KLK 2022 Corporate Governance Report

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CORPORATE GOVERNANCE REPORT
STOCK CODE : 2445

COMPANY NAME : Kuala Lumpur Kepong Berhad
FINANCIAL YEAR : September 30, 2022
OUTLINE:
SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing
Requirements.
SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES

PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA
MALAYSIA
Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures)
of the Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is
only applicable for financial institutions or any other institutions that are listed on the
Exchange that are required to comply with the above Guidelines.
1
SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE
Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing
Requirements.
Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.
Practice 1.1
The board should set the company’s strategic aims, ensure that the necessary resources are
in place for the company to meet its objectives and review management performance. The
board should set the company’s values and standards, and ensure that its obligations to its
shareholders and other stakeholders are understood and met.
Application : Applied
Explanation on : Kuala Lumpur Kepong Berhad is led by an experienced, competent and

application of the diverse Board that is made up of Directors with appropriate
practice competencies, knowledge, skills and experience from diverse sectors
and backgrounds and also in the Group’s core businesses. The
Directors collectively:
• set the Company’s strategic objectives;
• oversee the Company’s strategic direction, plans and priorities; and
• ensure that the necessary resources are in place for the Company to
meet its objectives and review management performance.
The Board is responsible for leading the Group and playing a strategic
role to oversee the conduct of the Group’s affairs and overall activities
of the Management. The principal functions and responsibilities of the
Board of Directors include the following:
(a) Together with Senior Management, promote good corporate

governance culture within the Group which reinforces ethical,
prudent and professional behaviour
• The Board together with Senior Management set the “tone

from the top” by formalising and committing to ethical values,
as well as promoting good corporate governance culture
within the Company based on the principles of transparency,
objectivity and integrity.
• The Board has in place policies and procedures to promote a

culture of integrity and ethics within the Group as a whole
while providing clarity on the parameters and controls
instituted.
These include the following:

- Board Charter,
2
- Code of Conduct for Directors,
- Code of Conduct for Employees,
- Code of Conduct and Ethics for the Company,
- Group Whistleblowing Policy,
- Group Donations and Sponsorship Policy,
- Policy on Related Party Transactions,
- Corporate Disclosure Policy and Procedures,
- Group Anti-Corruption Policy (including Gifts Registers and
Vendor Integrity Pledges),
- Grievance Redressal Policy.
(b) Review, challenge and decide on Management’s proposals for the

Group; and monitor its implementation
• The Board oversees the development and implementation of

corporate strategies by:
- working with the Senior Management to ensure that an
appropriate strategic direction and set of goals are in
place;
- regularly reviewing and amending or updating the
Company’s strategic direction and goals developed by the
Senior Management;
- providing guidance and leadership to the Senior
Management and ensuring that adequate resources are
available to meet its objectives; and
- overseeing planning activities including the development
and approval of strategic plans, major funding proposals,
investment and divestment proposals, annual corporate
budgets and long-term budgets including operating
budgets, capital expenditure budgets and cash flow
budgets.
(c) Ensure that the strategic plans of the Group support long term
value creation and include strategies on economic, environmental
and social considerations underpinning sustainability
• The Board reviews the progress and performance of the Group

to ensure that the strategic plans always support long term
value creation and include strategies on economic,
environmental and social considerations underpinning
sustainability.
• The Board embeds sustainability and corporate responsibility

practices as part of Group strategy.
(d) Supervise and assess Management performance to determine

whether the business is being properly managed
• The Board devotes sufficient time to provide leadership to the

Group by:
- guiding the development of appropriate standards and
3
values for the Group;
- acting in a manner consistent with the Directors’ Code of
Conduct; and
• Overseeing the performance of Management whilst
maintaining a relationship that is supportive yet vigilant.
(e) Ensure there is a sound framework for internal controls and risk
management
• The Board has overall responsibility for maintaining a sound

risk management and internal control system to safeguard
the interests of stakeholders and the Group’s assets. Through
the Group Risk Management Committee (“GRMC”), the Board
oversees the risk management framework of the Group. The
GRMC advises the Audit and Risk Committee (“ARC”) and the
Board on areas of high risk and the adequacy and
effectiveness of the Group’s risk management and internal
control system which is embedded in all aspects of the
Group’s activities.
• The Board oversees the control and accountability systems

that steer the Company’s progress towards the goals set by
the Management which are in line with the Company’s
purpose, the agreed corporate strategy, legislative
requirements and community expectations.
• The Board ensures effective risk management, compliance and

control systems (including legal compliance) are in place.
(f) Understand the principal risks of the Group’s business and recognise
that business decisions involve the taking of appropriate risks
• The Board is cognisant of the significant financial and non-

financial elements that could result in exposures and alter the
risk profile of the Group.
(g) Set the risk appetite and establish a sound framework to manage
risk
• The Board ensures that there is an appropriate risk

management framework to identify, analyse, evaluate,
monitor and respond to significant financial and non-financial
risks factors.
(h) Ensure Senior Management has the necessary skills and experience,
and there are measures in place to provide for the orderly
succession of the Board and Senior Management
• The Board reviews potential candidates for the Board and

Senior Management positions across the Group through the
Nomination Committee (“NC”) to ensure efficient succession
4
planning and continuity of the vision and mission of the
Group.
• The Board, through the NC, assesses the calibre of key senior
management of the Group; and ensures that candidates
appointed to key senior management positions are of high
calibre and competence, as well as the right “fit”.
(i) Ensure the Group has in place procedures to enable effective

communication with stakeholders
• The Board ensures corporate accountability to the

shareholders primarily through adopting an effective
shareholder communications strategy, encouraging effective
participation at general meetings and, through its Chairman,
being the key interface between the Company and its
shareholders.
• The Board subscribes to high standards of transparency and

accountability in the disclosure of information to its
shareholders as well as to potential investors and the public.
The Company uses various channels for effective
communication with the shareholders and other stakeholders
including releasing timely announcements and disclosures to
Bursa Malaysia Securities Berhad, holding general meetings
and making information available on the Company’s website at
www.klk.com.my.
(j) Ensure all Directors are able to understand financial statements and
forms a view on the information presented
• The Board, through the assessment conducted by the NC, is

satisfied that all its members possess financial literacy given it
is the responsibility of the Directors to oversee the Group’s
financial reporting obligations.
(k) Ensure the integrity of the Group’s financial and non-financial

reporting
• The Board, through the ARC, ensures the integrity of the

financial and non-financial reporting of the Group.
• The Board is cognisant of the disclosures on corporate

governance, sustainability and other non-financial aspects.
The Board is guided by its Board Charter and Code of Conduct for
Directors which clearly sets out the Board’s strategic intent, roles and
responsibilities in discharging its fiduciary and leadership functions,
and the standard of conduct expected of Directors respectively.
Board Committees, which operate within its respective defined Terms
5
of Reference, have been constituted to assist the Board in the
discharge of its specific duties and responsibilities. These Committees
comprise the ARC, NC and Remuneration Committee. The Chairman of
the respective Committees report to the Board the outcome of
deliberations at each Committee meeting.
To ensure the effective discharge of the Board and Board Committees’

functions and responsibilities, the Board has also put in place a
governance structure where specific tasks are delegated to the
relevant management and executive committees which report to the
Group Chief Executive Officer, and which are supported by relevant
working groups. The Group management committees consist of the
Corporate Responsibility Steering Committee, Sustainability Steering
Committee, Executive Committee, Treasury Committee and GRMC.
There are currently five (5) main Excos overseeing the property,
plantation, refineries and oleochemicals operations, as well as anti-
bribery and anti-corruption activities.
The Board is regularly updated on the Group’s businesses and the

competitive and regulatory environment in which they operate.
Additionally, in-house briefings by external auditors, solicitors and/or
Management are organised from time to time to update Directors on
relevant and new statutory and regulatory requirements and the
Group’s business and operational practices. All Directors are also
encouraged to visit the Group’s operating centres to have an insight
into the Group’s various operations which would assist the Board to
make effective decisions relating to the Group.
The Directors also attended various programmes to keep abreast with

general economic, industry and technical developments as well as
changes in legislation and regulations affecting the Group’s
operations.
Explanation for :
departure
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :
Timeframe :
6
Intended Outcome
company.
Practice 1.2
A Chairman of the board who is responsible for instilling good corporate governance
practices, leadership and effectiveness of the board is appointed.
Explanation on : The Chairman of the Company, who was appointed by the Board, is
application of the responsible for ensuring Board effectiveness and smooth functioning
practice of the Board in the interest of good corporate governance.
The roles and responsibilities of the Chairman of the Board are set out
in the Company’s Board Charter, which is available on the Company’s
website at www.klk.com.my.
The key roles and responsibilities of the Chairman include, amongst

others:
(a) Providing effective leadership to the Board, i.e. to ensure the

Board fulfils its obligations under the Board Charter;
(b) Setting the agenda for Board meetings together with the Group
Chief Executive Officer and ensuring the provision of complete
and accurate information to all Directors in a timely manner;
(c) Leading Board meetings and discussions, and ensuring the

effective and efficient conduct of the Board meetings;
(d) Encouraging active participation and allowing dissenting views to

be freely expressed to ensure that the key issues facing the Group
are addressed;
(e) Promoting consultative and respectful relations between Board

members and between the Board and Management.
(f) Chairing shareholders’ meetings and ensuring appropriate steps

are taken to provide effective communication with stakeholders
to ensure their views are communicated to the Board as a whole.
(g) Leading the Board in the adoption and implementation of good

corporate governance practices in the Company.
The 2022 Board Self-Evaluation results demonstrated the Directors’

trust in and belief that the Chairman has been effective in ensuring the
smooth functioning of the Board and was very effective in obtaining
Board consensus, conducting meetings, considering individual Director
7
views and communicating with shareholders.
Explanation for :
departure
Measure :
Timeframe :
8
Intended Outcome
company.
Practice 1.3
The positions of Chairman and CEO are held by different individuals.
Explanation on : The Board believes that the separation of the roles and responsibilities
application of the of the Chairman and the Group Chief Executive Officer (“CEO”)
practice ensures an appropriate balance of power and authority. Hence, there
is a clear division of responsibilities and accountabilities between the
Chairman and the Group CEO under the present hierarchical structure
to facilitate efficiency and expedite decision-making.
The division of responsibilities and accountabilities between the

