COMPANY SECRETARIES

Ms. Tung Wei YenMAICSA 7062671SSM Practising CertificateNo. 201908003813

Ms. Geetharani RangganathanMAICSA 7070549SSM Practising CertificateNo. 201908000614

AUDIT COMMITTEE

Ms. Caroline Ang Choo BeeChairperson

Mr. Heng Fu JoeMember

Mr. Faris Salim CassimMember

NOMINATION COMMITTEE

Mr. Heng Fu JoeChairman

Ms. Caroline Ang Choo BeeMember

Mr. Faris Salim CassimMember

REMUNERATIONCOMMITTEE

Mr. Heng Fu JoeChairman

Ms. Caroline Ang Choo BeeMember

Mr. Faris Salim CassimMember

Corporate Information

RISK MANAGEMENTCOMMITTEE

Mr. Heng Fu JoeChairman

Mr. Chang Chee SiongMember

Ms. Caroline Ang Choo BeeMember

Mr. Low Geoff Jin WeiMember

Mr. Faris Salim CassimMember

Mr. Heong Mun FooMember

AUDITORS

Deloitte PLT21, Jalan Tun Abdul RazakSusur 1/180000 Johor BahruJohor

SOLICITORS

Shearn Delamore & Co

PRINCIPAL BANKERS

Hong Leong Bank BerhadHSBC Bank Malaysia BerhadMalayan Banking BerhadOCBC Bank (Malaysia) BerhadStandard Chartered Bank Malaysia Bhd

REGISTERED OFFICE

No. 9, Persiaran SelangorSeksyen 1540200 Shah AlamSelangor Darul EhsanTel : 03-5524 8888/03-5519 1325Fax: 03-5519 1884

PRINCIPAL PLACE OFBUSINESS

Kompleks Daibochi PlasticLot 3 & 7, Air Keroh IndustrialEstate, Phase IV75450 MelakaTel : 06-231 2746Fax: 06-232 8988Website: www.daibochi.com

STOCK EXCHANGE LISTING

Main Market of Bursa MalaysiaSecurities Berhad(Stock code: 8125)

SHARE REGISTRAR

Tricor Investor & Issuing HouseServices Sdn. Bhd. 197101000970 (11324-H)Unit 32-01, Level 32, Tower AVertical Business Suite, Avenue 3Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala LumpurTel : 03-2783 9299Fax: 03-2783 9222Email:is.enquiry@my.tricorglobal.comWebsite: https://tiih.online/

BOARD OF DIRECTORS

Mr. Heng Fu Joe Mr. Chang Chee SiongChairman and Independent Non-Executive Director Managing Director

(appointed on 13 December 2019)

Ms. Caroline Ang Choo Bee Mr. Low Geoff Jin WeiIndependent Non-Executive Director Executive Director

Mr. Faris Salim Cassim Mr. Heong Mun FooIndependent Non-Executive Director Executive Director

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5-Year Group Financial Highlights

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Group Financial Results

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Profile of Directors

Mr. Heng Fu Joe, a Malaysian, male, aged 40, was appointed to the Board of Daibochi on 2 August 2010. He isan Independent Non-Executive Director and the Chairman of the Board. Mr. Heng is also the Chairman of theNomination Committee, Remuneration Committee and Risk Management Committee and a member of the AuditCommittee.

He is a Chartered Accountant of the Malaysian Institute of Accountants, a fellow member of the CharteredAccountants in Australia and New Zealand, a Chartered member of the Institute of Internal Auditors Malaysia, aCertified Public Accountant and an Approved Auditor with the Kampuchea Institute of Certified Public Accountantsand Auditors, Cambodia. His past experience includes being the Manager of RSM in Australia and a Finance Analystof Goldman Sachs International in London, United Kingdom. Mr. Heng is currently a Partner and the Chief OperatingOfficer of Baker Tilly, Malaysia.

Mr. Heng has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict ofinterest with the Company. He does not hold any directorship in other public companies and listed issuers. Mr. Henghas not been convicted of any offence within the past five (5) years or been imposed with any public sanctions orpenalties by the relevant regulatory bodies during the financial year.

He attended all the five (5) Board of Directors’ meetings held during the financial year ended 31 July 2020.

Mr. Chang Chee Siong, a Malaysian, male, aged 48, was appointed to the position of Managing Director on 13December 2019. He is also a member of the Risk Management Committee.

He holds a Master in Manufacturing and Production Management from Wawasan Open University and is a memberof the Chartered Institute of Marketing (UK). Mr. Chang joined the Company in 1994 and was appointed as theHead of Department, Marketing and Sales in 2006 and the General Manager, Marketing and Sales in 2014. Hehas extensive experience in sales and marketing.

Mr. Chang has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict ofinterest with the Company. He does not hold any directorship in other public companies and listed issuers. He hasnot been convicted of any offence within the past five (5) years or been imposed with any public sanctions orpenalties by the relevant regulatory bodies since his appointment.

He attended two (2) Board of Directors’ meetings held during the financial year ended 31 July 2020 as he wasappointed to the Board on 13 December 2019.

Mr. Low Geoff Jin Wei, an Australian, male, aged 38, was appointed to the Board of Daibochi on 5 October 2010as an Executive Director. He is also a member of the Risk Management Committee.

He graduated from the University of Sydney, New South Wales, Australia with a Bachelor of Commerce (Major inFinance & Marketing). Prior to this, Mr. Low was the Managing Director/Project Director of GlassKote (Malaysia)Sdn Bhd from 2005 to 2010.

Mr. Low has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict ofinterest with the Company. He does not hold any directorship in other public companies and listed issuers. He hasnot been convicted of any offence within the past five (5) years or been imposed with any public sanctions orpenalties by the relevant regulatory bodies during the financial year.

He attended all the five (5) Board of Directors’ meetings held during the financial year ended 31 July 2020.

2020 ANNUAL REPORT

Ms. Caroline Ang Choo Bee, a Malaysian, female, aged 51, was appointed to the Board of Daibochi on 16 July2012. She is an Independent Non-Executive Director and the Chairperson of the Audit Committee. Ms. Caroline Angis also a member of the Nomination Committee, Remuneration Committee and Risk Management Committee.

She is a Chartered Accountant of the Malaysian Institute of Accountants, a fellow member of the Association ofChartered Certified Accountants (ACCA), United Kingdom and an associate member of the Malaysian Institute ofChartered Secretaries and Administrators.

After obtaining the ACCA qualification, she gained extensive experience while being attached to the Audit andCorporate Recovery and Insolvency departments of Ernst & Young, Kuala Lumpur. She gained further experiencein finance and business while holding the position of Accountant in Honeywell Engineering Sdn Bhd, a fully ownedsubsidiary of Honeywell Inc., a Fortune 100 Public Listed Company in the USA.

Ms. Caroline Ang also gained experience in the global shared services sector when she held the position of SeniorAccountant in the Global Credit and Treasury Services Department of Honeywell Inc., based in Malaysia. She iscurrently a Partner of CW Integrated Consultancy Services, a management firm in Kuala Lumpur.

She has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict of interestwith the Company. She does not hold any directorship in other public companies and listed issuers. Ms. Caroline Anghas not been convicted of any offence within the past five (5) years or been imposed with any public sanctions orpenalties by the relevant regulatory bodies during the financial year.

