO2e
tonnes CO2e
tonnes CO2e
tonnes CO2e
tonnes CO2
tonnes CH4
tonnes N2O
tonnes CO2e
tonnes CO2e/1000 pcs gloves
tonnes CO2e/1000 kg rubbercompounded

N/A
N/A
N/A
N/A
513,026.01
512,631.86
7.19
0.71
513,026.01
0.024

28.45
5,222.04
N/A
5,250.49
421,567.65
421,261.43
5.58
0.66
426,818.14
0.026

70.00
3,408.66
1,826.32
5,304.98
298,953.09
298,710.67
4.00
0.41
304,258.07
0.023

N/A

2.74

2.46

tonnes CO2e
tonnes CO2
tonnes CO2e
tonnes CO2

2,324.63
2,324.63
2,324.63
2,324.63

2,148.77
2,148.77
2,148.77
2,148.77

3,091.26
3,091.26
3,091.26
3,091.26

tonnes CO2e
tonnes CO2
tonnes CO2e
tonnes CO2e

N/A
N/A
N/A
2,324.63

64.45
64.45
64.45
2,213.22

223.03223.03223.03
3,314.29

Purchased Electricity (Glove Division)
Purchased Electricity (TRP Division)
Total Scope 2
Scope 3Business Travel
Employee Commuting
Waste Generated in Operations
Total Scope 3
Total GHG Emissions (Scope 1 and 2)
Total GHG Emissions (Scope 1, 2 and 3)
Scope 1 & 2 Intensity (Gloves Division)
Scope 1 & 2 Intensity (TRP Division)
GHG Emissions Avoidance
Scope 2
Renewable Energy
Scope 2 Avoidance Subtotal
Carbon Absorption
Number of Trees Planted in StayLow Program
Total Emissions Trees Planted Absorb
Total GHG Emissions Avoidance

SECTION 4

Scope 2

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Performance Data (Cont’d)

Indicator
EnergyPurchased Electricity Consumption
Gloves Division
TRP Division
Total Purchased Electricity Consumption
Electricity Consumption Intensity (Gloves Division)
Electricity Consumption Intensity (TRP Division)

Unit of Measurement

kWh
GJ
kWh
GJ
kWh
GJ
kWh/1000 pcs gloves
kWh/1000 kg rubbercompounded

2021

167,945,825.00
604,604.97
N/A
N/A
167,945,825.00
604,604.97
7.78

2022

2023

147,585,356.12 102,919,973.99*
531,307.28
370,511.91*
13,979,073.41 10,814,188.86*
50,324.66
38,931.08*
161,564,429.53 113,734,162.85*
581,631.95
409,442.99*
9.40
8.23

N/A

2,860.03

2,476.84

3,066,789.00
11,040.44
2.61
N/A
N/A
N/A
3,066,789.00
11,040.44
2.61

2,834,791.00
10,205.25
3.16
2,834,791.00
10,205.25
3.16

3,849,183.40*
13,857.06*
3.82
229,000.00*
824.40*0.48
4,078,183.40*
14,681.46*
4.30

kWh/1000 pcs gloves

0.14

0.18

0.31

kWh/1000 kg rubbercompounded

N/A

-

52.45

Renewable Energy Consumption - Solar Energy
Electric Generated (Gloves Division)
Installed Capacity (Gloves Division)
Electric Generated (TRP Division)
Installed Capacity (TRP Division)

SECTION 4

Total Renewable Energy Consumption - Solar Energy
Installed Capacity
Renewable Energy Consumption Intensity (Gloves
Division)
Renewable Energy Consumption Intensity (TRP
Division)
Total Electricity Consumption
Gloves Division
TRP Division
Total Electricity Consumption% of Renewable Energy Consumption out of Total
Electricity Consumption
Fuel Consumption
DieselGloves Division
TRP Division
Total Diesel Consumption
Diesel Consumption Intensity (Gloves Division)
Diesel Consumption Intensity (TRP Division)

kWh
GJ
MWp
kWh
GJ
MWp
kWh
GJ
MWp

kWh
GJ
kWh
GJ
kWh
GJ

171,012,614.00
615,645.41
N/A
N/A
171,012,614.00
615,645.41

150,420,147.12 106,769,157.39*
541,512.53
384,368.97*
13,979,073.41 11,043,188.86*
50,324.66
39,755.48*
164,399,220.53 117,812,346.25*
591,837.19
424,124.45*

%

1.79

1.72

3.46

litre
GJ
litre
GJ
litre
GJ

N/A
N/A
N/A
N/A
N/A
N/A
N/A

159,591.24
6,110.75
44,127.96
1,689.66
203,719.20
7,800.41
0.01

146,400.36
5,605.67
45,774.76
1,752.72
192,175.12
7,358.39
0.01

N/A

9.03

10.48

N/A
N/A
N/A
N/A
N/A
N/A
N/A

29,673.66
994.2523,013.58
771.0952,687.24
1,765.34
0.002

14,576.39
488.4018,335.16
614.3432,911.55
1,102.73
0.001

N/A

4.71

4.20

litre/1000 pcs gloves
litre/1000 kg rubbercompounded

Gasoline
Gloves Division
TRP Division
Total Gasoline Consumption
Gasoline Consumption Intensity (Gloves Division)
Gasoline Consumption Intensity (TRP Division)

litre
GJ
litre
GJ
litre
GJ
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Indicator
EnergyLiquefied Petroleum Gas (LPG)
Gloves Division
TRP Division
Total Liquefied Petroleum Gas (LPG) Consumption

Unit of Measurement

2021

2022

2023

MMBtu
GJ
MMBtu
GJ
MMBtu
GJ

N/A
N/A
N/A
N/A
N/A
N/A

-

-

N/A

-

-

N/A

-

-

7,192,501.27
7,588,808.09
N/A
N/A
7,192,501.27
7,588,808.09
0.33

5,673,536.40
5,986,148.26
46,240.03
48,787.86
5,719,776.43
6,034,936.11
0.36

3,949,260.71*
4,166,864.98*
44,459.40*
46,909.11*
3,993,720.11*
4,213,774.09*
0.32

N/A

9.46

10.18

11,040.44
8,193,413.06
8,204,453.50

10,205.25
6,626,133.80
6,636,399.05

14,681.46*
4,631,678.19
4,646,359.65

MT
MT
MT

N/A
N/A
N/A

2,941.60
565.56
3,507.16

3,200.28
825.984,026.26

MT
MT

N/A
N/A

6,765.34
238.87

5,491.77
5.03

MT

N/A

7,004.21

5,496.80

MTMT
MT
KG/1000 pcs gloves
KG/1000 kg rubbercompounded

10,692.75
N/A
10,692.75
0.50

9,706.94
804.43
10,511.37
0.62

8,692.05
831.01
9,523.06
0.70

N/A

164.58190.33

MT
MT
MT
KG/1000 pcs gloves
KG/1000 kg rubbercompounded

7,598.22
N/A
7,598.22
0.35

6,722.72
7.22
6,729.94
0.43

5,036.93
19.89
5,056.82
0.40

N/A

1.48

4.56

Liquefied Petroleum Gas (LPG) Consumption Intensity
MMBtu/1000 pcs gloves(Gloves Intensity)
Liquefied Petroleum Gas (LPG) Consumption Intensity MMBtu/1000 kg rubber(TRP Intensity)
compounded
Natural Gas
MMBtu
Gloves Division
GJ
MMBtu
TRP Division
GJ
MMBtu
Total Natural Gas Consumption
GJ
Natural Gas Consumption Intensity (Gloves Division)
MMBtu/1000 pcs gloves
MMBtu/1000 kg rubber
Natural Gas Consumption Intensity (TRP Division)
compounded
Total Energy Consumption
Total Renewable Energy
GJ
Total Non-Renewable
GJ
Total Energy Consumption
GJ
Waste
Waste Disposed
Gloves Division
TRP Division
Total Waste Disposed
Waste Reused / Recycled / Other recovery process
Gloves Division
TRP Division
Total Waste Reused / Recycled / Other recovery
process
Waste Generated
Gloves Division
TRP Division
Total Waste Generated
Overall Waste Generated Intensity (Gloves Division)
Overall Waste Generated Intensity (TRP Division)
Scheduled Waste
Gloves Division
TRP Division
Total Scheduled Waste Generated
Schedule Waste Generated Intensity (Gloves Division)
Schedule Waste Generated Intensity (TRP Division)

SECTION 4

Performance Data (Cont’d)

100

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Performance Data (Cont’d)

Indicator
Waste
Non-Scheduled Waste
Gloves Division
TRP Division
Total Non-Scheduled Waste Generated
Non-schedule Waste Generated Intensity (Gloves
Division)
Non-schedule Waste Generated Intensity (TRP
Division)
Raw Materials
Gloves Division
Latex Consumption
Nitrile Consumption
Total Gloves Division Raw Materials Consumption
Latex Consumption Intensity
Nitrile Consumption Intensity
TRP Division
Natural Rubber
Synthetic Rubber
Other Rubber Compound
Metal Components
Total TRP Division Raw Materials Consumption

SECTION 4

NR & Synthetic Rubber Consumption Intensity
Total Rubber Consumption Intensity
Metal Components Consumption Intensity
Water
Municipal Water Withdrawal
Gloves Division
TRP Division
Total Municipal Water
Reclaimed Water Withdrawal
Gloves Division
TRP Division
Total External Waste Water
Water Withdrawal
Gloves Division
TRP Division
Total Water Withdrawal
Water Withdrawal Intensity (Gloves Division)
Water Withdrawal Intensity (TRP Division)
Treated Water Discharged (By destination)
Gloves Division
Surface water
Subsurface / well
Beneficial / other use
Ocean
Off-site water treatment
Total Treated Water Discharged (Glove Division)
Water Discharged Intensity (Gloves Division)

Unit of Measurement

2021

2022

2023

3,094.53
N/A
3,094.53

2,984.22
797.21
3,781.43

3,655.12
811.12
4,466.24

KG/1000 pcs gloves

0.14

0.19

0.29

KG/1000 kg rubbercompounded

N/A

163.10185.78

MTMT
MT
MT/1000 pcs gloves
MT/1000 pcs gloves

33,242.95
141,326.74
174,569.69
0.010
0.008

30,263.75
97,389.55
127,653.30
0.010
0.008

35,032.00
113,118.00
148,150.00
0.014
0.011

KG
KG
KG
KG
KG
KG/1000 kg rubbercompounded
KG/1000 kg rubbercompounded
KG/1000 kg rubbercompounded

N/A
N/A
N/A
N/A
N/A

1,154,300.00
922,492.00
384,948.00
3,988,365.31
6,450,105.31

1,150,130.00
866,452.00
130,499.00
3,391,307.01
5,538,388.01

N/A

424.90461.87

N/A

503.66491.76

N/A

816.00776.73

m3
m3
m3

6,917,521.00
N/A
6,917,521.00

6,389,017.00
78,851.28
6,467,868.28

4,758,411.43
70,896.12
4,829,307.55

m3
m3
m3

710,266.72
N/A
710,266.72

1,139,000.71
1,139,000.71

752,249.00
752,249.00

m3
m3
m3
m3/1000 pcs gloves
m3/1000 kg rubbercompounded

7,627,787.72
N/A
7,627,787.72
0.35

7,528,017.71
78,851.28
7,606,868.99
0.48

5,510,660.43
70,896.12
5,581,556.55
0.44

N/A

16.13

16.24

m3
m3
m3
m3
m3
m3
m3/1000 pcs gloves

5,041,067.97
5,041,067.97
0.23

4,254,787.46
4,254,787.46
0.27

3,442,221.36
3,442,221.36
0.28

MT
MT
MT

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

101

Indicator
Water
TRP Division
Surface water
Subsurface / well
Beneficial / other use
Ocean
Off-site water treatment
Total Treated Water Discharged (TRP Division)
Water Discharged Intensity (TRP Division)
Total Treated Water Discharged
Treated Water Discharged (By level of treatment)
Gloves Division
Discharge to a third party without treatment
Discharge to the natural environment without
treatment
Primary Treatment only
Secondary Treatment
Tertiary Treatment
Total Treated Water Discharged
Water Discharged Intensity (Gloves Division)
TRP Division
Discharge to a third party without treatment
Discharge to the natural environment without
treatment
Primary Treatment only
Secondary Treatment
Tertiary Treatment
Total Treated Water Discharged
Water Discharged Intensity (TRP Division)
Total Treated Water Discharged
Raw Water Consumption
Gloves Division
TRP Division
Total Water Consumption
Water Consumption Intensity (Gloves Division)
Water Consumption Intensity (TRP Division)
Effluents
Temperature (Average)
Compliance limit
Gloves Division
TRP Division
Quality of water discharged (BOD) - Biochemical
Oxygen Demand (Average)
Compliance limit
Gloves Division
TRP Division
Quality of water discharged (COD) - Chemical Oxygen
Demand (Average)
Compliance limit
Gloves Division
TRP Division

Unit of Measurement

2021

2022

2023

m3
m3
m3
m3
m3
m3
m3/1000 kg rubbercompounded
m3

N/A
N/A
N/A
N/A
N/A
N/A

-

-

N/A

-

-

5,041,067.97

4,254,787.46

3,442,221.36

m3

-

-

-

m3

-

-

-

4,654,634.61
386,433.36
5,041,067.97

3,658,074.96
596,712.50
4,254,787.46

3,095,560.56
346,660.80
3,442,221.36

0.23

0.27

0.28

m3

N/A

-

-

m

N/A

-

-

m
m3
m3
m3
m3/1000 kg rubbercompounded
m3

N/A
N/A
N/A
N/A

-

-

N/A

-

-

5,041,067.97

4,254,787.46

3,442,221.36

2,586,719.75
N/A
2,586,719.75
0.12

3,273,230.25
78,851.28
3,352,081.53
0.21

2,068,439.07
70,896.12
2,139,335.19
0.17

N/A

16.13

16.24

Max
40

Min
Max
40
32.64
-

Min
Max
40
32.43
-

Max

Min

Min

m3
m3
m3
m3
m3/1000 pcs gloves
compounded

3
3

m3
m3
m3
m3/1000 pcs gloves
m3/1000 kg rubbercompounded

degree celcius
degree celcius
degree celcius

Min
N/A
N/A
Min

mg/L
mg/L
mg/L

20.00
50.00
29.63
N/A
Min

mg/L
mg/L
mg/L

Max

80.00 200.00
135.64
N/A

Max

20.00
50.00
23.05
Min

Max

80.00 200.00
114.07
-

Max

20.00
50.00
19.63
Min

Max

80.00 200.00
97.50-

SECTION 4

Performance Data (Cont’d)102

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Performance Data (Cont’d)

Indicator
Water
Effluents
Quality of water discharged (TSS) - Total Suspended
Solids (Average)
Compliance limit
Gloves Division
TRP Division

SECTION 4

Board Diversity
GenderMale
FemaleTotal
Age Generation
Generation Z, Born After 1995
Generation Y, Born 1981-1995
Generation X, Born 1961-1980
Baby Boomers, Born 1945-1960
Total
Ethnicity (Local Only)
Malay
ChineseIndianOthers
Total

Unit of Measurement

2021

Min
mg/L
mg/L
mg/L

Max

50.00 100.00
26.85
N/A

2022

Min

Max

50.00 100.00
18.31
-

2023

Min

Max

50.00 100.00
16.86-

Headcount
Headcount
Headcount
Headcount

No.
8
1
9

%
89%
11%
100%

No.
7
2
9

%
78%
22%
100%

No.
7
2
9

%
78%
22%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

0
1
5
3
9

0%
11%
56%
33%
100%

0
1
5
3
9

0%
11%
56%
33%
100%

0
1
5
3
9

0%
11%
56%
33%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

1
8
9

11%
89%
0%
0%
100%

1
7
1
9

11%
78%
11%
0%
100%

1
7
1
9

11%
78%
11%
0%
100%

7,818

-

6,758

-

5,848

-

257
126
383

67%
33%
100%

264
133
397

66%
34%
100%

223
127
350

64%
36%
100%

10
4
24
345
671
6,764
7,818

<1%
<1%
<1%
4%
9%
87%
100%

11
6
25
355
635
5,726
6,758

<1%
<1%
<1%
5%
9%
85%
100%

10
5
24
311
557
4,941
5,848

<1%
<1%
<1%
5%
10%
84%
100%

6,297
1,521
7,818

81%
19%
100%

5,345
1,413
6,758

79%
21%
100%

4,527
1,321
5,848

77%
23%
100%

2,394
4,452
950
22
7,818

31%
57%
12%
<1%
100%

2,075
3,819
842
22
6,758

31%
57%
12%
<1%
100%

1,920
3,213
696
19
5,848

33%
55%
12%
<1%
100%

Workforce Profile
Employee Count
Total
Headcount
Leadership Breakdown by Gender (Manager-Level & Above)
Male
Headcount
FemaleHeadcount
Total
Headcount
Employee Diversity Profile
Job Category
Top Management
Headcount
Senior Management
Headcount
Upper Management
Headcount
Middle Management
Headcount
Executive
Headcount
Non-Executive
Headcount
Total
Headcount
GenderMale
Headcount
FemaleHeadcount
Total
Headcount
Age Generation
Generation Z, Born After 1995
Headcount
Generation Y, Born 1981-1995
Headcount
Generation X, Born 1961-1980
Headcount
Baby Boomers, Born 1945-1960
Headcount
Total
HeadcountKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

103

Performance Data (Cont’d)Unit of Measurement

2021

2022

2023

Headcount
Headcount
Headcount

No.
3,780
4,038
7,818

%
48%
52%
100%

No.
3,414
3,344
6,758

%
51%
49%
100%

No.
3,022
2,826
5,848

%
52%
48%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

2,516
653
587
24
3,780

67%
17%
16%
1%
100%

2,257
622
510
25
3,414

66%
18%
15%
1%
100%

1,970
535
490
27
3,022

65%
18%
16%
1%
100%

Headcount
Headcount
Headcount
Headcount
Headcount
Headcount
Headcount

N/A
N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A

1
2
133
287
990
1,413

0%
<1%
<1%
9%
20%
70%
100%

1
2
124
277
917
1,321

0%
<1%
<1%
9%
21%
69%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A

2,071
1,307
3,274
106
6,758

31%
19%
48%
2%
100%

1,754
1,214
2,773
107
5,848

30%
21%
47%
2%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A

3,378
36
3,344
6,758

50%
0%
1%
49%
100%

2,968
54
2,826
5,848

51%
0%
1%
48%
100%

Headcount

1,886

24%

1,692

25%

1,326

23%

Headcount
Headcount
Headcount
Headcount
Headcount
Headcount
Headcount

2
4
67
159
1,654
1,886

0%
<1%
<1%
4%
8%
88%
100%

2
5
66
165
260
1,194
1,692

<1%
<1%
4%
10%
15%
71%
100%

1
5
24
99
1,197
1,326

<1%
0%
<1%
2%
7%
90%
100%

Headcount
Headcount
Headcount

1,365
521
1,886

72%
28%
100%

1,005
687
1,692

59%
41%
100%

915
411
1,326

69%
31%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

1,127
679
79
1
1,886

60%
36%
4%
0%
100%

1,104
517
67
4
1,692

65%
31%
4%
0%
100%

840
451
34
1
1,326

63%
34%
3%
0%
100%

New Hire Profile
New Hire
Total
New Hire Diversity
Job Category
Top Management
Senior Management
Upper Management
Middle Management
Executive
Non-Executive
Total
GenderMale
FemaleTotal
Age Generation
Generation Z, Born After 1995
Generation Y, Born 1981-1995
Generation X, Born 1961-1980
Baby Boomers, Born 1945-1960
Total

SECTION 4

Indicator
Workforce Profile
Nationality
Malaysian
Non-Malaysian
Total
Ethnicity (Local Only)
Malay
ChineseIndianOthers
Total
Women by Job Category
Top Management
Senior Management
Upper Management
Middle Management
Executive
Non-Executive
Total
Employee Diversity by Employment Type
GenderMale
Permanent
FemaleMale
TemporaryFemaleTotal
Nationality
Malaysian
Permanent
Non-Malaysian
MalaysianTemporary
Non-Malaysian
Total

104

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Performance Data (Cont’d)

SECTION 4

Indicator
New Hire Profile
Nationality
Malaysian
Non-Malaysian
Total
Ethnicity (Local Only)
Malay
ChineseIndianOthers
Total
Employee Attrition
Employee Count
Attrition Rate
Job Category
Top Management
Senior Management
Upper Management
Middle Management
Executive
Non-Executive
Total
GenderMale
FemaleTotal
Age Generation
Generation Z, Born After 1995
Generation Y, Born 1981-1995
Generation X, Born 1961-1980
Baby Boomers, Born 1945-1960
Total
Nationality
Malaysian
Non-Malaysian
Total

Unit of Measurement

2021

2022

2023

Headcount
Headcount
Headcount

No.
1,708
178
1,886

%
91%
9%
100%

No.
1,655
37
1,692

%
98%
2%
100%

No.
1,012
314
1,326

%
76%
24%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A

1,186
120
335
14
1,655

72%
7%
20%
1%
100%

653
59
288
12
1,012

65%
6%
28%
1%
100%

Headcount
Headcount
Headcount
Headcount
Headcount
Headcount
Headcount
Headcount- 31.20%

2,820 38.90%

2,218 35.24%

0%
0%
<1%
2%
7%
90%
100%

3
1
8
77
182
1,947
2,218

<1%
<1%
<1%
3%
8%
88%
100%

-

9%

-

91%
100%

6
65
202
2,547
2,820

Headcount
Headcount
Headcount

-

82%
18%
100%

2,007
813
2,820

71%
29%
100%

1,719
499
2,218

78%
22%
100%

Headcount
Headcount
Headcount
Headcount
Headcount

-

42%
51%
7%
<1%
100%

1,470
1,184
160
6
2,820

52%
42%
6%
<1%
100%

993
1,041
180
4
2,218

45%
47%
8%
0%
100%

Headcount
Headcount
Headcount

-

55%
45%
100%

2,033
787
2,820

72%
28%
100%

1,403
815
2,218

63%
37%
100%

People and Development
Training Hours
Total Training Hours
Average Training Hours Per Employee
Total Training Hours - Gender
Male
FemaleTotal
Average Training Hours - Gender
Male
Female

Hours
Hours

89,806
11.50

127,736
18.90

122,392
20.90

Hours
Hours
Hours

N/A
N/A
N/A

N/A
N/A
N/A

N/A
N/A
N/A

N/A
N/A
N/A

72,781
49,611
122,392

59%
41%
100%

Hours
Hours

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

16.1
37.6

-

CREATING SUSTAINABLE VALUEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

105

Performance Data (Cont’d)

2021

2022

2023

No.
N/A
N/A
N/A
N/A
N/A
N/A
N/A

%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

No.
N/A
N/A
N/A
N/A
N/A
N/A
N/A

%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

No.
248
33
303
20,97238,851
61,985
122,392

%
<1%
<1%
<1%
17%
32%
51%
100%

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

24.8
6.5
12.6
67.4
69.8
12.5

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

2,715
36,697
82,980122,392

2%
30%
68%
100%

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

903
6,170
11,882
9,540
4,818
75,041
14,039122,392

1%
5%
10%
8%
4%
61%
11%
100%

N/A
N/A
N/A

N/A
N/A
N/A

2,237
2,539
4,776

47%
53%
100%

2,314
2,866
5,180

45%
55%
100%

N/A
N/A
N/A

N/A
N/A
N/A

121
111
232

52%
48%
100%

122
76
198

62%
38%
100%

N/A
N/A
N/A

N/A
N/A
N/A

121
111
232

52%
48%
100%

122
76
198

62%
38%
100%

N/A
N/A
N/A

N/A
N/A
N/A

121
111
232

52%
48%
100%

122
76
198

62%
38%
100%

SECTION 4

Indicator
Unit of Measurement
People and Development
Total Training Hours - Employee Category
Top Management
Hours
Senior Management
Hours
Upper Management
Hours
Middle Management
Hours
Executive
Hours
Non-Executive
Hours
Total
Hours
Average Training Hours - Employee Category
Top Management
Hours
Senior Management
Hours
Upper Management
Hours
Middle Management
Hours
Executive
Hours
Non-Executive
Hours
Total Training Hours - TypeE-Learning
Hours
On-Job Training
Hours
Classroom / Virtual
Hours
Total
Hours
Total Training Hours - Theme
Anti-Bribery & Corruptions
Hours
Environmental
Hours
Human Right & Labour Practice
Hours
Soft Skill, Professional Certification & Others
Hours
Quality
Hours
Technical & Functional
Hours
Workplace Safety
Hours
Total
Hours
Parental Leave
Total Number of Employee Entitled
Male
Headcount
FemaleHeadcount
Total
Headcount
Total Number of Employee Applied
Male
Headcount
FemaleHeadcount
Total
Headcount
Total Number of Employee Returned in Reporting Period After Leave End
Male
Headcount
FemaleHeadcount
Total
Headcount
Returned and Retention Rate of Employee Applied
Male
Headcount
FemaleHeadcount
Total
Headcount

106

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Performance Data (Cont’d)

SECTION 4

Indicator
Occupational Accident/ Illness
Employees
Number of Fatality Case due to workplace accident
Fatality Rate due to workplace accident
Percentage of employees covered for LTIFR (%)
Lost-Time Injury Frequency Rate (LTIFR)(number/a million hours worked)
Number of DOSH Work-related Recordable Cases(Including Fatalities)
Fatality due to Workplace Illness
Workplace Illness Frequency Rate
The number of workplace illness (Including fatalities)
Non-Employees (Suppliers/ Vendors/ Contractors)
Number of Fatality Case due to workplace accident
Fatality Rate due to workplace accident
Percentage of employees covered for LTIFR (%)
Lost-Time Injury Frequency Rate (LTIFR)(number/a million hours worked)
Number of DOSH Work-related Recordable Cases(Including fatalities)
Fatality due to Workplace Illness
Workplace Illness Frequency Rate
The number of workplace illness (Including fatalities)

Unit of Measurement

2021

2022

2023

100%

100%

100%

1.34

1.48

1.07

27

30

17

N/A
N/A
N/A

1.57
11

-

N/A
N/A
N/A

100%

100%

N/A

-

-

N/A

-

-

N/A
N/A
N/A

-

-

Notes:
1. The data and information provided have been prepared to the best of our ability in ensuring completeness, accuracy and reliability.
2. "N/A" indicates data not available.
3. Figures stated may not add up due to rounding figure.
4. Scope 1 Stationary Combustion emissions cover emissions from natural gas and diesel consumption at our production facilities, with the emission factors usedsourced from UK BEIS and US EPA.
5. Scope 1 Mobile Combustion emissions cover emissions from gasoline and diesel consumption and emissions from the mileage incurred by company vehicles.
The emission factors used are obtained from US EPA.
6. Scope 2 emissions cover purchased electricity from our production facilities and hostels, and is calculated using the location-based method based on theemission factors of Malaysia Energy Information Hub (“MEIH”) 2019 Grid Emission Factor (“GEF”) (Source: https://meih.st.gov.my/documents/10620/384e8c1b782-49a1-8dff-74c836b3a3f7).
7. Scope 3 Business Travel emissions cover all vehicles except trains. Emissions from air travel by our migrant workers are not accounted for in this year's
calculation, and steps will be taken to include this information in our next Sustainability Statement. Emission factors used are sourced from UK Department
for Business, Energy & Industrial Strategy (“BEIS”), US Environment Protection Agency (“EPA”) and Agence De l'Environnement et de la Maîtrise de l'Energie(“ADEME”), the French Agency For Environment and Energy Management.
8. Scope 3 Employee Commuting emissions cover all employee commuting activities, with the emission factor used sourced from UK BEIS.
9. Tracking of Scope 3 Waste Generation in Operations emissions commenced in FY2023, covering both scheduled and non-scheduled waste, with emission
factors used sourced from UK BEIS and US EPA.
10. The Scope 1 emission of our TRP division in FY2022 has been restated due to the reclassification of energy consumed from LPG gas consumption to natural gas
consumption.
11. Water consumption data covers the production facilities and hostels of both divisions.
12. Water withdrawal and consumption data relating to our TRP division in FY2022 was restated due to the use of the wrong unit of measurement in last year's
report. As a result, the figures presented for overall water withdrawal and overall water consumption in FY2023 is 55,520m3 lower than in last year's report.
13. The Metal Components Consumption Intensity of our TRP division in FY2022 was restated due to recognition of a calculation error.
14. "*" indicates that the data have been subject to external assurance.