Chairman and the Group CEO is clearly defined in the Board Charter.
The Chairman is responsible for ensuring Board effectiveness and
conduct with the focus on strategy, governance and compliance. He
promotes an open environment for debate, and ensures that all
Directors are able to speak freely and contribute effectively at Board
meetings. The Chairman also provides clear leadership to the Board
with regards to the Group’s long-term growth and strategy, while
respecting executive responsibility.
The Group CEO focuses on the business, organisational effectiveness

and day-to-day management of the Group. He also executes the
Board’s decisions and strategic policies, and chairs the Executive
Committee, which comprises Senior Management executives to
oversee the operations of the KLK Group. As such, the Group CEO is
responsible for proposing strategy to the Board, and for delivering the
strategy as agreed.
Explanation for :
departure
Measure :
Timeframe :
9
Intended Outcome
company.
Practice 1.4
The Chairman of the board should not be a member of the Audit Committee, Nomination
Committee or Remuneration Committee
Note: If the board Chairman is not a member of any of these specified committees, but the board
allows the Chairman to participate in any or all of these committees’ meetings, by way of
invitation, then the status of this practice should be a ‘Departure’.
Application : Departure
Explanation on :
application of the
practice
Explanation for : R. M. Alias, the Chairman of the Board, was the Chairman of the
departure Remuneration Committee (“RC”) during the financial year ended 30
September 2022, and a member of the Nomination Committee (“NC”)
until 23 November 2021.
Notwithstanding, R.M. Alias had retired as the Chairman of the RC

with effect from 1 December 2022 following his re-designation from
Independent Non-Executive Chairman to Non-Independent Non-
Executive Chairman pursuant to the Bursa Malaysia Main Market
Listing Requirements.
Measure : To instil good corporate governance practice and align with Practice
1.4, the Chairman of the Board had relinquished all his positions from
the Board Committees.
As at the date of writing this Report, the Chairman of the Board does
not chair any of the Board Committees and is not a member of any
Board Committees.
Timeframe : Others 0
10
Intended Outcome
company.
Practice 1.5
The board is supported by a suitably qualified and competent Company Secretary to provide
sound governance advice, ensure adherence to rules and procedures, and advocate
adoption of corporate governance best practices.
Explanation on : The Board is supported by an in-house Company Secretary, who is

application of the suitably qualified, experienced and competent. The Company
practice Secretary constantly undertakes continuous professional development
to keep abreast of relevant statutory and regulatory requirements.
The Company Secretary is responsible to provide clear and

professional advice to the Board on all governance matters and assist
the Board on the implementation of an effective corporate
governance system. The Company Secretary also periodically reviews
the Group’s governance processes for fitness of purpose, and
considers any improvements or initiatives that may strengthen the
governance of the Group.
Apart from playing an active role in advising the Board on governance

and regulatory matters, the Company Secretary also organises and
attends all Board meetings and ensures that Directors receive timely,
clear and concise information in advance prior to the scheduled
meetings.
In order to ensure uniformity of Board conduct, the Company

Secretary also has oversight of the overall corporate secretarial
functions of the Group, both locally and in the countries where its
subsidiaries are operating, and serves as an adviser on matters
pertaining to governance. The Company Secretary also reports to the
Chairman on all Board governance matters, and reports to the Group
Chief Executive Officer in relation to her other executive management
responsibilities.
The 2022 Board Self-Evaluation findings indicate that the level of

support given by the Company Secretary is effective in supporting the
Board in the discharge of its duties.
The Company Secretary constantly undertake continuous professional

development to keep abreast of relevant corporate governance and
regulatory requirements.
11
Explanation for :
departure
Measure :
Timeframe :
12
Intended Outcome
company.
Practice 1.6
Directors receive meeting materials, which are complete and accurate within a reasonable
period prior to the meeting. Upon conclusion of the meeting, the minutes are circulated in a
timely manner.
Explanation on : The annual meeting calendar is prepared and circulated in advance of

application of the each new year in order to facilitate the Directors’ time planning. The
practice calendar provides Directors with scheduled dates for meetings of the
Board and Board Committees, and the Annual General Meeting of the
Company for the upcoming year. The Chairman ensures that Board
Committee meetings are not combined with the Board meeting.
All Directors are provided with sufficient information and time to

prepare for meetings of the Board and Board Committees. The Agenda
which sets out the matters to be discussed is furnished to all Directors
in advance of each meeting. Detailed board papers that contain
relevant qualitative and/or quantitative information for the Agenda
are also circulated to the Directors simultaneously to give Directors
time to review the reports, obtain further clarification if necessary and
enable focused and constructive deliberation at Board meetings.
Monthly reports on the financial performance of the Company and the
Group are also circulated to the Directors for their views and
comments.
Meeting materials are uploaded electronically into a digital medium,

which allows board papers and other information to be securely and
remotely accessible by the Directors through dedicated applications in
a timely manner.
All proceedings of Board meetings (which include all material

deliberations and recommendations) are minuted and signed by the
Chairman of the meeting in accordance with the provisions of the
Companies Act 2016. All minutes of meetings would be circulated to
Directors in a timely manner. Minutes of meetings of each Committee
are also tabled to the Board for perusal and the Directors may request
clarification or raise comments on the minutes as they deem fit.
Every Director has the opportunity to review and make corrections to

the minutes. Board decisions or action items are also communicated
to the relevant members of Management for their follow-up.
Key decisions are always made at Board meetings, with Directors’

Circular Resolutions confined to formalising matters that have been
13
clarified by the Group Chief Executive Officer or discussed at Board
meetings. Such Directors’ Circular Resolutions are also accompanied
by Board papers to keep the Directors informed of the matter
concerned. All Directors’ Circular Resolutions are then tabled for
noting and confirmation at the subsequent Board meeting.
Explanation for :
departure
Measure :
Timeframe :
14
Intended Outcome
There is demarcation of responsibilities between the board, board committees and
management.
There is clarity in the authority of the board, its committees and individual directors.
Practice 2.1
The board has a board charter which is periodically reviewed and published on the
company’s website. The board charter clearly identifies–
▪ the respective roles and responsibilities of the board, board committees,
individual directors and management; and
▪ issues and decisions reserved for the board.
Explanation on : The Board is guided by its Board Charter which clearly sets out the
application of the Board’s strategic intent, roles and responsibilities in discharging its
practice fiduciary and leadership functions. The Board Charter serves as a
source reference and primary induction literature, providing insights
to prospective Board members and Senior Management. It clearly
explains the relationship and interaction between the Board, Board
Committees, individual Directors and Group Chief Executive Director.
Matters reserved for Board decision and approval are also set out in
the Board Charter.
The Board Charter is reviewed periodically and updated in accordance

with the needs of the Company to ensure its effectiveness and
consistency with the Board’s objectives and corporate vision.
The Board Charter was adopted by the Board on 20 February 2013,

and the last review was carried out in May 2022 to ensure it complies
with the latest legislation and best practices, and remains relevant and
effective for good governance policies and processes. The current
Board Charter is accessible for reference on the Company’s website,
www.klk.com.my.
Explanation for :
departure
Measure :
Timeframe :
15
Intended Outcome
The board is committed to promoting good business conduct and maintaining a healthy
corporate culture that engenders integrity, transparency and fairness.
The board, management, employees and other stakeholders are clear on what is considered
acceptable behaviour and practice in the company.
Practice 3.1
The board establishes a Code of Conduct and Ethics for the company, and together with
management implements its policies and procedures, which include managing conflicts of
interest, preventing the abuse of power, corruption, insider trading and money laundering.
The Code of Conduct and Ethics is published on the company’s website.
Explanation on : The Board is committed to engage in continuous efforts to identify

application of the best practices which support the Company in building a culture of
practice good corporate governance. The Board is also responsible to steer the
direction of the Group in terms of ethics, by determining the way in
which ethical considerations are to be approached, conducted and
addressed.
The Company has established the Code of Conduct and Ethics (“Code”)
to demonstrate its commitment in upholding appropriate standards of
ethical conduct and behaviour at all levels of the Company’s
businesses. The Code, together with other related policies, procedures
and guidelines, sets out the principles and standards of business ethics
and conduct of the Group and is to be observed by all employees,
officers and directors of the Group.
The Code covers, amongst others, the following principles and

standards:
• avoidance of conflict of interest
• compliance with anti-bribery and corruption policies
• prohibition of insider information and securities trading
• prevention of money laundering and terrorism financing
• restriction of unfair business practices
• protection of own intellectual property, and prohibition of use of
intellectual property rights of others
• commitment to corporate responsibility
• provision of equal opportunity
• encouraging workplace diversity
• prohibition on the use of forced or bonded labour, human
trafficking and child labour
• promotion of safe workplaces and prevention of work place
accidents and injuries
The Code was last reviewed and updated in August 2022 to ensure
that it continues to remain relevant and appropriate. The Code is
16
made available for reference by all employees, officers and directors
of the Group in the Company’s website, www.klk.com.my.
Additionally, the Board also adheres to the Code of Conduct for

Directors which sets out the standard of conduct expected of
Directors, with the aim to cultivate good ethical conduct that in turn
promotes the values of transparency, integrity, accountability and
social responsibility.
The Board recognises the importance of adhering to and complying

with the provisions of the Code of Conduct for Directors in their day-
to-day functioning. Thus, the Board collectively and individually acts
within the authority conferred upon them in the best interest of the
Group and:
(i) acts in the best interest of, and fulfils their fiduciary obligations
to the Group and its shareholders;
(ii) acts honestly, fairly, ethically and with integrity;
(iii) conducts themselves in a professional, courteous and respectful

manner without taking improper advantage of their position;
(iv) acts in good faith, responsibly, with due care, competence and
diligence without allowing their independent judgement to be
subordinated;
(v) uses their prudent judgement to avoid/abstain from all

situations, decisions or relationships which give or could give
rise to conflict of interest or appear to conflict with their
responsibilities within the Group, and to inform the Board, at
the earliest opportunity, of any existing or potential conflict of
interest situation;
(vi) does not exploit for his own personal gain, opportunities that
are discovered through use of corporate property, information
or position, unless the Group declines to pursue such
opportunity for its business interest;
(vii) ensures that they acquire the relevant knowledge about the
affairs, business and operations of the Company, and take such
steps as are required or necessary to this end;
(viii) maintain decorum and conduct themselves in such manner as

to uphold the image and reputation of the Company; and
(ix) strives to contribute towards the growth and stability of the

Group.
This Code of Conduct for Directors was recently reviewed in August

2022 mainly to ensure the standard of conduct expected of Directors
17
contained therein continues to remain relevant and appropriate. The
latest Code of Conduct for Directors is also available on the Company’s
website, www.klk.com.my.
Explanation for :
departure
Measure :
Timeframe :
18
Intended Outcome
The board is committed to promoting good business conduct and maintaining a healthy
corporate culture that engenders integrity, transparency and fairness.
The board, management, employees and other stakeholders are clear on what is considered
acceptable behaviour and practice in the company.
Practice 3.2
The board establishes, reviews and together with management implements policies and
procedures on whistleblowing.
Explanation on : The Group is committed to maintain high work standards and ethics in
application of the all of its practices. As whistleblowing is viewed positively by the Group
practice as a means in ensuring the standards by which the Group subscribes to
are upheld and maintained at a high standard, the Group has adopted
a Group Whistleblowing Policy to enable stakeholders to raise in
confidence possible corporate misdemeanours without fear of
intimidation or reprisal.
The Group Whistleblowing Policy provides an avenue for stakeholders

to raise or report legitimate concerns about any actual or suspected
unethical conduct, corporate misdemeanours of corrupt practices and
bribery, as well as improprieties involving the resources of the KLK
Group, at the earliest opportunity for expeditious investigation. The
Group is committed to absolute confidentiality and fairness in relation
to all matters raised and will support and protect those who report
violations in good faith.
The Group views seriously any wrongdoing on the part of any of its
stakeholders. Stakeholders include employees, business partners,
customers, contractors, suppliers, trading and joint-venture partners,
shareholders and members of the public, where relevant. Hence,
whistleblowing is viewed positively by the Group as a means to ensure
that the standards by which the Group subscribes to are upheld and
maintained at a high standard.
The details of the Group Whistleblowing Policy are available on the