Ms. Caroline Ang attended four (4) of the five (5) Board of Directors’ meetings held during the financial year ended31 July 2020.

Mr. Faris Salim Cassim, an Australian, male, aged 46, was appointed to the Board of Daibochi on 1 September2017 as an Independent Non-Executive Director. He is also a member of the Audit Committee, NominationCommittee, Remuneration Committee and Risk Management Committee.

He holds Bachelor of Laws and Bachelor of Commerce degrees from the University of Western Australia, Australia.Mr. Faris Salim Cassim practised as a solicitor in Sydney, Australia specialising in corporate, mergers andacquisitions law, and then in corporate finance with major financial institutions, also in Sydney, Australia.

Mr. Faris Salim Cassim’s past experience includes working as a Chief Financial Officer and Director for a healthcaretechnology start-up. He has extensive experience and knowledge in corporate and mergers and acquisitions law,corporate finance and equity capital markets. Mr. Faris Salim Cassim is currently a Director of Novis Pte. Ltd, whichis a private investment and business advisory services company based in Singapore.

He has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict of interestwith the Company. He does not hold any directorship in other public companies and listed issuers. Mr. Faris SalimCassim has not been convicted of any offence within the past five (5) years or been imposed with any public sanctionsor penalties by the relevant regulatory bodies during the financial year.

Mr. Faris Salim Cassim attended all the five (5) Board of Directors’ meetings held during the financial year ended31 July 2020.

Mr. Heong Mun Foo, a Malaysian, male, aged 34, was appointed as an Executive Director to the Board of Daibochiand the Chief Financial Officer of the Company on 4 April 2019. He is also a member of the Risk Management Committee.

He graduated with a Bachelor of Accounting with Honours from National University of Malaysia in 2009 and holdsa qualification from the Association of Chartered Certified Accountants (ACCA), United Kingdom. He is also amember of the Malaysian Institute of Accountants. Prior to joining Scientex Berhad’s group of companies in 2015,he was attached to Deloitte from 2009 to 2015 and has experience in the fields of auditing, initial public offering(IPO) and liquidation.

Mr. Heong has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict ofinterest with the Company. He does not hold any directorship in other public companies and listed issuers. Mr.Heong has not been convicted of any offence within the past five (5) years or been imposed with any publicsanctions or penalties by the relevant regulatory bodies during the financial year.

Mr. Heong attended all the five (5) Board of Directors’ meetings held during the financial year ended 31 July 2020.

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Profile of Key Senior Management

Mr. Lai Chin Siong, a Malaysian, male, aged 51, was appointed to the position of General Manager,Operations on 13 January 2014.

He holds a Bachelor in Accounting and Financial Management from Universiti Sains Malaysia. Mr. Lai joinedDaibochi in 1996 and has been the Head of Production since 2008. He has approximately 24 years of workingknowledge and experience in the manufacturing industry.

Mr. Lai has no family relationship with any Director and/or major shareholder of Daibochi and has no conflictof interest with the Company. He does not hold any directorship in public companies and listed issuers. Hehas not been convicted of any offence within the past five (5) years or been imposed with any public sanctionsor penalties by the relevant regulatory bodies during the financial year.

Mr. Mohammad bin Hashim, a Malaysian, male, aged 51, was appointed to the position of Deputy GeneralManager, Product Development and Technical on 13 January 2014.

Mr. Mohammad holds a degree in Bachelor of Science (Hons.), majoring in Chemistry from University ofMalaya. He joined the Company in June 1993 as a Production Executive and held the position of Head ofDepartment, Product Development and Technical since 2000. He has been with Daibochi for more than 25years. He has extensive experience in converting technology and is responsible for the Company’sTechnical/Research and Development department, which is highly regarded by our key customers.

He has no family relationship with any Director and/or major shareholder of Daibochi and has no conflict ofinterest with the Company. He does not hold any directorship in public companies and listed issuers. He hasnot been convicted of any offence within the past five (5) years or been imposed with any public sanctions orpenalties by the relevant regulatory bodies during the financial year.

2020 ANNUAL REPORT

Chairman’s Statement

Dear valued shareholders,

As the widespread impact of the coronavirus disease 2019 (“COVID-19”) posedmultiple challenges to the health of the global population and overall economies,Daibochi Berhad (“Daibochi” or the “Group”) found itself navigating new challengesin the business environment, as it adopted new practices and behaviours tomaintain smooth operations and uphold its commitments to customers.

While we strove to overcome the overwhelming uncertainties, I am pleased topresent to you Daibochi’s Annual Report 2020, which provides our stakeholders areview of the Group’s operating and financial performance for the financial yearended 31 July 2020 (“FY 2020”).

A member of the Scientex Group (“Scientex’) since April 2019, Daibochi’s growthstrategies and operational enhancements towards achieving long-term andsustainable growth in the flexible plastic packaging (“FPP”) industry have continuedto deliver significant results, as reflected in the Group achieving a record performance in FY 2020.

Economic Review

The global economy registered significantly slower growth of 2.9% in 2019 (2018: 3.6%), on a backdrop of globalsupply chain disruptions and trade policy uncertainties due to the US-China trade war, geopolitical tensions, andweaker emerging market economies. Malaysia reported moderate gross domestic product (“GDP”) growth of 4.3%in 2019 (2018: 5.9%) primarily due to weaker total exports and lower private investments. These effects werehowever partially mitigated by proactive actions by the Government in employing monetary and fiscal policies.

In the first half of 2020, the world grappled with the health threats posed by COVID-19 that occurred since January2020, resulting in a global health crisis, in the process causing major shocks to the economic and financial systemsof countries worldwide. Regionally, lockdown measures in various Southeast Asian countries have also resulted inslower economies and disruptions to supply chains.

The Malaysian economy was also impacted as the country posted negative GDP growth of -8.3% in the first half of2020, primarily due to inactivity across various sectors in line with the Movement Control Order implemented by theGovernment in March 2020 to May 2020 and subsequent recovery phases in order to contain the COVID-19 effectsin the country.

Corporate Developments

In FY 2020, we implemented several key developments aimed at enhancing the Group’s future performance:

• Acquisition of Mega Printing & Packaging Sdn. Bhd. ("Mega")

Daibochi had, in August 2019, completed the acquisition of the entire equity of Mega of 4.5 million ordinary shares for a total cash consideration of RM125.0 million.

Following the completion of our acquisition of Mega, we have also successfully completed the integration process of Mega’s operations to the Group’s enlarged operations, with optimisation across various operating processes such as supply chain and procurement, administrative and finance, and research and development.

Mega, which manufactures FPP for end users comprising printed and laminated structures in roll-form and pre-made pouches mainly for food and beverage (“F&B”) applications, including confectionery, snacks, noodles and powdered beverages, increases our exposure to a larger number of prominent and up-and- coming domestic brands in Malaysia, in addition to strengthening our export clientele.

• Disposal of 36.3% stake in Skyline Resources (M) Sdn Bhd (“Skyline Resources”)

In March 2020, we disposed of our entire stake in Skyline Resources of which its principal activity is in property development and property investment.

This disposal is aligned with the Group’s present focus in the converting business, and the RM10.0 million cash consideration received would be used for capital expenditure.