CREATING SUSTAINABLE VALUEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

107

Performance Data Table from
Bursa Malaysia’s ESG Reporting Platform
Measurement
Unit

Indicator

2023

Bursa (Labour practices and standards)
Bursa C6(a) Total hours of training by employee category
Executive

Hours

60,407

Non-executive

Hours

61,985Percentage

49.00

Number271

Number

1,947

Number0

Bursa C6(b) Percentage of employees that are contractors or temporary staff
Bursa C6(c) Total number of employee turnover by employee category
Executive
Non-executive
Bursa C6(d) Number of substantiated complaints concerning human rights violations
Bursa (Anti-corruption)
Bursa C1(a) Percentage of employees who have received training on anti-corruption by
employee category
Executive

Percentage

Non-executive

80.15

Percentage

0.38

Bursa C1(b) Percentage of operations assessed for corruption-related risks

Percentage

100.00Bursa C1(c) Confirmed incidents of corruption and action taken

Number0

Bursa C11(a) Scope 1 emissions in tonnes of CO2e

Metric tonnes

212,742.59

Bursa C11(b) Scope 2 emissions in tonnes of CO2e

Metric tonnes

86,210.50

Bursa C11(c) Scope 3 emissions in tonnes of CO2e (at least for the categories of businesstravel and employee commuting)

Metric tonnes

5,304.98

Bursa (Energy management)
Bursa C4(a) Total energy consumption

Megawatt

1,290,655.46

Megalitres

2,139.33519

Bursa (Water)
Bursa C9(a) Total volume of water used
Bursa (Health and safety)
Bursa C5(a) Number of work-related fatalities

NumberBursa C5(b) Lost time incident rate (“LTIR”)

Rate

1.07

0

Bursa C5(c) Number of employees trained on health and safety standards

Number2,374

Number0

Bursa (Data privacy and security)
Bursa C8(a) Number of substantiated complaints concerning breaches of customer privacy
and losses of customer data
Bursa (Waste management)
Bursa C10(a) Total waste generated

Metric tonnes

9,523.06

Bursa C10(a)(i) Total waste diverted from disposal

Metric tonnes

5,496.80

Bursa C10(a)(ii) Total waste directed to disposal

Metric tonnes

4,026.26

Percentage

62.00

Bursa (Supply chain management)
Bursa C7(a) Proportion of spending on local suppliersInternal assurance

External assurance

No assurance(*)Restated

SECTION 4

Bursa (Emissions management)

108

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

CREATING SUSTAINABLE VALUE

Performance Data Table from
Bursa Malaysia’s ESG Reporting Platform (Cont’d)

Measurement
Unit

2023

Executive Generation Z, Born After 1995

Percentage

1.66

Executive Generation Y, Born 1981-1995

Percentage

8.57

Indicator
Bursa (Diversity)
Bursa C3(a) Percentage of employees by gender and age group, for each employee category
Age Group by Employee Category

Executive Generation X, Born 1961-1980

Percentage

5.03

Executive Baby Boomers, Born 1945-1960

Percentage

0.26

Non-executive Generation Z, Born After 1995

Percentage

31.17

Non-executive Generation Y, Born 1981-1995

Percentage

46.37

Non-executive Generation X, Born 1961-1980

Percentage

6.87

Non-executive Baby Boomers, Born 1945-1960

Percentage

0.07

Percentage

8.60

Gender Group by Employee Category
Executive Male
Executive Female

Percentage

6.91

Non-executive Male

Percentage

68.81

Non-executive Female

Percentage

15.68

SECTION 4

Bursa C3(b) Percentage of directors by gender and age group
Male

Percentage

78.00

FemalePercentage

22.00

Generation Z, Born After 1995

Percentage

0.00

Generation Y, Born 1981-1995

Percentage

11.00

Generation X, Born 1961-1980

Percentage

56.00

Baby Boomers, Born 1945-1960

Percentage

33.00

Bursa (Community/Society)Bursa C2(a) Total amount invested in the community where the target beneficiaries are
external to the listed issuer

MYR

Bursa C2(b) Total number of beneficiaries of the investment in communities

NumberInternal assurance

External assurance

No assurance(*)Restated575,000.00
21,368

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

109

Directors’ Profile

TAN SRI DATO’
LIM KUANG SIA

MOHAMED SHAFEIIBIN ABDULGAFFOOR

Group Managing Director/
Chief Executive Officer,
Non-Independent
Executive Director

Chairman,
Independent
Non-Executive Director

M

61

M

Date Appointed:

Date Appointed:

14 June 1979 (Founder)

23 January 2017

Board Committee Membership(s):Board Committee Membership(s):

NIL

NIL

Qualifications and Working Experience:

Qualifications and Working Experience:

Tan Sri Dato’ Lim, a founder director of KOSSAN, graduatedwith a Bachelor of Science Degree in Chemistry from Nanyang
University in Singapore in 1975, a Post-graduate Diploma in
Chemical Engineering from University College, University of
London in 1976 and a Master’s Degree in Chemical Engineeringfrom Imperial College, University of London in 1977.

En. Mohamed Shafeii graduated with a Bachelor of Arts (Hons)
Degree from the University of Waterloo, Canada in 1986 andobtained the Master of Business Administration (Oil and Gas
Management) from University of Dundee, United Kingdom in
1994.

Present Appointment(s):• Honorary President of The Associated Chinese Chambers ofCommerce and Industry of Malaysia• Honorary President of The Chinese Chamber of Commerceand Industry of Kuala Lumpur and Selangor• Executive Advisor to the Klang Chinese Chamber of Commerceand Industry• Deputy President of the Malaysia Teochew Chamber ofCommerce• Honorary Life President of the Teochew Association Klang andCoast• Honorary Advisor of The Malaysia Lin Chamber of Commerce
Selangor State Liaison Committee• Honorary Advisor to the Lim Association Klang and Coast• Deputy Chairman of Pin Hwa High School• Vice Chairman of Kwang Hua Private High School• Vice Chairman of Hin Hua High School• Board Member of Confucian Private Secondary School
Directorship(s) in other Public Companies and Listed Entities:

Chairperson

Member

In 2018, he joined Perak Corporation Berhad and was the Group
Chief Executive Officer until his resignation in 2020. In addition,
he sat as the Non-Executive Chairman of Majuperak Holdings
Berhad from 2018 to 2019. Currently, he is the Chief Executive
Officer of Panah Jaya Services Sdn. Bhd., a company that involvedin oil and gas activities.
Directorship(s) in other Public Companies and Listed Entities:• Founder and Trustee of Yayasan Kossan

LEGEND:He has experience in auditing, administration and consulting. He
was an economist with Bank Negara Malaysia in 1986, an auditor
with Ernst & Young between 1987 to 1990 and was with Shapadu
Corporation Sdn. Bhd., a company involved in transportation, toll
concession, oil and gas and investment, between 1991 to 1994.
He joined Desa Pachi Consultancy Sdn. Bhd., a company thatprovides management and technical consulting services in 1995
as its Managing Director. While at the consulting company, he
was seconded to Westmont Industries Bhd./Sabah Shipyard Sdn.
Bhd. (1997 to 1999) and Ipco International Ltd. (2000 - 2002) as
their Managing Director and to Xian Leng Holdings Bhd. (1998 to2008) as its Independent Director.

• NIL

AC

Audit Committee

RC

Remuneration Committee

SECTION 5

71

110

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

Directors’ Profile (Cont’d)

LEE
CHOO HOCKHOH
KIM HYAN

Senior Independent
Non-Executive Director

Independent
Non-Executive Director

70

M

66

Date Appointed:

Date Appointed:

26 August 201323 January 2017

Board Committee Membership(s):Board Committee Membership(s):

AC

RMC

NC

RC

RC

Qualifications and Working Experience:

SECTION 5

F

AC

NC

RMC

Qualifications and Working Experience:

Mr. Lee is a Chartered Accountant with membership in Madam Hoh is a Chartered Accountant with membership in
the Malaysian Institute of Accountants and the Institute the Institute of Chartered Accountants in England and Walesof Chartered Accountants in England and Wales. Mr. Lee since 1983. She graduated with a Bachelor of Commerce from
qualified as an accountant in 1980 and has experience in the University of Melbourne, Australia in 1978.
accounting and tax. He joined Malayan Banking Berhad in
1983. His experience with Malayan Banking includes internal She has experience in accounting, auditing, internal audit,
audit, information technology, branch supervision, retail administration, education and training. She was with KPMG
banking, products development and market research, as well Malaysia (1984-2000 and 2008-2010) and headed one of its
as treasury operations. He was the Head of Finance in Malayan audit departments. Her last position in KPMG was technical
Banking Berhad from 1997 until his retirement in 2008.
director. During her second stint at KPMG, she was a Director
in the Professional Practice Department.
Mr. Lee was the Independent Non-Executive Director of HSBCBank Malaysia Berhad from 2013 to 2022. During his tenure, From 2000 to 2002, she was the senior technical consultant
he sat as the Chair of the Audit Committee as well as a member at the Malaysian Accounting Standards Board where sheof the Nominations and Remuneration Committee. In 2016, he assisted in the formulation of accounting standards forjoined HSBC Amanah Malaysia Berhad as an Independent Non- application in Malaysia. Between 2004 and 2008, she taught
Executive Director and was redesignated as Non-Independent at University Tunku Abdul Rahman and University of Malaya.
Non-Executive Director in 2019. He was the member of the She was the Operations Director at the Institute of Internal
Audit, Risk and Nominations and Remunerations Committees Auditors Malaysia between 2011 to 2012. Madam Hoh was
until his retirement in 2022.
with The Malaysian Institute of Certified Public Accountants
as its Senior Technical Manager from 2012 to 2019. Her main
Directorship(s) in other Public Companies and Listed Entities: scope of work was to provide technical support to two of the• Trustee of Yayasan Kossan

Institute’s Committees – the Accounting and Audit TechnicalCommittee and the Financial Statements Review Committee.
Directorship(s) in other Public Companies and Listed Entities:

• NIL

NC

Nominating Committee

RMC

Risk Management Committee

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

111

Directors’ Profile (Cont’d)

SHARONSHANTHY A/P
DORAIRAJTAN
KONG CHANG

Independent
Non-Executive Director

Non-Independent
Executive Director

F

57

Date Appointed:

Date Appointed:

1 November 2022

26 August 2013

Board Committee Membership(s):
NC

AC

M

Board Committee Membership(s):

NIL

RC

Qualifications and Working Experience:

Qualifications and Working Experience:

Ms. Sharon graduated with a Bachelor of Science(Mathematics) from Universiti Sains Malaysia and is a
Chartered Banker of the Asian Institute of Chartered Bankers.
She is also certified in various psychometrics instruments
including Hogan, DDI and SHL and leadership coaching such
as Gallup’s Strength.

Mr. Tan is currently a Key Senior Management and holds
the position of Chief Operating Officer in the Gloves Division
and Executive Director of Human Resources of the Group.
Additionally, he is responsible for all expansion and upgradingof manufacturing facilities and the construction of the Group’sbuildings. He also oversees several subsidiaries in the Gloves
Division.

She is a strategic human capital leader with 30 years ofexperience in driving transformation, change management
and merger and acquisition (“M&A”) transactions. Her
working experience includes being the Senior Vice President,Group Human Resource at Alliance Bank Malaysia Berhad
from 2017 to 2022, Chief Human Resource Officer at
MCIS Zurich Insurance Berhad from 2014 to 2017 and 17
years in OCBC Bank (Malaysia) Berhad from 1996 coveringtransformational
performance,
remuneration,
talentand succession management, industrial relations andorganisational learning. Other than financial institutions, herrole as Human Resource Analyst, Malaysia Airlines System
Berhad and Human Resource Manager at Halim Mazmin
Group exposed her to people management in service andlogistics industries.

He graduated with a Bachelor’s Degree in Architecture from the
University of Southwestern Louisiana, USA in 1992. Mr. Tan was
a Project Architect with DEG Akitek Sdn. Bhd. from 1992 to 1995
and a Project Manager with KYM Holdings Berhad from 1996
to 1997. In 1998, he joined Perusahaan Getah Asas Sdn. Bhd.,
a subsidiary, where he gained experience in finance, humanresource, production management, quality control and researchand development.
Directorship(s) in other Public Companies and Listed Entities:• NIL

Directorship(s) in other Public Companies and Listed Entities:• NIL

LEGEND:

Chairperson

MemberAC

Audit Committee

RC

Remuneration Committee

SECTION 5

55

112

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

Directors’ Profile (Cont’d)

LIM
SIAU TIAN

LIM
SIAU HING

Non-Independent
Executive Director

Non-Independent
Executive Director

50

M

51

Date Appointed:

Date Appointed:

26 August 2013

26 August 2013

Board Committee Membership(s):Board Committee Membership(s):

NIL

NIL

Qualifications and Working Experience:

Qualifications and Working Experience:

Mr. Lim Siau Tian is currently a Key Senior Management andholds the position of Executive Director of Marketing in the
Gloves Division. Additionally, he oversees several subsidiaries
in the Gloves Division and drives several corporate levelprojects. He is chairing the Corporate Sustainability committee

Mr. Lim Siau Hing is currently a Key Senior Management andholds the position of Executive Director of the Technical Rubber
Products Division and oversees all the division’s subsidiaries.

for the company.

SECTION 5M

He graduated with a Bachelor’s Degree in Marketing fromthe University of Central Oklahoma, USA in 1998. After
his graduation, he was involved in the trading of medical
disposables in the USA from 1998 to 2003, culminating in his
appointment as the Operations and Marketing Manager. He
joined KOSSAN in 2003 and was promoted to General Manager
of Marketing in the Gloves Division in 2008. Following this, heheld several roles and contributed his expertise in the rubber
glove industry during his term as Trustee in Malaysian Rubber
Council and as elected committee member in the Malaysian

He graduated with a Bachelor’s Degree in Business
Administration (majoring in Operations Management andAnalysis) from the University of Central Oklahoma, USA in 1998.
He joined KOSSAN upon graduation and gained experiencein quality control, production management, engineering andmarketing.
Directorship(s) in other Public Companies and Listed Entities:• NIL

Rubber Glove Manufacturers Association.
Directorship(s) in other Public Companies and Listed Entities:• President and Trustee of Yayasan Kossan

NC

Nominating Committee

RMC

Risk Management Committee

OUR GOVERNANCE

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

113

Directors’ Profile (Cont’d)

LIM
OOI CHOW

Non-Independent
Executive Director

41

M

Date Appointed:

26 August 2013
Board Committee Membership(s):RMC
Qualifications and Working Experience:

Mr. Lim Ooi Chow is currently a Key Senior Management andholds the position of Executive Director of Engineering andoversees several subsidiaries in the Gloves Division.

SECTION 5

He graduated with a Bachelor’s Degree in Computer Sciencefrom Monash University, Australia in 2005. He obtained
his Masters of International Business, also from Monash
University in 2006. Upon graduation, he worked as a
Computer Engineer in Australia. He joined KOSSAN in 2007
and gained experience in finance, information technology,
project management, production management andengineering.
Directorship(s) in other Public Companies and Listed Entities:• NIL

Notes:The details of Directors’ attendance at Board Meetings are set out in the Corporate Governance Overview Statement on page 117 of this Integrated Annual
Report. None of the Directors of the Company have family relationships with any Director and/or substantial shareholder with the exception of the following:• Mr. Lim Ooi Chow is the son of Tan Sri Dato’ Lim Kuang Sia.
• Messrs Lim Siau Tian, Lim Siau Hing and Lim Ooi Chow are cousins.
• Messrs Lim Siau Tian and Lim Siau Hing are nephews of Tan Sri Dato’ Lim Kuang Sia.
Other than as disclosed, none of the Directors have any conflict of interest or potential conflict of interest with the Company, have not been convicted of any
offence, other than traffic offences, within the past five years and have no public sanction or penalty imposed by any relevant regulatory bodies during thefinancial year.

LEGEND:

Chairperson

AC

Audit Committee

NC

Nominating Committee

MemberRC

Remuneration Committee

RMC

Risk Management Committee

114

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCEKey Senior Management Profile

PUAN SRI DATIN CHOW CHENG MOEYF

71

TAN ENG TECK
M

64

Chief Financial Controller

General Manager, Business Development (TRP)

Qualifications and Working Experience:
Puan Sri Datin Chow holds a Bachelor of Science Degree inEngineering. She joined KOSSAN in 1980 and has served invarious capacities in the Group prior to her appointment in her
present position in February 2017.

Qualifications and Working Experience:
Mr. Tan holds an Honours Degree in Polymer Science andTechnology. He joined KOSSAN in 1994 and has held various
positions in KOSSAN prior to his appointment in his present
position in 2003.

NIL

NIL

NIL

NIL

NIL

NIL

NIL

Puan Sri Datin Chow is the spouse of Tan Sri Dato’ Lim Kuang Sia and themother of Mr. Lim Ooi Chow

MOK CHEE HONG
M

SECTION 551

YAU KIM WOON
M

53

Chief Financial Officer

Senior General Manager, Corporate Strategy

Qualifications and Working Experience:
Mr. Mok is a Fellow Member of the Association of Chartered
Certified Accountants and a member of the Malaysian Instituteof Accountants. He joined KOSSAN in his present position in June
2021.

Qualifications and Working Experience:
Mr. Yau holds a Diploma in Accounting from Ungku Omar
Polytechnic, and a Bachelor of Business Admin (Hons.),major in Operation Management from University Utara
Malaysia. He joined KOSSAN in his present position inJune 2022.

He started his career as an auditor with BDO Binder before
joining Talam Corporation Berhad as Assistant Finance Manager
and Panasonic Malaysia as Finance Manager. He subsequently
moved to Carlsberg Brewery Malaysia Berhad as Senior FinanceManager and then to a multinational company as Financial
Controller. Prior to joining KOSSAN, he was the Chief Financial
Officer in a public listed company.
NIL

NIL

NIL

NIL

LEE HON CHEE

He started his career as a Customer Service Executive with oneof the largest mineral companies in the world, NS BlueScope
Sdn. Bhd. He built his career along the path of supply chain
management in Fast Moving Consumer Goods (FMCG) and the
medical device industries.
His last position held before joining KOSSAN was the Regional
Director APAC – Demand Fulfilment with Teleflex Medical Sdn.
Bhd., where his scope of responsibility covered APAC region.
NIL

NIL

NIL

NIL

M

62

Senior Group Accountant
Qualifications and Working Experience:
Mr. Lee is a member of the Malaysian Institute of Accountants
and holds a Bachelor’s Degree in Business Accounting. He joined
KOSSAN in 1994 and has served in various capacities in theGroup prior to his appointment in his present position in 2009.
NIL

NIL

NIL

NIL

Present Directorship(s) in other public companies and listed entities
Any family relationship with any director and/or major shareholder of the Company
Any conflict of interest or potential conflict of interest with the Company
Any list of convictions for offences, other than traffic offences, within the past 5 years
and particulars of any public sanction or penalty imposed by the relevant regulatory
bodiesNote:
The disclosure on the particulars of the key senior management is made in compliance pursuant to Appendix 9C of Bursa Malaysia Securities Main Market
Listing Requirements.

OUR GOVERNANCE

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

115

Corporate Governance Overview Statement

The Board of Directors (“Board”) of Kossan Rubber Industries Bhd. (“KOSSAN”
or “the Company”) remains committed and continues to endeavour to comply
with the principles and practices set out in the Malaysian Code on Corporate
Governance 2021 (“MCCG”) with the aim in ensuring long-term sustainablegrowth of the Group for the interest of shareholders and other stakeholders.
With that in mind, the Board regularly reviews its corporate governance practices
ensuring alignment with the MCCG and applicable regulatory obligations.

A
We are pleased to present our Corporate
Governance

Overview

Statement(“Statement”) for the financial year ended

Board Leadershipand Effectiveness

31 December 2023 (“FY2023”). This Statement
provides an overview on how the Company
and its subsidiaries (“Group”) had applied andadopted the three (3) principles of the MCCG
during the financial year under review.
This Statement is prepared in compliancewith the Bursa Malaysia Securities Berhad
Main Market Listing Requirements (“MMLR”)
andshouldCorporate

be

read

Governancetogether

with

the

Report

2023

(“CG

C

Integrity in PRINCIPLES Effective
Corporate
Audit and Risk
ReportingManagement
and Meaningful
Relationship withB
Stakeholders

PRINCIPLE A:

Board Leadership and Effectiveness

ROLES AND RESPONSIBILITIESCorporate governance plays a vital role in ensuring an effective board that can make informed decisions that benefit and deliver
sustainable value to the Company and stakeholders. We, the Board of Directors, are responsible for the oversight and overall
effective management of the Company. To enable us to effectively discharge our responsibilities whilst meeting the goals andobjectives of the Company, we had established a Board Charter in 2014 that clearly sets out the governance structure, authority
and responsibilities of the Board, Board Committees, individual directors and Management, including a formal schedule ofissues and decisions reserved for the Board. The Board also delegates specific responsibilities, as set out in each respective
terms of reference (“TOR”), to the Board Committees, namely, the Audit, Nominating and Remuneration Committees.
The Board Charter and TORs of each Board Committee are published on our website at https://www.kossan.com.my/about-us/corp-governance.html.
KOSSAN Board Charter

KOSSAN Nominating Committee Terms of Reference

KOSSAN Audit Committee Terms of Reference

KOSSAN Remuneration Committee Terms of Reference

SECTION 5

Report”), which is available on our website athttps://www.kossan.com.my/about-us/corpgovernance.html

116

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INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

Corporate Governance Overview Statement (Cont’d)

THE BOARDThe Board currently has nine (9) members, comprising one (1) independent non-executive chairman, three (3) independent
non-executive directors (“INEDs”) and five (5) executive directors (“EDs”).

Chairman
En. Mohamed Shafeii bin Abdul Gaffoor, our Independent Non-Executive Chairman, chairs the Board meetings, sets
the agenda items, promotes active engagement among Directors and ensures the smooth functioning of the Board. He
provides leadership for the adoption of good corporate governance practices and leads the Board towards continuous
improvements. The Chairman of the Board is not a member of the Audit, Nominating and Remuneration Committees.
The positions of the Chairman of the Board and Chief Executive Officer (“CEO”) are held by different individuals. Their clear
and distinct roles and responsibilities are set out in the Board Charter. This is to ensure balance of power and authority
with no one individual has unfettered powers on decision making.
Group Managing Director/Chief Executive Officer
Tan Sri Dato’ Lim Kuang Sia, the Group Managing Director/CEO, focuses on the Group’s businesses and manages the dayto-day operations of the Company as well as implements the Board’s decisions.
Senior Independent Non-Executive Director
Mr. Lee Choo Hock is the appointed Senior INED. He serves as the principal conduit between the Chairman and the Board
and, importantly, represents the views of independent directors and leads communication to ameliorate misunderstanding
and boardroom tension. Further, he is also the Whistleblowing Committee Chairman who oversees the whistleblowing
function and ensures its effectiveness.
Mr. Lee has served the Company for a cumulative term of more than nine (9) years, since his appointment to the Board in
26 August 2013. The Board, with Mr. Lee abstaining from deliberation, was satisfied that Mr. Lee has met the independence
guidelines as set out in Chapter 1 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa
Malaysia”) and is able to continue to bring independent and objective judgment to the Board.

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The Board, except for Mr. Lee, unanimously recommended that Mr. Lee continues to serve as an INED of the Company,
subject to the approval of the shareholders through a two-tier voting process as per Practice 5.3 of the MCCG.
Independent Non-Executive Directors
Our INEDs play an important role in providing objective, impartial and independent views, advice and judgment to theBoard. Their presence ensures adequate check and balance in Board decisions and safeguard the interest of minority
shareholders.
Company Secretaries
The Board is supported by two suitably qualified and competent Company Secretaries. The Company Secretaries assisted
the Chairpersons of the Board and Board Committees in the distribution of notices, agendas and meeting materials,
ensuring compliance with Board procedures as well as providing advice on regulatory compliance and corporate
governance. The Company Secretaries regularly undertake continuous professional development to keep abreast of thelatest developments. The Board is satisfied with the performance and support rendered by the Company Secretaries.

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Corporate Governance Overview Statement (Cont’d)Board and Board Committee Attendance
Members of the Board and Board Committees had discharged their roles and responsibilities in FY2023 through theirattendance at the Board and Board Committees meetings which were set out as below:
NAME

ATTENDANCE
BOD

1. MOHAMED SHAFEII BIN ABDUL GAFFOOR
Chairman, Independent Non-Executive Director

AC

NC

RC

RMC

6/6

6/6

2/2

1/1

4/4

6/6

6/6

2/2

1/1

4/4

6/6

6/6

2/2

1/1

6/6

2. TAN SRI DATO’ LIM KUANG SIAGroup Managing Director/CEO,

5/6

Non-Independent Executive Director

3. LEE CHOO HOCK
Senior Independent Non-Executive Director

4. HOH KIM HYAN
Independent Non-Executive Director

5. SHARON SHANTHY A/P DORAIRAJ
Independent Non-Executive Director

6. TAN KONG CHANG

6/6

Non-Independent Executive Director

7. LIM SIAU TIAN

6/6

Non-Independent Executive Director

8. LIM SIAU HING

5/6

9. LIM OOI CHOWLEGEND:

4/4

6/6

Non-Independent Executive Director

Chairperson

BOD

Board of Directors

RC

Remuneration Committee

MemberAC

Audit Committee

NC

Nominating Committee

RMC

Risk Management Committee

Board Administration
In relation to board meetings, agendas for upcoming meetings were set by the Chairman and supported by the Company
Secretary. The notices and agendas were distributed to the members prior to meetings together with the relevant Board
papers. This is to ensure that all members are able to receive complete and accurate information in a timely manner.
Information shared to the members are required to be clear, concise and of sufficient depth to facilitate constructive
deliberations and assist the members in decision-making process. Executive directors and/or senior management will joinmeetings discussions by invitation when required, enabling the members to understand the matters in depth and question
Management directly.
To facilitate Directors’ attendance at meetings, an annual meeting calendar was given to all Directors before the beginningof each new financial year. Each Director is also required to notify the Chairman of the Board prior to his/her acceptance of
directorship outside the Group. The notification should include an approximate indication of time to be spent on the new
directorship.

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Non-Independent Executive Director

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Corporate Governance Overview Statement (Cont’d)

BUSINESS CONDUCT AND CORPORATE CULTURE
The KOSSAN Code of Ethics and Conduct (“KCEC”)
The KCEC was adopted to help the employees of the Group to make the right choices and to act appropriately in responseto ethical behaviour in the workplace. The KCEC is applicable to all directors and employees of KOSSAN.
Anti-Bribery and Corruption (“ABC”) Policy
The Group has implemented an ABC Policy to guide and govern the prevention of corrupt practices and other unethicalconduct within the organisation. The ABC Policy emphasises the Group’s zero-tolerance approach towards any form ofbribery and corruption.
Whistleblowing Policy
The Board has implemented a Whistleblowing Policy that enables both employees and members of the general public toreport any instances of malpractice or improper conduct. The Policy is supported by a set of procedures that provide clear
guidelines on how to raise concerns and report any suspected wrongdoing.
All reports are received by the Whistleblowing Committee which comprises exclusively of the following INEDs:• Lee Choo Hock				: Chairman/Senior Independent Non-Executive Director• Mohamed Shafeii bin Abdul Gaffoor		: Member/Independent Non-Executive Director• Hoh Kim Hyan				: Member/Independent Non-Executive Director

The Whistleblowing Policy underscores the Board’s commitment to promoting transparency, accountability, and ethicalconduct throughout the organisation. It assures whistleblowers that their identity will be kept confidential and that they
will not face any form of retaliation, harassment or victimisation. The Board believes that the Whistleblowing Policy serves
as an essential tool for enhancing corporate governance, risk management and ethical behaviour across the organisation.

SUSTAINABILITY GOVERNANCE
The responsibility to embed sustainability in the Group’s business strategy and operations rests with the Board. The

SECTION 5

Board is assisted by the Group Managing Director/CEO who oversees the formulation, implementation and effective
management of the Company’s sustainability strategies and targets. In 2022, the Board had adopted the Sustainability
Policy which comprises four (4) guiding principles, i.e., Long term value creation, Invest to green DNA, Vibrant humancapital and Excellence innovation (L.I.V.E.) with twelve (12) Sustainability Principles.
Further details on the sustainability governance structure, key sustainability matters and stakeholders engagements
can be found in the Sustainability Statement on pages 23 to 35 of this IAR.
DIRECTORS TRAININGSAs the business landscape continues to evolve, our Board recognises the importance for Directors to keep themselves
up-to-date on the latest developments in order to discharge their duties and responsibilities effectively. To achieve this,all Directors had, during the financial year under review, attended trainings to continuously update their knowledge andskills which includes not only legislative developments but also market trends, economic environment, technologicaladvancements, and ESG (environmental, social and governance) considerations. Additionally, our Company Secretaryprovides regular updates to the Board and its committees on regulatory and corporate governance matters.
The trainings attended by the Directors in FY2023 are set out on pages 8 to 12 of the CG Report.
In 2023, all Directors had completed the Mandatory Accreditation Programme (“MAP”) Part II with the Institute of Corporate
Directors Malaysia (“ICDM”), a corporate body approved by Bursa Malaysia.