Company’s website, www.klk.com.my.
Explanation for :
departure
19
Measure :
Timeframe :
20
Intended Outcome
The company addresses sustainability risks and opportunities in an integrated and strategic
manner to support its long-term strategy and success.
Practice 4.1
The board together with management takes responsibility for the governance of
sustainability in the company including setting the company’s sustainability strategies,
priorities and targets.
The board takes into account sustainability considerations when exercising its duties
including among others the development and implementation of company strategies,
business plans, major plans of action and risk management.
Strategic management of material sustainability matters should be driven by senior

management.
Explanation on : Environmental, social and governance (“ESG”) compliance has long

application of the been embedded in the Group’s operations and DNA. To assist in
practice developing the Group’s ESG roadmap to a more sustainable business,
which would generate superior long-term financial returns, whilst
contributing positively to the environment and society, the Board had
appointed KPMG Management & Risk Consulting Sdn Bhd (“KPMG”) in
August 2021 as its ESG consultant.
During the financial year under review, KPMG had interviewed with
the Company’s Senior Management and relevant personnel,
presented a Gap Assessment Report and formulated a customised
ESG-related plan for the Company’s business sectors to ensure the
Group’s sustainability strategies and actions plans were effectively
implemented.
Premised on the above, the Group had reviewed and enhanced the
structures for both of its sustainability governance and reporting.
While the Board still remains at the helm to govern and lead the
Group’s overall responsibility in integrating sustainable ESG initiatives
throughout the Group’s business strategies, the Audit and Risk
Committee (“ARC”) now has an enlarged role. As such, the previous 3-
tiered reporting structure which comprised of the Board, the
Sustainability Steering Committee (“SSC”) and the Sustainability
Working Committee (“SWC”), has been expanded into a 4-tiered
structure to reflect the ARC’s role.
In the enhanced sustainability governance framework, the SSC which

drives the Group sustainability efforts reports at least once a year to
the ARC, instead of directly to the Board. This is to ensure
sustainability matters are given adequate attention before being
escalated to Board level. At the ARC level, sustainability matters will
21
be evaluated before escalating the higher priority sustainability issues
to Board level. The Group’s ESG risks would be reviewed by the ARC as
part of its risk assessment exercise.
The SSC is chaired by the Group Chief Executive Officer (“CEO”) and
includes senior management representatives from the Plantation,
Manufacturing, Property, Sustainability and Legal/Corporate
Secretarial departments. The main role of the SSC is to formulate ESG
strategies and monitor compliance with sustainability-related policies
and keep track of the achievement of sustainability targets endorsed
by the Board.
The SWC supports the SSC. The SWC comprises of working level
representatives from Sustainability, Purchasing, Human Resources,
Health & Safety, Operations, Finance, Communications and Risk
Management functions. It carries out periodic reviews on
sustainability initiatives implemented and regularly consolidates and
monitors sustainability data collected across the Group. The SWC is
also tasked with initiating awareness programmes to enlighten KLK
staff on sustainability and get their buy-in, which is essential to the
success of company-driven sustainability programmes.
The SWC also maintains continuous engagement with external

stakeholders to ensure that their points of view are captured when
devising new, or evaluating existing, sustainability initiatives.
Further details on the Group’s sustainability journey and governance

structure are provided in the Sustainability Statement and Report of
the Annual Report 2022.
Explanation for :
departure
Measure :
Timeframe :
22
Intended Outcome
Practice 4.2
The board ensures that the company’s sustainability strategies, priorities and targets as well
as performance against these targets are communicated to its internal and external
stakeholders.
Explanation on : The Board recognises that stakeholders engagement, assessment and

application of the feedback are an integral part of the Group’s global sustainability,
practice strategy and initiatives. As such, the stakeholder groups, which are key
to the Group’s operations and have significant influence over the
impacts of the Group’s businesses, were identified and engaged on
various platforms.
The Group is committed to continuously improve the quality of

engagement with stakeholders. Sustainability strategies, priorities,
targets and performance against the targets are communicated to the
Group’s internal and external stakeholders, through the Company’s
website at https://www.klk.com.my/sustainability/ as well as the
Sustainability Statement and Report in the Company’s Annual Report.
Stakeholder engagement, carried out in both formal and informal set

ups, have been an important avenue for the Company to understand
the concerns and issues raised and provide suitable solutions where
relevant. To this end, the Group conducts sessions which are targeted
to match specific needs and expectations of the relevant stakeholders.
The Group’s Sustainability Policy (“Policy”) which was published in

December 2014, serves as the focal guiding document for the Group’s
sustainability practices. It was revised in August 2018 to incorporate
constructive inputs on developments and concerns from the Group’s
stakeholders. The Group’s values, sustainability pillars and
commitments are kept in check through this Policy which is available
for viewing at www.klk.com.my/sustainability.
The Group also engages with its internal and external stakeholders by:
(i) employing the FPIC (Free, Prior and Informed Consent)
approach to ensure that the rights of local and indigenous
communities are both respected and protected;
(ii) conducting open discussions with investors, customers
and non-governmental organisations to share and
exchange of information on the Company’s values, the
way the Company conducts business and interacts with
the environment and communities; and
(iii) disclosing in the corporate website, www.klk.com.my,
information pertinent to shareholders and investors as
23
well as updates to the public on major corporate events as
and when they occur.
Explanation for :
departure
Measure :
Timeframe :
24
Intended Outcome
Practice 4.3
The board takes appropriate action to ensure they stay abreast with and understand the
sustainability issues relevant to the company and its business, including climate-related risks
and opportunities.
Explanation on : The Board is cognisant of the importance of having adequate

application of the understanding and discourse with Management in addressing
practice environmental, social and governance (“ESG”) risks. Hence, the Board,
via the Nomination Committee, had assessed the training needs of
each Director to ensure all Directors had attended appropriate
continuous training, stay abreast with and understand the
sustainability issues relevant to the Company and the Group’s
business, including climate-related risks and opportunities.
During the financial year under review, a high-level ESG and climate
change training had been arranged for Senior Management and
Directors to ensure they have sufficient understanding and knowledge
of the latest information on management of sustainability and ESG
considerations in business operations. All Board members had
attended at least one (1) sustainability-related training to stay abreast
with sustainability developments. The training attended by the Board
members during the financial year are disclosed in the Corporate
Governance Overview Statement in the Annual Report.
Explanation for :
departure
Measure :
Timeframe :
25
Intended Outcome
Practice 4.4
Performance evaluations of the board and senior management include a review of the
performance of the board and senior management in addressing the company’s material
sustainability risks and opportunities.
Explanation on : The Board recognises the importance of sustainability in all its

application of the business operations and had included sustainability as one of the
practice criteria in the annual board evaluation for the year ended 30
September 2022 (“2022 Board Self-Evaluation”).
In the 2022 Board Self-Evaluation, the Board was assessed on their

roles relating to sustainability. The Board was satisfied with its
performance in addressing the sustainability issues of the Group and
was of the view that it would be better if the Board could devote more
time focusing on sustainability issues going forward. The criteria
pertaining to sustainability in annual board evaluation would be
reviewed from time to time to ensure its relevance.
Similarly, Management’s commitment in taking into account

sustainability considerations when implementing the Company’s
strategies, business plans and risk management policies and
procedures is, amongst others, one of the criteria in their performance
assessments.
Explanation for :
departure
Measure :
Timeframe :
26
Intended Outcome
Practice 4.5- Step Up

The board identifies a designated person within management, to provide dedicated focus to
manage sustainability strategically, including the integration of sustainability considerations
in the operations of the company.
Note: The explanation on adoption of this practice should include a brief description of the
responsibilities of the designated person and actions or measures undertaken pursuant to the role
in the financial year.
Application : Adopted
Explanation on : The Group has a Chief Sustainability Officer to provide dedicated focus
adoption of the to manage sustainability strategically, including the integration of
practice sustainability considerations in the operations of the Company.
During the financial year under review, the Chief Sustainability Officer
was tasked to head the Group’s efforts to:
(i) close the sustainability gaps identified by an external ESG
consultant;
(ii) oversee the ESG risk management programme;
(iii) implement sustainability strategies and action plans; and
(iv) drive culture and confidence in the Group’s sustainability
efforts.
27
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.
Practice 5.1
The Nomination Committee should ensure that the composition of the board is refreshed
periodically. The tenure of each director should be reviewed by the Nomination Committee
and annual re-election of a director should be contingent on satisfactory evaluation of the
director’s performance and contribution to the board.
Explanation on : 1. Board Refreshment

application of the
practice The Board, through its Nomination Committee (“NC”), reviews
annually:
(i) the composition, size and structure of the Board and each Board
Committee; and
(ii) the skills and core competencies of each Director,
to ensure that the Board and Board Committees’ compositions comply
with the provisions of the relevant guidelines and regulations.
The Board and the NC have upon their annual assessment, concluded
that the current Board comprises of a balanced mix of skills,
knowledge and experience in the business and management fields
which are relevant to enable the Board to carry out its responsibilities
in an effective and efficient manner.
To foster better debate and decision making, and ensure the Board is
less subject to “Groupthink”, the Board had in November 2021
endorsed the NC’s proposal to refresh the composition of the NC.
As part of the Group’s effort to uphold good governance practices and

compliance with the mandatory 12-year tenure limit for independent
directors introduced via the latest amendment in Main Market Listing
Requirements of Bursa Malaysia (“Main LR”), the NC also reviewed the
impact on the Board and Board Committees composition and
regulatory compliance status arising from the proposed re-designation
of the long-serving independent directors, i.e. R. M. Alias and Dato’
Yeoh Eng Khoon. The proposed re-designation of R. M. Alias and Dato’
Yeoh Eng Khoon as non-independent director, and the changes to the
Board and Board Committees arising therefrom were effected on 1
December 2022.
2. Director’s Re-election
The NC also reviewed and assessed the performance of the Directors

who are subject to re-election. Based on the assessment, the NC was
satisfied with their performance and was of the view that their
continued service would benefit the Company and its stakeholders. As
28
such, the NC recommended to the Board for re-election of the
Directors at the forthcoming Annual General Meeting.
In order to ensure a person to be appointed or elected/re-elected as a

Director of the Company possesses the necessary quality and
character
as well as integrity, competency and commitment, the Board had in
May 2022 adopted a Directors’ Fit and Proper Policy which serves as a
guide for the NC and the Board in their review and assessment of
candidates to be appointed or Directors to be re-elected.
Explanation for :
departure
Measure :
Timeframe :
29
Intended Outcome
Practice 5.2
At least half of the board comprises independent directors. For Large Companies, the board
comprises a majority independent directors.
Explanation on : As at 30 September 2022, the Board has nine (9) members, comprising
application of the two (2) Executive and seven (7) Non-Executive Directors, six (6) of
practice whom are Independent. The Executive Directors are the Group Chief
Executive Officer and Chief Operating Officer, and the Chairman is an
Independent Non-Executive Director. The composition of the Board
meets the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad of at least one-third (1/3) of the board being
independent and this Practice 5.2 of the Board comprising a majority
of independent Directors for Large Companies as follows:
Designation Number of Directors Percentage (%)

Executive Director 2 22.22
Non-Independent 1 11.11
Non-Executive
Director
Independent Non- 6 66.67
Executive Director
TOTAL 9 100.00
The Board comprises a majority of Independent Directors who are

essential in providing unbiased and independent opinion, advice and
judgement and thus play a key role in corporate accountability. All
Independent Directors act independently of Management and are not
involved in any other relationship with the Group that may impair
their independent judgement and decision-making.
The balance between Independent Non-Executive, Non-Independent