Chairman, Heng Fu Joe

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Corporate Governance and Sustainability

Daibochi strives to maintain best practices in corporate governance in order to ensure long term sustainability and creation of value for our stakeholders.

Further disclosures on Daibochi’s sustainability measures are outlined in the Sustainability Statement of this Annual Report.

2021 Outlook

The International Monetary Fund, in its World Economic Outlook Update in October 2020, estimates that the global economy would register GDP growth of 5.2% in 2021, strengthening from the projected negative growth of -4.4% for 2020. The recovery is expected to be gradual with global GDP forecasted to just exceed 2019 levels amidst uncertainties faced worldwide in light of the ongoing COVID-19 pandemic.

Despite the challenging global scene, there has been an increase in reliance on FPP to cater to the change in consumer behaviour, for instance the growth in demand for packaged foods and snacks, as well as to preserve the quality and safety of a broad range of food and beverage products. In Southeast Asia, we also see this trend holding true, and even accelerated by the region’s increasing population and urbanisation.

Daibochi’s strong market position in Southeast Asia and Oceania, where we serve the FPP needs of not only leading multinational brands, but also a broadening number of regional and domestic brands, places us in an advantageous position to capture these market opportunities.

Daibochi has embarked on its major expansion programme with capital expenditure of RM100.0 million over a two-year period from FY 2020-FY 2021 to expand our manufacturing capacity by approximately 60%. This gives the Group the capability to serve our customers and capture more growth opportunities alongside the expanding businesses of our regional clientele, onboard new customers, and further enhance our operating efficiency through adoption of newer and higher-output machines.

Going forward, we are also seeing increasing demand by multinational brands for more sustainable FPP solutions that are able to support their near-term sustainability goals. We are also active in the co-development of sustainable FPP with Scientex such as mono-material laminates in collaboration with our clientele, with new commercialisations in the pipeline to meet our clientele’s evolving needs.

While there are remaining uncertainties on the future impact and the course of the COVID-19 pandemic, we are cautiously confident to navigate potential challenges. Our optimistic outlook is supported by our healthy financial standing, as well as continued growth in our regional and domestic businesses, given the essential nature of our core business which provides FPP to the F&B and fast moving consumer goods industries.

Appreciation

My deepest appreciation goes to our Board of Directors, management, and all employees, for your commitment towards the Group’s performance and sustainable growth. As we strive to expand further in Malaysia and in the regional markets towards reiterating our status as a regional FPP supplier to major brands, we hope to receive your continued support for the years to come.

Furthermore, I would like to welcome our new Managing Director, Mr. Chang Chee Siong, who was appointed to the Board on 13 December 2019. Having joined the Group in 1994, he was appointed as the Head of Department, Marketing and Sales in 2006, and subsequently General Manager, Marketing and Sales in 2014. Armed with extensive sales and marketing experience, in addition to a keen understanding of the Group’s operations and strategies, we look forward to him taking the Group to new heights.

I would also like to thank our business partners, associates, customers and valued shareholders for enabling our growth thus far. We hope to maintain a long term and fruitful relationship.

Heng Fu Joe Chairman and Independent Non-Executive Director

2020 ANNUAL REPORT

Management Discussion and Analysis

Established since 1972, Daibochi Berhad (“Daibochi” or the “Group”) is today a leading producer of flexibleplastic packaging (“FPP”) in the Southeast Asia and Oceania region. Leveraging on our extensivemanufacturing expertise for high-quality and innovative FPP solutions coupled with industry leading printingcapabilities, we fulfil the FPP requirements of an increasing number of prominent international and local brandsin the food and beverage (“F&B”) and fast moving consumer goods (“FMCG”) segments.

Daibochi, a FPP market leader in Malaysia, became a member of the Scientex Group (“Scientex”) since April2019. We went on to acquire FPP producer, Mega Printing & Packaging Sdn. Bhd. (“Mega”) in August 2019,which not only further enhanced our capacity, capabilities and product portfolio, but also expanded our clientreach and strengthened our market position in the domestic and regional FPP industry.

Notwithstanding the challenging external circumstances in the financial year ended 31 July 2020 (“FY 2020”)under review, Daibochi attained significant milestones in its operating and financial performance, in addition toreinforcing our growth strategies towards achieving greater long-term sustainability.

Financial Review

Daibochi reported annual revenue of RM619.3 million in FY 2020, underpinned by resilient demand for FPPfrom multinational and domestic companies for their F&B and FMCG brands across key markets served in theSoutheast Asia and Oceania region. In the preceding 19-month financial period ended 31 July 2019 (“FPE2019”), Daibochi reported revenue of RM699.3 million.

Of total FY 2020 revenue, domestic sales emerged as the major contributor at RM343.1 million or 55.4% oftotal revenue, while exports made up the balance RM276.2 million or 44.6%. These proportions representeda shift in geographical contribution due to the inclusion of Mega which had a higher composition of domesticclients, compared to FPE 2019 where exports accounted for the lion’s share with 54.3% of group revenue.

While the Group benefited from sales growth to existing and new customers, profit before tax (“PBT”) stood atRM63.3 million in FY 2020, resulting from improved operating efficiency through the integration of internalprocesses, best practices and supply chain with Scientex and Mega.

These factors culminated in Daibochi attaining its highest-ever bottomline performance in its 48-year history,with group profit attributable to shareholders reaching a record RM47.7 million in FY 2020. Indeed, markingthis milestone against the backdrop of a tough operating landscape makes the accomplishment moresignificant, and sets the tone for the Group’s growth trajectory in the future.

Description FY 2020 FPE 2019 RM’000 RM’000 Revenue 619,277 699,336 PBT 63,302 24,879 Profit attributable to owners of the Company 47,670 17,298

Financial Position

The accomplishment of the Group’s record-breaking performance was well-supported by its stronger base oftotal assets, which rose to RM483.1 million as at FY 2020 compared to RM365.1 million as at FPE 2019. Theincrease came mainly from the acquisition of Mega, in addition to other capital expenditure for plant,machinery and equipment. Inventories within the enlarged entity increased to RM72.3 million from RM62.4million in FPE 2019, while trade and other receivables were higher at RM102.6 million compared to RM89.3million in FPE 2019.

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Still, the Group remained in strong financial position, with higher levels of reserves prompting the growth ofshareholders’ equity to RM252.8 million in FY 2020, versus RM206.2 million in FPE 2019. Notably, net gearingimproved to 0.20 times in FY 2020 compared to 0.21 times in FPE 2019 despite the acquisition of Mega inAugust 2019. The Group’s net gearing remained well below the targeted threshold of less than 0.50 times inline with prudent management whilst providing adequate room for future growth endeavours.

The Group’s total number of issued shares stood at 327,898,483 ordinary shares as at 31 July 2020, of which550,100 ordinary shares were held as treasury shares.

Cash Flow and Capital Management

Significantly, Daibochi recorded healthy cash flow in FY 2020, with RM120.6 million in net cash from operatingactivities. This amply supported the Group’s significant investing activities in FY 2020, with net cash used ininvesting activities amounting to RM109.7 million, mainly attributed to the acquisition of Mega and purchaseof new plant, machinery and equipment.

Net cash used in financing activities stood at RM2.2 million, with the majority of funds used for repayment ofterm loans and dividend payments to shareholders.