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Corporate Governance Overview Statement (Cont’d)

Appointment of New Directors
The NC is responsible for assessing suitable candidates for any
new appointment of directors to the Board. Candidates are
sourced from unrelated third parties and the NC will interview
the shortlisted candidates prior to recommending to the Board
for approval.
The NC has a selection criterion which are based on objective
criteria, merit and with due regard for diversity in skills,
experience, age, cultural background and gender as well as
the criteria specified in the Directors Fit and Proper Policy(“DFPP”). The DFPP serves as a guide to ensure the person
appointed or elected/re-elected as a Director possesses thenecessary character, integrity, experience, competence andtime commitment to discharge his/her role effectively.
Re-election of Directors
Annually, the NC reviewed the eligibility of the retiring
Directors who are subjected to re-election at the forthcoming
Annual General Meeting (“AGM”) pursuant to the Company’s
Constitution. Having considered the outcome of the Board
Effectiveness Evaluation for FY2023 (“BEE 2023”), theircontribution to board deliberations, their ability to act in thebest interest of the Company in decision making and also the

DFPP, the NC was satisfied that each retiring Director met
the performance criteria required for an effective Board andrecommended the re-elections of the retiring Directors to theBoard.
Each of the retiring Directors abstained at the Board
deliberations and decisions regarding his own eligibility tostand for re-election.
The Board, save for the retiring Directors who had abstained
from deliberations on their own re-election, supported theNC’s views and recommends the re-appointment of theretiring Directors at the forthcoming AGM. The statement of
support is included in the notes accompanying the Notice ofAGM.
Evaluation
The NC, being the evaluation committee, undertook theannual evaluation of the Board as a whole, Board Committees
and individual Directors, including the independence of each
Independent Director for the financial year under review.
The BEE 2023 was facilitated by the Company Secretary.
The assessments and evaluations carried out were properly
documented.
The outcome of the BEE 2023 indicated that the performanceof the Board and the Board Committees during the evaluation
period had been satisfactory and they had discharged theirduties and responsibilities effectively and in accordance with
their TORs. The outcome of the evaluation formed one of thebasis of the NC’s recommendations to the Board for the reelection of Directors at the forthcoming AGM.

REMUNERATIONThe Group’s Remuneration Policy aims to attract and retain competent Directors and senior management
who are capable of effectively leading and managing the Group. The remuneration packages for the EDs andsenior management are tied to their individual and corporate performance, responsibilities, qualifications, skills
and experiences. In the case of the NEDs, their remuneration levels commensurate to their responsibilities,
skills, and time commitments. The Group’s Remuneration Policy can be found on our Company’s website athttps://www.kossan.com.my/about-us/corp-governance.html.
The Remuneration Committee (“RC”) is chaired by Mdm Hoh Kim Hyan, an INED, and the members comprises whollyof INEDs. During the financial year under review, the RC reviewed the remuneration packages of the EDs and senior
management prior recommending their packages to the Board for approval. The proposed fees for INEDs were reviewed
by the Board as a whole.
To ensure impartiality and transparency, Directors do not participate in discussions or voting on decisions relating to his/her own remuneration package during the RC and Board meetings.
Details of the remuneration of Directors of the Company for FY2023 on a name basis, including the components ofremuneration, can be found on page 37 of the CG Report.

SECTION 5

NOMINATING COMMITTEE (“NC”) STATEMENTThe NC comprises exclusively of INEDs and is chaired by
Ms. Sharon Shanthy a/p Dorairaj, an INED. The NC plays anessential role in ensuring the effectiveness of our Board. This
includes reviewing and assessing the composition of the Board,
tenure of the independent directors and appointment and/or
re-appointment of a board member. The NC is also responsible
for assessing the performance of the Directors of the Company
every year.

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Corporate Governance Overview Statement (Cont’d)

PRINCIPLE B:

Effective Audit and Risk Management

EFFECTIVE AND INDEPENDENT AUDIT COMMITTEE (“AC”)
The AC comprises three (3) INEDs. The Chairman of the AC is not the Chairman of the Board. Mr. Lee Choo Hock, the Senior
INED, is the Chairman of the AC while En. Mohamed Shafeii bin Abdul Gaffoor, also an INED, is the Chairman of the Board.
Two (2) of the AC members are chartered accountants and all members of the AC are well educated and financially literate.
They attended courses to improve their understanding of matters under the purview of the AC, including developments inaccounting and auditing standards and practices. None of the members of the AC were former key audit partners who are
required to exercise a cooling-off period of at least three (3) years before his/her appointment to the AC.
The AC undertook an annual assessment of the competency and independence of the external auditors and recommended
their re-appointment to the Board, upon which the shareholders’ approval will be sought at the forthcoming AGM. The external
auditors were required to declare their independence annually to the AC as specified by the By-Laws issued by the MalaysianInstitute of Accountants. The external auditors had provided the declaration in their annual audit plan presented to the AC.
The AC also reviewed the provision of non-audit services rendered to the Group by the external auditors and its affiliates andnoted that the total amount of fees paid and payable for non-audit services rendered by the Group external auditors and its
affiliates for FY2023 was RM410,314.
A summary of the activities undertaken by the AC in FY2023 are set out in the AC Report on pages 126 to 127 of this IAR.
RISK MANAGEMENT AND INTERNAL CONTROLSECTION 5

Establishing an Effective Risk Management and Internal Control Framework
The Board is responsible for the Group’s risk management framework and system of internal control and the review of theiradequacy and integrity. The Board had established the Risk Management Framework to ensure that an effective system ofinternal control that provides reasonable assessment of effective and efficient operations, financial controls and compliancewith laws and regulations as well as with internal procedures and guidelines are in place within the Group.
The AC is responsible to assist the Board in ensuring the adequacy and effectiveness of internal controls and oversees therisk management function through the Risk Management Committee (“RMC”). The RMC comprises a majority of independent
directors to oversee the Group’s risk management framework and policies. The RMC reviews and recommends for the Board’s
consideration and approval the risk management principles, framework and policies for managing risks within the Group. The
RMC also monitors and assesses the risk appetite and tolerance of the Group to safeguard the Group’s assets and shareholders’investment.
Further details of the risk management and internal control are set out in the Statement on Risk Management and Internal
Control on pages 122 to 125 of this IAR.
Internal Audit (“IA”)
The Board has established an in-house IA function which reports directly to the AC. The IA function undertakes an independent
assessment of the internal control system of the Group and provides assurance to the AC that no material issue or major
deficiency has been noted which could pose a high risk to the overall system of internal control. The IA assignments werecarried out in accordance with the 2023 audit plan approved by the AC.
The Board ascertained that the IA personnel are free from any relationships or conflicts of interest, which could impair theirobjectivity and independence and is satisfied that the IA function is adequately staffed with qualified and experienced persons.
The IA function is carried out in accordance with the IA Charter and IA Framework with reference to The Institute of Internal
Auditors’ International Professional Practices Framework. The AC, in its oversight of the IA function, was satisfied that the saidfunction was effective and able to function independently.
Further details of the IA function are contained in the AC Report on page 128 of this IAR.

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Corporate Governance Overview Statement (Cont’d)

PRINCIPLE C:

Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders

COMMUNICATION WITH STAKEHOLDERS
The Board aims to achieve effective engagement with our shareholders and other stakeholders by providing information thatare consistent, accurate, transparent and timely through various platforms including our Company’s website, annual reports,financial statements, announcements made to Bursa Malaysia and engagements through the investor relations function.
A summary of our Stakeholders Engagements’ activities conducted in FY2023 are shown on pages 24 to 26 of the
Sustainability Statement of this IAR.
CONDUCT OF GENERAL MEETINGThe Company had leveraged on technology by conducting the 43rd AGM virtually. The Notice of the 43rd AGM was sent toall shareholders at least 28 days in advance of the 43rd AGM ensuring shareholders were given sufficient notice and time toconsider the agenda items that will be discussed and decided at the AGM.
All Directors and senior management attended the 43rd AGM, either at the broadcast venue or virtually, to address questions
raised by shareholders, financial and/or non-financial related. Shareholders, corporate representatives and proxies who
registered for remote participation and voting via Boardroom Smart Investor Portal were able to join the live streaming of theproceedings of the AGM, posed questions and casted their votes online. To make the AGM more meaningful and interactive,
questions posed by shareholders were displayed on screen to all meeting participants during the meeting itself.
The Company had appointed Boardroom Share Registrars Sdn. Bhd. as poll administrators to conduct the polling process on all
resolutions tabled at the AGM, and Sky Corporate Services Sdn. Bhd. as scrutineers to verify the poll results. The poll results wereannounced to Bursa Malaysia on the same day for the benefit of shareholders.
The Minutes of the 43rd AGM (including the responses to the related questions raised by shareholders during andafter the AGM) were published in our website within 30 business days after the conclusion of the 43rd AGM athttps://www.kossan.com.my/investors/corporate-information.html
KOSSAN 43rd AGM Minutes

This Statement was approved by the Board on 16 April 2024.

SECTION 5

COMPLIANCE STATEMENT122

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Statement on Risk Management
and Internal Control
INTRODUCTION
This Statement is made pursuant to paragraph 15.26(b) of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad where the Board of Directors(“Board”) of a public listed company is required to publish a statement about thestate of risk management and internal controls of the listed issuer as a group and isprepared in accordance with Principle B Part II of the Malaysian Code on Corporate
Governance of Securities Commission Malaysia (“MCCG”), with the guidance from the“Statement on Risk Management and Internal Control – Guidelines for Directors of
Listed Issuers”.
The Board is committed to maintain and continuously improve the Group’s system ofrisk management as well as internal controls and is pleased to provide the following
statement which outlines the nature and scope of risk management and internal
controls of the Group during the year under review.
BOARD’S RESPONSIBILITY
The Board acknowledges and affirms its responsibility in establishing and maintaining an effective risk management framework andinternal control system to safeguard shareholders’ investments and the Group’s assets and also ensures that the system of internal
control manages risk and forms part of its corporate culture.

SECTION 5

The Board continuously reviews the risk management framework, processes, responsibilities and assesses for reasonable assurance
that the risks faced by the Group are being managed effectively and efficiently within the Group’s defined risk appetite and tolerance.
However, the Group’s risk management and internal control system is designed to manage, rather than eliminate the risk of failure
to achieve business objectives. Notwithstanding and due to the limitations inherent in any system of risk management and internal
control, the system can only provide reasonable but not absolute assurance against material misstatement, loss or fraud.
The Board delegates the oversight and implementation of the Board’s policies and procedures on the system of risk management andinternal control to the Audit Committee (“AC”). The AC is responsible to, amongst others:
•
•
•
•
•
•

Review and monitor the effectiveness of the Group’s system of risk management and internal control;
Evaluate the process of identifying, evaluating, monitoring and reporting of risks and internal control;
Evaluate and monitor the risk management framework in line with the Group’s business objectives and risk appetite;
Identify changes to risk and take appropriate actions to mitigate and control risks;
Provide assurance to the Board that the risk management and internal control system is operating adequately and effectively; andReview the Internal Audit Report of its findings, recommendations, management responses and action plans and present to theBoard of its recommendation on a quarterly basis.

RISK MANAGEMENT
The Board has established a risk management framework for identifying, monitoring, reviewing and continually improving risk
management. The risk management framework is being adopted as a standardised approach in implementing risk managementin the Group for timely identification, reporting and management of principal risks. The implementation of the risk management
framework promotes an effective risk culture whilst embedding risk management into its processes and structures to create andmaintain an environment that enables the Group to meet performance objectives.
The key features of the risk management framework provide a risk control environment that includes:
A Risk Management Policy Statement describing the Group’s commitment to embed risk management to create and maintain anenvironment that enables the Group to meet performance objectives driven through technological advancement, people value, andcontinual improvement to deliver sustainable business growth, manage risk exposures and pursue opportunities in line with its risk
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Statement on Risk Management
and Internal Control (Cont’d)Board ofDirectors

Audit
Committee

Risk
Management
Committee

Group Risk
Committee

Business andFunctional
UnitsInternal
Audit

A Risk Management Committee (“RMC”) established by
the Board and reporting to the Audit Committee to provide
assurance concerning the Group’s risk management. The RMC
is fully represented by members of the Board and is tasked withthe overall responsibility to oversee the implementation of therisk management framework and policies within the Group. The
RMC is responsible to, amongst others:• Ensure the overall risk management processes are
adopted by the Group and to oversee the development ofappropriate guidelines and policies for implementation;• Ensure the risk management processes are integrated
into all core business processes and that the culture of theorganisation reflects the risk consciousness of the Board;• Review the quarterly risk management reports, risk
registers, risk management activities and management
response thereto;• Identify and communicate to the Board on principal risks
challenges and management action plans to manage therisks; and• Evaluate and review the risk management framework andpolicy.
A Group Risk Committee (“GRC”) formed in May 2020 tosupport the RMC in establishing the strategic approaches toimplementing risk management within the Group. The GRC
is headed by an Executive Director who is a member of the
RMC and comprises majority of other Executive Directors who
are risk owners themselves and are responsible to ensure theimplementation of the risk management framework, proceduresand policies within the Group.
A Risk Management Process which is aligned to risk
management practices of ISO 31000:2018 Risk Management– Guidelines. Risks arising from the business operations arecontinuously identified and updated into a risk register. The levelof residual risk is determined after identifying and evaluating
the effectiveness of the controls measures. Each risk is mapped
based on a matrix which specifies its likelihood (how likely therisk to occur) and its impact (the extent of its impact if the risk
did occur). The risks are assessed to determine if the residual
risk rating is High, Medium, or Low. Thereafter, dependingon the residual risk rating, the owners of these risks will drive
the implementation of risk mitigation measures guided by aresidual risk response guide towards achieving a residual riskthat is within the acceptable tolerance. On a quarterly basis, arisk management report detailing the Group’s status of risk
reviews and any incidents is presented to the RMC for review anddeliberation and thereafter recommend for endorsement by the
AC and the Board.
The Board believes that maintaining a sound system of risk
management and internal control is premised on a clear
understanding and appreciation of the key elements of the Risk
Management Framework and Governance Policies.

SECTION 5

A Governance and Risk Organisation Structure identifying
the Board in retaining the overall risk management
responsibility and the delegation of authority and responsibilityof the management and reporting mechanism as depicted in
the diagram below;

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Statement on Risk Management
and Internal Control (Cont’d)

INTERNAL CONTROL
Whilst the Board focuses on effective risk oversight and setting the tone and culture towards an effective risk management andinternal controls structure, the management is entrusted with the implementation of the system of internal control encompassing thetypes of control including strategic, financial, operational, compliance and governance to achieving the Group’s objectives.
The Group has a clear defined organisation structure with clearly defined lines of authority, accountability and responsibility of theBoard, Board Committees, corporate and operations unit management.
The key processes in reviewing the adequacy and effectiveness of the risk management and internal control system include thefollowing:
The Audit Committee, assisted by the Risk Management
Committee and the Internal Audit Department, performs
the duty of reviewing and evaluating the adequacy andeffectiveness of the Group’s system of risk management
and internal control.

The Nominating and Remuneration Committees(“NRC”) assist the Board to review and recommend
the appointment of new directors and remuneration
policies for directors and senior management. The NRC
also assesses the effectiveness of the Board, the Board
Committees and individual Board member.

The Risk Management Committee (“RMC”) has been
established by the Board and is supported by the Group
Risk Committee (“GRC”) to provide assurance concerning
the Group’s risk management. The RMC performs
quarterly review of the risk management processes andoversee the development of appropriate guidelines andpolicies for implementation.

The Internal Audit Department (“IA”) performs internal
audits on the effectiveness of internal control mechanism on
various operating units and also checks on the compliancewith laws and regulatory requirements, including policies
and procedures. Significant findings of non-compliance arehighlighted in the reports to the Audit Committee.

SECTION 5

The key features of the internal control processes are described as follows:• Board meetings are held at least once in a quarter with a formal agenda on matters for discussion. During the meeting, theBoard reviews the financial performance of the Group, discuss and deliberate on the business development, management,
corporate issues and regulatory matters affecting the Group.
• Board Committees with clearly defined terms of reference and authority hold regular meetings and assist the Board inoverseeing internal controls and Board effectiveness. This includes reviewing the adequacy and integrity of the Group’s
internal control system and to follow-up on action plans by Management on the recommendations proposed by the internal
audit department.
• The Group Managing Director/Chief Executive Officer (“Group MD/CEO”) plays a pivotal role in communicating the Board’s
expectations of the system of risk management and internal control to management. This is achieved through his active
participation in the management of the business as well as chairing at various management and committee meetings. The
Group MD/CEO will update the Board of any significant matters that require Board immediate attention.
• Monthly management meetings are held to review the financial and manufacturing operational performance of business
units including key performance indicators, productivity, efficiency and effectiveness. This includes evaluation of factors
impacting performance such as business, operational and key management.
• There is an established mechanism to identify and review the risks element that impact on the financial performances of
the Group to manage risks including and not limited to volatility of foreign exchange rates, escalating cost of operations andcompetitive pricing of products.
• A Whistleblowing Policy serves as an avenue for all employees and the general public to raise concerns about malpractice or
improper conduct within the Group whilst ensuring the integrity of the process and information and also protecting the rights
of informants.
• An Anti-Bribery and Corruption Policy which describes the Group’s commitment to ensure zero-tolerance against any formsof bribery and corruption. The Group is committed to maintain and preserve the highest standard of integrity, transparency
and accountability in our business operation.

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Statement on Risk Management
and Internal Control (Cont’d)

ASSURANCE MECHANISMThe Group has in place an in-house Internal Audit Department (“IA”) established by the Board to provide independent assurance
on the adequacy and effectiveness of the risk management and internal control system.
For the year ended 31 December 2023, the IA reviewed the adequacy and effectiveness of the internal control processes andnecessary actions have been and are being taken to remedy any significant failings or weaknesses for the financial year underreview and up to the date of approval of this Statement for inclusion in this Annual Report.
The Board, through the AC, has reviewed the effectiveness of the Group’s system of risk management and internal control.
There were no significant risk management and internal control aspects that would have resulted in any material losses orcontingencies that would require disclosure in this Annual Report.
The Board has received assurances from the Group MD/CEO and the Chief Financial Officer that for the year ended
31 December 2023, the Group’s risk management and internal control system is operating adequately and effectively in allmaterial aspects, based on the risk management and internal control system of the Group. Taking into consideration theinformation and assurances given, the Board is satisfied with the adequacy, integrity and effectiveness of the Group’s system ofrisk management and internal control.
Continuous quality assurance audits are being conducted as part of the requirements and compliance of the ISO 9001, ISO
13485, IATF 16949, MS ISO/IEC 17025, ISO 14001 and ISO 45001 certifications.
BOARD’S COMMITMENT
The Board remains committed towards keeping abreast with the ever-changing business environment in order to support
the Group’s business and operations. There were no material losses incurred during the current financial year as a result of
weaknesses in internal control that would require a separate disclosure in this Annual Report.
The Board and the Management, in striving for continuous improvement, have and will continue to put in place appropriate
measures to further strengthen and enhance the Group’s system of risk management and internal control environment.
REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS
in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk
Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants for inclusionin the Annual Report of the Group for the year ended 31 December 2023, and reported to the Board that nothing has come totheir attention that cause them to believe that the statement intended to be included in the Annual Report of the Group, in allmaterial respects:a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk
Management and Internal Control: Guidelines for Directors of Listed Issuers, orb) is factually inaccurate.
AAPG 3 does not require the external auditors to consider whether the Statement on Risk Management and Internal Control
covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management andinternal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors
are also not required to consider whether the processes described to deal with material internal control aspects of any significant
problems disclosed in the Annual Report will, in fact, remedy the problems.
This Statement has been approved by the Board on 16 April 2024.

SECTION 5

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out

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Audit Committee Report

The Audit Committee is pleased to present the Audit Committee Report for the year ended 31 December 2023.
1.

TERMS OF REFERENCE OF THE AUDIT COMMITTEE
The duties and responsibilities of the Audit Committee (“AC”) are set out in the Terms of Reference of the AC and is available
on KOSSAN’s website at www.kossan.com.my.
AC Terms of Reference

2.

COMPOSITION AND ATTENDANCE AT MEETINGSThe AC comprises the following members and the details of their attendance at the AC meetings held during the year ended
31 December 2023 were as follows:
Composition of the AC
Lee Choo HockAttendance
6/6(Chairman / Senior Independent Non-Executive Director)

Hoh Kim Hyan

6/6

(Member / Independent Non-Executive Director)

Sharon Shanthy a/p Dorairaj

6/6(Member / Independent Non-Executive Director)

Other directors and members of the Management team attended the AC meetings at the invitation of the AC, whennecessary. The Group’s external auditors attended three (3) of the meetings while the internal auditors attended five (5) of
the meetings.
3.

SUMMARY OF ACTIVITIESThe following activities were carried out by the AC during the financial year under review:

SECTION 5(a) Financial Reporting
Reviewed the quarterly and annual financial statements of the Group prior to submission to the Board for consideration
and approval.
(b) External Audit(i)

Reviewed and discussed with the external auditors the nature and scope of the audit and audit plan prior to thecommencement of audit and ensured the audit was comprehensive.

(ii) Discussed and reviewed the Group’s financial statements with the external auditors including issues and findings
noted in the course of the audit and Management’s responses thereto.
(iii) Reviewed the award of non-audit services provided by the external auditors and its affiliates and the overall
independence of the external auditors.
(iv) Assessed the suitability, objectivity and independence of the external auditors and recommended to the Board fortheir re-appointment.
(v) Conducted private meetings with the external auditors without the presence of Executive Directors or Management.

OUR GOVERNANCE

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

127

Audit Committee Report (Cont’d)

SUMMARY OF ACTIVITIES (CONT’D)(c) Internal Audit(i)

Reviewed the internal auditors’ reports which covered all business sectors of the Group, the audit findings and therecommendations on the internal control system.

(ii) Reviewed the follow-up audit reports submitted by the internal auditors to ensure the implementation of agreed
audit recommendations by Management in a timely manner.
(iii) Reviewed and approved the annual internal audit plan to ensure adequate scope and coverage of the Group’s key
activities.
(iv) Reviewed the competency and adequacy of resources of the internal audit function to ensure it is effective andable to function independently, and that all internal audit personnel are free from any relationships or conflicts ofinterest which could impair their objectivity and independence.
(d) Risk Management and Internal Controls(i)Reviewed the adequacy and effectiveness of internal control and risk management framework of the Group.

(ii) Reviewed and discussed with the external and internal auditors on their evaluation of the system of internal
control of the Group.
(iii) Reviewed the risk profile of the Group and the business divisions and action plans by Management to mitigate
risks.

(e) Annual Report
Reviewed the AC Report, Statement on Risk Management and Internal Control, Corporate Governance Overview
Statement and Corporate Governance Report before recommending to the Board for inclusion in the annual report.
(f) Others(i)Reviewed the whistleblowing procedures and whistleblowing activities to monitor the actions taken in respect ofwhistleblowing reports received.

(ii) Reviewed the Terms of Reference of the AC pursuant to the amendments to the Main Market Listing Requirements
by Bursa Malaysia on AC.
(iii) Reviewed any related party transactions (“RPT”) and confirmed no conflict of interest situation that had arisen
within the Group including any transaction, procedure or course of conduct that raised questions of management
integrity.
(iv) Reviewed any RPT tabled by Management before presentation to the Board to ensure the RPT undertaken werein the best interest of the Group, the values were fair, reasonable and on normal commercial terms and were not
detrimental to the interest of the minority shareholders.
(v) Reviewed, on half yearly basis, the terms of the Shareholders’ Mandate for Recurrent Related Party Transactionsof a revenue or trading nature were adhered to and ensured procedures used were at arm’s length and inaccordance with the Group’s normal commercial terms and were not prejudicial to the minority shareholders or
disadvantageous to the Group.
The AC discharged its duties and responsibilities in accordance with its Terms of Reference.

SECTION 5

3.

128

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR GOVERNANCE

Audit Committee Report (Cont’d)4.

INTERNAL AUDIT FUNCTION
The Group has in place an in-house Internal Audit Department (“IA”) established by the Board to ensure a sound internal
control system is in place. The IA reports directly to the AC and is guided by the Internal Audit Charter. The IA performed
audits based on an annual internal audit plan approved by the AC. During the financial year under review, the IA performed
financial, operational and compliance audits. The IA also reviewed recurrent related party transactions for compliance tomandate.
The IA reported its findings, recommendations and Management’s responses to the AC on a quarterly basis. Follow-up
reviews were conducted and the status of the implementation of action plans were monitored and reported to the AC.
The cost incurred for the internal audit function for the financial year ended 31 December 2023 was RM383,973(2022: RM540,699)

5.

REPORT TO THE EXCHANGE
There were no material matters that warrant reporting to Bursa Malaysia Securities Berhad.

6.

EVALUATION OF THE AC
The Nominating Committee (“NC”) reviewed the term of office and performance of the AC and each of its members
through an annual effectiveness evaluation. The NC was satisfied that the AC and members had carried out their duties
in accordance to their Terms of Reference.

SECTION 5

Lee Choo Hock
Chairman
Audit Committee
16 April 2024

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

129

Director’s Responsibility Statement

The Directors are required by the Companies Act 2016 (“the Act”) to prepare the financial statements for each financial year
which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of
the results and cash flow of the Group and of the Company for the financial year. As required by the Act and the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad, the financial statements have been prepared in accordance with theapplicable Financial Reporting Standards in Malaysia.
In preparing these financial statements, the Directors have:(a)

Adopted appropriate accounting policies and applied them consistently;(b)Made judgments and estimates that are reasonable and prudent; and(c)Prepared the financial statements on a going concern basis;

The Directors are responsible to ensure that the Group keeps accounting records which disclose with reasonable accuracy thefinancial position of the Group and to ensure these financial statements comply with the Act. The Directors are also responsible
for taking such steps as are reasonably open to them to preserve the interest of stakeholders, to safeguard the assets of theGroup and to detect and prevent fraud and other irregularities.

SECTION 7

This Directors’ Responsibility Statement is made in accordance with the resolution of the Board of Directors dated
16 April 2024.

130

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Directors’ Reportfor the Year Ended 31 December 2023

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company
for the financial year ended 31 December 2023.

PRINCIPAL ACTIVITIESThe Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are asstated in Note 8 to the financial statements. There has been no significant change in the nature of these activities during thefinancial year.

ULTIMATE HOLDING COMPANY
The Company is a subsidiary of Kossan Holdings (M) Sdn. Bhd., of which is incorporated in Malaysia and regarded by the Directors
as the Company’s ultimate holding company, during the financial year and until the date of this report.

SUBSIDIARIESThe details of the Company’s subsidiaries are disclosed in Note 8 to the financial statements.

RESULTSGroup
RM’000Company
RM’000Owners of the Company

13,337

18,614Non-controlling interests

2,979

-

16,316

18,614

Profit for the year attributable to:

RESERVES AND PROVISIONSSECTION 6

There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed
in the financial statements.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

131

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

DIVIDENDS
Since the end of the previous financial year, the amounts of dividends paid by the Company were as follows:i)

In respect of the financial year ended 31 December 2022:•

ii)

a first interim single tier ordinary dividend of 2.5 sen per ordinary share totalling RM63,790,491 declared on 16
February 2023 and paid on 22 March 2023.

In respect of the financial year ended 31 December 2023:•

an interim single tier ordinary dividend of 2 sen per ordinary share totalling RM51,032,392 declared on 22 February
2024 and paid on 08 April 2024.

The final single tier ordinary dividend recommended by the Directors in respect of the financial year ended 31 December 2023
is 2 sen per ordinary share total RM51,032,392.
DIRECTORS OF THE COMPANY
Directors who served during the financial year until the date of this report are:Tan Sri Dato’ Lim Kuang Sia
Lee Choo Hock
Lim Ooi Chow
Lim Siau Tian
Lim Siau Hing
Tan Kong Chang
Mohamed Shafeii Bin Abdul Gaffoor
Hoh Kim Hyan
Sharon Shanthy A/P Dorairaj
The Directors of the Company’s subsidiaries (excluding Directors who are also Directors of the Company) in office during thefinancial year until the date of this report are:

SECTION 6

Lim Kuang Yong
Lim Leng Bung
Lee Seek Ping
Lim Siew Bing
Lee Hon Chee
Matthew Ang Hwee Tong
Wu Zhong
Dr. Or Tan Teng (Resigned on 30 April 2023)

132

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

DIRECTORS’ INTERESTS IN SHARES
The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly
owned subsidiaries) of those who were Directors at financial year end (including the interests of the parents, spouses or childrenof the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are
as follows:
Number of ordinary shares
At 1.1.2023

BoughtSold

At 31.12.2023

7,018,904

73,220,000(10,000,000)

70,238,904

Lim Kuang Yong^

920,500

73,220,000(10,000,000)

64,140,500

Lim Leng Bung^

1,804,600

73,732,800(10,000,000)

65,537,400

Tan Kong Chang-

50,000,000-

50,000,000

1,240,818,020

18,350,300(366,100,000)

893,068,320

3,177,984--

3,177,984

1,240,818,020

18,350,300(366,100,000)

893,068,320

100,000--

100,000

1,240,818,020

18,350,300(366,100,000)

893,068,320

1,529,200

490,100-

2,019,300

1,240,818,020

18,350,300(366,100,000)

893,068,320

10,196,888

73,220,000(10,000,000)

73,416,888

1,240,818,020

18,350,300(366,100,000)

893,068,320- parents

920,500

73,220,000(10,000,000)

64,140,500- spouse

637,900--

637,900

Kossan Rubber Industries Bhd.
Direct interests
Tan Sri Dato’ Lim Kuang Sia

Deemed interests
Tan Sri Dato’ Lim Kuang Sia **- holding company- spouse
Lim Leng Bung ** ^- holding company
Tan Kong Chang **- spouse
Lim Kuang Yong ** ^- holding company- children
Lim Ooi Chow**- holding company- parents
Lim Siau Tian**

SECTION 6- holding company

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

133

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

DIRECTORS’ INTERESTS IN SHARES (CONT’D)
Number of ordinary shares
At 1.1.2023

BoughtSold

At 31.12.2023

1,240,818,020

18,350,300(366,100,000)

893,068,320

2,000,000

73,520,000(10,600,000)

64,920,000-

15,805,000-

15,805,000

78,866--78,866616,134--

616,134

Kossan Rubber Industries Bhd. (cont’d)
Deemed interests (cont’d)
Lim Siau Hing**- holding company- parents
Lim Siew Bing**^- holding company
Cleanera HK Limited
Direct interests
Matthew Ang Hwee Tong^
Indirect interests
Matthew Ang Hwee Tong^**

Shares held through person connected to the Director or holding company.