Non-Executive and Executive Directors, together with the support
from Management, is imperative to prevent deliberations and
decision-making from being dominated by a select group of
individuals.
The composition and size of the Board is reviewed, through the

Nomination Committee, annually to ensure its appropriateness and
effectiveness.
Explanation for :
departure
30
Measure :
Timeframe :
31
Intended Outcome
Practice 5.3
The tenure of an independent director does not exceed a cumulative term limit of nine years.
Upon completion of the nine years, an independent director may continue to serve on the
board as a non-independent director.
If the board intends to retain an independent director beyond nine years, it should provide
justification and seek annual shareholders’ approval through a two-tier voting process.
Explanation on :
application of the
practice
Explanation for : For the financial year ended 30 September 2022, R. M. Alias and Dato’
departure Yeoh Eng Khoon have served on the Board as Independent Directors,
each exceeding a cumulative term of nine (9) years.
The Board has noted the requirement of this Practice 5.3 in relation to
the tenure of an Independent Director which shall not exceed a
cumulative term of nine (9) years and the need for annual
shareholders’ approval through a two-tier voting process to retain
long-serving Independent Directors who have served for more than
twelve (12) years.
Notwithstanding the above, the Board has re-designated R. M. Alias

and Dato’ Yeoh Eng Khoon as non-independent directors effective
from 1 December 2022 pursuant to the mandatory 12-year tenure
limit for independent directors introduced via the enhanced Main
Market Listing Requirements of Bursa Malaysia (“Main LR”).
Measure : R. M. Alias and Dato’ Yeoh Eng Khoon had been re-designated as non-
independent directors with effect from 1 December 2022. As at the
date of writing this Report, the composition of the Board has complied
with this Practice 5.3 and the Main LR.
Timeframe : Others 0
32
Intended Outcome
Practice 5.4 - Step Up

The board has a policy which limits the tenure of its independent directors to nine years
without further extension.
Note: To qualify for adoption of this Step Up practice, a listed issuer must have a formal policy
which limits the tenure of an independent director to nine years without further extension i.e.
shareholders’ approval to retain the director as an independent director beyond nine years.
Application : Not Adopted
Explanation on :
adoption of the
practice
33
Intended Outcome
Practice 5.5
Appointment of board and senior management are based on objective criteria, merit and with
due regard for diversity in skills, experience, age, cultural background and gender.
Directors appointed should be able to devote the required time to serve the board effectively.
The board should consider the existing board positions held by a director, including on
boards of non-listed companies. Any appointment that may cast doubt on the integrity and
governance of the company should be avoided.
Explanation on : The Nomination Committee (“NC”) oversees the selection and assessment
application of the of Directors to ensure the Board’s composition remains relevant and
practice optimal. Each year, the NC reviews the composition and size of the Board
and each Board Committee and the skills and core competencies of its
members to ensure an appropriate balance and diversity of skills and
experience. The NC also takes into account gender diversity in relation to
the composition of the Board.
Apart from reviewing the size, composition and diversity of the Board
annually, the NC also assesses the suitability of identified candidates for
membership of the Board and its Committees based on the Directors’ Fit
and Proper Policy adopted in May 2022 by the Board.
The Board Charter also sets out the expectation on the Directors’
commitment to the Company. Each of the Board members is expected to
commit sufficient time to carry out their role as Directors and/or member
of the Board Committees in which they are a member. A Director is also
expected to advise the Chairman of the Board of his/her intention to join
the board of another company outsider the Group. In this respect, the NC
noted that none of the Directors hold more than five (5) directorships
each in other listed corporations.
The Board aims to create a diverse Board in terms of race, religion,

gender, regional and industry experience, cultural and geographical
background, ethnicity, age and perspective to ensure that the Board is not
composed solely of like-minded individuals. Hence, the Board encourages
a dynamic and diverse composition by nurturing suitable and potential
candidates equipped with the competency, skills, experience, character,
time commitment, integrity and other qualities in meeting the future
needs of the Company.
During the financial year under review, an additional female Director has
been appointed on 1 December 2021 making a total of 22% female
participation on the Board. The current diversity in the race/ethnicity, age
and gender of the current Board and Key Senior Management (“KSM”) are
34
as follows:
Race/Ethnicity Gender Age Group

Malay Chinese Indian Male Female Below 60 70
60 - -
69 90
Number 2 7 0 7 2 2 1 6
of
Directors
Number 0 6 0 4 2 5 1 0
of KSM
Having assessed the size, composition and diversity of the Board annually,
the NC and the Board confirmed that the existing Board’s composition has
the requisite competencies and capacity to effectively discharge its
functions and responsibilities.
The composition of Senior Management has a strong impact on the

Company’s operations and management, decision-making and ultimately
its success. Hence, the NC is also responsible for developing succession
plans to identify potential and suitable successors for key Senior
Management positions in the Group with due regard to diversity in skills,
experience, age and cultural background.
Explanation for :
departure
Measure :
Timeframe :
35
Intended Outcome
Practice 5.6
In identifying candidates for appointment of directors, the board does not solely rely on
recommendations from existing board members, management or major shareholders. The
board utilises independent sources to identify suitably qualified candidates.
If the selection of candidates was based on recommendations made by existing directors,

management or major shareholders, the Nominating Committee should explain why these
source(s) suffice and other sources were not used.
Explanation on : The Nomination Committee (“NC”) is responsible to identify and

application of the recommend the right candidate with the necessary skills, experience
practice and competencies to be filled in the Board and Board Committees. The
recruitment process is continuous and proactive, taking into account
the Company’s agreed strategic priorities. Recruitment matters are
discussed in depth by the NC before the entire Board makes the final
decision on new appointments.
The Board continues to use various sources (including independent

sources) or search firms to identify suitably qualified candidates,
instead of relying solely on the recommendations of the Board, Group
Chief Executive Officer or major shareholders.
Explanation for :
departure
Measure :
Timeframe :
36
Intended Outcome
Practice 5.7
The board should ensure shareholders have the information they require to make an
informed decision on the appointment and reappointment of a director. This includes details
of any interest, position or relationship that might influence, or reasonably be perceived to
influence, in a material respect their capacity to bring an independent judgement to bear on
issues before the board and to act in the best interests of the listed company as a whole.
The board should also provide a statement as to whether it supports the appointment or
reappointment of the candidate and the reasons why.
Explanation on : The profiles of Directors are published in the Company’s Annual

application of the Report 2022. These include their age, gender, tenure of service,
practice directorships in other companies, working experience and any conflict
of interest as well as their shareholdings in the Company, if any.
The performance of each Director subject for re-election had been

assessed through the annual Board Self-Evaluation. The areas of
assessment of such Directors include their personal/professional
profile, attendance record, training activities, character and attitude,
governance and independence. The Board had endorsed the
Nomination Committee’s assessment that it is satisfied with the
performance and effectiveness of those Directors who are to be re-
appointed/standing for re-election. The information for the Directors
standing for re-election is disclosed in the Explanatory Notes to the
Notice of the Annual General Meeting.
Explanation for :
departure
Measure :
Timeframe :
37
Intended Outcome
Practice 5.8
The Nominating Committee is chaired by an Independent Director or the Senior Independent
Director.
Explanation on : During the year under review, the Nomination Committee (“NC”)
application of the comprised of four (4) Non-Executive Directors and was chaired by the
practice former Senior Independent Director (“SID”), Dato’ Yeoh Eng Khoon up
to 23 November 2021.
In view of the growing recognition that boards or committees with a

good mix of age, experience and backgrounds tend to foster better
debate and decision making, and are less subject to “Groupthink”, the
Board had on 23 November 2021 endorsed the NC’s proposal to
refresh the composition of the NC. To provide opportunities for a new
leader with a different mix of skills and exposure to lead the
Committee, Dato’ Yeoh Eng Khoon stepped down as the NC Chairman
and Tan Sri Azlan Bin Mohd Zainol was appointed as the new
Chairman of the NC.
As Dato’ Yeoh Eng Khoon had subsequently been re-designated as a

non-independent Director on 1 December 2022, he has retired from
the NC and his role as the SID has been assumed by Tan Sri Azlan Bin
Mohd Zainol.
The appointment of Chairman of the NC is set out in its Terms of

Reference, whereas the functions of a SID are set out in the Board
Charter, both of which are available on the Company’s website,
www.klk.com.my.
Explanation for :
departure
Measure :
Timeframe :
38
Intended Outcome
Practice 5.9
The board comprises at least 30% women directors.
Explanation on :
application of the
practice
Explanation for : As at 30 September 2022, the Board comprised of nine (9) Directors,
departure of whom two (2) are females, providing a representation rate of
22.22%, which complies with the new requirement of Bursa Malaysia
Main Market Listing Requirements to have at least one (1) woman
director on the board of a listed company.
The Board acknowledges the importance of boardroom diversity and

will commit to diversity at the leadership and employee levels. In
tandem with the heightened emphasis on the dimension of gender,
the Board ensures there is clear commitment to develop a corporate
culture that also embraces the aspect of gender diversity. Hence, the
Board had always been in support of a policy of non-discrimination on
the basis of race, religion and gender.
Although gender is one aspect on the diversity spectrum, it has been

prioritised in the Board recruitment process. The Board continues to
source for suitably qualified female candidates via various means or
search firms (including independent firms), in order to achieve 30%
female representation on the Board.
Measure : The Board aims to have a 30% female representation on the Board.
Hence, the Board will continue to actively source for suitable female
candidates and consider the appointment of additional female
Director(s) as and when there are right candidates available.
To focus on sourcing for suitably qualified female candidates and

recommend accordingly to the Board, the Board had established a
Select Committee on Board Gender Diversity which comprises three
(3) members as follows:
(i) Dato’ Lee Hau Hian

(ii) Mrs. Anne Rodrigues; and
(iii) Tan Sri Azlan Bin Mohd Zainol.
The Select Committee on Board Gender Diversity is delegated the
39
responsibility to source for suitably qualified female candidates for the
Board. It had been searching for suitably qualified female candidates
as the Nomination Committee remains committed to improving
boardroom diversity in terms of race, religion, gender, regional and
industry experience, cultural and geographical background, ethnicity,
age and perspective.
Timeframe : Others The Company complies with the

new requirement in Bursa Malaysia
Main Market Listing Requirements
to have at least one (1) female
director on the board of a listed
company. It remains committed to
meeting the target of 30% female
Directors and will recruit suitably
qualified female directors as and
when it is in the best interest of the
Company.
40
Intended Outcome
Practice 5.10
The board discloses in its annual report the company’s policy on gender diversity for the
board and senior management.
Explanation on : The Board acknowledges the importance of a diverse boardroom and

application of the workforce, and is committed to diversity at the leadership and
practice employee levels. In tandem with the heightened emphasis on the
dimension of gender, the Board ensures there is clear commitment to
develop a corporate culture that embraces the aspect of gender
diversity. Hence, it remains committed to a minimum 30% female
representation on the Board notwithstanding that the latest amended
Main Market Listing Requirements of Bursa Malaysia only requires
public listed companies to have at least one (1) female Director.
The Group is committed in creating a safe and comfortable workplace

for all employees. It practices inclusivity and non-discrimination by
race, caste, nationality, gender, religion, marital status, union
membership or political affiliation. Such commitment is also disclosed
in the Code of Conduct and Ethics for the Company.
To this end, the Group has put in place strong policies on Diversity,
Equality and Inclusion to ensure there is a culture of diversity in terms
of race, religion, gender, regional and industry experience, cultural and
geographical background, ethnicity, age and perspective. Incidences of
bullying and harassment of any sort are never tolerated.
Explanation for :
departure
Measure :
Timeframe :
41
Intended Outcome
Stakeholders are able to form an opinion on the overall effectiveness of the board and
individual directors.
Practice 6.1
The board should undertake a formal and objective annual evaluation to determine the
effectiveness of the board, its committees and each individual director. The board should
disclose how the assessment was carried out its outcome, actions taken and how it has or
will influence board composition.
For Large Companies, the board engages an independent expert at least every three years,
to facilitate objective and candid board evaluation.
Note: For a Large Company to qualify for adoption of this practice, it must undertake annual board
evaluation and engage an independent expert at least every three years to facilitate the
evaluation.
Explanation on : During the year under review, the Board, with the assistance of the
application of the Nomination Committee (“NC”), continued to monitor the performance
practice of the Board, its Board Committees and each individual Director
through a formal annual board evaluation.
The Board recognised that annual board evaluation is an opportunity

for the Board to review Board efficiency, assess its composition and
identify areas for improvement to maximise board effectiveness.
Having used the same set of questions from FY 2018 to 2020 for three
(3) years, a new methodology and evaluation style with revised
questionnaires were adopted for the 2021 annual board evaluation.
This is to ensure that the board evaluation continues to lead to
performance improvements and is not simply a box-ticking exercise.
Although the annual board evaluation for the year ended 30