Dividends

In line with our commitment to reward shareholders, Daibochi declared total dividends of 5.0 sen per ordinaryshare in respect of FY 2020. This comprised an interim dividend of 2.0 sen per ordinary share paid on 17 July2020, and a proposed final dividend of 3.0 sen per ordinary share payable on 15 January 2021 subject toshareholders’ approval at the Company’s forthcoming Annual General Meeting.

The total dividend payout would amount to RM16.4 million, representing 34.3% of FY 2020 profit attributableto shareholders.

The Group has a dividend policy to distribute not less than 30% of the Group’s normalised reported annual netprofit attributable to shareholders.

Corporate Developments

Daibochi made two corporate transactions in FY 2020, namely the acquisition of FPP peer Mega, and disposalof a non-core associate to focus on the FPP business:

• Acquisition of Mega

We completed the acquisition of Mega in August 2019, amounting to RM125.0 million in cash consideration for 4.5 million shares representing the entire equity of Mega, funded through internally-generated funds and bank borrowings.

Through Mega, Daibochi benefited from combined manufacturing capacities and capabilities, as well as a wider product portfolio in the F&B sector, particularly for confectionery, snacks, noodles, and powdered beverages.

Furthermore, Mega’s extensive coverage of domestic F&B clients in addition to its exports business complements Daibochi’s predominantly multinational clientele, thus strengthening our overall market position and prospects in the FPP industry.

• Disposal of 36.3% stake in Skyline Resources (M) Sdn Bhd (“Skyline Resources”)

Daibochi had in March 2020 disposed of 36.3% equity interest in Skyline Resources, held under our wholly-owned subsidiary, Daibochi Land Sdn Bhd. The disposal proceeds of RM10.0 million would be used for the Group’s capital expenditure (“Capex”).

The disposal of Skyline Resources, whose principal activities are in property development and property investment, was undertaken in line with efforts to reorganise our business activities to focus on our core competency in FPP.

2020 ANNUAL REPORT

Operational Highlights

Daibochi is committed to maintaining a competitive position in the FPP industry in Southeast Asia and Oceania.We continuously invest into improving our manufacturing capabilities, and undertake research and development(“R&D”) into innovative FPP solutions that meet latest packaging needs of major global F&B and FMCG brands.

One of the Group’s major exercises in FY 2020 was to implement enhancements to our operating capabilities andefficiencies through the integration process with Scientex. These included integrating various processes and sharingsupport services such as R&D and human resources, as well as setting up a state-of-the-art bagging facility in ourAyer Keroh plant. Improvements in efficiencies were achieved through implementation of a just-in-time ordersystem, stringent wastage control measures, and increasing capacity to better serve customers.

At the same time, we collaborated with Scientex on R&D, positioning us in the forefront of FPP innovation to meetthe high-performance and superior-quality requirements of our clients. Through our ongoing R&D, we successfullycommercialised our 100% recyclable mono-material laminates in FY 2020 for a prominent beverage brand inMalaysia, and are currently working on rolling out solutions to other product lines of the brand owner.

With sustainability becoming increasingly important among consumers worldwide, our industry leading R&Dcapabilities provide us with a key competitive edge in the FPP industry. We have been working closely withvarious key clients, comprising leading local and multinational brands, towards the implementation of sustainableand recyclable plastic packaging solutions.

With product trials in various stages of completion and many projects in the pipeline, we have witnessedencouraging results and expect more commercialisations and roll outs to these multinational brands progressivelyover the next few years. This also comes as leading international brands increasingly adopt sustainable solutionsin their supply chains, in line with corporate sustainability goals and growing consumer demand.

We will continue to reinforce our competitive strengths and market position in Southeast Asia and Oceania, byenhancing our capabilities in developing innovative and sustainable FPP solutions for the multinational andregional brand owners.

Growth Strategies

Having marked a strong financial year, Daibochi is poised to grow from strength to strength by implementingthe following initiatives:

• Expanding production capacity via RM100.0 million Capex investment across FY 2020 to FY 2021

Daibochi continues to strive for growth in the FPP industry in the Southeast Asia and Oceania region, where demand for FPP remains on a resilient uptrend. FPP also continues to play a key role in the F&B and FMCG industries due to its importance in preserving product quality, freshness, and safety for the consumer.

In view of the encouraging prospects, Daibochi has allocated Capex of RM100.0 million over a two- year period across FY 2020 and FY 2021 to expand our manufacturing capacity by 60%. The Capex is allocated for the purchase of 21 new lines covering the printing, lamination, and bagging processes. Seven of these lines were commissioned in FY 2020 with 14 lines to come on stream in FY 2021. The Group endeavours to maintain its net gearing level below 0.50 times.

• Developing sustainable FPP to meet increasing global needs As corporations and consumers worldwide increasingly favour and adopt sustainability-driven practices, FPP suppliers have the responsibility to deliver innovative and sustainable FPP solutions capable of meeting rigorous sustainability standards.

To capture growth opportunities in this large market we would train our sights on R&D efforts to develop innovative and sustainable FPP products that effectively cater to our clients’ sustainability goals.

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Our collaborative R&D with Scientex combines vast experience in meeting the innovation and high- quality solutions requirements of major international brand owners, and strong technical capabilities in the development of environmentally-friendly FPP. This vertically integrated model provides us with an edge in providing industry leading solutions and reliability for the continued success of our clients’ global brands. These FPP solutions help enable the shift towards a circular, closed-loop system, that conserves resources, while maximising product applications and value to communities in the product lifecycle.

• Extending customer reach across Southeast Asia and Oceania

As a key FPP producer for the regional F&B and FMCG markets, Daibochi serves the FPP requirements of major international brands, in addition to many domestic brands in various countries. Supported by our ongoing capacity expansions, we intend to capture growing opportunities, driven by the region’s increasing population and shifting consumer trends.

We strive to increase our supply to a greater range of our multinational clients’ brands and product portfolio in the regional markets, and strengthen our position as a key solutions provider in their global supply chains.

We also aim to provide the same benefits of high quality FPP and industry leading service standards to a greater number of home-grown and up-and-coming domestic and regional brands, supporting their growth efforts and packaging requirements.

Risks

As with any player within an open economy, Daibochi’s business is subject to several risks. We continuouslymonitor and employ effective management strategies to mitigate our risk exposure:

• Environmental issues

The usage of plastics globally has intensified scrutiny into their environmental impact; exacerbated by improper disposal practices and inadequate resources for the management, collection and recycling of plastic waste.

Daibochi’s focus on developing sustainable FPP solutions aims to find resolutions to these issues. Our cooperation with leading international brands places us in a unique position to play a greater role in the conservation of the environment as we implement our solutions to their supply chains.

• Coronavirus disease 2019 (“COVID-19”) pandemic

There are uncertainties on the COVID-19 pandemic and its potential impact to societies, businesses and supply chains.

During Malaysia’s Movement Control Order phase in March 2020 to control the pandemic, Daibochi as a provider of essential services to the F&B and FMCG industries secured approvals from the authorities to continue operations.

We continue to maintain operations while adhering to strict standard operating procedures and government regulations to ensure the health and safety of our employees, suppliers, customers and business associates amidst the pandemic.

2020 ANNUAL REPORT

• Availability of human workforce and automation

Daibochi has a dynamic workforce that comprises both locals and foreigners. Therefore, changes in policies by the Malaysian Government on hiring new foreign workers may pose an impact on the availability of workers in our operations.

