Frontken Berhad Annual Report 2020

Annual Report 2020 9 FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) We continued to improve our engagement with our employees and strengthen our leadership across our business units. Skills development programs such as continuing education courses, seminars and conferences were offered through internal and external training sessions. We promoted the upskilling and reskilling of our employees, where they were able to gain new expertise to help in their current roles as well as to take on different or entirely new roles. In addition, we encouraged the sharing and maximisation of knowledge within the Group including cross functional collaboration to create new ideas and value. We continued to reward our employees through bonuses, incentives and awards as we believe in sharing our success with those who have worked tirelessly to contribute to the growth of the Group. We have always strived to better our performance by continually strengthening our domain expertise and capabilities. Our efforts were validated with an all-time high share price and market capitalisation since inception. In addition, the Group was selected as “Forbes Asia 200 Best Under A Billion Company”. We also won “The Edge Billion Ringgit Club for “Highest Growth in Profit After Tax” 2 years in a row and “The Edge Billion Ringgit Club for “Highest Return to Shareholders Over Three Years” in FY2020 under the technology sector. We are truly encouraged by these recognitions and are inspired to perform better in the coming years. We take very seriously our achievements in Environmental, Social and Governance (“ESG”). We are committed to the communities in the countries where we operate in and continuously improve our ability to achieve all the ESG targets around the globe, one of them being the 17 United Nations Sustainability Development Goals (“SDG”). We have thus far managed to integrate 11 out of the 17 SDGs into our day to day business approach, with focus on where we can make the most meaningful and positive impact. In FY2020, we further optimised our green power to an accumulative 1,021,294KW since 2018, directly supporting renewable energy. We continued to adhere to strict waste classification, introduced new methods to perform internal recycling of waste water, enabling them to become reusable resources and lowering reliance on outsourcing. We also implemented two major waste reduction projects that have resulted in a total savings of 49 ton of water and 64 ton of waste recycled. As a result of our implementation on waste recycling projects, the total water consumption was further reduced by 8.3% compared to the year before. Around the world, there is growing awareness on the realisation of a sustainable society. We are committed to complying with, if not, exceeding all relevant regulatory requirements, to the prevention of pollution and continual improvement in the environmental, health and safety performance of our operations, processes and products. We believe in making a difference by creating value in a sustainable and socially responsible manner while continue to demonstrate our commitment to a better future. Further disclosures on the Group’s Sustainability initiatives can be found at the Sustainability section of this Annual Report and at our website at www.frontken.com . Semiconductor Division In 2020, the global semiconductor industry sales increased by 6.5% to US$439.0 billion compared to 2019, which was US$412.3 billion, as reported by the Semiconductor Industry Association (SIA). During the pandemic, consumers have moved dramatically toward online channels due to closure of schools, inability to conduct meetings or conferences physically and to travel due to stringent restriction imposed by most countries. Consequently, digital adoption took a quantum leap as the pandemic had pushed the world ahead by a few years and has turned digitisation into a more critical component in businesses. Semiconductor has been the driver of the accelerating digitalisation of businesses and society, and we have been fortunate to be a part of this value chain. As witnessed throughout the pandemic, the Group’s semiconductor business had been incredibly resilient. In FY2020, our semiconductor division contributed 85% of the Group’s total revenue, with an improved profit after tax of 32% compared to the year before. Our research and development (“R&D”) team continued to drive forward incremental improvements and ongoing effort in Continuous Improvement Process and at the same time provide our customers with cost advantages and efficiency. The skills and experience our team have built over the years coupled with pro-active engagement with customers were able to give us an advantage to continue to be one the leaders in our industry. Chairman’s Message (cont’d)