September 2022 (“2022 Board Self-Evaluation”) was managed and
facilitated internally by the Company Secretary through the
questionnaires circulated to each Director, the board evaluation was
conducted professionally with a well-defined and structured
framework.
In particular, the new approach solicited ideas from Directors about:

• board composition and diversity;
• board practices;
• quality of information and decision making;
• board support and committees;
• strategic and operational oversight;
• risk management and internal control; as well as
• succession planning and human resource management.
The 2022 Board Self-Evaluation was conducted through the

questionnaires which included a combination of open-ended
42
questions requesting improvement suggestions from Directors in
order to yield valuable insights into how board performance might be
improved, and close-ended multiple choice questions.
In order to encourage open and frank assessment, the Company

Secretary collated the duly completed forms from each individual
Director and referred the same to the Chairman of NC on a no-name
basis. The Chairman of the NC analysed the responses from the Board
members and then tabled the results analysis report to NC for review
and identification of areas for improvement.
The NC’s findings were subsequently presented to the Board for

review and discussion in order to develop an agreed action plan for
improvement. Based on the findings from the 2022 Board Self-
Evaluation, the Board and Board Committees, as well as the individual
Directors, have discharged their duties competently and amicably in
accordance with their respective charters and terms of reference.
There were no major concerns from the results of the 2022 Board Self-
Evaluation.
The NC had also assessed Directors’ effectiveness and training needs

by reviewing the results of the 2022 Board Self-Evaluation and the
Directors’ commitment to training during the financial year. The NC
noted that the members of the Board had attended various
programmes to keep abreast with general economic, industry and
technical developments as well as changes in legislation and
regulations affecting the Group’s operations. In-house briefings by
external auditors, solicitors and/or Management are also organised
from time to time to update Directors on relevant statutory and
regulatory requirements and the Group’s business and operational
practices.
Details of the training and seminars attended by the Directors during

the financial year under review are set out in the Corporate
Governance Overview Statement in the Annual Report 2022 of the
Company.
In line with the intended outcome of Practice 6.1 and to ensure board
evaluation remains a valuable feedback mechanism for improving
Board effectiveness, maximizing strengths and highlighting areas for
further improvement, the Board is committed to undertake a periodic
board evaluation facilitated by a professional independent expert. To
this end, the Board will consider engaging an independent expert to
facilitate objective and candid board evaluation for the financial year
ending 30 September 2023.
Explanation for :
departure
43
Measure :
Timeframe :
44
Intended Outcome
The level and composition of remuneration of directors and senior management take into
account the company’s desire to attract and retain the right talent in the board and senior
management to drive the company’s long-term objectives.
Remuneration policies and decisions are made through a transparent and independent
process.
Practice 7.1
The board has remuneration policies and procedures to determine the remuneration of
directors and senior management, which takes into account the demands, complexities and
performance of the company as well as skills and experience required. The remuneration
policies and practices should appropriately reflect the different roles and responsibilities of
non-executive directors, executive directors and senior management. The policies and
procedures are periodically reviewed and made available on the company’s website.
Explanation on : The Board has in place a formal Remuneration Policy for Directors and
application of the Senior Management (“Policy”). The Policy (which was first adopted in
practice 2018) establishes a formal and transparent procedure for developing a
structure for the remuneration of Directors and Senior Management
of the Company with the objective of supporting and driving business
strategy and the long-term interests of the Company.
The aim of the Policy is to:

(i) determine the level of remuneration of Directors and Senior
Management;
(ii) attract, retain and reward high performing, experienced and
qualified Directors and Senior Management by providing
remuneration commensurate with their responsibilities and
contributions, and be competitive with the industry; and
(iii) encourage value creation for the Company by aligning the
interests of Directors and Senior Management with the long-
term interests of shareholders.
The Board, through the Remuneration Committee (“RC”) will conduct

a periodic review of the criteria to be used in recommending the
remuneration package of Directors and Senior Management to ensure
that it is in line with current market practices and needs. The
Remuneration Policy was reviewed and updated in May 2022. The
Policy is accessible on the Company’s website, www.klk.com.my.
The fees of the Non-Executive Directors and any benefits payable to

the Directors shall from time to time be determined by Ordinary
Resolutions of the Company in general meeting in accordance with
Section 230 of the Companies Act 2016.
The Board, as a whole, upon recommendations from the RC,
determines the fees of the Non-Executive Directors and benefits
45
payable to the Directors. Directors’ fees and other benefits payable to
the Directors for carrying out their duties as Directors of the Company
are approved by the shareholders at the Annual General Meeting of
the Company.
The Board has endorsed that the Directors’ fees would be held
constant for three (3) years. In order to ensure that the Directors’ fees
align with appropriate peer groups and are measured against profits
and other targets set in accordance with the Company’s annual budget
and plans, the Remuneration reviews the Directors’ fees annually. The
review usually takes place in October each year.
The Board, through the Remuneration Committee, agreed that there is

no change to the remuneration for this financial year 2022 of the
Directors, as follows:
Fees (RM) Meeting

Remuneration Per Allowances
Annum (RM)
Chairman of the Board 540,000
Board member 270,000
Chairman of the Audit and Risk 35,000
Committee
2,000 per
Audit and Risk Committee member 25,000
meeting
Chairman of the Nomination 25,000
Committee (“NC”) and RC
respectively
NC and RC member respectively 15,000
Explanation for :
departure
Measure :
Timeframe :
46
Intended Outcome
The level and composition of remuneration of directors and senior management take into
account the company’s desire to attract and retain the right talent in the board and senior
management to drive the company’s long-term objectives.
Remuneration policies and decisions are made through a transparent and independent
process.
Practice 7.2
The board has a Remuneration Committee to implement its policies and procedures on
remuneration including reviewing and recommending matters relating to the remuneration of
board and senior management.
The Committee has written Terms of Reference which deals with its authority and duties and
these Terms are disclosed on the company’s website.
Explanation on : The Board has established a Remuneration Committee (“RC”) since

application of the 1994 to structure and review the remuneration policy for executives
practice of the Group, and to ensure that compensation and other benefits
encourage performance that enhances the Group’s long-term
profitability and value. The RC’s recommendations on the
remuneration package for Senior Management and that for the Group
Chief Executive Officer, are subject to the approval of the Board, and
in the case of Non-Executive Directors’ fees including Board
Committees’ fees, the approval of the shareholders.
The RC comprises three (3) members, all of whom are Non-Executive

Directors and a majority of whom are Independent. The roles and
responsibilities of the RC are provided in its Terms of Reference (which
last review was carried out in May 2022) and is available on the
The Board is satisfied that the RC has effectively and efficiently

discharged its roles and responsibilities, which include amongst
others, the following:
(1) Reviewed and recommended to the Board the Non-Executive

increased Directors’ fees and benefits payable to the Directors of
the Company and where appropriate, other companies within the
Group, as well as the remuneration and terms of service of the
Executive Director. The Board then agreed that shareholders’
approval be sought at the Annual General Meeting on the
Directors’ remunerations.
(2) Reviewed the Group’s remuneration policy, benefits and salary

scales for its senior management and executives, taking into
account the demands, complexities and performance of the
47
Group as well as skills and experience required in order to attract
and retain the right talent to drive the long-term objectives of the
Group.
(3) Reviewed and recommended the annual bonus quantum for

bonus schemes applicable to employees of the Group.
(4) Reviewed the terms and conditions of the service agreements and
to consider and review the remuneration and compensation
packages including overall benefits and tenure, where applicable,
and to monitor the structures and levels of remuneration to
ensure consistency with the Company’s remuneration objectives
of some key senior management of the Group.
(5) Reviewed the effectiveness of the Company’s performance

measurement and reward process.
The RC met twice during the year under review where all the RC
members attended.
Explanation for :
departure
Measure :
Timeframe :
48
Intended Outcome
Stakeholders are able to assess whether the remuneration of directors and senior
management is commensurate with their individual performance, taking into consideration
the company’s performance.
Practice 8.1
There is detailed disclosure on named basis for the remuneration of individual directors. The
remuneration breakdown of individual directors includes fees, salary, bonus, benefits in-kind
and other emoluments.
Explanation on : The details of the remuneration of Directors for the year under review
application of the are disclosed in the Corporate Governance Overview Statement of the
practice 2022 Annual Report.
The detailed disclosure allows shareholders to make an informed

decision when voting on the approval of Directors’ remuneration and
foster confidence in investors by allowing them to understand the
Company’s basis and motivation behind their remuneration
framework.
49
Company (‘000) Group (‘000)
emoluments
emoluments
Benefits-in-
Benefits-in-
No Name Directorate
Allowance
Allowance
Bonus
Bonus
Salary
Salary
Other
Other
Total
Total
kind
kind
Fee
Fee
Tan Sri Dato’ Seri Executive Input Input Input Input
1 5640 8460 30 2405 16535 5640 8460 30 2405 16535
Lee Oi Hian Director info here info here info here info here
Executive Input Input Input Input
2 Lee Jia Zhang 1920 2240 31 768 4959 1920 2240 31 768 4959
Director info here info here info here info here
Independent Input Input Input Input Input Input
3 R.M. Alias 567 18 23 608 567 18 23 608
Director info here info here info here info here info here info here
Non-Executive
Non- Input Input Input Input Input Input Input Input
4 Dato’ Lee Hau Hian 300 20 320 300 20 320
Independent info here info here info here info here info here info here info here info here
Director
Dato’ Yeoh Eng Independent Input Input Input Input Input Input
5 313 26 7 346 313 26 7 346
Khoon Director info here info here info here info here info here info here
Tan Sri Azlan bin Independent Input Input Input Input Input Input Input Input
6 309 20 329 309 20 329
Mohd Zainol Director info here info here info here info here info here info here info here info here
Independent Input Input Input Input Input Input Input Input
7 Quah Poh Keat 304 22 326 304 22 326
Director info here info here info here info here info here info here info here info here
Independent Input Input Input Input Input Input Input Input
8 Anne Rodrigues 295 22 317 295 22 317
Director info here info here info here info here info here info here info here info here
Cheryl Khor Hui Independent Input Input Input Input Input Input Input Input
9 246 18 264 246 18 264
Peng Director info here info here info here info here info here info here info here info here
Input Input Input Input Input Input Input Input Input Input Input Input Input Input
10 Input info here Choose an item.
info here info here info here info here info here info here info here info here info here info here info here info here info here info here
50
Intended Outcome
Practice 8.2
The board discloses on a named basis the top five senior management’s remuneration
component including salary, bonus, benefits in-kind and other emoluments in bands of
RM50,000.
Explanation on :
application of the
practice
Explanation for : The Company does not comply with the recommendations to disclose
departure the detailed remuneration of the top five Senior Management (i.e. the
top five highest paid executives) in bands of RM50,000 on a named
basis by virtue of the sensitivity associated with the disclosure of such
information. The Board is of the opinion that it is important for the
Group to preserve confidentiality of such information in order to avoid
any negative impact vis-a-vis recruitment and talent retention arising
from such disclosure.
Management had benchmarked the remuneration package of the