To address the risks associated with the Group’s reliance on foreign worker recruitment, we prioritise the hiring of more local workers. We also continuously invest into automation of production processes and systems that enable us to become less labour-intensive and more efficient.

• Cybersecurity

The extensive utilisation of information technology systems give rise to potential security breaches such as hacking, information theft and virus threats that may disrupt operations and/or cause financial or reputational losses.

The Group maintains comprehensive measures to prevent security incidents, including regular security upgrades for all workstations, use of firewall system, as well as backup and recovery procedures to ensure continuity.

• Cost and supply of raw materials

Daibochi’s key raw materials used in the production of FPP are films, ink, solvents and adhesives, which may be subject to supply availability and price fluctuations. We develop a robust supplier base to ensure continued availability of critical raw materials, and continuously monitor raw material prices to adapt our procurement responses efficiently.

• Foreign currency exchange rate fluctuations

Daibochi conducts our export transactions in foreign currencies including the United States Dollar and Australian Dollar. We manage foreign exchange exposure risks by matching revenue, cost and borrowings to the same currencies to further mitigate risk.

• Compliance risk

As a regional FPP provider for multinational customers and local brands, Daibochi is subject to country- specific laws and regulatory requirements. Any breach in compliance may adversely affect business operations and customers’ trust, and potentially lead to financial and reputational losses.

We continuously enhance our corporate governance policies, risk management, and internal controls to maintain strict compliance with relevant laws and regulations.

Daibochi’s growing prominence in the FPP industry in Southeast Asia and Oceania comes from our focus onproviding industry-leading solutions, coupled with efficient manufacturing operations and innovation capabilities.

In addition to aspirations for business growth, we would also strive for continuous improvements in ourcapabilities, towards playing a greater role in shaping the future of FPP use in the F&B and FMCG sectors.We look forward to growing together with our clients, supporting their efforts in bringing the best products tothe everyday consumer.

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Sustainability Statement

Daibochi Group is committed towards building a sustainable business and conducting our operations as aresponsible corporate citizen. This Sustainability Statement provides an overview on the management of theeconomic, environment and social matters in the Group’s operations during the financial year ended 31 July2020 (“FY 2020”).

Sustainability Governance

The Board sets the tone and steers a strong sustainability culture whilst Management ensures that ethical,social values and good environmental practices are cascaded throughout the entire organisation.

Governance Structure

Key Leadership Roles and Responsibilities

Board of Directors Reviews and approves the Sustainability Statement.

Managing Director • Reviews material sustainability matters with the Management team; • Formulates sustainability strategies/initiatives with the Management team; and • Reports to the Board on material sustainability matters.

Management Team: Heads of Departments: • Responsible for stakeholder engagement process, identifying material Sales, Corporate, Finance, sustainability matters, executing and monitoring the implementation of Operations, Management sustainability initiatives/strategies; and Information Systems and • Reports to the Managing Director on material sustainability matters. Product Development & Technical

Stakeholder Engagement

We recognise that our stakeholders are pivotal to the Group’s long-term growth. Hence, sustainability issuesthat are of relevance or interest to these stakeholders are essential to our business. Our key stakeholders andtheir areas of interest identified during our various engagements with them are reflected below:

Key Stakeholder Group Engagement Methods Areas of Interest

Employees Discussions, meet ings, t ra in ing Remunerat ion package, career programmes and team building progression, occupational safety and health

Customers Meetings, feedback to sales personnel, Product quality and service, competitive audits and customer surveys price, environment, occupational safety and health

Governments and Meetings, on-site inspections and Economy, environment, occupational Regulators correspondences safety and health, compliance with applicable laws

Investors and Annual report, announcements, press Performance and financial results, Shareholders releases, investor briefings and general business strategy and out look, meetings governance

Local Communities Community programmes Social responsibility

Suppliers Meetings, discussions and information Price, payment, occupational safety from procurement personnel and health

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Our Workforce

Our employees are our greatest asset and key to our success. We foster an inclusive working environment bycultivating a culture of personal ownership and facilitating the pursuit of excellence for all employees.

Information on our workforce can be viewed below:

Number of employees - 1,157

Daibochi complies with all applicable labour laws, rules and regulations in the countries in which the Groupconducts its operations. The Group offers a fair and competitive remuneration package based on ouremployees’ performance, roles and responsibilities to ensure that we meet industry standards in attracting andretaining talent. Employees are offered a wide variety of learning and development opportunities that enhancetheir existing knowledge and skills to fulfil current job expectations as well as future roles in the organisation.

Team building

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Supply Chain

Our supply chain plays an important role in ensuring the efficiency and effectiveness of our operations.Suppliers and service providers are chosen for their ability to consistently deliver over the long-term and operatein a responsible and ethical manner. Presently, 70% of our raw materials suppliers are based in Malaysia.

Key Sustainability Topics

The 4 key sustainability topics selected in FY 2020 represent a decrease in the number of topics underconsideration. This decision was made to focus on topics deemed to be most material to our business, bearingon the Group’s overall economic, environmental and social impact as well as the significance to our stakeholders.

The United Nations Sustainable Development Goals

The 4 key sustainability topics have been aligned with the United Nations Sustainable Development Goalswhich are most pertinent to our operations as follows:

No. Topic United Nations Sustainable Development Goals 1 Product Innovation

2 Waste Management

3 Occupational Safety and Health

4 Local Communities

Sustainability Materiality Matrix

The 4 key sustainability topics were then plotted onto a matrix to portray their significance to Daibochi’sbusiness operations and the Group’s stakeholders.

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fluen

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akeh

olde

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sess

men

tsan

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High

List of identified key sustainabilitytopics

1. Product Innovation

2. Waste Management

3. Occupational Safety and Health

4. Local Communities

Legend

Economic

Environment

Social

HighLow Significance of economic, environmental and social impacts

Materiality Matrix

Impact on Key Stakeholders

Key Sustainability Key Area Stakeholders Effect on Economic, Environmental and Topic of Impact Social Outcomes

Product Innovation Economic - Customers - Sustainable packaging solutions have - Suppliers become increasingly important in the - Governments recent years as consumers are more and Regulators focused on the environment

- Our integration of resources and processes with Scientex Berhad (our holding company) (“Scientex”), technical expertise, and collaboration with customers enables us to develop sustainable and innovative products to meet the growing demand from consumers Waste Management Environmental - Customers - Managing waste generated from our - Suppliers operations in a responsible manner - Governments enables us to mitigate the potential impact and Regulators on the environment

- Focusing on eco-friendly practices for effective environmental management

Occupational Social - Employees - Maintaining a safe and healthy working Safety and Health - Governments environment and complying with relevant and Regulators laws and regulations to ensure the safety and health of our employees

Local Communities Social - Customers - Engaging with the community to cultivate - Investors and environmental awareness for their Shareholders well-being - Governments and Regulators - Local Communities

1

2 3

4

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1. Product Innovation

As awareness on the impact of plastics on the environment grows amongst consumer groups, it is increasingly important to remain focus on developments of sustainable flexible plastic packaging solutions as well as other innovative products to fulfil consumer preferences and for the long-term preservation of the environment. Our efforts in terms of product innovation focuses on:

• Developing packaging solutions in line with customers’ needs and market trends. • Developing sustainable packaging solutions.

