Frontken Berhad Annual Report 2020

Annual Report 2020 23 FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) We ensure that the Group’s zero tolerance policy towards fraud, corruption and unethical actions are strictly adhered to. Our Group’s policies on anti-bribery and corruption policies and Fraud Investigation andWhistleblower help with our fraud risk management. We conduct fraud and control awareness program throughout the year to constantly refresh and update our people in this area. Our Whistleblower hotlines allow our employees and any external party at any location to report any incident of misconduct without fear of repercussions. In the reporting period of FY2020, we achieved the following: (a) ENTERPRISE RISK MANAGEMENT: (i) Zero incident of material losses for the period; (ii) Zero incident of corruption and bribery for the period. (b) INFOTECH AND DATA SECURITY: Zero incident of data losses and security breaches for the period. (c) TAX COMPLIANCE: Zero incidents of tax non-compliance for the period. Responsible Innovation and Service In FY2020, we led the advanced precision cleaning and coating in the 3nm process technology in Taiwan and 8nm process technology in Singapore. We also led the most advanced precision cleaning and coating for the next generation memory wafer process in both Taiwan and Singapore. In FY2020, our R&D team researched and developed more environmentally friendly methods for our chemical management, coating and cleaning process, we improved our production process flow and productivity, and most importantly we replace the dangerous and hazardous steps and processes that are not safe and conducive to the physical and mental health of employees and the environment. Our sustainability development efforts have been devoted to the environmental safety management; and the related innovation projects were designed to effectively reduce occupational hygiene risk, improve workplace environments and employee health management. We have successfully established an automated cleaning system which significantly reduces employees’ exposure to hazardous substances. For our effort, our subsidiary Ares Green Technology Corporation received an award from a major customer on the Supply Chain Environment, Safety and Health for our outstanding efforts. In the reporting period of FY2020, we achieved the following: (a) INNOVATION - Research and development capability ratio per unit of dollar revenue/RND Cost for each period of 71. (baseline data for FY2019 is 68). (b) INNOVATION PROJECTS FOR SUSTAINABILITY DEVELOPMENT: (i) Accumulative green power project (KW) since 2018 = 1,021,294 (ii) Accumulative DIW recycling project since 2018 (Ton) = 159,440 (iii) Accumulative waste recycling project since 2018 (Kg) = 127,644 Responsible Green Production The Group has continued to improve its green production method through its research and development to meet the operational challenges that global warming may bring by making progress through innovation. In FY2020, our production capacity has increased while processes continue to grow more complex, but through our efforts, unit production average power usage is reduced to 10.16 kWh (FY2019 = 11.2 kWh) per part produced; the unproduction average water usage is maintained at 0.12 (FY2019 = 0.12) cubic metre per part; and unit production average waste produced is maintained at 0.4 kg (FY2019= 0.4 kg) per part. To assess the environmental impact of the Group’s business activities as a whole, including its value chain, the Group in FY2020 began calculating Scope 1, 2, and 3 of the greenhouse gas (“GHG”) emissions. The calculation is based on the GHG Protocol, which is the most widely used international accounting and reporting tool. We have identified Scope 2 electricity consumption as having the greatest potential impact on achieving our stated energy and emissions targets. Most of our energy use is associated with our production. Optimising energy efficiency in our operations is a key component of the Group’s overall sustainability strategy. We are committed to continue to cut energy usage to lower our utility costs and reduce our environmental footprint. We are committed to doing our part to achieve a low-carbon future. We have already boosted the share of renewable power in our energy mix. Our sources of renewable energy include: On-Site Generation: renewable power generated by renewable energy sources (i.e. solar). Sustainability Report (cont’d)