Company’s Senior Management with industry standards to ensure the
remuneration of the Senior Management is appropriate and aligned
with the individual’s responsibilities and contribution. With the
existing robust internal process, the Board believes that the
remuneration of the top five Senior Management is fair and in line
with market practices as the remuneration packages are justified by
individual performance, job responsibilities and the Group’s
performance against financial objectives.
Additionally, the Company has disclosed the total key management

personnel compensation in a Note to the Audited Financial Statements
for financial year 2022.
Measure : The Board will continue evaluating the implications of such disclosure
and will make the necessary disclosure provided that it is in the best
interest of the Group to do so.
Timeframe : Others The Company intends to maintain

the current practice to preserve the
confidentiality of such information.
51
Company
No Name Position
Salary Allowance Bonus Benefits Other emoluments Total
Input info here Input info here

1 Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item.




52
Intended Outcome

Companies are encouraged to fully disclose the detailed remuneration of each member of
senior management on a named basis.
Explanation on :
adoption of the
practice
53
Company (‘000)
Other emoluments
No Name Position
Allowance
Benefits
Bonus
Salary
Total
Input info here Input info here Input info here Input info here Input info here Input info here Input info here Input info here
1
2
3
4
5
54
Intended Outcome
There is an effective and independent Audit Committee.
The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.
Practice 9.1
The Chairman of the Audit Committee is not the Chairman of the board.
Explanation on : The Audit Committee was established in 1993 in line with the Main
application of the Market Listing Requirements of Bursa Malaysia (“Main LR”).
practice Subsequently, on 14 August 2018, the Audit Committee was renamed
as the Audit and Risk Committee (“ARC”) to recognise the importance
of the risk oversight and management functions carried out by the
ARC.
The Chair of the ARC and the Chair of the Board are held by different
persons. Dato’ Yeoh Eng Khoon was the Chairman of ARC since 27
May 2009. Having considered the importance of “committee
refreshment”, i.e. periodic rotation of committees’ Chair and
membership, Dato’ Yeoh Eng Khoon had retired from the Chair of ARC,
but remains as a member; Mr. Quah Poh Keat was re-designated as
the new ARC Chairman in place of Dato’ Yeoh Eng Khoon, on 23
November 2021.
For the financial year 2022, the ARC comprises four (4) members, all of
whom are Independent Non-Executive Directors. As the Board had re-
designated Dato’ Yeoh Eng Khoon as Non-Independent Director on 1
December 2022, the ARC now comprises of four (4) members of which
three (3) are Independent Directors, and one (1) Non-Independent
Non-Executive Director, as at the date of writing this report.
The Board believes that the separation of the positions of the

Chairman of the Board and of the ARC enables the Chairman of the
ARC to devote sufficient time to the affairs of the ARC.
The Chairman of ARC is responsible to promote robust and open

deliberations during ARC meetings, to maintain active ongoing
dialogue with management and both internal and external auditors,
and to ensure that the ARC meetings are conducted efficiently with
each agenda items being thoroughly and thoughtfully discussed by all
members of the ARC.
He is also the key contact between the ARC members and members of
the Board, as well as Senior Management and the auditors.
55
Explanation for :
departure
Measure :
Timeframe :
56
Intended Outcome
Practice 9.2
The Audit Committee has a policy that requires a former partner of the external audit firm of
the listed company to observe a cooling-off period of at least three years before being
appointed as a member of the Audit Committee.
Explanation on : The Audit and Risk Committee (“ARC”) of the Company adopts the
application of the policy that requires a former key audit engagement partner to observe
practice a cooling-off period of at least three (3) years before being appointed
as a member of the ARC in its Terms of Reference. The Terms of
Reference of the ARC, which was last reviewed and updated in May
2022, is available at the Company’s website.
The Board has not appointed any former key audit partner as a
member of the ARC.
Explanation for :
departure
Measure :
Timeframe :
57
Intended Outcome
Practice 9.3
The Audit Committee has policies and procedures to assess the suitability, objectivity and
independence of the external auditor to safeguard the quality and reliability of audited
financial statements.
Explanation on : The Audit and Risk Committee (“ARC”) plays a crucial role in evaluating
application of the the performance of the external auditors. Assessment on the
practice performance of the external auditors was carried out at the ARC
meeting based on the independence and capabilities of the external
auditors as well as the effectiveness of the audit process.
The ARC met the external auditors without the presence of

Management once during the year under review. In the third quarter
of 2022, the Company’s external auditors, Messrs BDO PLT (“BDO”)
presented its 2022 Audit Planning Memorandum for the ARC’s review.
This 2022 Audit Plan outlined its engagement team, audit timeline and
the areas of audit emphasis. This formed part of the ARC’s assessment
of the suitability, objectivity and independence of BDO on an annual
basis. Based on the outcome of the assessment, the ARC decides
whether or not to recommend to the Board for shareholders’ approval
to be sought for the re-appointment of BDO at the forthcoming
Annual General Meeting in 2023.
Having regard to the outcome of the annual assessment of BDO, the

Board approved the ARC’s recommendation that shareholders’
approval be sought at the forthcoming AGM for the re-appointment of
BDO as external auditors of the Company for the financial year ending
30 September 2023.
Explanation for :
departure
Measure :
Timeframe :
58
Intended Outcome

The Audit Committee should comprise solely of Independent Directors.
Application : Adopted
Explanation on : For the year under review, the Audit and Risk Committee (“ARC”)
adoption of the consists of four (4) members, who are all Independent Non-Executive
practice Directors. The members of the ARC were as follows:
Quah Poh Keat (Chairman)

- Independent Non-Executive Director
Dato’ Yeoh Eng Khoon

- Senior Independent Non-Executive Director
Anne Rodrigues
Cheryl Khor Hui Peng

59
Intended Outcome
Practice 9.5
Collectively, the Audit Committee should possess a wide range of necessary skills to
discharge its duties. All members should be financially literate, competent and are able to
understand matters under the purview of the Audit Committee including the financial
reporting process.
All members of the Audit Committee should undertake continuous professional development
to keep themselves abreast of relevant developments in accounting and auditing standards,
practices and rules.
Explanation on : The Audit and Risk Committee (“ARC”) comprises members from
application of the diverse backgrounds with extensive experience in accounting, law, risk
practice management, banking, finance, taxation etc. to meet their
responsibilities and contribute diverse perspectives that strengthen
the quality of deliberations. Mr. Quah Poh Keat, Mrs. Anne Rodrigues
and Ms. Cheryl Khor Hui Peng are members of the Malaysian Institute
of Accountants, whilst Dato’ Yeoh Eng Khoon has degrees in
Economics and Law.
With their financial literacy, the ARC members are able to critically
probe highly risky transactions as well as key accounting policies and
judgments adopted by the Company in its financial reporting and give
strategic input to the Board on the drivers of financial performance.
The ARC members had attended various professional development

programmes and seminars to keep themselves abreast of relevant
development in accounting and auditing standards, practices and
rules. Details of the professional development programmes and
seminars attended by the ARC members during the financial year 2022
are set out in the Corporate Governance Overview Statement in the
Annual Report 2022 of the Company.
The Nomination Committee reviewed and assessed the duties carried

out by the ARC during the financial year and was satisfied that the ARC
and each of its members have sufficient understanding of the Group’s
business and able to apply a critical and probing view on the financial
results and information prepared by Management. The ARC had also
discharged their duties effectively and efficiently in accordance with
its Terms of Reference.
60
Explanation for :
departure
Measure :
Timeframe :
61
Intended Outcome
Companies make informed decisions about the level of risk they want to take and implement
necessary controls to pursue their objectives.
The board is provided with reasonable assurance that adverse impact arising from a
foreseeable future event or situation on the company’s objectives is mitigated and managed.
Practice 10.1
The board should establish an effective risk management and internal control framework.
Explanation on : The Board acknowledges the importance of a sound risk management

application of the system and internal control, and is supported by the Audit and Risk
practice Committee (“ARC”) and Group Risk Management Committee (headed
by the Group Chief Executive Officer) respectively to ensure the risks
in the Group are identified and managed with the appropriate risk
management system. The risk management process includes
identifying principal business risks in critical areas, assessing the
likelihood and impact of material exposures and determining its
corresponding risk mitigation and treatment measures.
In this respect, the Board is briefed on any potential fraud,

whistleblowing and internal audit findings in order to enable them to
assess the integrity of the Group’s financial information and the
adequacy and effectiveness of the Group’s system of internal control
and risk management processes.
A formal risk management framework has been established with the

aim of setting clear guidelines in relation to the level of risk acceptable
to the Group. The framework is also designed to ensure proper
management of the risks that may impede the achievement of the
Group’s goals and objectives.
In addition, the Group has in place an on-going process for identifying

the principal business risks in critical areas, assessing the likelihood
and impact of material exposures and determining its corresponding
risk mitigation and treatment measures.
Having reviewed the adequacy and effectiveness of the Group’s risk

management and internal control system for the financial year under
review, the Board is of the opinion that the risk management and
internal control system is operating adequately and effectively.
Explanation for :
departure
62
Measure :
Timeframe :
63
Intended Outcome
Practice 10.2
The board should disclose the features of its risk management and internal control
framework, and the adequacy and effectiveness of this framework.
Explanation on : The Board via the Audit and Risk Committee (“ARC”) reviews and
application of the monitors the risk management framework and policies of the Group,
practice which include the reviewing of the Group’s procedures for detecting
fraud and ensuring that arrangements are in place by which an
employee or third party may, in confidence, raise concerns about
possible improprieties in matters of financial reporting, financial
control or any other matters. The ARC also assists the Board to review
and assess the scope and effectiveness of the systems and processes
established by the Group Risk Management Committee (“GRMC”) to
identify, assess, manage and monitor financial and non-financial risks;
oversee execution of the processes; and ensure the systems and
processes are continuously improved as the business environment
changes.
Additionally, the ARC oversees the conduct, and reviews the results of
company-wide risk assessments including the identification and
reporting of critical risks. The ARC also advises the Board on the
Group’s current risk exposures and future risk strategy based on its
overall risk appetite and tolerance, and coordinates the activities of
the various standing board committees for risk oversight.
The ARC is also responsible for reviewing reports on any material

breaches of risk limits and the adequacy, timeliness and effectiveness
of any corrective action taken by the GRMC in response to risk and
provide timely input to the GRMC on critical risk issues. The GRMC will
be engaged in an ongoing risk appetite dialogue as conditions and
circumstances change and new opportunities arise.
In addition, the ARC has been tasked with the following additional
duties and responsibilities in relation to the Group’s anti-bribery and
corruption policies and procedures:
(i) reviewing and evaluating the adequacy and effectiveness of the