Developing packaging solutions in line with customers’ needs and market trends

The Group adopts stringent benchmarks in our operational processes to ensure the quality and safety of our products and this is reflected in the international accreditations, ISO 9001, ISO 14001 and FSSC 22000 (Food Safety System Certification) attained by us. Continual investment in enhanced capabilities also paves the way for the development of innovative products. The Group’s manufacturing facilities are equipped with state-of-the-art machinery and in-house laboratory facilities to produce high-quality packaging solutions. Capacity and capability expansions undertaken during FY 2020 are:

• Installation of 7 high speed machineries which include 4 bag making machines, 2 extrusion laminators and 1 gravure printer. • Completed the new bagging section at the Company’s manufacturing plant, equipped with 13 bagging machines, integrated visitors’ walkway and stringent quality control environment. Close collaborations with customers and brand owners form the basis for market-centric innovation. Feedback is gained through regular review sessions which lay the groundwork for collaboration on developing new products which are geared to our customers’ specific needs, as well as collaborations that unlock improved product value.

New bagging section and integrated visitors’ walkway Example of bag produced

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Bowl pack Internal print

Developing sustainable packaging solutions

Daibochi’s close collaboration with multinational (“MNC”) clients and the integration of resources and processes with Scientex has enabled us to develop sustainable packaging solutions and innovative products in line with customers’ needs and market trends. Our notable achievement in sustainable packaging solutions is the development of flexible mono-material laminates with the following features: • 100% Recyclable. • Able to satisfy current laminate properties and functional performance especially in terms of barrier to oxygen and moisture, machine ability to run as well as aesthetics.

Bricks packaging (gusset bag)

This sustainable innovation, the first of its kind in Malaysia, was developed for a renowned domestic beverage brand during FY 2020 and we are currently collaborating with the customer to roll out packaging solutions for their other products. Leveraging on our competitive advantage, we are also undergoing various stages of qualifications with our prominent MNC customers and the response has been promising. Accordingly, Daibochi targets to capitalise this innovation for other product lines which include pet food, confectionery and beverages.

2. Waste Management

Daibochi endeavours to conduct our operations in an environmentally responsiblemanner by adopting environmental best practices in our production process. Our ISO14001 environmental management certification signifies our commitment to minimisethe impact on the environment and conserve natural resources.

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Wastes from our production plants are managed and disposed effectively in accordance with the relevant country-level laws and regulations in terms of its transportation, storage and disposal. The nature of waste considered herein specifically refers to non-scheduled waste, which is defined as recyclable and non-recyclable plastic waste generated from our manufacturing plants.

Non-recyclable production waste were either sold to waste collectors or delivered to a third-party waste- to-energy incineration facility and is free of asbestos, scheduled waste or any hazardous materials and converted into alternative fuel. In addition, plastic pellets and resins are delivered by the waste collector to plastic recycling companies to be recycled for use in the injection moulding industry for household products, including waste bins and plastic chairs.

We seek to keep waste to a minimum within our production process. Frequent briefings and meetings are held by Management with the production team to continuously instil waste management awareness. Waste management matters are also reported at monthly management meetings. We recorded an improvement in waste reduction, as tabulated below, by focusing on our core competency in converting, instead of upstream activities and continuous process improvements across our manufacturing plants.

FY 2020 FPE 2019

Recyclable waste/sales tonnage 1.9% 1.1%

Non-recyclable waste/sales tonnage 2.9% 12.6% (converted to alternative fuel)

Non-recyclable waste/sales tonnage (others) 8.2% 4.6%

Total Waste/Sales Tonnage 13.0% 18.3%

3. Occupational Safety and Health

Creating a healthy and safe environment for our employees, contractors,service providers, customers and visitors to our manufacturing facilitiesremains a priority and this is manifested in Daibochi’s Safety and HealthPolicy. Our Safety and Health Committee (“SH Committee”) is entrustedwith cultivating safe workplace practices which encompass the following

measures:

• Developing and administering safety policies. • Conducting annual safety audits and inspections of our manufacturing sites. • Ensuring compliance with Occupational Safety and Health Administration laws and regulations. • Providing personal protective equipment to all concerned workers to reduce potential occupational hazard exposure.

The SH Committee performed the following duties during FY 2020:

• Provided regular training sessions to all relevant production employees on fire safety, chemical spills, machine safety and accident-prevention. • Held meetings for major accident cases on an immediate basis and conducted investigations of the accidents, including corrective and preventive actions. • Reported details of major accidents at monthly assemblies or briefings with production employees. • Carried out reviews on accidents on a monthly basis and reported to Management. • Collaborated with the Fire Department to conduct trainings at our Melaka plants for our firefighting team to ensure preparedness in the eventuality of fire emergencies.

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As a result of our safety and health initiatives, we achieved our target of zero fatalities in the Group’s manufacturing plants, details of which are tabulated below:

Accident cases FY 2020 FPE 2019

No. of major injury 4 7 No. of minor injury 7 12

No. of Fatality - -

Notes: • Number of major injury - defined as an injury that prevents the said employee from performing his normal occupation for more than 4 days of work, including the day of accident • Number of minor injury - defined as an injury that prevents the said employee from performing his normal occupation for 4 days of work or less, including the day of accident

Training on fire safety

4. Local Communities

As a responsible corporate citizen, we support the betterment of the local communitiesby contributing towards socio-economic development as outlined herein:

• Approximately 71% of our workforce comprises local employees. • At the Company level, we provided the poor/marginalised community in

Melaka with supplementary work and income by collaborating with a non-profit organisation in respect of an assembly project and to supply a portionof our fresh fruits’ requirements in the staff canteen.

• 9 trainees were recruited by the Company for industrial training during FY 2020.

On the social responsibility front, we made a positive impact by providing contributions to:

• a secondary school in Melaka for the education of poor students. • the Melaka Fire Department for its Fire Safety Awareness Campaign. • an association which assists poor and needy patients who are terminally ill.

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Management of emissions and materials/ substances inaccordance with safety and health requirements are asfollows:

• Trained and qualified personnel to closely monitor all emissions such as air and water discharge.• Emissions from our vehicles and transporters are within regulatory limits. • Hazardous substances and chemical containers are clearly identified, located in designated areas, and disposed properly.• Stringent monitoring measures to prevent spills during handling and transportation of hazardous materials for safety purposes. • Air emission monitoring and monthly industrial effluent testing.

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The Group supports green activities and environmental conservation efforts through the following initiatives:

• Participation by the Company’s employees in recycling activities through our “Green Day” campaign every Tuesday and Thursday. • Employees are encouraged to practise the 5R’s – ‘Refuse, Reuse, Reduce, Repair and Recycle’ in their daily activities. Recycling activity

Special Section: Coronavirus Disease 2019 (“COVID-19”) Activities

The COVID-19 pandemic has brought unprecedented challenges to the global economy, people and businesses worldwide. Throughout the crisis, our primary focus has been to safeguard the health and safety of our employees as well as maintain continuity of the Group’s business/operations to meet customers’ needs and support the requirements imposed by the Government and local authorities during the Movement Control Order (“MCO”). The key initiatives undertaken by the Group are summarised herein:

• Providing a working environment that promotes personal hygiene. • Mandatory temperature checks for employees and visitors prior to commencing work or entering the premises. • Limiting the number of visitors from visiting the plants unless it is necessary. • Restricting movement between manufacturing areas/work premises to reduce the risk of transmission. • Establishing alternate workdays or extra shifts and encouraging employees to work remotely from home. • COVID-19 screening for all employees based in Malaysia.