^

These are the Directors of the Company’s subsidiaries in office during the financial year until the date of this report.

By virtue of their interests in the shares of the Company, Tan Sri Dato’ Lim Kuang Sia, Lim Leng Bung, Lim Kuang Yong, Lim Ooi
Chow, Lim Siau Tian, Lim Siau Hing and Lim Siew Bing are deemed interested in the shares of the subsidiaries during the financial
year to the extent that Kossan Rubber Industries Bhd. has an interest.

SECTION 6

None of the other Directors holding office at 31 December 2023 had any interest in the ordinary shares of the Company and of
its related corporations during the financial year.

134

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit(other than those shown below) by reason of a contract made by the Company or a related corporation with the Director or witha firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.
The Directors’ benefits paid to or receivable by Directors in respect of the financial year ended 2023 are as follows:
From
the Company
RM’000From
subsidiaries
RM’000

Fees

590

-

Remunerations

35

9,030

625

9,030

Directors of the Company:

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of theCompany to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
ISSUE OF SHARES AND DEBENTURES
There were no changes in the issued and paid-up capital of the Company and no debentures were issued during the financial
year.
OPTIONS GRANTED OVER UNISSUED SHARESNo options were granted to any person to take up unissued shares of the Company during the financial year.
INDEMNITY AND INSURANCE COSTSSECTION 6

There is no indemnity given to or insurance effected for Directors, officers or auditors of the Company during the financial year.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

135

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps toascertain that:i)all known bad debts have been written off and adequate provision made for doubtful debts, andii)

any current assets which were unlikely to be realised in the ordinary course of business have been written down to an
amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:i)that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group andin the Company inadequate to any substantial extent, orii)

that would render the value attributed to the current assets in the financial statements of the Group and of the Company
misleading, oriii)

which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of
the Company misleading or inappropriate, oriv)

not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial
statements of the Group and of the Company misleading.

At the date of this report, there does not exist:i)any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which
secures the liabilities of any other person, orii)

any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may
substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

SECTION 6

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended
31 December 2023 have not been substantially affected by any item, transaction or event of a material and unusual nature nor
has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

136

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Directors’ Report (Cont’d)for the Year Ended 31 December 2023

AUDITORS
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
The auditors’ remuneration of the Group and of the Company during the year are RM589,850 and RM62,400, respectively.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:…………………………………………………………
Tan Sri Dato’ Lim Kuang Sia
Director…………………………………………………………
Tan Kong Chang
Director

Klang, Selangor Darul Ehsan

SECTION 6

Date: 16 April 2024

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

137

Statements of Financial Position
as at 31 December 2023

Group

Company

Note2023
RM’0002022
RM’0002023
RM’0002022
RM’000Property, plant and equipment

3

1,294,426

1,356,924

142,221112,915

Right-of-use assets

469,75863,071--

Investment properties

5

28,10640,16818,534

18,918Goodwill on consolidation

6

4,926

4,926

-

-

Intangible assets

7

1,178

1,108

-

-

Investments in subsidiaries

8

-

-

307,851

307,418

Other investments

9

366

181

15

15

Deferred tax assets

10

3,952

4,254

-

-

Trade and other receivables

11

-

-

193,047

182,693

1,402,712

1,470,632

661,668

621,959

239,228

287,073--

Total non-current assets
Inventories

12

Other investments

9822,708

724,567

269,924

240,459

Trade and other receivables

11

248,389

275,969

1,922

196

Prepayments

19,205

15,3201,530

81

Current tax assets

198,236

205,577-

5

Derivative financial assets

18

523

-

-

-

Cash and cash equivalents

14

1,271,323

1,348,010

367,085

482,442

Total current assets

2,799,612

2,856,516

640,461

723,183

Total assets

4,202,324

4,327,148

1,302,129

1,345,142

SECTION 6

Assets138

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCEStatements of Financial Position (Cont’d)
as at 31 December 2023

Group

Company

Note2023
RM’0002022
RM’0002023
RM’0002022
RM’000Share capital

15.1

323,885

323,885

323,885

323,885

Translation reserve

15.2

14,583

3,817

-

-

Capital reserve

15.3

2,431

2,431

-

-

Treasury shares

15.4

Equity(26,764)(26,764)(26,764)(26,764)Retained earnings

3,521,844

3,572,297

994,162

1,039,338

Equity attributable to ownersof the Company

3,835,979

3,875,666

1,291,283

1,336,459

27,021

22,266--

3,863,000

3,897,932

1,291,283

1,336,459

Non-controlling interests
Total equity
Liabilities
Loans and borrowings

16

Lease liabilities
Deferred tax liabilities

10

Total non-current liabilities

254

918

-

-

4,875

5,846

-

-

120,479

137,703

4,836

2,826

125,608

144,467

4,836

2,826

10,18571,313-375

Lease liabilities

2,024

5,477

-

-

Current tax liabilities

2,112

1,862

216

-

7,352

4,709

-

-

Loans and borrowings

16

Contract liabilities

13

Derivative financial liabilities

18

-

1,214

-

-

Trade and other payables

17

192,043

200,174

5,794

5,482

Total current liabilities

213,716

284,749

6,010

5,857

Total liabilities

339,324429,216

10,846

8,683

4,202,324

4,327,148

1,302,129

1,345,142

SECTION 6

Total equity and liabilities

The notes on pages 149 to 201 are an integral part of these financial statements.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

139

Statements of Profit or Loss and Other
Comprehensive Income
for the Year Ended 31 December 2023

Revenue

Company

Note2022
RM’00019

2023
RM’0002022
RM’0001,591,043

2,343,764-

131,719

Other income

47,53644,132

9,416

7,500

Changes in inventories of finishedgoods and work-in-progress(33,386)(71,705)--

Raw materials and consumables used

(885,161)(1,263,277)--

Goods purchased for resale(31,946)(57,870)--

Staff costs(299,184)(374,498)(627)(1,610)3(108,573)(125,246)(763)(1,404)57(1,023)--

3(35,384)---(252,078)(309,767)(4,492)(6,912)(7,076)

184,5103,534

129,293

Depreciation of property, plant and equipment
Reversal of impairment loss/(Impairment loss)
on trade receivables
Impairment loss on plant and equipment
Other operating expenses
Results from operating activities
Finance costs

20(1,412)(4,254)(8)(28)

Finance income

21

43,03033,266

19,70817,012

34,542

213,522

23,234

146,277

Profit before tax
Tax expense23(18,226)(54,310)(4,620)(5,076)

Profit for the year24

16,316

159,212

18,614

141,201

SECTION 6

Group
2023
RM’000140

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCEStatements of Profit or Loss and Other
Comprehensive Income (Cont’d)for the Year Ended 31 December 2023

Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000Foreign currency translation differences forforeign operations

12,542(9,857)--

Other comprehensive income/(expense) for
the year, net of tax

12,542(9,857)--

Total comprehensive income for the year

28,858149,355

18,614

141,201

Owners of the Company

13,337

157,095

18,614

141,201

Non-controlling interests

2,979

2,117

-

-

16,316

159,212

18,614

141,201

Owners of the Company

24,103148,022

18,614

141,201

Non-controlling interests

4,755

1,333

-

-

28,858149,355

18,614

141,201

Note
Other comprehensive income/(expense),
net of tax
Item that may be reclassified subsequently
to profit or loss

Profit attributable to:Profit for the year
Total comprehensive income attributable to:Total comprehensive income for the year
25

0.52

6.16

Diluted earnings per ordinary share (sen)

25

0.52

6.16

SECTION 6

Basic earnings per ordinary share (sen)The notes on pages 149 to 201 are an integral part of these financial statements.

At 31 December 2022

SECTION 6(26,764)
Note 15.4

Note 15.1

-

-

-

-

-

-

-

(26,764)

Note 15.2

3,817

-

-

-

(9,073)-(9,073)(9,073)

12,890Treasury Translation
sharesreserve
RM’000
RM’000323,885--

Dividends to owners of the Company

Acquisition of non-controlling interests-

Total comprehensive income for the year--

Profit for the year

26-

Total other comprehensive expense for theyear

Dividends to non-controlling interests-

323,885

Foreign currency translation differences forforeign operations

At 1 January 2022

Group

Note

Share
capital
RM’000Non-distributable

Note 15.3

2,431

1,492

-

-

-

-

-

-

939

Capitalreserve
RM’0003,572,297--(306,194)

157,095

157,095--

3,721,396

Retainedearnings
RM’000Distributable

Attributable to owners of the Company

3,875,666

1,492

-

(306,194)

148,022

157,095(9,073)(9,073)

4,032,346

Total
RM’00022,266(5,410)(1,660)

-

1,333

2,117

(784)

(784)

28,003

Noncontrollinginterests
RM’0003,897,932(3,918)(1,660)(306,194)

149,355

159,212(9,857)(9,857)4,060,349

Total
equityRM’000OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

141

Consolidated Statement of Changes in Equity
for the Year Ended at 31 December 2023

The notes on pages 149 to 201 are an integral part of these financial statements.

Note 15.4

Note 15.1--

Dividends to owners of the Company(26,764)--

Total comprehensive income for the year
323,885--

Profit for the year

Note 15.2

14,583-

10,766-

10,766

10,766

3,817

Note 15.3

2,431

-

-

-

-

-

2,431

Capitalreserve
RM’0003,521,844(63,790)

13,337

13,337--

3,572,297

Retainedearnings
RM’000Distributable

3,835,979(63,790)

24,103

13,337

10,766

10,766

3,875,666

Total
RM’00027,021

-

4,755

2,979

1,776

1,776

22,266

Noncontrollinginterests
RM’0003,863,000(63,790)

28,85816,316

12,542

12,542

3,897,932

Total
equityRM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

At 31 December 2023

-

-

-

(26,764)-

323,885

Treasury Translation
sharesreserve
RM’000
RM’000Total other comprehensive income for the
year

26

Note

Share
capital
RM’000Non-distributable

Attributable to owners of the Company

Foreign currency translation differences forforeign operations

At 1 January 2023

Group

SECTION 6142
OUR PERFORMANCE

Consolidated Statement of Changes in Equity (Cont’d)for the Year Ended at 31 December 2023

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

143

Statement of Changes in Equity
for the Year Ended at 31 December 2023

Non-distributable

Note

Distributable

Share
capital
RM’000Treasuryshares
RM’000Retainedearnings
RM’000Total
equityRM’000323,885(26,764)

1,204,331

1,501,452--

141,201

141,201

Company
At 1 January 2022
Profit and total comprehensive income
for the year--

(306,194)(306,194)

At 31 December 2022/1 January 2023

Dividends to owners of the Company

323,885(26,764)

1,039,338

1,336,459

Profit and total comprehensive income
for the year--

18,614

18,614--(63,790)(63,790)323,885(26,764)

994,162

1,291,283

Note 15.1

Note 15.4

Dividends to owners of the Company

26

SECTION 6

At 31 December 2023

26

The notes on pages 149 to 201 are an integral part of these financial statements.

144

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCEStatements of Cash Flowsfor the Year Ended at 31 December 2023

Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’00034,542

213,522

23,234

146,2773

108,573

125,246

763

1,404

Note
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant andequipment
Depreciation of right-of-use assets

4

4,276

4,709

-

51

Depreciation of investment properties

5

343

336

384

386

Finance costs

20

1,412

4,254

8

28

Finance income

21(43,030)(33,266)(19,708)(17,012)(22,685)(17,032)(8,019)(6,379)35,384

-

-

-

(57)

1,023

-

-

Fair value gain on other investments
Impairment loss on property,
plant and equipment

3(Reversal of impairment loss)/Impairment
loss on trade receivables

94

110

-

-

Gain on disposal of property, plant andequipment

(335)

(260)

-

(28)

Gain on disposal of investment property-(5,478)

-

-

(48)

(34)

-

-

Amortisation on intangible assets

7

Net gain on termination of right-of-use assets
Net unrealised fair value changes onderivatives

24

(523)

1,248

-

-

Net unrealised foreign exchange differences

24

1,349

1,939

-

-

Property, plant and equipment written off

24

5,330

6,090

8

-

Loss on disposal of joint venture

-

1,400

-

-

Bargain purchase on acquisition of subsidiary-(1,080)--124,625

302,727(3,330)124,727

SECTION 6

Operating profit/(loss) before changes inworking capital

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

145

Statements of Cash Flows (Cont’d)for the Year Ended at 31 December 2023

Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000Operating profit/(loss) beforechanges in working capital

124,625

302,727(3,330)124,727

Change in inventories

47,845

136,949--

Change in trade and otherreceivables and prepayments

21,189297,432(13,529)(19,183)

Change in trade and other payables(8,131)(97,113)312(23,086)

Change in contract liabilities

2,643(18,757)--

Cash generated from/(used in) operations

188,171621,238(16,547)

82,458Interest received

43,03033,266

19,70817,012(886)(2,649)(8)(28)

Tax paid(29,567)(560,487)(2,389)(4,153)

Tax refund

2,010

2,013

-

-

202,758

93,381

764

95,289(86,954)(115,260)(35,767)(27,335)(75,641)(707,535)(21,446)(233,989)

NoteInterest paid

Net cash from operating activities
Acquisition of property, plant and equipment
Acquisition of other investments

(iii)

(164)

(104)

-

-

Acquisition of non-controlling interests-(3,918)--

Increase in investments in subsidiaries

-

-

(433)

(135,777)

Proceeds from disposal of property, plant andequipment

614

2,678

28

1,455

Proceeds from intra-group transfer of property,
plant and equipment

-

-

5,662

-

Proceeds from disposal of investment property-

10,701--

Proceeds from disposal of right-of-use asset

-

80

-

-

Acquisition of subsidiary, net of cash and cash
equivalents

-

1,028

-

-

(162,145)(812,330)(51,956)(395,646)

Acquisition of intangible assets

Net cash used in investing activities

SECTION 6

Cash flows from investing activities

146

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCEStatements of Cash Flows (Cont’d)for the Year Ended at 31 December 2023

Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

Dividends paid to owners of the Company(63,790)(306,194)(63,790)(306,194)

Dividends paid to non-controlling interests-(1,660)

-

-

(526)

(1,856)--

Net repayment of other borrowings(18,563)(103,817)

(375)

(597)

Repayment of term loans(43,229)(63,452)--

Payment of lease liabilities(3,697)(3,936)-(72)

Net cash used in financing activities(129,805)(480,915)(64,165)(306,863)

Net decrease in cash and cash equivalents(89,192)(1,199,864)(115,357)(607,220)

Effect of exchange rate fluctuations on cash
held

12,505(9,891)--

1,348,010

2,557,765

482,442

1,089,662(ii)

1,271,323

1,348,010

367,085

482,442

Note

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

Payment relating to short-term leases

24

1,742

1,792

-

-

Payment relating to leases of low-value assets

24

183

124

-

-

Interest paid in relation to lease liabilities

20

386

543

-

1

Payment of lease liabilities

3,697

3,936

-

72

Total cash outflows for leases

6,008

6,395

-

73

Note
Cash flows from financing activities

Interest paid

Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December(i)Cash outflows for leases as a lesseeGroupCompany

Included in net cash from operating
activities:

SECTION 6

Included in net cash from financing
activities:

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

147

Statements of Cash Flows (Cont’d)for the Year Ended at 31 December 2023

(ii)

Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position
amounts:
Group

Company

Note2023
RM’0002022
RM’0002023
RM’0002022
RM’00014

102,844

114,618

1,060

1,077

Short term investments

14

1,061,979

1,064,476

364,025

446,365

Short term deposits placed with licensed banks

14

106,500

168,9162,000

35,0001,271,323

1,348,010

367,085

482,442

Cash and bank balances

Acquisition of property, plant and equipment
In prior year, the Group acquired property, plant and equipment with an aggregate cost totalling RM116 million out of
which RM1 million were financed by means of hire purchase arrangement.

SECTION 6(iii)

251,801

Total liabilities
fromfinancing
activities
1,886

1,886

-

-

-

72

1,044

Lease liabilities

Total liabilities
fromfinancing
activities
(669)

(72)

(597)

-

-

-

(375)

-

-

375

(375)

-

-

-

At 31
December
2023
RM’000At 31
December Net changes
from
2022/
financing
1 January
cash flows
2023
RM’000
RM’000375(65,489)(731)(3,697)

1,357(17,832)(43,229)

11,32327,353

43,521

-

-

-

-

-

532

532

-

-

-

(1,259)(1,259)

-

-

-

Net
changes
New Acquisition
fromof new Termination
financing hire purchaseof leaseleasescash flows arrangements
RM’000
RM’000
RM’000
RM’00083,554(28)(28)

The notes on pages 149 to 201 are an integral part of these financial statements.

972

Net changes
from
At 1
financing
January2022 cash flows
RM’000
RM’000

1,100

-

1,100

-

-

Hire purchasefinancing(171,205)(3,936)(715)(103,102)(63,452)

At 31
December2022/
1 January
2023
RM’00017,338

6,899

626

9,521

292

At 31
December
2023
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

Company

972

13,401

Lease liabilities

130,455

Trade finance unsecured

Hire purchasefinancing

106,973

Term loans unsecured

Group

At
1 January
2022
RM’000Netchanges
New hire Acquisition
fromof new Termination
purchasefinancingof leaseleasescash flows arrangements
RM’000
RM’000
RM’000
RM’000Reconciliation of movements of liabilities to cash flows arising from financing activities

SECTION 6148
OUR PERFORMANCEStatements of Cash Flows (Cont’d)for the Year Ended at 31 December 2023

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

149

Notes to the financial statements

Kossan Rubber Industries Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on theMain Market of Bursa Malaysia Securities Berhad. The address of the principal place of business and registered office of theCompany is as follows:
PRINCIPAL PLACE OF BUSINESS/REGISTERED OFFICE
Wisma Kossan
Lot 782, Jalan Sungai Putus
Off Batu 3 ¾, Jalan Kapar
42100 Klang
Selangor Darul Ehsan
The consolidated financial statements of the Company as at and for the financial year ended 31 December 2023 comprise theCompany and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The financial
statements of the Company as at and for the financial year ended 31 December 2023 do not include other entities.
The Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are asstated in Note 8 to the financial statements.
The holding company during the financial year was Kossan Holdings (M) Sdn. Bhd. which was incorporated in Malaysia.
These financial statements were authorised for issue by the Board of Directors on 16 April 2024.

BASIS OF PREPARATION(a)Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRSs”), IFRS Accounting Standards as issued by the International AccountingStandards Board (“IFRS Accounting Standards”) and the requirements of the Companies Act 2016 in Malaysia.
The following are accounting standards, interpretations and amendments of the MFRSs that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:

MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2024•
Amendments to MFRS 16, Leases – Lease Liability in a Sale and Leaseback•
Amendments to MFRS 101, Presentation of Financial Statements – Non-current Liabilities with Covenants andClassification of Liabilities as Current or Non-current•
Amendments to MFRS 107, Statement of Cash Flows and MFRS 7, Financial Instruments: Disclosures – Supplier
Finance Arrangements
MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2025•
Amendments to MFRS 121, The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability
MFRSs, interpretations and amendments effective for annual periods beginning on or after a date yet to be
confirmed•
Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint
Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

SECTION 6

1.

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

150

OUR PERFORMANCE

Notes to the financial statements (Cont’d)1.

BASIS OF PREPARATION (CONT’D)(a)Statement of compliance (cont’d)
The Group and the Company plan to apply the abovementioned amendments:•from the annual period beginning on 1 January 2024 for the amendments, that are effective for annual periods
beginning on or after 1 January 2024.

•

from the annual period beginning on 1 January 2025 for the amendments that are effective for annual periods
beginning on or after 1 January 2025.

The initial application of the applicable amendments is not expected to have any material financial impact to thecurrent period and prior period financial statements of the Group and the Company.
(b)

Basis of measurement
The financial statements of the Group and the Company have been prepared on the historical cost basis except for
the following items, which are measured based on the measurement bases stated below:
Items 							Measurement bases
Derivative financial instruments				Fair value
Non-derivative financial instruments at FVTPL		Fair value(c)Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All
financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d)

Use of estimates and judgements
The preparation of the financial statements in conformity with MFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimates are revised and in any future periods affected.

SECTION 6

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies thathave significant effect on the amounts recognised in the financial statements other than those disclosed in thefollowing notes:•••

Note 3 – measurement of value-in-use of plant and machinery
Note 4 – extension options and incremental borrowing rates in relation to leases
Note 11 – measurement of the recoverability of trade receivables

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

151

Notes to the financial statements (Cont’d)

MATERIAL ACCOUNTING POLICIES(a)

Changes in material accounting policies(i)Material accounting policy information
The Group adopted amendments to MFRS 101, Presentation of Financial Statements and MFRS Practice Statement
2 – Disclosures of Accounting Policies from 1 January 2023. The amendments require the disclosure of ‘material’,
rather than ‘significant’, accounting policies. The amendments also provide guidance on the application ofmateriality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting
policy information that users need to understand other information in the financial statements.
Although the amendments did not result in any changes to the Group’s accounting policies, it impacted theaccounting policy information disclosed in the financial statements.
Management reviewed the accounting policies and made updates to the information disclosed in material
accounting policies (2022: significant accounting policies) in certain instances in line with the amendments.
The accounting policies set out in note 2(b) to (k) have been applied consistently to all periods presented
in these financial statements, except as explained above, which addresses changes in material accounting
policies.

(b)Basis of consolidation(i)

Subsidiaries
Investments in subsidiaries are measured in the Company’s statement of financial position at cost lessaccumulated impairment losses.

(c)

Property, plant and equipment(i)

Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any
accumulated impairment losses.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.

SECTION 6

2.

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

152

OUR PERFORMANCE

Notes to the financial statements (Cont’d)2.

MATERIAL ACCOUNTING POLICIES (CONT’D)(c)

Property, plant and equipment (cont’d)(ii)

Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of eachcomponent of an item of property, plant and equipment from the date that they are available for use. Freehold
land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets
are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:• Buildings					50 years• Plant and machinery				5 - 10 years• Motor vehicles					5 years• Factory renovation				
10 years• Factory furniture and equipment			
10 years• Electrical installation				
10 years• Office furniture, equipment and renovation		
5 - 10 years(d)Leases(i)

Lease and non-lease components
At inception or on reassessment of a contract that contains a lease component, the Group allocates theconsideration in the contract to each lease and non-lease component on the basis of their relative stand-alone
prices. However, for leases of properties in which the Group is a lessee, it has elected not to separate non-lease
components and will instead account for the lease and non-lease components as a single lease component.

(ii)

Recognition exemption
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that havea lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the subleaseseparately. It assesses the lease classification of a sublease with reference to the right-of-use asset arising fromthe head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which theGroup applies the exemption described above, then it classifies the sublease as an operating lease.

SECTION 6(e)Intangible assets(i)

Recognition and measurement
Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, aremeasured at cost less any accumulated amortisation and any accumulated impairment losses.

(ii)

Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets. The estimated useful lives for the patent is 10 years.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

153

Notes to the financial statements (Cont’d)

MATERIAL ACCOUNTING POLICIES (CONT’D)(f)

Investment properties
Investment properties are initially and subsequently measured at cost. Investment properties are accounted forsimilarly to property, plant and equipment.

(g)Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is calculated using theweighted average method.

(h)Goodwill on consolidation
Goodwill arises from business combinations is measured at cost less any accumulated impairment losses.

(i)

Other investments(i)Money market funds placed with financial institutions
The Group classifies money market funds placed with financial institutions not held for working capital purposesthat has a maturity of more than three months as other investments.

(j)Deferred tax assets/(liabilities)
The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of
the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date.

(k)

Financial instruments
Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:••

the amount of the loss allowance; andthe amount initially recognised less, when appropriate, the cumulative amount of income recognised inaccordance to the principles of MFRS 15, Revenue from Contracts with Customers.

SECTION 6

2.

3.

(277)

-

-

-

DisposalsWrite-off

Reclassification**

Effect of movement inexchange rates

77

-

-

426,401---

354,597

Reclassification**

Intra-group transfer

Effect of movement inexchange rates

At 31 December 2023

1,172,055--

15,691(56,392)

17,621

-

-

764

-

(1,647)

8,985

-

-

51

(1,864)-135

10,66329,490

-

-

46

(109)

-

284

29,269

-

46

(990)

(93)

1,021

29,285

5,365

-

-

5

(53)

-

-

5,413

-

241

(1,235)

-

352

6,055

41,828

56

5,662

338

(2,011)

(276)

2,877

35,1829551(2,141)(4,001)

4,640

36,124

21,82341,647--(15,691)(618)-

29,50828,448-(11,985)--

18,61079,175

176,236

-

-

(515)

(30)

-

43,665133,116-(1,468)-(61)

55,4702,625-(5,662)-(3,676)2,276,850

56

-

766

(66,523)

86,954-

2,259,273(1,730)

1,403

2,024

6,263

-

-

(87,996)(19,202)-116,360

2,250,438

-

4,487
1,776

At the end of the financial year, the net carrying amount of motor vehicles held under hire purchase arrangements is RM1.1 million (2022: RM3.2 million).

Assets held under hire purchase arrangements

Included in the reclassification are motor vehicles acquired by means of hire purchase arrangements which have been fully paid off and reclassed from rightof-use assets to property, plant and equipment.

(5,399)(47)

Write-off(1,753)

1,736

16,768

-

501

(833)

-

187

10,808**--

Disposals

5,936

1,208,573

78

1,403

(124)

(6,216)

2,892

18,735

Included in the freehold land is an amount of USD2,794,500 equivalent to RM12.8 million as at 31 December 2023 (31 December 2022: USD2,894,771
equivalent to RM12.7 million) representing the freehold land and building of an overseas subsidiary of which the carrying amount of the building is notsegregated from the freehold land as the required details are not available.

789-(1,817)

11,311(81,574)(8,446)

29,663

1,259,436

Total
RM’000*430,934

354,644

Additions-803(1,099)

(108)

1,734

429,604

Buildings
RM’000Plant
andmachinery
RM’000

OfficeFactory
furniture,
Plant andfurnitureequipment machinery
Building
Software
Motor
Factory
andElectrical
and
under
under
under
vehicles renovation equipment installation renovation construction construction development
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

31 December 2022/
1 January 2023

15354,906

Additions

At 1 January 2022

Cost

Group

Freeholdland*
RM’000PROPERTY, PLANT AND EQUIPMENTSECTION 6154
OUR PERFORMANCE

Notes to the financial statements (Cont’d)

3.

-

Reclassification**exchange rates--(1,994)

124

-

-

-

-

-

Impairment loss

DisposalsWrite-off

Reclassification**

Effect of movement inexchange rates-

83,025--354,644354,597

At 31 December 2023

338,533

439,411507,710

833,52233,751

799,771-11(55,200)(1,636)33,75187,434

769,162

769,162(1,836)-(75,705)(8,043)103,020751,726

751,726

Plant
andmachinery
RM’000

5,071

5,582

4,837

12,550-12,550-688-(1,550)-2,226

11,186

11,186

57

842

(124)

(5,508)2,021

13,89813,898

3,074

3,138

2,744

5,911

3

5,908

-

(127)

(1,864)

-

3

374

7,525

7,525

-

-

(833)

-

294

8,064

8,064

6,618

9,201

10,23722,872

1,351

21,521

-

19

(107)

-

1,351

1,541

20,06820,068

-

-

(976)

(15)

2,011

19,04819,048

1,682

1,820

1,359

3,683

6

3,677

-

-

(53)

-

6

137

3,593

3,593

-

-

(1,235)

-

132

4,696

4,696

20,967

17,97020,06920,861

273

20,58819(26)(1,975)

(211)

273

5,569

17,212

17,21215-(2,116)(3,110)6,368

16,055

16,05541,64728,44821,823

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

176,236

133,116

79,175

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2,625

6,263

4,487

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

OfficeFactory
furniture,
Plant andfurnitureequipmentmachinery
Building
Software
Motor
Factory
andElectrical
and
under
under
under
vehicles renovation equipment installation renovation construction construction development
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’0001,294,426

1,356,924

1,373,723

982,424

35,384

947,040

19

689(61,193)(3,397)35,384

108,573902,349

902,349(1,764)842(81,906)(16,784)

125,246876,715876,715

Total
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

SECTION 6

357,331343,376354,906

At 1 January 2022

366,376

83,025-

At 31 December 2022/
1 January 2023

Carrying amounts

impairment loss

Accumulated
depreciation
Accumulated-

11,292-

Charge for the year

At 31 December 2023

73,60373,603

-

-

-

(917)

(108)

-

Accumulated
depreciation

At 31 December 2022/
1 January 2023--

Write-off

Effect of movement in-

Disposals

63,228

11,400--63,228

Buildings
RM’000-Charge for the year

Accumulated
depreciation

At 1 January 2022

impairment loss

Depreciation andGroup

Freeholdland
RM’000PROPERTY, PLANT AND EQUIPMENT (CONT’D)OUR PERFORMANCE

155

Notes to the financial statements (Cont’d)

156

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

3.

PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Impairment of plant and machinery
The current global oversupply of rubber gloves and overcapacity which resulted in low average selling prices and low plantutilisation, respectively, have prompted the Group to carry out review on its plant and machinery to ascertain if there is
impairment required.
Arising from the review, certain aged plant and machinery which are less efficient were identified for decommissioning andtheir carrying amount of RM35.4 million was fully impaired as at 31 December 2023.

SECTION 6

For other plant and machinery which were temporarily decommissioned for modification to improve cost efficiency, theGroup has carried out impairment test. Based on the impairment test performed, there is no impairment required as theestimated recoverable amount of these plant and machinery is higher than its carrying amount.

3.

2,764
2,678

42,63842,638

2,062
1,459

3,222

2,113
603
2,716

3,116
628
(1,891)
260

4,175
4,175

6,338
(2,596)
433

555
445

1,814

628
74
(138)
(283)
281

2,260
690
(2,120)
(202)
-

1,183
(166)
(291)
726

4,074
153
(2,842)(202)-

58,63392,37633,227--58,63333,74392,37633,22725,406-

Building
under
construction
RM’000

6,263
2,625

4,487

-

-

6,263
2,024
(5,662)
2,625

4,487
1,776
-

Softwareunder
development
RM’000112,915
142,221

88,238

3,776
763
(138)
(283)
4,118

6,325
1,404
(4,011)(202)
260

116,691
35,767(166)(5,662)(291)
146,339

94,56327,335(5,438)
(202)
433

Total
RM’000SECTION 6

Included in the reclassification are motor vehicles acquired by means of hire purchase arrangements which have been fully paid off and reclassed from rightof-use assets to property, plant and equipment.

2,850

1,035
86
1,121

-

42,638

949
86
-

3,799
3,799

42,63842,638-

3,799-

42,638-

Buildings
RM’000

Officefurniture,
Motor equipment andvehiclesrenovation
RM’000
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023***

At 1 January 2022
At 31 December 2022/
1 January 2023
At 31 December 2023

Carrying amounts

Accumulated depreciation
At 1 January 2022
Charge for the year
Disposals
Reclassification***Write-off
At 31 December 2022/
1 January 2023
Charge for the year
DisposalsWrite-off
At 31 December 2023

Cost
At 1 January 2022
Additions
Disposals
Reclassification***Write-off
At 31 December 2022/
1 January 2023
Additions
Disposals
Intra-group transfer
Write-off
At 31 December 2023

Company

Freeholdland
RM’000PROPERTY, PLANT AND EQUIPMENT (CONT’D)OUR PERFORMANCE

157

Notes to the financial statements (Cont’d)KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

158

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

3.

PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Assets held under hire purchase arrangements
At the end of the financial year, the net carrying amount of motor vehicles held under hire purchase arrangements is RM
nil (2022: RM1.9 million).

4.

RIGHT-OF-USE ASSETS

Note

Land
RM’000

Buildings
RM’000MotorvehiclesRM’000

Total
RM’00036,943

8,434

1,040

46,417

-

1,886

-

1,886

251

-

-

251

-

(25)

(49)

(74)

19,861*-(561)

19,300Group
At 1 January 2022
Additions
Borrowing costs capitalised at 3.31% per
annum

4.3

Termination
Reclassification

3,5

Depreciation(770)(3,624)(315)(4,709)56,285

6,671

115

63,071

Additions

-

532

-

532

Termination-(1,211)-(1,211)

11,719*-(77)

11,642(813)(3,425)(38)(4,276)

67,191

2,567-

69,758

-

224

224

At 31 December 2022/1 January 2023

Reclassification

3,5

Depreciation
At 31 December 2023
Company
At 1 January 2022
Depreciation

-

-

(51)

(51)

Reclassification

-

-

(173)

(173)

At 31 December 2022/
1 January 2023/ 31 December 2023

-

-

-

-

*

SECTION 6-

The reclassification of land is a reclassification from investment property to right-of-use assets due to a change in theuse of the asset.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

159

Notes to the financial statements (Cont’d)

RIGHT-OF-USE ASSETS (CONT’D)
The Group leases a number of land, factory buildings, worker hostels and motor vehicles. The leasehold land has leaseterm of 95 years. The remaining leases typically run for a period between one to seven years, with an option to renew theleases after that date. Lease payments are increased every two to three years to reflect current market rentals.
4.1

Extension options
Some leases of factory buildings and worker hostels contain extension options exercisable by the Group not lessthan 6 months before the end of the non-cancellable contract period. Where applicable, the Group seeks to include
extension options in new leases to provide operational flexibility. The extension options held are exercisable only by
the Group and not by the lessors. The Group assesses at lease commencement whether it is reasonably certain to
exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there
is a significant event or significant change in circumstances within its control.
None of the leases of motor vehicles contain extension options exercisable by the Company before the end of the
non-cancellable contract period.

Group

4.2

Potential future
Lease lease payments
liabilities not included inrecognised lease liabilities(discounted)(discounted)
RM’000
RM’000

Historicalrate ofextension
options
%

Land

2,866

-

100

Buildings

1,067

-

100

3,933

-

100

Significant judgements and assumptions in relation to leases
The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain to
exercise the extension options. The Group considers all facts and circumstances including their past practice and any
cost that will be incurred to change the asset if an option to extend is not taken, to help them determine the lease
term.
The Group also applied judgement and assumptions in determining the incremental borrowing rates of the respective
leases. The Group first determines the closest available borrowing rates before using significant judgement todetermine the adjustments required to reflect the term, security, value or economic environment of the respective
leases.

4.3

Borrowing costs
Included in the additions of right-of-use for land is an amount of RM nil (2022: RM251,174) representing the borrowing
costs capitalised (see Note 20).

SECTION 6

4.

160

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)5.

INVESTMENT PROPERTIES
LeaseholdLand
RM’000

Buildings
RM’000

Total
RM’00067,295(5,223)(19,861)
42,211(12,036)
30,175-67,295(5,223)(19,861)
42,211(12,036)
30,175

Accumulated depreciation
At 1 January 2022

1,707

-

1,707

Charge for the year
At 31 December 2022/1 January 2023
Charge for the year
Reclassification
At 31 December 2023

336
2,043
343
(317)
2,069

-

336
2,043
343
(317)
2,069

Carrying amounts
At 1 January 2022

65,588-65,588At 31 December 2022/1 January 2023

40,168-40,168At 31 December 2023

28,106-28,106

FreeholdLand
RM’000

Buildings
RM’000

Total
RM’00010,10012,30522,405

Accumulated depreciation
At 1 January 2022
Charge for the year

-

3,101
386

3,101
386

At 31 December 2022/1 January 2023
Charge for the year
At 31 December 2023

-

3,487
384
3,871

3,487
384
3,871

Carrying amounts
At 1 January 2022

10,1009,204

19,304

At 31 December 2022/1 January 2023

10,1008,818

18,918At 31 December 2023

10,1008,434

18,534

Note
Group
Cost
At 1 January 2022
Disposals
Reclassification
At 31 December 2022/1 January 2023
Reclassification
At 31 December 2023

4
4

4

Note

SECTION 6

Company
Cost
At 1 January 2022/31 December 2022/
1 January 2023/31 December 2023

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

161

Notes to the financial statements (Cont’d)

INVESTMENT PROPERTIES (CONT’D)
The following are recognised in profit or loss in respect of investment properties:
Group

Lease income

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

838

669

1,303

1,076

(994)

(978)

(470)

(464)

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

341

352

719

1,302

-

-

-

485

341

352

719

1,787

Group
Level 3
RM’000Company
Level 3
RM’000143,630

68,464

94,84955,132

Direct operating expenses:- income generating investment properties
5.1

Operating lease payments receivable
The operating lease payments to be received are as follows:
Group

Less than one year
Between one and five years
Total undiscounted lease payments
5.2

Company

Fair value information
Fair value of investment properties are categorised as follows:

2023
Land and buildings
2022
Land and buildings

The following table shows the valuation technique used in the determination of fair value within Level 3.
Type

Description of valuation technique and inputs used

Land and buildings

Fair value of land and buildings has been generally derived using the sales comparison
approach. Sales price of comparable properties in close proximity are adjusted for differencesin key attributes such as property size. The most significant input into this valuation approachis price per square meter of comparable properties.

SECTION 6

5.

162

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

6.

GOODWILL ON CONSOLIDATIONGroup

At cost
6.1

2023
RM’0002022
RM’000

4,926

4,926

Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent thelowest level within the Group at which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to each unit are as follows:
Group
2023
RM’0002022
RM’000864

864

Cleanroom products

4,062

4,062

Total

4,926

4,926

Technical rubber products

Key assumptions used in determining the recoverable amountFor the purpose of impairment testing, the carrying amounts are allocated to the individual entities which are the
cash-generating units (“CGU”). Recoverable amount of each CGU is estimated based on its value-in-use. The value-inuse calculations apply a discounted cash flow model using cash flow projections based on past experiences, actual
operating results and financial budgets approved by management covering a 5-year period.
The key assumptions for the computation of value-in-use of CGU containing goodwill, pertained to cleanroom
products, include the following:•••

SECTION 6•

The revenue in the 5-year cash flow projection is expected to increase by a compounded annual growth rate of
3% over the 5 years.
The terminal value was estimated using the perpetuity growth model, with nil growth rate to perpetuity whichis consistent with prior year.
A pre-tax discount rate of 9.3% (2022: 11.4%) was applied in determining the recoverable amount of the unit.
The discount rate was estimated based on the Group’s weighted average cost of capital.
There will be no other significant changes in the government policies and regulations which will directly affectthe investees’ businesses. The inflation for the operating expenses is in line with the estimated gross domestic
product growth rate for the country, in which the CGU operates, based on past trends.

The key assumptions represent management’s assessment of future trends in the cleanroom industry and are basedon both external sources and internal sources of information (historical data).
The Group believes that no reasonably foreseeable changes in the above key assumptions that would cause thecarrying amount of the CGU to materially exceed its recoverable amount other than changes in the prevailing
operating environment of which the impact is not ascertainable.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

163

Notes to the financial statements (Cont’d)

INTANGIBLE ASSETSGroupPatents
RM’000Intellectual
propertyrights
RM’000

Total
RM’000

1,177

1,639

2,816

104

-

104

1,281

1,639

2,920

164

-

164

1,445

1,639

3,084

63

-

63

-

1,639

1,639

Cost
At 1 January 2022
Additions
At 31 December 2022/1 January 2023
Additions
At 31 December 2023

Amortisation and impairment loss
At 1 January 2022
Accumulated amortisation
Accumulated impairment loss
Amortisation for the year

63

1,639

1,702

110

-

110

173

-

173

At 31 December 2022/1 January 2023
Accumulated amortisation
Accumulated impairment loss
Amortisation for the year

-

1,639

1,639

173

1,639

1,812

94

-

94

At 31 December 2023
267

-

267

-

1,639

1,639

267

1,639

1,906

At 1 January 2022

1,114

-

1,114

At 31 December 2022/1 January 2023

1,108

-

1,108

At 31 December 2023

1,178

-

1,178

-

1,639

1,639

-

1,639

1,639

-

-

-

Accumulated amortisation
Accumulated impairment loss

Carrying amounts

Company

Cost
At 1 January 2022/31 December 2022/
1 January 2023/31 December 2023

Accumulated impairment loss
At 1 January 2022/31 December 2022/
1 January 2023/31 December 2023

Carrying amounts
At 1 January 2022/31 December 2022/
1 January 2023/31 December 2023

SECTION 6

7.

164

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)8.

INVESTMENTS IN SUBSIDIARIES
Company

Cost of investment

2023
RM’0002022
RM’000307,851

307,418

Details of the subsidiaries are as follows:

SECTION 6

Name of subsidiary

Principal place ofbusiness/Country ofincorporation
Principal activities

Effective ownership interestand voting interest
2023
%

2022
%

Perusahaan Getah Asas Sdn. Bhd.

Malaysia

Manufacturing of latex examination
gloves100

100

Kossan Latex Industries (M) Sdn. Bhd.

Malaysia

Manufacturing of latex examination
gloves100

100

Hibon Corporation Sdn. Bhd.

Malaysia

Manufacturing and marketing of
rubber based parts and products

90.4

90.4

Doshin Rubber Products (M)Sdn. Bhd.

Malaysia

Manufacturing and trading of rubber
products

90

90

Ideal Quality Sdn. Bhd.

Malaysia

Manufacturing of latex examination
gloves100

100

Kossan Engineering (M) Sdn. Bhd.

Malaysia

Fabrication and installation ofmachinery

100

100

Kossan International Sdn. Bhd.

Malaysia

Trading of latex examination gloves

100

100

Kossan Sdn. Bhd.

Malaysia

Investment holding

100

100

Premium Medical Products Sdn. Bhd.

Malaysia

Investment holding

100

100

Cleanera (Malaysia) Sdn. Bhd.

Malaysia

Trading of latex examination gloves
and cleanroom products

100

100

Cleanera HK Limited+Hong Kong

Investment holding and trading ofcleanroom products

83

83

KPH Logistics, Inc.#

United Statesof America

Distribution of household goods

100

100

KPH (San Francisco), LLC.#

United Statesof America

Property holding

100

100

KISB Asia Pacific Sdn. Bhd.

Malaysia

Investment holding

100

100

Kossan Labuan Bhd.

Malaysia

Investment holding

100

100

Kossan Industries Sdn. Bhd.

Malaysia

Manufacturing and sales of rubber
products

100

100

Kossan Security Services Sdn. Bhd.

Malaysia

Manage auxiliary police services for
KOSSAN group

100

100

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

165

Notes to the financial statements (Cont’d)

INVESTMENTS IN SUBSIDIARIES (CONT’D)

Name of subsidiary

Principal place ofbusiness/Country ofincorporation
Principal activities

Effective ownership interestand voting interest
2023
%

2022
%

Kossan Trading Sdn. Bhd.

Malaysia

Manufacturing, processing andtrading of chemicals and rubbercompound

100

100

Kossan Ceramics Sdn. Bhd.

Malaysia

Manufacturing of formers andceramic products

100

100

Aseptapak (M) Sdn. Bhd.

Malaysia

Dormant

100

100

Kossan Management Services
Sdn. Bhd.

Malaysia

Provision of management services

100

100

Kossan Research & Development
Sdn. Bhd.

Malaysia

Dormant

100

100

Wear Safe (Malaysia) Sdn. Bhd.

Malaysia

Manufacturing of surgical, procedureand examination gloves

100

100

Kossan Gloves Sdn. Bhd.

Malaysia

Investment holding

100-

Malaysia

Manufacturing and sales of rubber
products

90

90

Manufacturing and sales ofcleanroom products

83

83

Malaysia

Investment holding-

100

Republic ofIndonesia

Dormant

100

100

Hong Kong

Investment holding

100

100

The People’s
Republic of China

Trading of machinery parts

100

100

The People’s
Republic of China

Trading of latex examination gloves

100

100

Subsidiary of Doshin
Rubber Products (M) Sdn. Bhd.
Quality Profile Sdn. Bhd.
Subsidiary of Cleanera
HK Limited
Dongguan Cleanera Cleanroom
Products Company Limited+

The People’s
Republic of China

Subsidiary of Kossan
Engineering (M) Sdn. Bhd.
Kossan Gloves Sdn. Bhd.
Subsidiary of Kossan Labuan Bhd.
PT. Kossan Setia Jaya#
Subsidiary of Kossan
International Sdn. Bhd.
KISB HK Limited+
Subsidiary of KISB HK Limited
KISB Limited Shanghai+
Subsidiary of KISB
Limited Shanghai
Pureshield (Shanghai) Health Scienceand Technology Co. Limited+#+

Not required to be audited under the laws of the place/country of incorporation. The financial statements of thesubsidiaries are consolidated using management accounts.
Not audited by KPMG PLT.

SECTION 6

8.

166

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)8.

INVESTMENTS IN SUBSIDIARIES (CONT’D)

8.1

Material non-controlling interests in subsidiaries
There are no non-controlling interests that are material to the Group for the year ended 31 December 2023.

8.2

Acquisition of subsidiary – Kossan Gloves Sdn. Bhd.
On 25 August 2023, the Company acquired 250,000 ordinary shares (100%) in Kossan Gloves Sdn. Bhd. from Kossan
Engineering Sdn. Bhd. as part of the Group’s internal re-organisation for a cash consideration of RM432,955.

9.

OTHER INVESTMENTS
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

366

181

15

15

822,708

724,567

269,924

240,459

823,074

724,748

269,939

240,474

Non-current
Fair value through profit or loss
Current
Fair value through profit or loss

Other investments in current assets represents investments in money market with a redemption notice of one (1) business
day and has insignificant risk in the underlying assets invested.

10.

DEFERRED TAX ASSETS/(LIABILITIES)Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilities

Net

2023
RM’0002022
RM’0002023
RM’0002022
RM’0002023
RM’0002022
RM’000Property, plant and equipment--(126,125)(146,459)(126,125)(146,459)

Right-of-use assets--(4,435)(5,667)(4,435)(5,667)

Revaluation on properties#--(4,149)(4,775)(4,149)(4,775)

5,177

8,052

-

-

5,177

8,052

SECTION 6

Group

Unutilised reinvestment allowanceand unabsorbed capitalallowances
Tax loss carried forward

7,032

1,927

-

-

7,032

1,927

Provisions

9,647

10,278

-

-

9,647

10,278

Lease liabilities

4,915

6,157

-

-

4,915

6,157

7

264

-

-

7

264

-

-

(9,492)(4,048)(9,492)(4,048)

896

822

-

-

896

822

Derivatives
Fair value gain on otherinvestments
OthersOUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

167

Notes to the financial statements (Cont’d)

DEFERRED TAX ASSETS/(LIABILITIES) (CONT’D)
Recognised deferred tax assets/(liabilities) (cont’d)AssetsLiabilities

Net

2023
RM’0002022
RM’0002023
RM’0002022
RM’0002023
RM’0002022
RM’000Tax assets/(liabilities)

27,67427,500(144,201)(160,949)(116,527)(133,449)

Set off of tax(23,722)(23,246)

23,722

23,246

-

-

3,952

4,254

(120,479)(137,703)(116,527)(133,449)

Property, plant and equipment

-

-

(905)

(796)

(905)

(796)

Fair value gain on otherinvestments--(3,456)(1,532)(3,456)(1,532)

Revaluation on properties#

-

-

(475)

(498)

(475)

(498)

-

-

(4,836)(2,826)(4,836)(2,826)Group

Net tax assets/(liabilities)
Company#

This pertained to properties that the Group and the Company elected to apply the optional exemption to use previous
revaluation or valuation at the date of transition to MFRSs as deemed cost under MFRSs in the financial year ended
31 December 2012.

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items (stated at gross):
Group
2023
RM’0002022
RM’000Unutilised tax losses

25,35958

Other deductible temporary differences

3,982

-

29,341

58

7,042

14

Tax at 24% (2022: 24%)

In accordance with the provision of the Finance Act 2021, the unutilised tax losses are available for utilisation in the nextten (10) years, for which, any excess at the end of the tenth (10th) year, will be disregarded, except for the other deductible
temporary differences which do not expire under current tax legislation. Deferred tax assets have not been recognised in
respect of this item because it is not probable that future taxable profit will be available against which certain subsidiaries
within the Group can utilise the benefits there from.
Tax losses for which no deferred tax asset was recognised expire as follows:
Group
2023
RM’0002022
RM’000

Expiring in 2028

58

58

Expiring in 2033

25,301-

25,35958

SECTION 6

10.

10.

At 31 December
2023

(905)

(109)

Recognised in
profit or loss

23

(796)

At 31 December
2022/
1 January 2023

2,292

23

(3,088)

Recognised in
profit or loss

(126,125)

At 1 January 2022

Company

At 31 December
2023

20,33423(146,459)(7,023)

Recognised in
profit or loss

23

(139,436)

-

-

-

-

-

(4,435)

1,232(5,667)(62)(5,605)Rightof-use
assets
RM’000

(475)

23

(498)

23

(521)

(4,149)626(4,775)151(4,926)

Revaluationonproperties
RM’000

-

-

-

-

-

5,177

(2,875)

8,052

8,052

-

Unutilised
reinvestment
allowance
andunabsorbed
capitalallowances
RM’000

-

-

-

-

-

7,032

5,105

1,927

1,830

97

Tax loss
carriedforward
RM’000

-

-

-

-

-

9,647

(631)

10,278(5,921)

16,199Provisions
RM’000

-

-

-

-

-

4,915

(1,242)

6,157

123

6,034

Lease
liabilities
RM’000

-

-

-

-

-

7

(257)

264

161

103

Derivatives
RM’000(3,456)(1,924)(1,532)(1,532)-(9,492)(5,444)(4,048)(4,048)-Fair value
gain onotherinvestments
RM’000

-

-

-

-

-

896

74

822

770

52

Others
RM’000(4,836)(2,010)(2,826)783(3,609)(116,527)

16,922(133,449)(5,967)(127,482)

Total
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

At 31 December
2022/
1 January 2023

Recognised in
profit or loss

At 1 January 2022

Group

Property,plant andequipment
Note
RM’000Movement in temporary differences during the year

DEFERRED TAX ASSETS/(LIABILITIES) (CONT’D)SECTION 6168
OUR PERFORMANCE

Notes to the financial statements (Cont’d)OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

169

Notes to the financial statements (Cont’d)

TRADE AND OTHER RECEIVABLES
Group

Company

Note2023
RM’0002022
RM’0002023
RM’0002022
RM’00011.1--

193,047

182,693

238,199

265,489

-

-

(539)

(664)

-

-

11.4

237,660

264,825

-

-

11.2

31

26

-

-

237,691

264,851

-

-

-

-

1,281

45

Other receivables

5,300

4,524

536

61

Refundable deposits

5,393

6,576

105

90

5

18

-

-

10,698

11,1181,922

196

248,389

275,969

1,922

196

248,389

275,969

194,969

182,889

Non-current
Non-tradeAmount due from subsidiaries
Current
Trade
Trade receivables
Less: Allowance for impairment loss
Amount due from related parties
Non-tradeAmount due from subsidiaries

Amount due from related parties

11.3

11.1 The non-trade amount due from subsidiaries is unsecured, subject to interest at 3.17% (2022: 2.75%) per annum andrepayable beyond the next 12 months.
11.2 The trade amount due from related parties is subject to negotiated trade terms.
11.3 The non-trade amount due from subsidiaries is unsecured, subject to interest at 3.17% (2022: 2.75%) per annum andrepayable on demand.
11.4 The key assumptions for the estimation of recoverability of trade receivables include the following:••

The Group uses ageing analysis to monitor the credit quality of trade receivables. Any trade receivables having
significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitoredindividually.
The Group considers that any trade receivables with past due less than 90 days are having low credit risk
by considering historical payment trends and financial strength of the trade receivables. The amount of theallowance for impairment loss on these balances is negligible.

SECTION 6

11.

170

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

12.

INVENTORIES
Group
2023
RM’0002022
RM’000Raw materials

62,762

77,062Work-in-progress

3,591

4,800

Finished goods

172,875

205,211239,228

287,073

950,493

1,392,852

Recognised in profit or loss:
Inventories recognised as cost of sales

13.

CONTRACT LIABILITIESGroupContract liabilities

2023
RM’0002022
RM’000

7,352

4,709

The contract liabilities primarily relate to the advance consideration received from customers for the purchase of gloves,
for which revenue is recognised at a point in time upon transfer of control as per International Commercial Terms(“INCOTERM”). The contract liabilities are expected to be recognised as revenue within a year.
Significant changes to contract liabilities balances during the financial period are as follows:

SECTION 6

14.

Group

2023
RM’0002022
RM’000Contract liabilities at the beginning of the period recognised as revenue(4,709)(23,466)

Advances received during the year

44,552

39,468Advances received and utilised during the year

(37,200)(34,759)

2,643(18,757)

CASH AND CASH EQUIVALENTS
Group
2023
RM’000Company
2022
RM’0002023
RM’0002022
RM’000Cash and bank balances

102,844

114,618

1,060

1,077

Short term investments

1,061,979

1,064,476

364,025

446,365

106,500

168,9162,000

35,0001,271,323

1,348,010

367,085

482,442

Short term deposits placed with licensed banks

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

171

Notes to the financial statements (Cont’d)

15.

CAPITAL AND RESERVES

15.1 Share capitalGroup and Company
Numberof shares
2023
’000

Amount2023
RM’000

Numberof shares
2022
’000

Amount2022
RM’0002,557,872

323,885

2,557,872

323,885

Ordinary shares, issued and fully paidwith no par value classified as equity
instruments:
At 1 January/31 December

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one
vote per share at meetings of the Company. In respect of the Company’s treasury shares that are held by the Group,
all rights are suspended until those shares are reissued.

15.2 Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of financial statementsof foreign operations.

15.3 Capital reserve
The capital reserve comprises the difference between the consideration paid and net assets acquired in acquisitionof non-controlling interests.

15.4 Treasury shares
Treasury shares comprises cost of acquisition of the Company’s own shares. As at 31 December 2023, the Company
held a total of 6,252,000 (2022: 6,252,000) of its 2,557,871,616 (2022: 2,557,871,616) issued ordinary shares astreasury shares.
There were no shares repurchased during the year.

LOANS AND BORROWINGS
Group
Note

2023
RM’000Company
2022
RM’0002023
RM’0002022
RM’000Non-current
Term loans - unsecured

16.1

-

291

-

-

Hire purchase financing

16.2

254

627

-

-

254

918

-

-

292

43,230--Current
Term loans - unsecured

16.1

Hire purchase financing

16.2

372

730

-

375

Trade finance - unsecured

16.3

9,521

27,353--

10,18571,313-375

10,43972,231-375

SECTION 6

16.

172

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

16.

LOANS AND BORROWINGS (CONT’D)

16.1 Term loans - unsecured
Unsecured term loans consist of the following:(a)

RM denominated term loan of RM0.29 million (2022: RM0.99 million) representing a 5-year term loan obtainedin 2019 with monthly repayment instalments, and bears interest rates of 4.10% to 4.47% (2022: 3.52%) per
annum,(b)

RM denominated term loan of RM nil million (2022: RM36.53 million) representing a 3-year term loan obtainedin 2020 with monthly repayment instalments, and bears interest rate of nil % (2022: 3.88%) per annum, and(c)

RM denominated term loan of RM nil million (2022: RM6.00 million) representing a 5-year term loan obtainedin 2018 with monthly repayment instalments, and bears interest rate of nil % (2022: 3.95%) per annum.

16.2 Hire purchase financing payable
The hire purchase financing are payable as follows:
Payment
RM’000Interest
RM’000Principal
RM’000Less than one year

392

20

372

Between one and five years

258

4

254

Total undiscounted lease payments

650

24

626

Less than one year

774

44

730

Between one and five years

651

24

627

1,425

68

1,357

Payment
RM’000Interest
RM’000Principal
RM’000Less than one year

-

-

-

Total undiscounted lease payments

-

-

-

Less than one year

383

8

375

Total undiscounted lease payments

383

8

375

Group
2023

2022

Total undiscounted lease payments

Company

SECTION 6

2023

2022

16.3 Trade finance - unsecured
The trade finance facilities are utilised for working capital purposes and are subject to interest rate at 2.95% to 4.92%(2022: 3.35% to 4.96%) per annum.

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

173

Notes to the financial statements (Cont’d)

17.

TRADE AND OTHER PAYABLES
Group
Note

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000108,582

111,379

-

-

Trade
Trade payables
Amount due to related parties

393

526

-

-

108,975

111,905

-

-

17.1

Non-trade
-

11

-

-

2,920

1,362

-

-

Other payables

32,76037,819

4,007

4,762

Accrued expenses

47,38849,0771,787

720

83,06888,269

5,794

5,482

192,043

200,174

5,794

5,482

Amount due to ultimate holding company 17.2
Amount due to related parties

17.2

17.1 The trade amount due to related parties is subject to negotiated trade terms.
17.2 The non-trade amounts due to ultimate holding company and related parties are unsecured, interest free andrepayable on demand.

DERIVATIVE FINANCIAL ASSETS/(LIABILITIES)
2023

2022

Nominalvalue
RM’000Assets
RM’000Liabilities
RM’000Nominalvalue
RM’000Assets
RM’000Liabilities
RM’00034,923523-

182,499-(1,214)Group
Derivatives at fair value throughprofit or loss
- Forward foreign exchange
contracts

Forward foreign exchange contracts are used to manage the foreign currency exposures arising from the Group’s
receivables and payables denominated in currencies other than the functional currencies of Group entities. Most of theforward foreign exchange contracts have maturities of less than one year after the end of the reporting period and havematured subsequent to year end.

SECTION 6

18.

174

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

19.