Group’s policies, internal controls, procedures and reporting
systems for detecting, preventing and reporting inappropriate
business conduct, fraud and breaches of anti-corruption laws
periodically or at least once every three (3) years.
64
(ii) reviewing the Group’s assessment of corruption risks and
overseeing the creation, maintenance and ongoing operation of
the Group’s risk mitigation strategies to ensure that the Group has
established and maintained appropriate and efficient procedures
to manage corruption risk and to defend against corporate liability
charges arising from corruption prosecution.
Further details on the features of the risk management and internal

control framework are provided in the Statement on Risk
Management and Internal Control in the Annual Report 2022.
Explanation for :
departure
Measure :
Timeframe :
65
Intended Outcome

The board establishes a Risk Management Committee, which comprises a majority of
independent directors, to oversee the company’s risk management framework and policies.
Explanation on :
adoption of the
practice
66
Intended Outcome
Companies have an effective governance, risk management and internal control framework
and stakeholders are able to assess the effectiveness of such a framework.
Practice 11.1
The Audit Committee should ensure that the internal audit function is effective and able to
function independently.
Explanation on : The Group has an independent in-house Internal Audit Division (“IAD”)
application of the whose primary function is to independently assess and report to
practice Board, through the Audit and Risk Committee (“ARC”), the systems of
internal controls of the Group.
The IAD reports directly to the ARC and conducts reviews on the
effectiveness of the internal controls and procedures and the extent of
compliance with the applicable laws and regulations and Group’s
established policies, procedures and guidelines.
The IAD carries out its duties in accordance with the Internal Audit
Charter and adopts a risk-based approach focusing on high risks areas.
Among the areas reviewed were the effectiveness of key controls and
processes in the operating units to provide reasonable assurance that
the systems would continue to operate satisfactorily and effectively.
During the year, IAD had carried out the following activities:
1) Performed audit assignments for operating units in Malaysia,

Indonesia, China, Europe and Liberia as per the Audit Plan
approved by the ARC.
2) Carried out investigations on specific areas as directed by the ARC

and Management.
3) Reviewed the Group’s Corruption Risk Assessment exercise which

assesses and identifies vulnerable processes and risk factors that
may require mitigation controls to address potential bribery and
corruption practices.
4) Participated as working committee in the implementation of new

Group IT systems to ensure pertinent controls are adequately in
place.
5) Conducted in-house training for internal auditors and operating

units’ personnel to enhance competencies, practices and
awareness on internal controls and managing of risks.
To ensure internal audit function is effective and able to function

independently, the ARC appraises and recommends to the Board the
67
appointment, transfer and termination of the Head of IAD and takes
cognisance of staff members’ resignations from the Internal Audit
function.
Explanation for :
departure
Measure :
Timeframe :
68
Intended Outcome
Companies have an effective governance, risk management and internal control framework
and stakeholders are able to assess the effectiveness of such a framework.
Practice 11.2
The board should disclose–
▪ whether internal audit personnel are free from any relationships or conflicts of
interest, which could impair their objectivity and independence;
▪ the number of resources in the internal audit department;
▪ name and qualification of the person responsible for internal audit; and
▪ whether the internal audit function is carried out in accordance with a recognised
framework.
Explanation on : The Internal Audit Division (“IAD”) reports directly to the Audit and
application of the Risk Committee (“ARC”) and is independent from the operational
practice activities of the Group and its subsidiaries. The Head of IAD and their
audit personnel do not hold any managerial authority and
responsibility over the operations that internal audit covers in its
scope of work.
The IAD has a total of 71 experienced audit personnel with relevant

qualifications (e.g., ACCA, CPA and degree) based in Malaysia and
Indonesia. The Head of IAD, Mr. Terrence Lim Tou Sean is an Associate
member of the Institute of Internal Auditors Malaysia and has a
Bachelor’s Degree in Economics from University of Adelaide. He is also
a member of the Malaysia Institute of Accountants. He started his
career as an external auditor in one of the big four accounting firms
and later on moved to the internal audit departments of various public
listed financial institutions in Malaysia and Singapore. Mr. Lim has in
total 41 years of internal and external audit experiences.
The activities of the IAD function are guided by the Internal Audit
Charter and the Annual Audit Plan approved by the ARC. The IAD
adopts a risk-based auditing approach, which is in line with the
International Professional Practices Framework (“IPPF”) issued by the
Institute of Internal Auditors.
Explanation for :
departure
Measure :
69
Timeframe :
70
Intended Outcome
There is continuous communication between the company and stakeholders to facilitate
mutual understanding of each other’s objectives and expectations.
Stakeholders are able to make informed decisions with respect to the business of the
company, its policies on governance, the environment and social responsibility.
Practice 12.1
The board ensures there is effective, transparent and regular communication with its
stakeholders.
Explanation on : KLK upholds a strong culture of continuous, timely and equal

application of the dissemination of material information with shareholders,
practice stakeholders, media and regulators through practicable and legitimate
channels. Its commitment, both in principle and practice, is to
maximise transparency consistent with good corporate governance,
except where commercial confidentiality dictates otherwise.
The Company uses several formal channels to account to shareholders

and stakeholders, including:
Annual General Meetings
The Board ensures the Company’s General Meetings, particularly the

Annual General Meeting (“AGM”) are conducted in an efficient
manner in order to serve as the principal forum for dialogue and
interaction with the shareholders of the Company. At AGMs,
shareholders are encouraged to present their views or to seek
clarification on the progress, performance and major developments of
the Company. The Chairman also plays a pivotal role in fostering
constructive dialogue between shareholders, the Board and Senior
Management.
In view of the situation arising from COVID-19 pandemic, the Company

had conducted a fully virtual AGM in 2022 by leveraging technology in
accordance with the Companies Act 2016, the Company’s Constitution
and Securities Commission’s Guidance and FAQs on the Conduct of
General Meetings for Listed Issuer. Members had joined the AGM
online and remotely, and also voted electronically using the Remote
Participation and Voting facility provided by Tricor Investor & Issuing
House Services Sdn Bhd via its TIIH Online website. Shareholders and
proxies were able to submit their questions electronically via the TIIH
Online before and during the AGM. To ensure transparency, questions
submitted in advance by the Minority Shareholders Watch Group
together with the Group’s responses were presented to the
shareholders at the AGM. Electronic poll voting was conducted on all
resolutions with immediate announcement of results by the Chairman.
The results were then released to Bursa Malaysia Securities Berhad
71
immediately after the meeting to enable the public to know the
outcome thereof. The AGM minutes are also made available on the
Annual Report
The Company and the Group have consistently been able to publish its
Annual Reports in a timely manner. The Notice of AGM is circulated
more than 30 days before the date of the meeting to enable
shareholders to thoroughly review the Annual Report which contains
comprehensive reports on the Group’s financial performance,
directions and insights. Such active step of serving the Notices of AGM
earlier than the minimum notice period allows shareholders ample
time in planning their meeting attendance as well as enables
institutional shareholders who hold shares through custodians, to
communicate voting instructions to the custodian and ensure that
these are acted on.
Investor Relations
The Board also recognises the importance of keeping shareholders,

investors, research analysts, bankers and the press informed of the
Group’s business performance, operations and corporate
developments. The Board’s primary contact with major shareholders is
via the Group Chief Executive Officer, Chief Operating Officer, Group
Chief Financial Officer, and the Head of Investor Relations and
Corporate Communication, who have regular dialogues with
institutional investors and deliver presentations to analysts
periodically.
Announcements to Bursa Malaysia Securities Berhad
Announcement of interim and full year financial results, circulars and

other relevant matters are made via Bursa LINK in a timely manner to
ensure equal and fair access to information is provided to the
investing public to make informed decisions.
Company website
The Company website, www.klk.com.my serves as a channel of

communication for shareholders, investors and the general public.
Information such as disclosures made to Bursa Malaysia Securities
Berhad (including interim and full year financial results, Annual Report
and other announcements on relevant transactions undertaken by the
Group), Company Profile, Corporate Information, Group Policies,
Corporate Mission & Values, Terms Of Reference, Corporate
Disclosure Policy and an overview of the Group’s business activities
etc., can be obtained from the website. Requests for information on
the Company can be forwarded to its dedicated Investor Relations &
Corporate Communications Department through the same website.
72
Explanation for :
departure
Measure :
Timeframe :
73
Intended Outcome
There is continuous communication between the company and stakeholders to facilitate
mutual understanding of each other’s objectives and expectations.
Stakeholders are able to make informed decisions with respect to the business of the
company, its policies on governance, the environment and social responsibility.
Practice 12.2
Large companies are encouraged to adopt integrated reporting based on a globally
recognised framework.
Explanation on :
application of the
practice
Explanation for : The Company had embedded some important elements of integrated
departure reporting in the Company’s Annual Report 2022 to comply with the
requirements of the Global Reporting Initiative Standards: Core
option. This demonstrates the Company’s aspirations towards the
adoption of integrated reporting to provide information on how the
Company’s strategy, performance, governance and prospects lead to
value creation.
The Board of Directors believes that the Company’s existing reporting

standards are sufficiently concise and clear to enable stakeholders to
make informed decisions with respect to the business and direction of
the Company, its policies and governance, the environment and social
responsibility.
Measure : Having considered the importance of full adoption of integrated
reporting, the Company will review the need to put in place policies
which adopt integrated reporting based on a globally recognised
framework at the appropriate time.
Timeframe : Within 2 years
74
Intended Outcome
Shareholders are able to participate, engage the board and senior management effectively
and make informed voting decisions at General Meetings.
Practice 13.1
Notice for an Annual General Meeting should be given to the shareholders at least 28 days
prior to the meeting.
Explanation on : The Company and the Group have consistently been able to circulate
application of the its notice for an Annual General Meeting (“AGM”) to the shareholders
practice at least 28 days prior to the meeting, well in advance of the 21-day
requirement under the Companies Act 2016 and the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad. Such active
step of serving the notices of AGM earlier than the minimum notice
period allows shareholders ample time in planning their meeting
attendance as well as enables institutional shareholders who hold
shares through custodians, to communicate voting instructions to the
custodian and ensure that these are acted on.
The notice for an AGM is accessible by the shareholders via Bursa