COVID-19 test Sanitising machinery

Daibochi donated 400 food kits to the Melaka State Government to assist the poor and needy during the MCO period, contributed to relief funds and provided essentials and necessities such as food, beverage and masks to frontliners in Melaka.

Donation of food kits to the Melaka State Government Appreciation to frontliners

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Corporate Governance Overview Statement

The Board values the importance of adopting high standards of corporate governance to ensure sustainabilityof the Group’s business and long-term value creation. In realising this, the Board remains committed towardsupholding professionalism, integrity and ethical conduct throughout the Group.

This Corporate Governance Overview Statement presents our governance framework and practices in respectof the financial year ended 31 July 2020 (“FY 2020”) and outlines the Group’s key focus areas and priorities.This statement is to be read together with our Corporate Governance Report (“CG Report”) which is availableon our website at http://daibochi.com/corporate-governance/ as well as via an announcement on BursaMalaysia Securities Berhad’s (“Bursa Securities”) website at https://www.bursamalaysia.com.

PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS

1. Board Responsibilities

Roles and Responsibilities

1.1 The Board sets the tone at the top for the Group’s governance standards by advocating a robust culture of integrity, good business conduct and ethical behaviour. Management is responsible for the alignment of best corporate governance practices across the entire organisation. There are well- defined policies and comprehensive systems to ensure that the Group’s business is properly managed, with effective oversight and control. 1.2 The Company is steered by an experienced, dynamic and well-balanced Board comprising six (6) competent professionals with diverse expertise in accounting, business, finance, legal, corporate, management, business development, sales and marketing that add value to the Group. 1.3 The Board has developed clear roles and responsibilities and each Director has a fiduciary duty to discharge his or her duties in the best interests of the Group at all times. The principal responsibilities of the Board include matters pertaining to corporate governance, overseeing the Group’s conduct of business, ensuring strategic plan supports long-term value creation, succession planning of the Board and Senior Management, reviewing the adequacy and effectiveness of risk management and internal control systems, maintaining effective communication policies and procedures with stakeholders, upholding the integrity of the Group’s financial and non-financial reporting or disclosures and embedding sound sustainable business practices throughout the Group’s operations. The Company’s Board Charter, available at http://daibochi.com/corporate-governance/, sets out the Board’s strategic intent and the Board’s roles and responsibilities. 1.4 The Board formed four (4) Board Committees (“BCs”), namely, the Audit Committee (“AC”), Nomination Committee (“NC”), Remuneration Committee (“RC”) and Risk Management Committee (“RMC”), entrusted to support the Board in discharging its duties efficiently. The BCs are chaired by an Independent Non-Executive Director (“INED”) of the Company to promote good governance and transparency and their Terms of Reference are available at http://daibochi.com/corporate-governance/, to be reviewed from time to time.

Chairman and Managing Director

1.5 The position of the Chairman and Managing Director are held by two (2) individuals with distinct functions to ensure an optimal balance of power and increased accountability. The Chairman is primarily responsible for the Board’s conduct, effectiveness of its governance process and fostering constructive interactions with shareholders at the general meetings. The Chairman also chairs the NC, RC and RMC and is the Senior Independent Director of the Board. The Managing Director develops the Group’s business in accordance with strategies, policies, budgets and business plans, oversees day-to-day operations and provides guidance and leadership to employees of the Company.

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Board Conduct 1.6 The Board has established codes and policies to support our core values and this is reflected in our Code of Conduct and Ethics and the Directors’ Code of Ethics which governs the standards of ethics, integrity and good conduct expected from employees and Directors respectively. The Company’s Whistle-blowing Policy provides an avenue for employees and stakeholders to report genuine concerns about unethical behaviour and improper conduct within the Company, in good faith and without fear of reprisal. During FY 2020, the Group adopted an Anti-Corruption and Anti-Bribery Policy in line with the Board’s commitment to promote ethical business conduct. The codes and policies are accessible at http://daibochi.com/corporate-governance/. 1.7 The Board, through the AC, reviews related party transactions (“RPT”) (including recurrent RPTs) and possible conflict of interest situations (if any) on a quarterly basis. This is to ensure that transactions are undertaken in the best interest of the Company/Group, fair, reasonable, on normal commercial terms and not detrimental to the interests of the minority shareholders. A Director who has an interest in a transaction must abstain from deliberating and voting on the relevant resolution, in respect of such transaction at the Board meeting and at the general meeting convened to consider the said matter. The Company obtained the renewal of its shareholders’ mandate in respect of recurrent RPTs at the Annual General Meeting (“AGM”) held on 13 December 2019. 1.8 Directors and principal officers of the Company who have access to price sensitive information which has not been disclosed to Bursa Securities and the investors have a duty to maintain the confidentiality of information that he/she obtains by virtue of his/her position and are prohibited from dealing in the Company’s securities while in possession of this information. In this regard, the Company Secretaries advised the Directors and principal officers on trading restrictions i.e. dealings during and outside closed period in accordance with Bursa Securities’ Main Market Listing Requirements (“Listing Requirements”). Board Meetings 1.9 Board meetings are convened on a quarterly basis, with additional meetings held, as and when necessary, to deliberate on particular matters. Directors may participate in a meeting by means of a conference telephone or similar electronic telecommunication pursuant to Regulation 97 of the Company’s Constitution if he/she is unable to attend in person. 1.10 Board meetings are structured with a pre-set agenda. The Board has a formal schedule of matters reserved to it for deliberation and decision, including the approval of annual and interim results, major capital expenditure and investments, yearly budget, strategic issues affecting the business of the Group and corporate policies and procedures. The Board also receives briefings from Management pertaining to the operational issues and financial performance of the Group as and when necessary. 1.11 Notices of meetings and meeting papers are sent a week ahead of the scheduled meetings enabling the Directors to seek clarification and to peruse the issues to be deliberated at the Board meetings. External advisors may be invited to attend Board meetings to advise and/or furnish the Board with professional insight and clarification needed on relevant matters. These ensure that members are fully apprised of matters for constructive discussions and effective decision making at meetings. 1.12 The Board convened a total of five (5) Board meetings during FY 2020 and the Directors’ attendance at the meetings fulfilled the requirement stipulated by Bursa Securities. The respective Directors also attended meetings of the BCs. The frequency of Directors’ attendance at the Board meetings is set out in the Profile of Directors in this Annual Report.

1.13 All proceedings/minutes of the meetings are prepared and circulated in a timely manner to reflect the decision making process of the Board appropriately. Minutes of Board and BCs meetings are circulated to members for their perusal prior to the confirmation at the following meetings and are signed by the respective Chairpersons. Minutes of the AC’s proceedings are circulated to all Board members for notation purposes.