REVENUEGroup

Sales of rubber products
Dividend income
Management fees

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’0001,591,043

2,343,764

-

-

-

-

-

117,601---

14,118

1,591,043

2,343,764-

131,719

Disaggregation of revenue by geographical location and by segment is as disclosed in Note 27.
Nature of goods

Timing of recognition or method used to recognise revenue Significant payment terms

Rubber products

Revenue is recognised at a point in time upon transfer of
Average credit terms of 60 - 90 days
control as per International Commercial Terms (“INCOTERM”)

There are no variable element in consideration, obligation for returns or refunds nor warranty in substantially all of thecontracts for the provision of goods by the Group.
Transaction price allocated to remaining performance obligations
Most of the Group’s contracts are based on purchase orders whereby the contracted volumes are agreed upon. An
insignificant amount of contracts have original contract period of more than one year, for which the remaining performanceobligation is expected to be fulfilled in the next twelve months. Hence, there is no further disclosure on future performanceobligation.

20.

FINANCE COSTS
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000- Hire purchase

45

38

8

27

- Term loans

526

1,856

-

-

Interest expense on:

SECTION 6- Trade financeInterest on lease liabilities

Recognised in profit or loss

455

2,068

-

-

386

543

-

1

1,412

4,505

8

28

1,412

4,254

8

28

-

251

-

-

1,412

4,505

8

28

Capitalised into qualifying assets as a reductionof borrowing costs:- right-of-use assets

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

175

Notes to the financial statements (Cont’d)

FINANCE INCOME
Group

Interest income of financial assets calculatedusing the effective interest method that areat amortised cost

22.

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’00043,03033,266

19,70817,012KEY MANAGEMENT PERSONNEL COMPENSATIONThe key management personnel compensation are as follows:Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

590

474

590

474

12,294

13,42735

3,472

12,884

13,901

625

3,946

7,778

11,166-

3,730

Directors:- Fees- Remunerations

Other key management personnel:- Remunerations

Other key management personnel comprise persons other than the Directors of Group entities, having authority andresponsibility for planning, directing and controlling the activities of the entities either directly or indirectly.

SECTION 6

21.

176

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

23.

TAX EXPENSE

Recognised in profit or loss
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’00035,569(421)

48,315

1,213

1,353

28

1,397

4,506

35,14848,343

2,610

5,859

Origination and reversal of temporary
differences(17,972)

3,360

1,975

1,420

Under/(Over) provision in prior year

1,050

2,607

35

(2,203)(16,922)

5,967

2,010

(783)

18,22654,310

4,620

5,076

Profit before tax

34,542

213,522

23,234

146,277

Income tax calculated using Malaysian tax rateof 24% (2022: 24%)

8,290

51,245

5,576

35,107

Effect of tax rates in foreign jurisdiction(551)(1,348)--Non-deductible expenses

8,633

6,447

2,612

2,371

-

305

-

-

Effect of deferred tax assets not recognised

7,028

-

-

-

Income not subject to tax

Current tax expense
Current year
(Over)/Under provision in prior year

Deferred tax expense

Total tax expense

Reconciliation of tax expense

SECTION 6

Effect of prosperity tax(5,754)(4,951)(4,977)(34,682)

Revaluation reserve crystalised

(23)

(23)

(23)

(23)

Others

(26)

-

-

-

17,59751,675

3,188

2,773

- income tax expense

(421)

28

1,397

4,506

- deferred tax expense

1,050

2,607

35

(2,203)

18,22654,310

4,620

5,076

Under/(Over) provision in prior year

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

177

Notes to the financial statements (Cont’d)

PROFIT FOR THE YEAR
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000- KPMG PLT

590

536

62

62

- Other auditors

90

90

-

-

Note
Profit for the year is arrived
at after charging/(crediting)

Auditors’ remuneration
Audit fees:

Non-audit fees:- KPMG PLT

50

10

50

10

- Local affiliates of KPMG PLT

360

798

82

244

Material expenses/(income)Depreciation of property, plant andequipment

3

108,573

125,246

763

1,404

Depreciation of right-of-use assets

4

4,276

4,709

-

51

Depreciation of investment properties

5

343

336

384

386

Amortisation of intangible assets

7

94

110

-

-

Impairment loss on plant and equipment

335,384---

Personnel expenses (including key
management personnel):- Contributions to Employees’
Provident Fund

20,37723,087-

1,677- Wages, salaries and others

278,807351,411627

20,009---(20,076)

-

2,625

-

-

Property, plant and equipment written off

5,330

6,090

8

-

Net unrealised fair value changes onderivatives

(523)

1,248

-

-

Net unrealised foreign exchange
differences

1,349

1,939

-

-

820

1,250

-

-

- Overprovision of bonus in prior year
Research and development expenses

Net realised loss on foreign exchange

SECTION 6

24.

178

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

24.

PROFIT FOR THE YEAR (CONT’D)
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’000

(335)

(260)

-

(28)

Gain on disposal of investment property-(5,478)--Gain on termination of right-of-use asset

(48)

(34)

-

-

Interest on short-term deposits placedwith licensed banks(38,637)(15,264)(12,846)(12,418)

Interest income on other investments(4,393)(18,002)(1,458)

(420)

-

-

(5,404)(4,174)

(838)

(669)

(1,303)(1,076)(22,685)(17,032)(8,019)(6,379)Note

Material expenses/(income) (cont’d)
Net gain on disposal of property, plantand equipment

Interest on amount due from subsidiaries
Rental income
Fair value gain on other investments

Expenses arising from leases
Expenses relating to short-term leases

a

1,742

1,792

-

-

Expenses relating to leases of low-value
assets

a

183

124

-

-

(57)

1,023

-

-

Net (gain)/loss on impairment offinancial instruments
Financial assets at amortised cost

SECTION 6

Note aThe Group leases premises with contract terms of less than 1 year and office equipment with contract terms of 1 to 5 years.
These leases are short-term leases and leases of low-value items. The Group has elected not to recognise right-of-use
assets and lease liabilities for these leases.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

179

Notes to the financial statements (Cont’d)

25.

EARNINGS PER ORDINARY SHARE
Basic earnings per share
The calculation of basic earnings per share at the end of the reporting period was based on the profit attributable toordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
Group

Profit for the year attributable to owners of the Company

2023
RM’0002022
RM’00013,337

157,095

Weighted average number of ordinary shares
Group

Weighted average number of ordinary shares at 31 December, net of treasury shares

2023
’000

2022
’000

2,551,620

2,551,620

Group
2023
Sen

2022
Sen

0.52

6.16

Sen
per shareTotalamount
RM’000Date ofpayment

2.50

63,79022 March 2023

12.00

306,19422 April 2022

Basic earnings per share
There is no dilution in earnings per share as there are no dilutive potential ordinary shares.

DIVIDENDS
Dividends recognised by the Company:

2023
Interim single tier 2022 ordinary
2022
Fourth interim single tier 2021 ordinary

After the end of the reporting period the following dividends were proposed by the Directors. These dividends will berecognised in subsequent financial period upon approval by the owners of the Company.

Sen
per shareTotalamount
RM’000Interim single tier 2023 ordinary*

2.00

51,032

Final single tier 2023 ordinary

2.00

51,032102,064*

The interim single tier 2023 ordinary dividend of 2 sen per ordinary share totalling RM51,032,392 was declared on 22
February 2024 and paid on 8 April 2024.

SECTION 6

26.

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

180

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

27.

OPERATING SEGMENTS
The Group has four reportable segments, as described below, which are the Group’s strategic business units. The strategic
business units offer different products and services, and are managed separately because they require different technology
and marketing strategies. For each of the strategic business units, the Group Managing Director / Chief Executive Officer(“Group MD/CEO”) reviews internal management reports on a monthly basis. The following summary describes theoperations in each of the Group’s reportable segments:••••

Technical rubber products
Gloves (other than cleanroom gloves)
Cleanroom products
OthersOther operations of the Group mainly comprise investment holding and engineering services which are not of sufficient
size to be reported separately.
Performance is measured based on segment profit before tax, as included in the internal management reports that are
reviewed by the Group MD/CEO. Segment profit is used to measure performance as management believes that suchinformation is the most relevant in evaluating the results of certain segments relative to other entities that operate withinthese industries.
Segment assets
The total of segment assets is measured based on all assets of a segment, as included in the internal management reportsthat are reviewed by the Group MD/CEO. Segment total assets is used to measure the return on assets of each segment.
Segment liabilities
The total of segment liabilities is measured based on all liabilities of a segment, as included in the internal management
reports that are reviewed by the Group MD/CEO.
Segment capital expenditure

SECTION 6

Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

181

Notes to the financial statements (Cont’d)

OPERATING SEGMENTS (CONT’D)
Geographical segments
The four segments are managed on a worldwide basis and the Group’s manufacturing facilities are primarily based in
Malaysia (country of domicile) with sales offices operating both out of Malaysia and Hong Kong.
In presenting information on the basis of geographical segments, segment revenue is based on geographical location of
the sales offices. Segment assets are based on the geographical location of the assets. The amounts of non-current assets
do not include right-of-use assets, investment properties, goodwill and intangible asset, other investments and deferred
tax assets.
2023
RM’0002022
RM’000- for local market

127,156

157,156- for export market

1,419,230

2,107,565

44,65779,043

1,591,043

2,343,764

1,279,620

1,342,210

Group
Revenue
Sales offices located in Malaysia

Sales offices located outside of Malaysia

Non-current assets
Located in Malaysia
Located outside of Malaysia

14,806

14,714

1,294,426

1,356,924

Major customers
There were no major customers with revenue equal or more than 10% of the Group’s total revenue for the years ended
31 December 2023 and 31 December 2022.

SECTION 6

27.

27.

9,248

11,75025,090242,859

96,79038,888281,020

2,822,942

113,171

66,104

367,760

2,933,088

50

42

9,069

103,842

477

38

9,170

88,3382,135

36,984

22,415

999,554(3,248)20,065

Effect of reclassification

As restated

141,646(43,112)

5,548

293

5,255

184,758

23,3132022
RM’0002022
RM’0002022
RM’000Cleanroom
products

GlovesTechnical rubber
products

17,251

46,067(28,816)2022
RM’0002,350

38,46827,196

1,062,863

Others

Certain comparative figures in the segment results have been reclassified to confrom with current year’s presentation.

9,598

11,04026,820275,986

As previously reported*

Depreciation

Included in the measureof segment results are:Capital expenditure

Included in the measureof segment assets are:Segment liabilities

Segment assets

184,510-

184,5102022
RM’000125,246

116,360

429,216

4,327,148

Total

108,573

86,954

339,324

4,202,324(54,310)

16,316KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

159,212(18,226)

2,343,764

Profit for the year

1,591,043

2022
RM’000Tax expense

17,251-

2023
RM’00033,266(5,545)-2022
RM’00043,0305,548

145,1562023
RM’000Finance income

3,226

100,059

2022
RM’000(4,254)

141,646

2,001,600

2023
RM’000Total(1,412)(38,410)

1,286,392

2022
RM’000

OthersFinance costs

20,065

197,008

2023
RM’000Cleanroom
products

184,51033,653

204,592

2022
RM’000Gloves(7,076)

Segment results*

Total external revenue

Business segments

2023
RM’000Technical rubber
products

OPERATING SEGMENTS (CONT’D)SECTION 6

182
OUR PERFORMANCE

Notes to the financial statements (Cont’d)OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

183

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS
28.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a)
(b)
(c)

Financial assets measured at amortised cost (“FAAC”);
Financial liabilities measured at amortised cost (“FLAC”); andFair value through profit or loss (“FVTPL”):
Mandatorily required by MFRS 9.

Note

Carrying
amount
RM’000FAAC / Mandatorily at(FLAC)FVTPL
RM’000
RM’000

Other investments

9823,074-

823,074

Trade and other receivables

11

248,389

248,389-

Cash and cash equivalents

14

1,271,323

1,271,323-

Derivative financial assets

18

523

-

523

2,343,309

1,519,712

823,5979

269,939-

269,939

Trade and other receivables

11

194,969

194,969-

Cash and cash equivalents

14367,085

367,085-

831,993562,054

269,939

2023
Financial assets
Group

Company
Other investments

Financial liabilities
Group
Loans and borrowings

16(10,439)(10,439)-

Trade and other payables

17(192,043)(192,043)-(202,482)(202,482)-(5,794)(5,794)-(5,794)(5,794)-Company
Trade and other payables

17

SECTION 6

28.

184

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INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.1 Categories of financial instruments (cont’d)

Note

Carrying
amount
RM’000FAAC / Mandatorily at(FLAC)FVTPL
RM’000
RM’000

Other investments

9724,748-724,748

Trade and other receivables

11

275,969

275,969-

Cash and cash equivalents

14

1,348,010

1,348,010-

2,348,727

1,623,979

724,748

2022
Financial assets
Group

Company
Other investments

9240,474-

240,474

Trade and other receivables

11

182,889

182,889-

Cash and cash equivalents

14482,442

482,442-905,805

665,331240,474

Financial liabilities
Group
Loans and borrowings

16(72,231)(72,231)-

Trade and other payables

17(200,174)(200,174)-

Derivative financial liabilities

18(1,214)-(1,214)(273,619)(272,405)(1,214)

SECTION 6

Company
Loans and borrowings

16

(375)

(375)

-

Trade and other payables

17(5,482)(5,482)-(5,857)(5,857)-OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

185

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.2 Net gains and losses arising from financial instruments
Group

Company

2023
RM’0002022
RM’0002023
RM’0002022
RM’00027,60133,786

9,477

6,799

Financial assets at amortised cost

36,525

11,052

18,25016,592Financial liabilities at amortised cost

(1,026)(3,711)(8)(27)

63,10041,127

27,71923,364

Net gains/(losses) on:
Financial assets at fair value through profit
or loss:- Mandatorily required by MFRS 928.3 Financial risk management
The Group and the Company have exposures to the following risks from their use of financial instruments:•••

Credit risk
Liquidity risk
Market risk

28.4 Credit risk
Credit risk is risk of a financial loss if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s
exposure to credit risk arises principally from loans and advances to subsidiaries and financial guarantees given tobanks for credit facilities granted to subsidiaries. There are no significant changes as compared to prior periods.
Trade receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit
evaluations are performed on all customers. It is the Group’s policy that local customers who wish to trade on credit
terms are subject to credit verification procedures, and hence there is no requirement for collateral. New overseas
customers will be required either to provide in advance telegraphic transfers or letter of credits issued by reputablebanks in countries where the customers are based.

SECTION 6

28.

186

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.4 Credit risk (cont’d)Trade receivables (cont’d)
Risk management objectives, policies and processes for managing the risk (cont’d)Once the local or overseas customers become regular customers and proven to be creditworthy, these customers
will be assigned a credit term approved by management and letter of credit will no longer be required.
At each reporting date, the Group or the Company assesses whether any of the trade receivables are credit impaired.
The gross carrying amount of credit impaired trade receivables are written off (either partially or fully) when there
is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the
debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off. Nevertheless, trade receivables that are written off could still be subject to enforcement
activities.
There are no significant changes as compared to previous year.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables isrepresented by the carrying amounts in the statement of financial position.
Recognition and measurement of impairment loss
A significant portion of these trade receivables are regular customers that have been transacting with the Group.
To measure the expected credit losses, trade receivables have been grouped based on credit risk and 90 days pastdue.
The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any trade receivables having
significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitoredindividually.
The Group considers that any trade receivables with past due less than 90 days are having low credit risk byconsidering historical payment trends and financial strength of the trade receivables. The amount of the allowance
for impairment loss on these balances is negligible.

SECTION 6

The following table provides information about the exposure to credit risk and ECLs for trade receivables.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

187

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.4 Credit risk (cont’d)Trade receivable (cont’d)
Recognition and measurement of impairment loss (cont’d)
2023

2022

Gross
carrying
amount
RM’000Loss
allowance
RM’000Netbalance
RM’000Gross
carrying
amount
RM’000Loss
allowance
RM’000Netbalance
RM’000Current (not past due)

202,212-202,212

195,692-

195,692

0-30 days past due

29,655(171)

29,48453,635(2)

53,63331-60 days past due

3,904

(60)

3,844

6,405

(7)

6,398

61-90 days past due

366

(2)

364

2,661

(237)

2,424

91-120 days past due

530

-

530

2,204

(99)

2,105

1,532

(306)

1,226

4,892

(319)

4,573

238,199(539)

237,660

265,489(664)

264,825Group

More than 120 days past due

The movements in the allowance for impairment in respect of trade receivables during the year are shown below.
Total
RM’000Group
Balance at 1 January 2022

402

Net measurement of loss allowance – credit impaired

1,023

Amounts written off(761)

Balance at 31 December 2022/1 January 2023

664

Net measurement of loss allowance – credit impaired(57)

Amounts written off(68)

Balance at 31 December 2023

539

Cash and cash equivalents and other investments
The cash and cash equivalents and other investments are placed with licensed banks and financial institutions. As at
the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in thestatement of financial position.
These licensed banks and financial institutions have low credit risks. The Group and the Company are of the view thatthe loss allowance is not material and hence, it is not provided for.
Other receivables
Expected credit loss of other receivables is determined individually after considering the financial strength of theother receivables. Based on management’s assessment, the probability of the default of these receivables is low andhence, no loss allowance has been made.

SECTION 6

28.

188

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.4 Credit risk (cont’d)Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain
subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by
the subsidiaries.
Exposure to credit risk, credit quality and collateral
The maximum exposure to credit risk amounts to RM9.8 million (2022: RM77 million) representing the outstandingbanking facilities of the subsidiaries as at the end of the reporting period. The fair value of such financial guarantees
is not expected to be material as the probability of the subsidiaries defaulting on the credit lines is remote.
Recognition and measurement of impairment loss
The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position
deteriorates significantly. The Company considers a financial guarantee to be credit impaired when:••

The subsidiary is unlikely to repay its credit obligation to the bank in full; or
The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default of the guaranteed loans individually using internal information
available.
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not material.
Inter-company loans and advances
Risk management objectives, policies and processes for managing the risk
The Company provides management services, unsecured loans and advances to subsidiaries. The Company monitors
the ability of the subsidiaries to repay the loans and advances on an individual basis.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts
in the statement of financial position.
Management services and loans and advances are only provided to subsidiaries which are wholly owned by theCompany.

SECTION 6

Recognition and measurement of impairment loss
Generally, the Company considers loans and advances to subsidiaries have low credit risk. The Company assumes
that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates significantly. As
the Company is able to determine the timing of payments of the subsidiaries’ loans and advances when they arepayable, the Company considers the loans and advances to be in default when the subsidiaries are not able to pay
when demanded. The Company considers a subsidiary’s loan or advance to be credit impaired when:••

The subsidiary is unlikely to repay its loan or advance to the Company in full; or
The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default for these loans and advances individually using internal
information available.
As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are notrecoverable.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

189

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.5 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
exposure to liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management
to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the endof the reporting period based on undiscounted contractual payments:
Contractualinterest
rate/
Carrying
Discount Contractual
amountrate cash flows
RM’000%
RM’000Under 1
year
RM’000

1-2
years
RM’000

2-5
years
RM’000More than
5 years
RM’000Group
2023
Non-derivative
financialliabilities
Term loans- unsecured292

4.10 – 4.47

292

292

-

-

-

Trade finance- unsecured

9,521

2.95 – 4.92

9,521

9,521

-

-

-

Hire purchasefinancing626

4.10 - 4.57

650

392

258

-

-

Lease liabilities

6,899

4.55

12,503

2,306

700

866

8,631

192,043-

192,043

192,043---

209,381

215,009

204,554

958

866

8,631

(523)

(34,923)(34,923)---

Trade andother
payables

SECTION 6

28.

Derivative
financialassetsForwardforeignexchange
contracts(grosssettled):Inflow
Outflow-

34,40034,400---208,858

214,486

204,031

958

866

8,631

190

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.5 Liquidity risk (cont’d)Maturity analysis (cont’d)Contractualinterest
rate/
Carrying
Discount Contractual
amountrate cash flows
RM’000%
RM’000Under 1
year
RM’000

1-2
years
RM’000

2-5
years
RM’000More than
5 years
RM’000Group
2022
Non-derivative
financialliabilities
Term loans- unsecured

43,521

3.52 - 3.95

44,09943,805294--

Trade finance- unsecured

27,3533.35 - 4.96

27,35327,353---Hire purchasefinancing

1,357

4.10 - 4.80

1,425

774

392

259

-

Lease liabilities

11,323

4.55

17,586

4,326

2,704

1,707

8,849

Trade andother
payables

200,174-

200,174

200,174---

290,637

276,432

3,390

1,966

8,849

-

-

-

283,728
Derivative
financialliabilities
Forwardforeignexchange
contracts(grosssettled):SECTION 6

Inflow
Outflow--(182,499)(182,499)

1,214

-

183,713

183,713---291,851

277,646

3,390

1,966

8,849

284,942OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

191

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.5 Liquidity risk (cont’d)Maturity analysis (cont’d)Contractualinterest
rate
Carrying
Discount Contractual
amountrate cash flows
RM’000%
RM’000Under 1
year
RM’000

1-2
years
RM’000

2-5
years
RM’000More than
5 years
RM’000Company2023
Non-derivative
financialliabilities
Trade andother
payables

5,794

-

5,794

5,794

-

-

-

Financialguarantee

-

-

9,814

9,814

-

-

-

15,60815,608

-

-

-

5,794
2022
Non-derivative
financialliabilities
Hire purchasefinancing

375

4.14

383

383

-

-

-

Trade andother
payables

5,482

-

5,482

5,482

-

-

-

Financialguarantee--

77,461

77,461---

83,326

83,326

-

-

-

5,857

SECTION 6

28.

192

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INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.6 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect
the Group’s financial position or cash flows.
28.6.1 Currency risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency otherthan the respective functional currencies of Group entities. The currency giving rise to this risk is primarily U.S.
Dollar (“USD”).
Risk management objectives, policies and processes for managing the risk
The Group uses forward foreign exchange contracts to hedge its foreign currency risk. Most of the forward
foreign exchange contracts have maturities of less than one year after the end of the reporting period. Where
necessary, the forward foreign exchange contracts are rolled over at maturity.
In respect of other monetary assets and liabilities held in currencies other than RM, the Group ensures thatthe net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates where
necessary to address short term imbalances.
As at the end of reporting date, forward foreign exchange contracts were entered into with the following
amounts:

Forward foreign exchange contracts used to hedge receivables and payables
Amount to bereceived/(paid)
USD’000

Averagecontract rate
USD/MYR

Equivalent
RM’0007,500

4.656434,923

Trade receivables

46,7004.3901205,017

Trade payables(4,867)4.6271(22,518)

41,8334.3626

182,499

Group
Hedged item
2023
Trade receivables

SECTION 6

2022

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

193

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.6 Market risk (cont’d)28.6.1 Currency risk (cont’d)Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group
entities) risk, based on carrying amounts as at the end of the reporting period are as follows:Group
Denominated in USD
2023
RM’0002022
RM’000Bank balances

14,46442,889Trade receivables

214,656

243,097

Trade payables(37,892)(15,127)523(1,214)

191,751

269,645

Forward foreign exchange contracts used to hedge receivables
and payables
Net exposure
Currency risk sensitivity analysis

A 5% (2022: 5%) strengthening of RM against USD at the end of the reporting period would have decreased
equity and post-tax profit or loss by the amounts shown below. This analysis is based on foreign currency
exchange rate variances that the Group considered to be reasonably possible at the end of the reporting
period. This analysis assumes that all other variables, in particular interest rates, remained constant.
Profit or loss
2023
RM’0002022
RM’000(7,287)(10,247)

Group
USD

A 5% (2022: 5%) weakening of RM against USD at the end of the reporting period would have had equal but
opposite effect on equity and post-tax profit or loss respectively, on the basis that all other variables remained
constant.

SECTION 6

28.

194

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.6 Market risk (cont’d)28.6.2 Interest rate risk
The Group’s investments in fixed rate financial assets and its fixed rate borrowings are exposed to a risk ofchange in their fair values due to changes in interest rates. The Group’s investments in variable rate financial
assets are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables andpayables are not significantly exposed to interest rate risk.
Risk management objectives, policies and processes for managing the risk
Interest rate exposure arising from the Group’s loans and borrowings, deposits placed with licensed banks
and investments with financial institutions is managed through monitoring and reviewing interest rates in themarket and their impact to the Group’s financial performance.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,
based on carrying amounts as at the end of the reporting period are as follows:Group

Company

Note2023
RM’0002022
RM’0002023
RM’0002022
RM’000

Deposits placed withlicensed banks

14

106,500

168,9162,000

35,000

Short term investments

14

1,061,979

1,064,476

364,025

446,365(6,899)(11,323)--

Fixed rate instruments

Lease liabilities
Trade finance- unsecured

16(9,521)(27,353)--

Hire purchase financing

16

(626)

(1,357)-(375)

Term loans- unsecured

16

(292)

(43,521)--

1,151,141

1,149,838

366,025

480,990822,708

724,567

269,924

240,459

SECTION 6

Floating rate instruments
Other investments

9

Amount due from subsidiaries

11

-

-

193,047

182,693822,708

724,567

462,971423,152

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

195

Notes to the financial statements (Cont’d)

FINANCIAL INSTRUMENTS (CONT’D)
28.6 Market risk (cont’d)28.6.2 Interest rate risk (cont’d)Interest rate risk sensitivity analysis(a)

Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge
accounting model. Therefore, a change in interest rates at the end of the reporting period would notaffect profit or loss.

(b)

Cash flow sensitivity analysis for variable rate instruments
A change of 50 (2022: 50) basis points (“bp”) in interest rates at the end of the reporting period would have(decreased)/increased post-tax profit or loss by the amounts shown below. This analysis assumes that allother variables, in particular foreign currency rates, remain constant.
Profit or loss
50 bp
increase
RM’00050 bp
decrease
RM’0003,126(3,126)2,753(2,753)

1,759(1,759)1,608(1,608)Group
2023
Floating rate instruments
2022
Floating rate instruments
Company2023
Floating rate instruments
2022
Floating rate instruments

SECTION 6

28.

28.

823,231--(1,214)--Hire purchase financing--

Term loans - unsecured(1,214)-

Forward foreignexchange contracts

Financial liabilities

Other investments

724,567

-

-

-

-

-

Hire purchase financing

2022
Financial asset--

Term loans - unsecured

Financial liabilities

523
822,708-

Other investments

Level 2
RM’000

-

-

-

-

-

-

-

-

-

-

-

Level 3
RM’000(1,214)--(1,214)

724,567---

823,231

822,708

523

Total
RM’000

-

-

-

-

-

-

-

-

-

-

-

Level 1
RM’000

-

-

-

-

-

-

-

-

-

-

-

Level 2
RM’000(45,524)(1,425)(44,099)

-

181

(942)

(650)

(292)

366

366

-

Level 3
RM’000

523

523

Total
fair Carrying
value amount
RM’000 RM’000

(918)

(626)

(292)

(1,214)(1,214)

724,748 724,748

(942)

(650)

(292)

(1,425)(1,357)(45,524) (46,738) (46,092)(1,425)(44,099) (44,099) (43,521)

-

181

(942)

(650)

(292)

366 823,597 823,597

366 823,074 823,074

-

Total
RM’000Fair value of financial instruments not
carried at fair value

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

Forward foreignexchange contracts

Group
2023
Financial assets

Level 1
RM’000Fair value of financial instruments
carried at fair value

The tables below analyses other financial instruments at fair value.

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings reasonably approximate their fairvalues due to the relatively short term nature of these financial instruments.

28.7 Fair value information

FINANCIAL INSTRUMENTS (CONT’D)SECTION 6196
OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

-

-

-

-

-

-

-

-

-

240,459-

240,459

269,924-

269,924

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(383)

182,708

182,69315

193,062

193,047

15

Total
fair Carrying
value amount
RM’000 RM’000

(383)

(383)

(375)

182,708 423,167 423,167

182,693 182,693 182,693

15 240,474 240,474

193,062 462,986 462,986

193,047 193,047 193,047

15 269,939 269,939

Fair value of financial instruments not
carried at fair value
Level 1
Level 2
Level 3Total
RM’000
RM’000
RM’000
RM’000KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

SECTION 6

Hire purchase financing

-

-

-

Amount due fromsubsidiaries

Financial liabilities

240,459-

Other investments

240,459

269,924-

2022
Financial assets--

Amount due fromsubsidiaries

269,924-

Other investments

Company
2023
Financial assets

Fair value of financial instruments carried atfair value
Level 1
Level 2
Level 3Total
RM’000
RM’000
RM’000
RM’00028.7 Fair value information (cont’d)

FINANCIAL INSTRUMENTS (CONT’D)OUR PERFORMANCE

197

Notes to the financial statements (Cont’d)

198

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

28.

FINANCIAL INSTRUMENTS (CONT’D)
28.7 Fair value information (cont’d)Level 2 fair value
Other investments with financial institutions
The fair value of other investments with financial institutions is determined based on the fair value quoted by thecounter-party.
Derivatives
The fair value of forward foreign exchange contracts is estimated by discounting the difference between thecontractual forward price and the current forward price for the residual maturity of the contract using a risk-freeinterest rate (based on government bonds).

Transfer between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and Level 2 fair values during the financial year (2022: no transfer ineither directions).