Malaysia Securities Berhad’s website as well as the Company’s
website. The said notice is also advertised in one (1) nationally
circulated daily newspaper such as The Star.
The Company also provides details of the AGM to the shareholders

regarding the eligibility of the shareholders, their rights to appoint
proxies and other relevant information pertaining to the AGM. In
addition, there are explanatory notes providing detailed explanations
for each resolution to be tabled to enable shareholders to make
informed decisions in exercising their voting rights.
Explanation for :
departure
Measure :
Timeframe :
75
Intended Outcome
Practice 13.2
All directors attend General Meetings. The Chair of the Audit, Nominating, Risk Management
and other committees provide meaningful response to questions addressed to them.
Explanation on : In view of the ongoing COVID-19 pandemic, the Company had

application of the convened its 49th Annual General Meeting (“AGM”) on 17 February
practice 2022 virtually in accordance with the Companies Act 2016, the
Company’s Constitution and Securities Commission’s Guidance and
FAQs on the Conduct of General Meetings for Listed Issuer. Members
had joined the AGM online, and also voted electronically using the
Remote Participation and Voting facility provided by Tricor Investor &
Issuing House Services Sdn Bhd via its TIIH Online website.
All the nine (9) Directors, the Company Secretary and Senior
Management, together with the external auditors attended the AGM.
Amongst them, two (2) Directors were the Chairmen of the Audit and
Risk Committee, Nomination Committee and Remuneration
Committee. The Senior Independent Non-Executive Director acted as a
point of contact for shareholders and other stakeholders at the AGM.
Shareholders and proxies were able to submit their questions

electronically via TIIH Online before and during the AGM.
The proceedings of the 49th AGM included addressing issues raised by

the shareholders and Minority Shareholders Watch Group in relation
to the operational and financial performance of the Kuala Lumpur
Kepong Berhad Group and further clarification of the proposed
resolutions, before putting such resolutions to vote. All queries raised
were responded to by the Board during and after the AGM.
The proceedings of AGM is available to shareholders and the public for

viewing at the Company’s website, www.klk.com.my.
Explanation for :
departure
Measure :
76
Timeframe :
77
Intended Outcome
Practice 13.3
Listed companies should leverage technology to facilitate–
• voting including voting in absentia; and
• remote shareholders’ participation at general meetings.
Listed companies should also take the necessary steps to ensure good cyber hygiene
practices are in place including data privacy and security to prevent cyber threats.
Explanation on : The Annual General Meetings (“AGM”) of the Company are always
application of the held at an easily accessible venue to facilitate high shareholders’
practice attendance. Shareholders who are unable to attend general meetings
may appoint any persons as their proxies to attend, speak and vote on
their behalf at the general meetings in accordance with the relevant
provisions of the Constitution.
At its 49th AGM held on 17 February 2022, Kuala Lumpur Kepong

Berhad had leveraged technology to convene its AGM as a fully virtual
meeting conducted via live streaming, where members had joined the
AGM online, and also voted electronically using the Remote
Participation and Voting (“RPV”) facility provided by Tricor Investor &
Issuing House Services Sdn Bhd (“Tricor”) via its TIIH Online website.
In view of the ongoing COVID-19 pandemic, shareholders were

advised to take advantage of the RPV facility which was available on
Tricor’s TIIH Online website. Detailed procedures were provided to
shareholders in the Administrative Guide and Notes which was sent to
the shareholders with the Abridged Annual Report.
In order to ensure a seamless meeting experience, prior to the AGM,

the Information Technology department of the Group had conducted
a dry run together with Tricor to ensure the system meets the
required standards and quality. The work carried out at the dry run
included testing of login, password and broadcast facilities, role play
session of Questions and Answers, and ensuring internet traffic
performance.
Shareholders who had registered to participate in the AGM had logged

on to the TIIH Online website and participated remotely via live
streaming at the AGM. At the same time, they cast their votes online
until the close of the voting session.
The electronic polling process was conducted by Tricor, the Poll

Administrator and results of the poll was verified by the Scrutineers,
Asia Securities Sdn. Berhad.
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Explanation for :
departure
Measure :
Timeframe :
79
Intended Outcome
Practice 13.4
The Chairman of the board should ensure that general meetings support meaningful
engagement between the board, senior management and shareholders. The engagement
should be interactive and include robust discussion on among others the company’s financial
and non-financial performance as well as the company’s long-term strategies. Shareholders
should also be provided with sufficient opportunity to pose questions during the general
meeting and all the questions should receive a meaningful response.
Note: The explanation of adoption of this practice should include a discussion on measures
undertaken to ensure the general meeting is interactive, shareholders are provided with sufficient
opportunity to pose questions and the questions are responded to.
Explanation on : At the commencement of the fully virtual 49th Annual General

application of the Meeting, the Chairman informed that questions and answers for each
practice resolution would be allowed upon the completion of the tabling of all
ten (10) resolutions.
All the nine (9) Directors, Company Secretary and Senior Management
were present at the 49th AGM and ready to provide responses to the
questions posed by shareholders via TIIH Online website at
https://tiih.online in relation to the agenda items for the AGM, both
prior to and during the meeting.
During the AGM held on 17 February 2022, the Company had received
in advance, questions from the Minority Shareholders Watch Group
and shareholders, as well as real-time questions in relation to the
Company’s operations and performance from shareholders present at
the virtual AGM.
The Chairman of the Board and the Group Chief Executive Officer
answered all questions relating to the audited financial statements
which were received prior to the AGM, including questions raised by
the Minority Shareholders Watch Group in relation to the operational
and financial matters, and corporate governance.
Shareholders were invited to raise any questions during the AGM

using the query box until the end of the meeting. The Chairman of the
Board had informed the meeting participants that for questions which
could not be answered at the meeting, the responses would be
provided to the shareholders in the AGM minutes.
To ensure effective communication with the shareholders at the

meeting, questions posed by shareholders in advance were displayed
on the screen for the meeting participants’ reference whilst the
Company Secretary read out the shareholders’ questions.
80
Live questions which were not addressed at the meeting were
responded to in the AGM minutes. The said minutes is available for
viewing on the Company’s website at www.klk.com.my.
Explanation for :
departure
Measure :
Timeframe :
81
Intended Outcome
Practice 13.5
The board must ensure that the conduct of a virtual general meeting (fully virtual or hybrid)
support meaningful engagement between the board, senior management and shareholders.
This includes having in place the required infrastructure and tools to support among others,
a smooth broadcast of the general meeting and interactive participation by shareholders.
Questions posed by shareholders should be made visible to all meeting participants during
the meeting itself.
Note: The explanation of adoption of this practice should include a discussion on measures
undertaken to ensure the general meeting is interactive, shareholders are provided with sufficient
opportunity to pose questions and the questions are responded to. Further, a listed issuer should
also provide brief reasons on the choice of the meeting platform.
Explanation on : The 49th Annual General Meeting (“AGM”) of the Company was held
application of the as a fully virtual meeting conducted entirely through live streaming
practice and remote voting using the Remote Participation and Voting (“RPV”)
Facilities provided by the appointed Poll Administrator, Tricor Investor
& Issuing House Services Sdn Bhd (“Tricor”).
Tricor’s TIIH Online platform was selected as it is one of the few

platforms that could effectively and reliably support the conduct of a
virtual general meeting. Further, the TIIH Online platform provided a
seamless and user-friendly interface for shareholders from the point
of registration through the participation in the general meeting,
engaging on questions and answers and ending with voting. The
online platform was also secured exclusively for the shareholders with
approved registration for the RPV Facilities at the AGM.
The shareholders and proxies were able to view the live webcast of
the AGM proceedings, post questions to the Board or Management
and submit their votes in real-time whilst the meeting was in progress.
The procedures for the RPV facilities were explained in the
Administrative Guide and Notes issued to the shareholders on 31
December 2021.
The advance questions from the shareholders and Minority

Shareholders Watch Group, and the Company’s responses were
displayed on the screen during the AGM. The relevant real time
questions were also displayed on the screen during AGM.
The Poll Administrator briefed the shareholders through its video

presentation on the e-voting procedures at the start of the AGM. The
poll results were verified by the Independent Scrutineers and
announced by the Chairman.
82
The AGM minutes are accessible on the Company’s website at
www.klk.com.my.
Explanation for :
departure
Measure :
Timeframe :
83
Intended Outcome
Practice 13.6
Minutes of the general meeting should be circulated to shareholders no later than 30
business days after the general meeting.
Note: The publication of Key Matters Discussed is not a substitute for the circulation of minutes of
general meeting.
Explanation on : The Company’s minutes of the 49th Annual General Meeting (“AGM”)
application of the held on 17 February 2022 detailing the meeting proceedings, together
practice with the list of questions and answers provided during the AGM
(including the Minority Shareholders Watch Group’s questions and
Company’s responses) were uploaded to the Company’s website at
www.klk.com.my on 14 March 2022, which is within 30 business days
after the AGM.
Explanation for :
departure
Measure :
Timeframe :
84
SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES
PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA
MALAYSIA
Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures)

of the Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is
only applicable for financial institutions or any other institutions that are listed on the
Exchange that are required to comply with the above Guidelines.
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CORPORATE GOVERNANCE REPORT

STOCK CODE : 2445

SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES

Explanation on : Kuala Lumpur Kepong Berhad is led by an experienced, competent and

(a) Together with Senior Management, promote good corporate

• The Board together with Senior Management set the “tone

• The Board has in place policies and procedures to promote a

These include the following:

(b) Review, challenge and decide on Management’s proposals for the

• The Board oversees the development and implementation of

• The Board reviews the progress and performance of the Group

• The Board embeds sustainability and corporate responsibility

(d) Supervise and assess Management performance to determine

• The Board devotes sufficient time to provide leadership to the

• The Board has overall responsibility for maintaining a sound

• The Board oversees the control and accountability systems

• The Board ensures effective risk management, compliance and

• The Board is cognisant of the significant financial and non-

• The Board ensures that there is an appropriate risk

• The Board reviews potential candidates for the Board and

(i) Ensure the Group has in place procedures to enable effective

• The Board ensures corporate accountability to the

• The Board subscribes to high standards of transparency and

• The Board, through the assessment conducted by the NC, is

(k) Ensure the integrity of the Group’s financial and non-financial

• The Board, through the ARC, ensures the integrity of the

• The Board is cognisant of the disclosures on corporate

Board Committees, which operate within its respective defined Terms

To ensure the effective discharge of the Board and Board Committees’

The Board is regularly updated on the Group’s businesses and the

The Directors also attended various programmes to keep abreast with

The key roles and responsibilities of the Chairman include, amongst

(a) Providing effective leadership to the Board, i.e. to ensure the

(c) Leading Board meetings and discussions, and ensuring the

(d) Encouraging active participation and allowing dissenting views to

(e) Promoting consultative and respectful relations between Board

(f) Chairing shareholders’ meetings and ensuring appropriate steps

(g) Leading the Board in the adoption and implementation of good

The 2022 Board Self-Evaluation results demonstrated the Directors’

The division of responsibilities and accountabilities between the

The Group CEO focuses on the business, organisational effectiveness

Notwithstanding, R.M. Alias had retired as the Chairman of the RC

Explanation on : The Board is supported by an in-house Company Secretary, who is

The Company Secretary is responsible to provide clear and

Apart from playing an active role in advising the Board on governance

In order to ensure uniformity of Board conduct, the Company

The 2022 Board Self-Evaluation findings indicate that the level of

The Company Secretary constantly undertake continuous professional

Explanation on : The annual meeting calendar is prepared and circulated in advance of

All Directors are provided with sufficient information and time to

Meeting materials are uploaded electronically into a digital medium,

All proceedings of Board meetings (which include all material

Every Director has the opportunity to review and make corrections to

Key decisions are always made at Board meetings, with Directors’

The Board Charter is reviewed periodically and updated in accordance

The Board Charter was adopted by the Board on 20 February 2013,

The Code of Conduct and Ethics is published on the company’s website.

Explanation on : The Board is committed to engage in continuous efforts to identify