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1.14 Decisions of the Board and BCs may also be obtained via circular resolutions, where appropriate. Key matters requiring the Board or BCs’ approvals are reserved for resolution at the respective meetings to facilitate discussions as part of good corporate governance. Access to Information 1.15 Directors have access to all information and receive timely updates from Management in respect of matters pertaining to the Group. They may seek clarification from Management and the Company Secretaries as well as independent professional advice at the Company’s expense, if necessary, in the furtherance of their duties. Time Commitment 1.16 Directors are expected to notify the Chairman and Company Secretaries before accepting any new directorship, including an indication of time that they will spend on their new appointment. They must not hold directorships in more than five (5) public listed companies (“PLCs”). None of the Directors held any directorship in other PLCs during FY 2020. The schedule of Board and BCs meetings and general meetings is planned well in advance to facilitate the Directors’ time management and to enable them to fit the meetings into their respective schedules. The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles on the Board and BCs.

Professional Development and Induction

1.17 The Board recognises the importance of ongoing professional development for the Directors to enable them to discharge their duties effectively. The Directors are empowered by the Board to evaluate or assess their own training needs on a continuous basis. The Directors attended the following professional trainings during FY 2020:

Director Programmes attended during FY 2020

Mr. Heng Fu Joe “MFRS 16 Leases” “CPA Congress 2019” “Townhall 2019” “CAANZ-MICPA Audit Forum 2019: Future of Audit” “World Conference "One Vision One Direction", Singapore (Audit)” “World Conference "One Vision One Direction", Singapore (Plenary)” “ICDM Post-Budget Breakfast Talk” “ISQM: Another Tsunami of Changes for Auditors?” “The Role of the Board in Strategy & Risk Management Oversight” “Rethinking Auditing with Blockchain Technology” “Baker Tilly Network Conference 2020” “Annual Managers (Audit Townhall)” “Leadership Webinar Series: Self Development: Managing Emotional

Intelligence” “Leadership Webinar Series: Future Ready: Aligning the Organisation

Culture” “Leadership Webinar Series: Digital Communication: Communicating

with Different Generations and Different Cultures (Part 1)” “Leadership Webinar Series: Future Ready: Action Plan for

Triumphing in The VUCA World” “Leadership Webinar Series: Future Ready: Integrating Technology

into Your Business” “Leadership Webinar Series: Self Development: Technique for

Resilience and Perspective-Taking” “How to Think Like a Futurist: 3 Ways to Prepare for the New Normal

Confirmation” “The New Normal: Expected Trends in Tax, Economic and Corporate

Transactions Confirmation” “Surviving COVID-19: Being Kind in A Challenging Situation”

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Director Programmes attended during FY 2020

Mr. Heng Fu Joe “The #New Normal Amid COVID-19: Leverage on Regional Experiences” “How to Build Your Team's Learning Mind-set Amid Uncertainty” “COVID-19 The #New Normal: Corporate Rescue Mechanisms in

Times of Crisis “E-Bank Confirmation” “Global Economic Recovery from COVID-19 Pandemic” “How COVID-19 will Change the Future of Work in Southeast Asia” “Mind the Gap! - Audit Your Anti-Bribery & Corruption Programme

Effectively” “Delivering Work While at Home: Lessons from Silicon Valley” “Data Valuation & Governance” “SMEs: The Mind-set to Adopt During A Crisis” “Digital Transformation for SMEs In A Time of Crisis” “Inventories AWP” (e-learning)” “Virtual Audit Forum” “Impairment (Overview of Standards & Cash Flows Review) AWP

(e-learning)” “MFRS 15 - Property Developer AWP (e-learning”) “Updates on MIA By Laws - Partners' Rotation”

Ms. Caroline “Service Tax SST 2019”Ang Choo Bee “Amendments to Companies Act 2016 and What you Should Know(“Ms. Caroline Ang”) About the Practising Certificate under Section 241” “Face to Face with Innovators” “MIA Webinar Series: Latest Implications of Digital Tax in Malaysia” “Case Study Workshop for Independent Directors”

Mr. Low Geoff Jin Wei “Integrated and Sustainability Reporting Workshop on Materiality Assessment, Stakeholder Engagement and Risk and Opportunities” “Integrated Reporting Training” “Anti-Corruption and Anti-Bribery E-Training”

Mr. Heong Mun Foo “Integrated and Sustainability Reporting Workshop on Materiality Assessment, Stakeholder Engagement and Risk and Opportunities” “Integrated Reporting Training” “Anti-Corruption and Anti-Bribery E-Training”

Mr. Chang Chee Siong “Mandatory Accreditation Programme” “Anti-Corruption and Anti-Bribery E-Training”

Mr. Faris Salim Cassim “Force Majeure & COVID-19: How Are Contractual Relationships Affected and Managed”

1.18 Mr. Chang Chee Siong, who was newly appointed as the Managing Director during FY 2020, was furnished with induction materials to enable him to gain an understanding of the Company’s corporate policies and governance matters.

Company Secretaries 1.19 The Directors have the support of qualified Company Secretaries to enable them to discharge their duties effectively. The Company Secretaries attend to all corporate secretarial matters and ensure that the Company complies with its Constitution, the Companies Act 2016 (the “Act’) and the Listing Requirements. The appointment and removal of the Company Secretaries are within the purview of the Board. The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board during FY 2020.

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Sustainability 1.20 The Board is mindful that good sustainability practices are integral to the Group’s long term business growth. Our sustainability practices are reported in the Sustainability Statement in this Annual Report.

2. Board Composition

Balanced Board 2.1 The Company’s Constitution stipulates that the number of Directors shall not be less than two (2) and not more than nine (9) individuals. The current Board comprises six (6) Directors, three (3) of whom are INEDs, constituting half of the Board. Mr. Chang Chee Siong was appointed as the new Managing Director of the Company upon Mr. Lim Soo Koon’s retirement on 13 December 2019.

2.2 The Board is of the view that its composition, with an appropriate mix of INEDs and Executive Directors (“EDs”) is adequate for the effective discharge of its functions and responsibilities. The three (3) INEDs augment the Board’s independence and bring objective perspectives and judgement, whilst the EDs provide strong operational and financial insights into the business, allowing well considered decisions to be made.

2.3 Independent Directors may over time develop significant understanding into the Group’s business and operations and can continue to provide valuable contributions to the Board. Hence, the Board believes that independence of the INEDs must be based on their professionalism, integrity and objectivity and not merely on form i.e. the tenure or number of years that they have served on the Board.

2.4 Practice 4.2 of the Malaysian Code on Corporate Governance (“MCCG”) provides that if the Board intends to retain an independent director beyond nine (9) years, it should justify and seek annual shareholders’ approval. Mr. Heng Fu Joe’s tenure as an Independent Director had exceeded nine (9) years on 1 August 2019 as he was appointed to the Board as an INED on 2 August 2010. In compliance with Practice 4.2, the NC undertook the assessment and recommended to the Board to seek shareholders’ approval at the forthcoming AGM for Mr. Heng Fu Joe to be retained and to continue to act as an Independent Director of the Company based on the following justifications:

(a) he fulfills the criteria of an Independent Director as defined in the Listing Requirements; (b) he continues to exercise sound independent judgement and demonstrates objectivity in the discharge of his fiduciary duties for effective check and balance at the Board and BCs’ meetings; (c) his extensive accounting and finance experience and understanding of the Group’s business enable him to participate actively and contribute valuable insights at the Board and BCs’ meetings; (d) he maintains a professional relationship with the Board members and is independent from Management; and (e) he does not have any business/other relationship which may interfere