Level 3 fair value
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal
and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

SECTION 6

Financial instruments not carried at fair value
Type

Description of valuation technique and inputs used

Term loans, hire purchasefinancing and amount due fromsubsidiaries

Discounted cash flows using a rate based on the current market rate of borrowingof the respective Group entities at the reporting date.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

199

Notes to the financial statements (Cont’d)

29.

CAPITAL MANAGEMENTThe Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability tocontinue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future developmentof the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio and make relevant
adjustment to the capital structure in light of changes in economic conditions.
The debt-to-equity ratio at 31 December 2023 and at 31 December 2022 were as follows:
Group
Note

2023
RM’0002022
RM’00016

10,43972,231

6,899

11,323(1,271,323)(1,348,010)

Net cash position(1,253,985)(1,264,456)

Total equity

3,835,979

3,875,666--*

Total borrowings
Lease liabilities
Less: Cash and cash equivalents

14

Debt-to-equity ratio*

There was no change in the Group’s approach to capital management during the financial year.
*30.

Not presented as the Group is in net cash position.

CAPITAL AND OTHER COMMITMENTS
Group
2023
RM’0002022
RM’00053,38896,345

Property, plant and equipment
Within one year:
Contracted but not provided for

RELATED PARTIES
Significant related party transactions
Related party transactions have been entered into in the normal course of business under negotiated trade terms. The
significant related party transactions of the Group and the Company, other than key management personnel compensation(see Note 22), are shown below. The balances related to the below transactions are shown in Notes 11 and 17.

SECTION 6

31.

200

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Notes to the financial statements (Cont’d)

31.

RELATED PARTIES (CONT’D)
Significant related party transactions (cont’d)
Transaction amounts for theyear ended 31 December
2023
RM’0002022
RM’000

(355)

(941)

(2,241)(2,130)-

6(8,419)136(1,668)172(1,661)

Pan Asian Corporation Sdn. Bhd.
Rental expenses

(823)

(601)

Chemtube (M) Sdn. Bhd.
Sales*
Upkeep of plant and machinery16(3,178)35(3,523)

Pleasure Latex Products Sdn. Bhd.
Sales*-7

KJR Hi-Tech Sdn. Bhd.
Sales*-

8

6(6,562)

7(4,356)

14
(59)

30
(147)

Gummitech Industries Sdn. Bhd.
Rental income-

122

Kossan Adhesive (M) Sdn. Bhd.
Sales*

15

15

Group
Ultimate holding company and its subsidiaries
Kossan Holdings (M) Sdn. Bhd.
Rental expenses

Kossan Chemical Industries (M) Sdn. Bhd.
Rental expenses
Hai Poh Marketing Sdn. Bhd.
Sales*
Purchase of chemicals and processing services
Kossan Paint (M) Sdn. Bhd.
Sales*
Purchase of paint, consumables and processing fees

SECTION 6

Companies in which certain Directors have financial interests
HT Ceramics (M) Sdn. Bhd.
Sales*
Purchase of formers

Kossan F.R.P. Industries (M) Sdn. Bhd.
Sales*
Upkeep of plant and machinery

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

201

Notes to the financial statements (Cont’d)

RELATED PARTIES (CONT’D)
Significant related party transactions (cont’d)
Transaction amounts for theyear ended 31 December
2023
RM’0002022
RM’000-122

Subsidiaries
Kossan Latex Industries (M) Sdn. Bhd.
Management fee income
Intra-group transfer of property, plant and equipment

76

3,380
-

Perusahaan Getah Asas Sdn. Bhd.
Management fee income
Rental income
Intra-group transfer of property, plant and equipment

235
64

3,813
235
-

Wear Safe (Malaysia) Sdn. Bhd.
Management fee income
Intra-group transfer of property, plant and equipment

89

3,306
-

Ideal Quality Sdn. Bhd.
Management fee income
Intra-group transfer of property, plant and equipment

725

2,569
-

Kossan International Sdn. Bhd.
Intra-group transfer of property, plant and equipment

4,594

-

Kossan Trading Sdn. Bhd.
Intra-group transfer of property, plant and equipment

114-

Kossan Industries Sdn. Bhd.
Management fee income
Rental income

726

886
606

Cleanera HK Limited
Dividend income

-

9,601

Hibon Corporation Sdn. Bhd.
Management fee income

-

164

4,793

3,655

Kossan Security Services Sdn. Bhd.
Security charges

(91)

(192)

Kossan Engineering (M) Sdn. Bhd.
Dividend income-

108,000

Kossan Ceramics Sdn. Bhd.
Interest income

609

519

Kossan Management Services Sdn. Bhd.
Rental income
Management fee expense

342
(834)

114
(382)

Company
Companies in which certain Directors have financial interests
Gummitech Industries Sdn. Bhd.
Rental income

Premium Medical Products Sdn. Bhd.
Interest income*

There are no allowances for impairment loss being provided in respect of the related companies and related parties
balances outstanding at year end and no impairment loss made during the year.

SECTION 6

31.

202

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCESTATEMENT BY DIRECTORS PURSUANT TOSECTION 251(2) OF THE COMPANIES ACT 2016
In the opinion of the Directors, the financial statements set out on pages 137 to 201 are drawn up in accordance with Malaysian
Financial Reporting Standards, IFRS Accounting Standards as issued by the International Accounting Standards Board and therequirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group andof the Company as of 31 December 2023 and of their financial performance and cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Tan Sri Dato’ Lim Kuang Sia
Director

Tan Kong Chang
Director

Klang, Selangor Darul Ehsan
Date: 16 April 2024

STATUTORY DECLARATION PURSUANT TOSECTION 251(1)(b) OF THE COMPANIES ACT 2016
I, Lee Hon Chee, the officer primarily responsible for the financial management of Kossan Rubber Industries Bhd., do solemnly
and sincerely declare that the financial statements set out on pages 137 to 201 are, to the best of my knowledge and belief,correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the Statutory
Declarations Act 1960.

SECTION 6

Subscribed and solemnly declared by the abovenamed Lee Hon Chee, MIA CA6481, at Klang in the State of Selangor Darul Ehsan
on 16 April 2024.

Lee Hon Chee

Before me:

Commissioner for Oaths
Selangor Darul Ehsan

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

203

INDEPENDENT AUDITORS’ REPORTto the Members of Kossan Rubber Industries Bhd.
(Registration No. 197901003918 (48166-W))(Incorporated in Malaysia)

Report on the Audit of the Financial Statements
OpinionWe have audited the financial statements of Kossan Rubber Industries Bhd., which comprise the statements of financial position
as at 31 December 2023 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes
to the financial statements, including material accounting policy information, as set out on pages 137 to 201.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of theCompany as at 31 December 2023, and of their financial performance and their cash flows for the year then ended in accordance with
Malaysian Financial Reporting Standards, IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS
Accounting Standards”) and the requirements of the Companies Act 2016 in Malaysia.
Basis for Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing.
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements
section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of
the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of
Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethicalresponsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters

SECTION 6

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of thefinancial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters.

204

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Independent Auditors’ Report (Cont’d)to the Members of Kossan Rubber Industries Bhd.
(Registration No. 197901003918 (48166-W))(Incorporated in Malaysia)
Key Audit Matters (Cont’d)
Impairment of plant and equipment
Refer to Note 3 – Property, plant and equipment.
The key audit matter

How the matter was addressed in our audit

As at 31 December 2023, the total carrying amount of plant and We performed the following audit procedures, among others:machinery of the Group amounted to RM338.5 million.
•
We evaluated management’s impairment assessment
model against the requirements of the relevant accounting
There were indications of impairment on certain plant andstandard.
machinery due to global oversupply of rubber gloves andovercapacity which resulted in low average selling prices andWe challenged the Group’s key assumptions used such
low plant utilisation, respectively. The Group has determined •as projected revenue, profit margins, plant utilisation andthe recoverable amount of those plant and machinery based on
discount rates by comparing them to available external
value-in-use which is calculated using the cash flow projections.
and internal sources of information.
The cash flow projections involve significant management
estimation and judgement on the assumptions on projected
Assessed the sensitivity of key assumptions to fluctuations
revenue, profit margins, plant utilisation rate and discount rate. •to understand the impact of their reasonable changes tothe recoverable amounts.
•

We considered the adequacy of the Group’s disclosure on
the key assumptions used.

We have determined that there are no key audit matters in the audit of the separate financial statements of the Company tocommunicate in our auditors’ report.
Information Other than the Financial Statements and Auditors’ Report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the information included in
the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the annual report and we do not express
any form of assurance conclusion thereon.

SECTION 6

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual
report and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group andof the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work wehave performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We havenothing to report in this regard.

OUR PERFORMANCEKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

205

Independent Auditors’ Report (Cont’d)to the Members of Kossan Rubber Industries Bhd.
(Registration No. 197901003918 (48166-W))(Incorporated in Malaysia)

Responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give atrue and fair view in accordance with Malaysian Financial Reporting Standards, IFRS Accounting Standards and the requirements of theCompanies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary
to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the ability of theGroup and of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance withapproved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

•

Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of theGroup and of the Company.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Directors.

•

Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the ability of the Group or of the Company to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Groupand of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or theCompany to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company,
including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying
transactions and events in a manner that gives a true and fair view.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our audit opinion.

SECTION 6

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we
exercise professional judgement and maintain professional scepticism throughout the audit. We also:

206

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OUR PERFORMANCE

Independent Auditors’ Report (Cont’d)to the Members of Kossan Rubber Industries Bhd.
(Registration No. 197901003918 (48166-W))(Incorporated in Malaysia)

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of thefinancial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremelyrare circumstances, we determine that a matter should not be communicated in our auditors’ report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we havenot acted as auditors are disclosed in Note 8 to the financial statements.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act
2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG PLT(LLP0010081-LCA & AF 0758)
Chartered Accountants
Petaling Jaya, Malaysia

SECTION 6

Date: 16 April 2024

Chan Chee KeongApproval Number: 03175/04/2025 J
Chartered Accountant

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

207

Global Reporting Initiative (GRI) Content Index

Standard of Use

KOSSAN RUBBER INDUSTRIES BHD has reported in accordance with the GRI
Standards for the period 1 January 2023 - 31 December 2023

GRI 1 Used

GRI 1: Foundation 2021

Applicable GRI Sector Standard(s)Not applicable

GRI
Standards

GRI
Disc
No.

Disclosure Title

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally Page (s) of thisAssuredIAR 2023

General Disclosures
The organization and its reporting practices
2-1

Organizational details

-

-

6

2-2

Entities included in the organization’ssustainability reporting

-

-

18

2-3

Reporting period, frequency andcontact point

-

-

18

2-4

Restatements of information--

53-54, 56-57,
59-60

2-5

External assurance--

18, 94-96

Activities and workers
2-6

Activities, value chain and otherbusiness relationships

-

-

7-8

2-7

Employees

-

-

83-88

2-8

Workers who are not employees

-

-

8

There is no ofNot
workers who are notapplicable
emplyoees.

N/A

Governance

GRI 2:
GeneralDisclosures
2021

2-9

Governance structure and composition--

23,115-116

2-10

Nomination and selection of thehighest governance body

-

-

119

2-11

Chair of the highest governance body--23, 116

2-12

Role of the highest governance bodyin overseeing the management of
impacts

-

-

23

2-13

Delegation of responsibility for
managing impacts--

23, 118

2-14

Role of the highest governance body insustainability reporting

-

-

23

2-15

Conflicts of interest

-

-

113

2-16

Communication of critical concerns

-

-

24-26

2-17

Collective knowledge of the highest
governance body--109-1132-18

Evaluation of the performance of thehighest governance body

-

-

119

2-19

Remuneration policies

-

-

119

2-20

Process to determine remuneration

-

-

2-21

Annual total compensation ratio

-

-

-

-

119
Information
unavailable

Data were notcollected

N/A

Strategies, policies and practices
Statement on sustainable development
strategy

9-15

2-23

Policy commitments--

21, 39, 63

2-24

Embedding policy commitments--

21, 39, 63

2-25

Processes to remediate negative

-

-

-

-

impacts
2-26

Mechanisms for seeking advice and16

65, 118

18, 118

raising concerns
2-27Compliance with laws and regulations--

44, 50, 59

2-28

Membership associations

-

-

66

Stakeholder Engagement
2-29

Approach to stakeholder engagement

-

-

16

24-26

2-30

Collective bargaining agreements

-

-

8

64

Material Topics
GRI 3:
Material
Topics 2021

3-1

Process to determine material topics

-

-

27

3-2

List of material topics

-

-

27-35

SECTION 7

2-22

208

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI
Disc
No.

Disclosure Title

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally
Assured(Y/N)

Page (s) of thisIAR 2023

N

38

N

40

N

39

N

40

N

39

N

41

N

42

N

43

N

43

N

44

N

44

N

44

N

44

N

44

Economic/ Governance
Ethical Business
GRI 3:
Material
Topics 2021

SECTION 7

GRI 205:
AntiCorruption
2016

3-3

Management of material
topics

205-1

Operations assessed forrisk related to corruption

C1 (b)

205-2

Communication andtraining about anticorruption policies andprocedures

C1 (a)

205-3

Confirmed incidents ofcorruption and actions
taken

C1 (c)

Percentage
of operations
assessed forcorruption-related
risks
Percentage of
employees who
have received
training on
anticorruption
by employee
category
Confirmed
incidents ofcorruption andaction taken

8,
16

GRI 415:
Public Policy
415-1
Political contributions
2016
Cyber Security and Data Privacy									GRI 3: Material
Management of material
3-3Topics 2021
topicsNumber of
substantiatedSubstantiated complaints
complaints
16
GRI 418:
concerning breaches ofconcerning
Customer
418-1
C8 (a)
customer privacy andbreaches ofPrivacy 2016
losses of customer data
customer privacy
and losses ofcustomer data
Product Quality and Safety
GRI 3:
Management of material
Material
3-3
topics
Topics 2021
Percentage ofsignificant product
Assessment of the healthand service
and safety impacts of
categories for
416-1
S3 (a)
product and service
which health andcategories
safety impacts
are assessed for
improvement
Total numberof incidents of
GRI 416:
noncompliance
Customerwith regulations
Health andIncidents of nonor voluntary
Safety 2016
compliance concerning the416-2
S3 (b) codes concerning
health and safety impacts
the health &of products and services
safety impacts
9of products andservices within thereporting period
Number of recalls
issued and total
units recalled forS3 (c)
health and safety
reasons
Requirements for product417-1
and service informationand labeling
Incidents of nonGRI 417:
compliance concerning
Marketing and 417-2
product and service
Labelling 2016
information and labeling
Incidents of non417-3
compliance concerningmarketing communications

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

209

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI
Disc
No.

Disclosure Title

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally Page (s) of thisAssuredIAR 2023(Y/N)

Economic/ Governance (cont’d)Partnership and Collaboration
GRI 3:
Material Topics 3-3
2021

Management of material
topicsGRI 204:
Procurement
Practices 2016

Proportion of spending on
local suppliers

C7 (a)

Legal actions for anticompetitive behavior,anti-trust, and monopoly
practices

204-1

GRI 206:
Anti206-1
Competitive
Behaviour 2016

GRI 308:
Supplier
Environmental
Assessment
2016

308-1

308-2

GRI 414:
Supplier Social
Assessment
2016

414-1

414-2

N

45

Proportion of
spending on local
suppliers

N

47

-

-

N

47

S6 (a)

Percentage of
new suppliers
that werescreened using
environmental
criteriaN

47

S6 (b)

Number of
suppliers assessed
for environmental
impacts

N

47

N

46

S7 (a)

Percentage of
new suppliers thatwere screenedusing social
criteriaN

47

S7 (b)

Number of
suppliers
assessed for social
impacts

N

47

N

46

N

48

N

51

N

98-99

New suppliers thatwere screened using
environmental criteria

8,
16,
17

Negative environmental
impacts in the supply chain
and actions taken

New suppliers that werescreened using social
criteria

Negative social impacts
in the supply chain andactions taken

Environment
Environmental Compliance
GRI 3:
Material Topics 3-3
2021

Management of material
topics12

GRI 302:
Energy 2016

Management of material
topics302-1

Energy consumption within
the organization

C4 (a)

Total energy
consumption

302-2

Energy consumption
outside of the organization

-

-

302-3

Energy intensity

-

-

302-4

Reduction of energy
consumption--

Information
unavailable

302-5

Reductions in energy
requirements of products
and services--

Information
unavailable

7,
12,
13

N

97

N

54, 98-99

Steps are being
taken to include theinformation in thenext Report

N/A

N/A

Steps are being
taken to include theinformation in thenext Report

N/A

N/A

SECTION 7

Climate Change
GRI 3:
Material Topics 3-3
2021

210

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI Disc Disclosure Title
No.

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally
Page (s) of
Assured this IAR 2023
(Y/N)

Environment (cont’d)
Climate Change (cont’d)

GRI 305:
Emissions 2016

305-1

Direct (Scope 1) GHG
emissions

C11 (a)Scope 1 emissions
in tonnes of CO2eN53, 97305-2

Energy indirect (Scope 2)
GHG emissions

Scope 2 emissions
C11 (b)in tonnes of CO2eY53, 97305-3

Other indirect (Scope 3)
GHG emissions

C11 (c)Scope 3 emissions
in tonnes of CO2eN53, 97305-4

GHG emissions intensity

-

-

305-5

Reduction of GHG
emissions305-6

Emissions of ozonedepleting substances (ODS)

305-7

-

-

7,
12,
13

N

53, 97

Steps are being taken to
Information
include the information
unavailable
in the next Report

N

N/A

N

N/A

N

N/A

N

58

N

59 - 60, 100--

KOSSAN does not emit
a material amountNot applicable of these emissions
through our businessprocess.

Nitrogen oxides (NOX),
sulfur oxides (SOX), andother significant air
emissions

S4 (a)

Amount of air
emissions ofpollutants andparticulate matter

KOSSAN does not emit
a material amountNot applicable of these emissions
through our businessprocess.

Management of material
topics--S5 (a)

Total weightor volume ofmaterials that areused to produce
and package
products andservices

Waste Management
GRI 3:
Material Topics
2021

3-3

301-1

Materials used by weight orvolume301-2

Recycled input materials
used

-

-

N

59

301-3

Reclaimed products andtheir packaging materials

-

-

N

59

306-1

Waste generation andsignificant waste-related
impacts

-

-

N

58-59

306-2

Management of significant
waste-related impacts

-

-

N

58-59

306-3

Waste generatedN

59 - 60,
99 - 100306-4

Waste diverted from
disposalN

59 - 60,
99 - 100

C10 (a)Total waste
generated, and a
breakdown of thefollowing:(i) total waste
diverted from
disposal(ii) total waste
directed todisposalN

59 - 60,
99 - 100

GRI 301:
Materials 2016

GRI 306:
Waste 2020

SECTION 7

306-5

Waste directed to disposal

12

11,
12

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

211

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI Disc Disclosure Title
No.

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally
Page (s) of
Assured this IAR 2023
(Y/N)

Environment (cont’d)Water and Effluents Management
GRI 3: Material
Topics 2021

GRI 303:
Water andeffluent 2018

3-3

Management of material
topics

-

-

N

55

303-1

Interactions with water asshared resource

-

-

N

55

303-2

Management of water
discharge-related impacts

S8(a)Total volume ofwater (effluent)discharge over thereporting periodN

56-57,
100-102

303-3

Water withdrawal

6,
12

N

57,100N

56-57,
100-102

303-4

Water discharge

S8 (a)

Total volume ofwater (effluent)discharge over thereporting period

303-5

Water consumption

C9 (a)

Total volume ofwater usedN56, 102

SocialHuman Rights and Labor PracticeGRI 3:
Material Topics
2021

3-3

Management of material
topics

-

-

N

61

GRI 402:
Labor/
Management
Relations 2016

402-1

Minimum notice periods
regarding operationalchanges

-

-

N

63

GRI 407:
Freedom of
Association
407-1
and Collective
Bargaining 2016

Operations and suppliers inwhich the right to freedomof association and collective
bargaining may be at risk

-

-

N

64

GRI 408:
Child Labor
2016

408-1

Operations and suppliers at
significant risk for incidents
of child labor

-

-

N

64

GRI 409:
Forced orCompulsory
Labor 2016409-1

Operations and suppliers at
significant risk for incidents
of forced or compulsory
labor

-

-

N

63-64

GRI 410:
Security
Practices 2016

410-1

Security personnel trainedin human rights policies orprocedures--

Steps are being taken to
Information
include the information
Unavailable
in the next Report

N/A

N/A

GRI 411:
Rights ofIndigenous
Peoples 2016

411-1

Incidents of violations
involving rights ofindigenous peoples

-

-

Not
Applicable

None of KOSSAN
current operating sites
are located in or near
indigenous land

N/A

N/A

C6 (d)

Number of
substantiatedcomplaints
concerning
human rights
violations

N

64

-

-

N

67

8,
10,
16

3-3

Management of material
topics3,
8

SECTION 7

Workplace Safety
GRI 3:
Material Topics
2021

212

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI Disc Disclosure Title
No.

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally
Page (s) of
Assured this IAR 2023
(Y/N)

Social (cont’d)Workplace Safety (cont’d)

GRI 403:
Occupational
Health and
Safety 2018403-1

Occupational health andsafety management system

-

-

N

67-68

403-2

Hazard identification, risk
assessment, and incident
investigation

-

-

N

69

403-3

Occupational healthservices

-

-

N

69-71

403-4

Worker participation,
consultation, andcommunication on
occupational health andsafety

-

-

N

69

403-5

Worker training on
occupational health andsafetyC5 (c)

Number of
employees trainedon health andsafety standards

N

71

403-7

Prevention and mitigationof occupational healthand safety impacts
directly linked by business
relationships

-

-

N

70-72

403-8

Workers covered by an
occupational health andsafety management system

-

-

N

72

C5 (a)

Number of workrelated fatalities

N72, 106

C5 (b)

Lost time incident
rate

N72, 106Work-related ill health

-

-

N

72, 106

Management of material
topics

-

-

N

73

C5 (c)

Number of
employees trainedon health andsafety standards

N75, 105

C6 (a)

Total hoursof training
by employee
category

403-9
403-10Work-related injuries

3,8

People Development
GRI 3:
Material Topics
2021

3-3

404-1

GRI 404:
Training and
Education 2016

Average hours of training
per year per employee

4

404-2

Programs for upgrading
employee skills andtransition assistanceprograms

-

-

N

73-75

404-3

Percentage of employees
receiving regularperformance and careerdevelopment reviews

-

-

N

74

3-3

Management of material
topics

-

-

N

76

401-2

Benefits provided to fulltime employees that are
not provided to temporaryof part-time employees

-

-

N

76-77

401-3

Parental leave

-

-

N

80

403-6

Promotion of worker health

-

-

N

76-79

Health and Wellness
GRI 3: Material
Topics 2021

SECTION 7

GRI 401:
Employment
2016
GRI 403:
Occupational
Health and
Safety 2018

3,
8

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

213

Global Reporting Initiative (GRI) Content Index (Cont’d)

GRI
Standards

GRI Disc Disclosure Title
No.

Bursa
Ref No.

Bursa
Indicators

Map toSDGs

ReasonOmmision
Explanation

Externally
Page (s) of
Assured this IAR 2023
(Y/N)

Social (cont’d)Diversity and Inclusivity
GRI 3:
Material Topics
2021

GRI 202:
Market Presence
2016

GRI 401:
Employment
2016

GRI 405:
Diversityand Equal
Opportunity
2016

GRI 406:
NonDiscrimination
2016

3-3

Management of material
topics

-

-

N

81

202-1

Ratios of standard entry level
wage by gender compared to
local minimum wage

-

-

N

82, 88202-2

Proportion of senior
management hired from thelocal community

-

-

N

84

C6 (c)

Total numberof employee
turnover by
employee
categoryN

87-88, 104

C6 (b)

Percentage of
employees thatare contractors or
temporary staff

N86, 104

C3 (a)

Percentage of
employees bygender andage group, foreach employee
categoryN

82-85,
102-103, 108

C3 (b)

Percentage ofdirectors bygender and age
group

N

82-85,
102-103, 108

401-1

405-1

New employee hires andemployee turnover

Diversity of governancebodiesand employees

10

405-2

Ratio of basic salary andremuneration of womenand men--N

82-85, 88
102-103, 108

406-1

Incidents of discriminationand corrective actions
taken

-

-

N

81-82

Management of material
topics

-

-

N

89

C2 (a)

Total amountinvested in thecommunity
where the target
beneficiaries are
external to thelisted issuer

N

89-93

N

89-93

N

89-93

Community Welfare

GRI 413:
Local
Communities
2016

3-3

413-1

Operations with local
community engagement,
impact assessments, anddevelopment programsC2 (b)

413-2

Operations with significant
actual and potential
negative impacts on local
communities

Total number ofbeneficiaries of
the investment incommunities

1,
4

SECTION 7

GRI 3:
Material Topics
2021

214

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

List of Top 10 Properties
as at 31 December 2023

Date of
Acquisition/
Valuation*Age ofBuilding

Land
Area

HS(D) 264386, PT26537, Commercial
land
Mukim Bukit Raja,
Daerah Petaling,
Negeri Selangor
Office complex

05/02/2016

-

2.5
acres

HSD 24213, PT 10478,
Mukim Bidor,
Batang Padang,
Perak

Industrial land

12/03/2018

Geran 52935, Lot 6103,
Mukim Kapar,
Daerah Klang,
Negeri Selangor

Industrial land

GRN 52936 Lot 6104;
GRN 52937 Lot 6106;
GRN 52939 Lot 6108,
Mukim Kapar,
Daerah Klang,
Negeri Selangor

Industrial land

Geran 45731, Lot 6074,
Mukim Kapar,
Daerah Petaling,
Negeri Selangor

Industrial land

Geran 45732, Lot 6075,
Mukim Kapar,
Daerah Klang,
Negeri Selangor

Industrial land

Location
1

2

3

4

5

6

Building
12/12/2014

Factory–
5 yrs

10/06/2013

Factory–
3 yrs

06/07/2020–

Factory

21-24 yrs

Factoryn/a
28/02/2014

Factory

Industrial land

01/01/2011*

Geran 173929, Lot 63616,(formerly HSD 116841,
PT 54924),
Mukim Kapar,
Daerah Klang,
Negeri Selangor

Industrial land

10 Geran 173931, Lot 63617,(formerly HSD 116842,
PT 54925),
Mukim Kapar,
Daerah Klang,
Negeri Selangor

Industrial land–n/aFactory

15 yrs01/01/2011*

Factory and
OfficePlant A
Plant B
Plant C

Factory
Extension ofbuildings–
5 yrs

Geran 45715, Lot 6130,
Jln Meru, 41050 Klang,
Negeri Selangor

9–817.392acres

n/a

18/03/2014

8

TenureExisting
Use

Freehold-

42,638Underconstruction

92,377–96,507

Under
Construction

34,146–

40,611

Factory
and office

43,485–21,506

Factory
and office

54,822–29,395

Factory
and office
Under
Construction

11,463–

20,191

Factory
and office

31,908–36,589Under
Construction

5,985

–

15,603

Factory

26,453

–

6,800

n/a

Industrial land
HSD 283117, PT 7414,
Mukim Bestari Jaya,
Daerah Kuala Selangor,
Factory
Negeri Selangor

7

SECTION 7

Description

Net
Book
Value
2023
RM’000–

Leasehold99 years
expire22/11/2114

5.3292hectares

Freehold

12.766
acres

Freehold

4.0494hectares

Freehold

10 acres(3.7492
hectares)

Freehold56 acres(226,620
sq.mtr)Freehold

4.0519hectares

Freehold

4.544
hectares

Freehold

Factory andoffice13 yrs
12 yrs
6 yrs
01/01/2011*–
10 yrs9 yrs

4.355
hectares

Freehold

21,901

14,416
5,412
11,213–

6,570

Factory
Factory

24,356
1,015

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

215

Additional Compliance Information(a)

Utilisation of Proceeds
The Company did not implement any fund-raising exercise.

(b)Material Contracts
Save as disclosed, the Company and its subsidiaries did not have any material contracts involving directors’ and major
shareholders’ interests either still subsisting at the end of the financial year or, if not subsisting, entered into since the endof the previous financial year.

(c)

Conflict of Interest
None of the Directors, other than those disclosed in the Directors’ profile, have any family relationships with other
Directors and/or major shareholders of the Company or have any personal interest in any business arrangements
involving the Company.

(d)

Audit and Non-Audit Fees
The audit fees paid or payable by the Group and the Company to the external auditors, KPMG PLT, amounted to RM589,850
and RM62,400, respectively.
The non-audit fees paid or payable to the Group’s and the Company’s external auditors, KPMG PLT, or firms affiliated to theexternal auditors’ firm amounted to RM410,314 and RM131,764 respectively.
The non-audit fees of the Group and the Company amounted to 41% and 68% respectively of the total fees payable
mainly due to (i) Company taxation services and tax advisory and (ii) additional engagement for statutory requirements.
Approximately RM360,214 of the non-audit fees are pertaining to tax compliance matters engaged by various entities of theGroup.
Variation in Results
There was no material variance between the result for the financial year and the unaudited results previously announced
by the Company.

SECTION 7

(e)

216

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Statistics on Shareholdings
as at 29 March 2024

Total number of issued share
Class of shares
Number of shareholders
Voting right: 2,557,871,616: Ordinary share: 27,538: 1 vote per ordinary share

Analysis of Shareholdings

Size of Shareholdings
Less than 100

No. ofShareholders% ofShareholders

No. ofShares% of Issued
Share Capital

344

1.25

4,152

0.00

100 - 1,000

6,786

24.64

4,724,369

0.19

1,001 - 10,000

14,43752.43

63,233,408

2.48

10,001 - 100,000

5,062

18.38

153,869,953

6.03

908

3.30

1,436,719,414

56.31

100,001 to less than 5% of issued shares
5% and above of issued shares
Total
					
*

1

0.00

893,068,320

35.00

27,538100.002,551,619,616*

100.00Exclusive of 6,252,000 treasury shares

Directors’ Shareholdings							No. of Shares

SECTION 712
3

DirectInterest%

Indirect
Interest%

Tan Sri Dato’ Lim Kuang Sia

70,238,904

2.75

896,246,3041

35.12

2

Tan Kong Chang

50,000,000

1.95

100,0002

0.003

3

Lim Siau Tian--

637,9002

0.03

4

Lim Siau Hing

-

-

-

-

5

Lim Ooi Chow

-

-

-

-

6

Lee Choo Hock

-

-

-

-

7

Hoh Kim Hyan

-

-

-

-

8

Mohamed Shafeii Bin Abdul Gaffoor

-

-

-

-

9

Sharon Shanthy a/p Dorairaj

-

-

-

-

No.

Name of Directors

1through holding company and spousethrough spousenegligible

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

217

Statistics on Shareholdings (Cont’d)
as at 29 March 2024

No. of Shares%

DeemedInterest%

Kossan Holdings (M) Sdn. Bhd.

893,068,320

35.00

-

-

2

Employees Provident Fund Board

142,472,7004

5.58

-

-

3

abrdn plc--

138,099,7005

5.41

4

abrdn Holdings Limited

-

-

5

138,099,700

5.41

5

abrdn Malaysia Sdn. Bhd.

--

135,694,9005

5.32

Name of Substantial Shareholders

1This is an aggregation of securities from different securities accounts belonging to the same Registered Holder.   
through its subsidiaries

SECTION 745

DirectInterest

No.

218

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Statistics on Shareholdings (Cont’d)
as at 29 March 2024

SECTION 7

Top 30 Shareholders
No

Name of Shareholders

No. of Shares%

1

KOSSAN HOLDINGS (M) SDN. BHD.

893,068,320

35.00

2

LIM KUANG SIA

70,238,904

2.75

3

LIM LENG BUNG

65,537,400

2.57

4

LIM KUANG WANG

65,220,000

2.56

5

LIM KUANG YONG

64,140,500

2.51

6

TAN KONG CHANG

50,000,000

1.96

7

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD (ABERDEEN)

47,355,800

1.86

8

KUMPULAN WANG PERSARAAN (DIPERBADANKAN)

37,953,600

1.49

9

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (ABERDEEN)

35,194,200

1.38

10

TIAN SENN RESOURCES SDN. BHD.

32,000,000

1.25

11

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EXEMPT AN FOR AIA BHD.

31,768,100

1.25

12

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
URUSHARTA JAMAAH SDN. BHD. (2)28,500,630

1.12

13

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD (ABERISLAMIC)

24,810,700

0.97

14

CITIGROUP NOMINEES (ASING) SDN. BHD.
CBNY FOR NORGES BANK (FI 17)

23,813,500

0.93

15

HSBC NOMINEES (ASING) SDN. BHD.
JPMCB NA FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND

20,539,286

0.80

16

CARTABAN NOMINEES (TEMPATAN) SDN. BHD.
PAMB FOR PRULINK EQUITY FUND

19,816,800

0.78

17

HSBC NOMINEES (ASING) SDN. BHD.
JPMCB NA FOR VANGUARD EMERGING MARKETS STOCK INDEX FUND

19,659,200

0.77

18

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
URUSHARTA JAMAAH SDN. BHD. (ABERDEEN 2)

16,390,550

0.64

19

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD (ASIANISLAMIC)

15,980,900

0.63

20

LIM WOI KOK

15,905,000

0.62

21

LIM SEOW KIANG

15,805,000

0.62

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

219

Statistics on Shareholdings (Cont’d)
as at 29 March 2024

No

Name of Shareholders

No. of Shares%

22

LIM SIEW BING

15,805,000

0.62

23

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD (F TEMPLETON)

15,693,300

0.62

24

CARTABAN NOMINEES (TEMPATAN) SDN. BHD.
PRUDENTIAL ASSURANCE MALAYSIA BERHAD FOR PRULINK STRATEGIC FUND

15,619,400

0.61

25

CARTABAN NOMINEES (ASING) SDN. BHD.
EXEMPT AN FOR STATE STREET BANK & TRUST COMPANY (WEST CLT OD67)

15,308,300

0.60

26

CITIGROUP NOMINEES (ASING) SDN. BHD.
UBS AG

13,760,141

0.54

27

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD (PAR 1)

12,295,500

0.48

28

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (ABDN EQ ABSR FD)

11,517,400

0.45

29

HSBC NOMINEES (TEMPATAN) SDN. BHD.
HSBC (M) TRUSTEE BHD FOR PRINCIPAL DALI EQUITY GROWTH FUND

11,477,600

0.45

30

CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD (RHBISLAMIC)

11,323,900

0.44

1,716,498,931

67.27

TOTAL

SECTION 7

Top 30 Shareholders

220

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the 44th Annual General Meeting (“AGM”) of Kossan Rubber Industries Bhd. (“Company”)
will be conducted virtually for the purpose of considering and if thought fit, passing the resolutions, as ordinary resolutions,
set out in this notice.
Day and Date
Time
Broadcast Venue

Online Meeting Platform
Mode of Communication: Thursday, 30 May 2024
: 10.30 a.m.
: Training Centre, 2nd Floor, Kossan R&D Centre,
PT 7836, Jalan Haji Abdul Manan/KU8,
Kawasan Perindustrian Meru Selatan,
41050 Klang, Selangor Darul Ehsan: https://meeting.boardroomlimited.my: Typed text in the Online Meeting Platform

AGENDAORDINARY BUSINESS
1.

To receive the Audited Financial Statements for the financial year ended 31 December 2023
together with the Reports of the Directors and Auditors thereon.

2.

To approve the payment of a final single tier dividend of 2.0 sen per ordinary share for thefinancial year ended 31 December 2023.

(Resolution 1)

To approve the proposed payment of Directors’ fees of up to RM670,000 for the financial
year ending 31 December 2024 (2023: RM670,000).

(Resolution 2)

3.

4.

5.

To re-elect the following Directors who are retiring by rotation pursuant to Article 86 of
the Company’s Constitution and who being eligible offer themselves for re-election:(i)

Tan Sri Dato’ Lim Kuang Sia(Resolution 3)(ii)

Mr. Lim Siau Tian

(Resolution 4)(iii) Mr. Lim Siau Hing

(Resolution 5)

To re-appoint KPMG PLT as Auditors of the Company for the financial year ending
31 December 2024 and to authorise the Directors to fix their remuneration.

(Resolution 6)

SPECIAL BUSINESS
6.

Continuing in Office as an Independent Non-Executive Director(Resolution 7)“THAT approval be and is hereby given to Lee Choo Hock, who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine years, tocontinue to serve as an Independent Non-Executive Director of the Company.”

SECTION 7

7.

Proposed Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of theCompanies Act 2016
“THAT pursuant to Sections 75 and 76 of the Companies Act 2016, the Directors be andare hereby authorised to allot and issue shares in the Company at any time and uponsuch terms and conditions and for such purposes as the Directors may, in their absolute
discretion deem fit, provided that the aggregate number of shares issued pursuant tothis resolution does not exceed 10% of the total number of issued shares of the Company(excluding treasury shares) as at the date of this Annual General Meeting (“AGM”);(Resolution 8)

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

221

Notice of Annual General Meeting (Cont’d)

SPECIAL BUSINESS (CONT’D)
7.

Proposed Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of theCompanies Act 2016 (Cont’d)
THAT pursuant to Section 85 of the Companies Act 2016, read together with Article 52 of
the Constitution of the Company, approval be and is hereby given to waive the statutory
pre-emptive rights of the shareholders of the Company to be offered new shares ranking
equally to the existing issued shares of the Company arising from any issuance of newshares pursuant to Sections 75 and 76 of the Companies Act 2016;
THAT the Directors be and are also empowered to obtain the approval for the listing ofand quotation for the additional shares so issued on Bursa Malaysia Securities Berhad;
AND THAT such authority shall continue to be in force until the conclusion of the next
AGM of the Company.”
Proposed Renewal of and New Shareholders’ Mandate for Recurrent Related Party
Transactions of a Revenue or Trading Nature(Resolution 9)“THAT pursuant to Paragraph 10.09 of the Main Market Listing Requirements of
Bursa Malaysia Securities Berhad, approval be and is hereby given for the renewal ofand new shareholders’ mandates for the Company and/or its subsidiaries (“KOSSAN
Group”) to enter into recurrent related party transactions of a revenue or trading
nature with the related party (“Proposed Mandate for RRPT”), which are necessary
for the day-to-day operations of the KOSSAN Group, provided such transactions
are in the ordinary course of business and are on terms not more favourable to
the related party than those generally available to the public, particulars of which
are set out in Section 2.5 of the Document to shareholders of the Company dated
25 April 2024;
THAT such approval conferred by the shareholders’ mandate shall continue to be in force
until:(a)the conclusion of the next annual general meeting (“AGM”) of the Company following
this AGM at which such mandate is passed, at which time it will lapse, unless byan ordinary resolution passed at such general meeting whereby the authority isrenewed;(b)the expiration of the period within which the next AGM of the Company is required
to be held pursuant to Section 340(2) of the Companies Act 2016 (“Act”) (but must notextend to such extension as may be allowed pursuant to Section 340(4) of the Act);or(c)

revoked or varied by resolution passed by the shareholders in a general meeting,whichever is the earlier;
AND THAT the Directors of the Company or any of them be and are/is (as the case may be)
hereby authorised to complete and do all such acts and things (including executing such
documents under the common seal in accordance with the provisions of the Company’s
Constitution, as may be required) as they may consider expedient or necessary to giveeffect to the Proposed Mandate for RRPT.”SECTION 7

8.

222

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Notice of Annual General Meeting (Cont’d)

9.

Proposed Renewal of Share Buy-Back Authority (“Proposed Share Buy-Back”)“THAT subject to the Companies Act 2016 (“Act”), the Main Market Listing Requirementsof Bursa Malaysia Securities Berhad (“Listing Requirements”), the Company’s Constitution
and other relevant statutory and/or regulatory requirements, the Company be and ishereby authorised to utilise an amount not exceeding the retained profits of the Company
to purchase such number of ordinary shares in the Company from time to time throughBursa Malaysia Securities Berhad upon such terms and conditions as the Directors may
deem fit and expedient in the interest of the Company provided that the ordinary sharesso purchased pursuant to this resolution shall in aggregate with the treasury sharesas defined under Section 127 of the Act (“Treasury Shares”), if any, then still held by
the Company did not exceed 10% of the total issued and paid-up share capital of theCompany;
THAT such authority shall commence upon the passing of this resolution until theconclusion of the next annual general meeting of the Company unless earlier revoked orvaried by a resolution of the shareholders of the Company at a general meeting;
AND THAT the Directors be and are hereby authorised to either cancel the shares sopurchased, retain as Treasury Shares, distribute as share dividend, sell, transfer, and/or
deal in any other manner they deem fit and expedient in the best interest of the Company
and in accordance with the Act, the Listing Requirements, the Company’s Constitution
and other relevant statutory and/or regulatory requirements for the time being in force.”

10. To transact any other business of which due notice shall have been given in accordancewith the Act.
NOTICE OF DIVIDEND PAYMENTNOTICE IS ALSO HEREBY GIVEN that the final single tier dividend of 2.0 sen per ordinary shareeach in respect of the financial year ended 31 December 2023, if approved by members at theAnnual General Meeting to be held on Thursday, 30 May 2024, will be paid on 18 July 2024. The
entitlement date for the dividend will be 21 June 2024.
A depositor shall qualify for entitlement only in respect of:(a)Shares transferred to the Depositor’s Securities Account before 4.30 p.m. on 21 June
2024 in respect of transfers; and(b)

Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis
according to the Rules of the Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD
KOSSAN RUBBER INDUSTRIES BHD.

SECTION 7

CHIA ONG LEONG (SSM P.C. No. 201908000832, MIA 4797)
CHIA YEW NGO (SSM P.C. No. 202008000487, LS 0001831)
Company Secretaries
Klang, Selangor Darul Ehsan
25 April 2024

(Resolution 10)

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

223

Notice of Annual General Meeting (Cont’d)

NOTES
1.

Remote Participation and Voting (“RPV”)
The 44th AGM will be conducted virtually through live streaming and online remote voting via RPV facilities. Please follow
the procedures provided in the Administrative Details in order to register, participate and vote remotely via the RPV
facilities. No members/proxy(ies) will be physically present at the Broadcast Venue on the day of the meeting.

2.

Proxy
2.1

Only members whose names appear in the Record of Depositors as at 24 May 2024 shall be entitled to participate
and vote at the AGM or appoint a proxy(ies) to participate and vote in his/her stead via RPV.

2.2

A member entitled to participate and vote remotely in the AGM via RPV is entitled to appoint a proxy(ies) tovirtually participate and vote remotely in his/her stead. A proxy may but need not be a member of the Company.

2.3

Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he/she specifies the
proportion of his/her shareholdings to be represented by each proxy.

2.4

A member who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act
1991, may appoint one (1) proxy in respect of each securities account. Where a member is an exempt authorised
nominee which holds shares in the Company for multiple beneficial owners in one (1) securities account (“Omnibus
Account”) as defined under the Securities Industry (Central Depositories) Act 1991, there is no limit to the numberof proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

2.5

The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his/her attorney
duly authorised in writing and in the case of a corporation, be executed under its common seal or the hand of theattorney duly authorised.

2.6

The instrument appointing a proxy must be deposited at the office of the share registrar, Boardroom Share
Registrars Sdn. Bhd., 11th Floor, Menara Symphony, 5 Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling
Jaya, Selangor Darul Ehsan or via electronic means through the Boardroom Smart Investor Online Portal athttps://investor.boardroomlimited.com not less than 24 hours before the time of the meeting and any adjournment
thereof. Please refer to the Administrative Details for further information on electronic submission.

EXPLANATORY NOTES
3.

Receiving of the Audited Financial Statements for Financial Year Ended 31 December 2023
Item 1 of the agenda is intended for discussion only as the provision of Section 340(1) of the Companies Act 2016 does
not require the Audited Financial Statements to be formally approved by the shareholders. As such, this item is not put
forward for voting.
Ordinary Resolution 2: Non-Executive Directors’ (“NEDs”) Remuneration
4.1

Section 230 (1) of the Companies Act 2016 provides, amongst others, that the fee of a director and any benefits to a
director of a listed company and its subsidiaries shall be approved at a general meeting. In this respect, the Board
agreed that approval of the shareholders be sought for the payments of Directors’ fees to the NEDs.

4.2

Ordinary Resolution 2 refers to the payment of Directors’ fees of up to RM670,000 for the financial year ending
31 December 2024 (2023: RM670,000). The amount has been estimated based on the Directors’ fees of thepreceding years approved by the shareholders of the Company.

SECTION 7

4.

224

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Notice of Annual General Meeting (Cont’d)

EXPLANATORY NOTES (CONT’D)
4.

5.

SECTION 7

6.

Ordinary Resolution 2: Non-Executive Directors’ (“NEDs”) Remuneration (Cont’d)
4.3

The actual payment of Directors’ fees incurred for the financial year 2023 was RM590,000 (2022: RM474,000).

4.4This resolution, if passed, will facilitate the payment of Directors’ fees on a current financial year basis. The Board
is of the view that it is just and equitable for Directors’ fees to be paid upon the discharge of their responsibilities
and services to the Company.

4.5

Any NED who is a shareholder of the Company will abstain from voting on Ordinary Resolution 2 at the 44th AGM.

Ordinary Resolutions 3 to 5: Re-election of Directors who retire in accordance with Article 86 of the Company’s
Constitution
5.1

Article 86 of the Company’s Constitution provides that one third (1/3) of the Directors of the Company for the time
being shall retire by rotation at the AGM of the Company and be eligible for re-election. Hence, three (3) Directors
are to retire at the 44th AGM in accordance with Article 86 of the Company’s Constitution.

5.2

For the purpose of determining the eligibility of the retiring Directors to stand for re-election at the 44th AGM, theBoard through the Nominating Committee (“NC”) had assessed each of the retiring Directors, taking into accountthe following:(a)The outcome of the Board Effectiveness Evaluation (“BEE”) 2023;(b)

The Director’s performance and contribution to the Board; and(c)

The Directors’ character, integrity, experience, competence and time commitment based on the criteria set
out in the Directors’ Fit and Proper Policy.

5.3

Based on the assessments, each individual Director met the performance criteria required of an effective Board.
The Board thus supported the NC’s recommendations that the retiring Directors are eligible to stand for reelection. The profiles of the retiring directors are set out in the Profile of the Board of Directors in this Integrated
Annual Report.

5.4

Each of the retiring Directors abstained at the Board deliberations and decisions regarding his own eligibility tostand for re-election.

5.5

Any retiring Director referred to in Ordinary Resolutions 3 to 5, who is a shareholder of the Company, will abstain
from voting on the resolution in respect of his re-election at the 44th AGM.

Ordinary Resolution 6: Re-appointment of Auditors
6.1

The Audit Committee (“AC”) at its meeting held on 22 February 2024 undertook an annual assessment of thesuitability and independence of the external auditors, KPMG PLT. In the assessment, the AC considered the audit
scope, performance and independence of the external auditors.

6.2

The AC also took into account the openness in communication and interaction with the lead audit engagement
partner and engagement team through discussion at the private meetings, which demonstrated their independence,
objectivity and professionalism.

6.3

The AC was satisfied with the suitability of KPMG PLT based on the quality of audit, performance, competency andsufficiency of resources the external audit team provided to the Group. The AC was also satisfied in its review thatthe provisions of non-audit services by KPMG PLT and its affiliates to the Company for financial year 2023 did notin any way impair their objectivity and independence as external auditors of the Company.

OTHER INFORMATIONKOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

225

Notice of Annual General Meeting (Cont’d)

EXPLANATORY NOTES (CONT’D)
6.

Ordinary Resolution 6: Re-appointment of Auditors (Cont’d)
6.4

The Board at its meeting held on 22 February 2024 supported the AC’s recommendation for the re-appointment of
KPMG PLT as the external auditors of the Company for financial year 2024 at the 44th AGM, subject to the approvalof the shareholders under Ordinary Resolution 6.

Special Business

8.

Ordinary Resolution 7: Continuing in Office as an Independent Non-Executive Director (“INED”)
7.1

The proposed Ordinary Resolution 7, if passed, will enable Mr. Lee Choo Hock to continue in office as an INED of
the Company in line with Practice 5.3 of the Malaysian Code on Corporate Governance 2021.

7.2

Mr. Lee Choo Hock, the Senior INED, has served the Company for a cumulative term of more than nine (9) years. The
Board, with Mr. Lee abstaining from deliberation, was satisfied that Mr. Lee has met the independence guidelines
as set out in Chapter 1 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and is able tocontinue to bring independent and objective judgment to the Board.

7.3

The Board, except for Mr. Lee, unanimously recommended that Mr. Lee continues to serve as an INED of theCompany, subject to the approval of the shareholders through a two-tier voting process.

Ordinary Resolution 8: Proposed Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of theCompanies Act 2016
8.1

The proposed Ordinary Resolution 8, if passed, will empower the Directors from the conclusion of this AGM to
the next AGM, to allot and issue up to a maximum of 10% of the issued share capital of the Company (excluding
treasury shares) at the time of issue for such purposes as they consider would be in the best interest of theCompany.

8.2

Ordinary Resolution 8 also includes a waiver of the statutory pre-emptive rights of shareholders which will enable
the Company to issue new shares, which rank equally to existing issued shares, without having to offer such newshares to the existing shareholders of the Company in proportion of their shareholdings from the issuance of the
new shares under this mandate.

8.3

This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approvalof the shareholders for such issuance of shares. This authority, unless revoked or varied at a general meeting, will
expire at the conclusion of the next AGM of the Company. This authority will provide flexibility to the Company
for any possible fund-raising exercise, including but not limited to placement of shares for purpose of funding
investment projects, working capital and/or acquisition. The Company did not issue any new shares under theprevious mandate.

8.4

At this juncture, there is no decision to issue new shares. Should there be a decision to issue new shares after
the general mandate is obtained, the Company will make an announcement in respect of the purpose and/or
utilisation of proceeds arising from such an issue of shares.

SECTION 7

7.

226

KOSSAN RUBBER INDUSTRIES BHD.
INTEGRATED ANNUAL REPORT 2023

OTHER INFORMATION

Notice of Annual General Meeting (Cont’d)

EXPLANATORY NOTES (CONT’D)
9.

10.

Ordinary Resolution 9: Proposed Renewal of and New Shareholders’ Mandates for Recurrent Related Party
Transactions of a Revenue or Trading Nature (“Proposal”)
9.1

The proposed Ordinary Resolution 9 is to seek shareholders’ approval on the related party transactions (“RPT”)
entered or to be entered into by the Group and the related parties in the ordinary course of business. These arerecurring transactions of a revenue or trading nature which are likely to occur with some degree of frequency andmay arise at any time and from time to time. These transactions may be constrained by the time-sensitive natureand confidentiality of such transactions, and it may be impractical to seek shareholders’ approval on a case-bycase basis before entering into such RPT.

9.2

By obtaining the shareholders’ mandates on the renewal of and new recurrent RPT on an annual basis, thenecessity to convene separate general meetings from time to time to seek shareholders’ approval as and whensuch recurrent RPT occur would not arise. This would reduce substantial administrative time, inconvenience andexpenses associated with the convening of such meetings, without compromising the corporate objective of theGroup or adversely affecting the business opportunities available to the Group.

9.3

As such, the Board is seeking the renewal of and new shareholders’ mandates pursuant to Part E, Paragraph 10.09
of the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad for the RPT to allow the Groupto enter into such recurrent RPT, made at arm’s length and on normal commercial terms, not more favourable
to the related parties than those generally available to the public and which will not be to the detriment of theminority shareholders of the Company. Further details on the Proposal are set out in Part A of the Document toshareholders of the Company dated 25 April 2024.

Ordinary Resolution 10: Proposed Renewal of Share Buy-Back Authority
10.1 The proposed Ordinary Resolution 10, if passed, will empower the Directors to purchase the Company’s shares of
up to a maximum of 10% of the issued share capital of the Company by utilising funds allocated out of retained
profits of the Company. The 10% limit shall be the aggregate of current shares purchased and Treasury Shares.
Further details on the Proposed Renewal of Share Buy-Back Authority are set out in Part B of the Document toshareholders of the Company dated 25 April 2024.

STATEMENT ACCOMPANYING THE NOTICE OF AGM
No individual is seeking election as a Director at this AGM.
Details of the Directors who are standing for re-election at this AGM are set out in the Profile of the Board of Directors on
pages 109 to 113 of this Integrated Annual Report.

SECTION 7

Personal Data Privacy
By registering for the RPV and/or submitting an instrument appointing a proxy(ies) and/or representative(s) to participate
and vote at the AGM via RPV, a member of the Company (i) consents to the collection, use and disclosure of the member’s
personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its
agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation andcompilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof),
and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines(collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or
representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies)and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any
penalties, liabilities, claims, demands losses and damages as a result of the member’s breach of warranty.

KOSSAN RUBBER INDUSTRIES BHD.
Company No. 197901003918 (48166-W)(Incorporated in Malaysia)

No. of Shares held
CDS Account No.

PROXY FORM
I/We_____________________________________________________________________________________________________________________________________(FULL NAME IN CAPITALS)
of_______________________________________________________________________________________________________________________________________(ADDRESS)
being a member of KOSSAN RUBBER INDUSTRIES BHD. (“the Company”) hereby appoint:
Full Name (in Block)

Proxy A

NRIC/Passport No.

Proportion of Shareholdings
No. of Shares%

Address

And/orFull Name (in Block)

Proxy B

NRIC/Passport No.

Proportion of Shareholdings
No. of Shares%

Addressor failing him/her THE CHAIRMAN OF THE MEETING as my/our proxy, to vote for me/us and on my/our behalf, at the 44th Annual
General Meeting of the Company to be conducted virtually on the Online Meeting Platform on Thursday, 30 May 2024 at 10.30 a.m.
or at any adjournment thereof, in the manner indicated below:
Day and Date		
Time			Broadcast Venue		: Thursday, 30 May 2024
: 10.30 a.m.
: Training Centre, 2nd Floor, Kossan R&D Centre, PT 7836, Jalan Haji Abdul Manan / KU8, Kawasan Perindustrian
Meru Selatan, 41050 Klang, Selangor Darul Ehsan: https://meeting.boardroomlimited.my: Typed text in the Online Meeting Platform

Online Meeting Platform
Mode of Communication

AGENDAFirst

SecondProxy A

Proxy BFOR

AGAINSTFOR

AGAINST

AS ORDINARY BUSINESS:
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6

To approve a final single tier dividend of 2.0 sen per ordinary share for thefinancial year ended 31 December 2023.
To approve the payment of Directors’ Fees of up to RM670,000 for thefinancial year ending 31 December 2024.
To re-elect Tan Sri Dato’ Lim Kuang Sia retiring pursuant to Article 86 of theCompany’s Constitution.
To re-elect Lim Siau Tian retiring pursuant to Article 86 of the Company’s
Constitution.
To re-elect Lim Siau Hing retiring pursuant to Article 86 of the Company’s
Constitution.
To re-appoint Messrs. KPMG PLT as auditors of the Company and toauthorize the Directors to fix their remuneration.

AS SPECIAL BUSINESS:
Ordinary Resolution 7

To approve Lee Choo Hock’s continuation in office as Independent
Non-Executive Director.
Ordinary Resolution 8 To approve authority to allot shares pursuant to Sections 75 and 76 of theCompanies Act 2016.
Ordinary Resolution 9 To approve renewal of and new shareholders’ mandate for recurrent related
party transactions of a revenue or trading nature.
Ordinary Resolution 10 To approve renewal of shareholders’ mandate for share buy-back.
Please indicate with an “X” on the spaces provided on how you wish your votes to be cast. In the absence of specific directions, yourproxy will vote or abstain from voting at his/her discretion.
Dated this ______________ day of _______________ 2024.
__________________________________________
Signature of Member(s) / Common Seal

Fold this flap for sealing
Notes:The 44th AGM will be conducted on a virtual basis through live streaming and online remote voting via Remote Participation and Voting (“RPV”) facilities. Please
follow the procedures provided in the Administrative Details in order to register, participate and vote remotely via the RPV facilities. No members/proxy(ies) will
be physically present at the broadcast venue on the day of the meeting.
(i)

Only members whose names appear in the Record of Depositors as at 24 May 2024 shall be entitled to participate and vote at the AGM or appoint a proxy(ies)to participate and vote in his/her stead via RPV.

(ii)

A member entitled to participate and vote remotely in the AGM via RPV is entitled to appoint a proxy(ies) to virtually participate and vote remotely in his/herstead. a proxy may but need not be a member of the Company.

(iii)

Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her shareholdings to be
represented by each proxy.

(iv)

A member who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, may appoint one (1) proxy in respectof each securities account. Where a member is an exempt authorised nominee which holds shares in the Company for multiple beneficial owners in one
securities account (“Omnibus Account”) as defined under the Securities Industry (Central Depositories) act 1991, there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(v)

The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his/her attorney duly authorised in writing and in the caseof a corporation, be executed under its common seal or the hand of the attorney duly authorised.

(vi)

The instrument appointing a proxy must be deposited at the office of the share registrar, Boardroom Share Registrars Sdn. Bhd., 11th Floor, Menara Symphony,
5 Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan or via electronic means through the Boardroom Smart Investor
Online Portal at https://www.boardroomlimited.my/ not less than 24 hours before the time of the meeting and any adjournment thereof. Please refer to the
Administrative Details for further information on electronic submission.

Then fold here

AFFIX
STAMP
The Share Registrar,
KOSSAN RUBBER INDUSTRIES BHD.
C/O BOARDROOM SHARE REGISTRARS SDN. BHD.
11th Floor Menara Symphony
5 Jalan Professor Khoo Kay Kim
Seksyen 13
46200 Petaling Jaya
Selangor Darul Ehsan
Tel : 03-7890 4700
Fax : 03-7890 4671
Website : https://www.boardroomlimited.com/my

1st fold here

KOSSAN RUBBER INDUSTRIES BHD.
Company No.: 197901003918 (48166-W)

Wisma KOSSAN, Lot 782, Jalan Sungai Putus,
Off Batu 33/4, Jalan Kapar 42100 Klang,Selangor Darul Ehsan, Malaysia
Tel: +603 3291 2657
Fax: +603 3291 2903
kossan@kossan.com.my

www.kossan.com.my