P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 32 MATERIAL SUSTAINABILITY MATTERS In this report, materiality in sustainability terms is not limited to the matters that have significant financial impact to the organisation but also includes the consideration of ESS impact to the Group’s ability to meet the needs of present and future generations. As defined in Paragraph 6.3, Practice Note 9 of the Main Market Listing Requirements (“Listing Requirements”), sustainability matters are considered material if they: (a) reflect the listed issuer’s significant economic, environmental and social impact; or (b) substantively influence the assessments and decisions of stakeholders. 1. Economic 1.1 Supply Chain Management The Group has a wide range of suppliers globally providing various products and services. Supply chain management is critical in facilitating the operations and the Group aims to build mutually beneficial relationships with the suppliers in the long run. Therefore, the Group engages with suppliers fairly, transparently and ethically. The Group will review the suppliers based on, amongst others, price and payment terms, product and service quality, operation scale and geographical proximity to the production facilities. The Group will take all reasonable efforts to conduct appropriate evaluations and assess the background information of the potential suppliers and communicate the Group’s expectation to promote environmentally and socially responsible practices to the suppliers. The Group also perform tests on samples collected from potential suppliers and may engage them on trial basis. Quality evaluation reports for each of these potential suppliers are compiled and those who pass the evaluation procedures to the satisfaction will be admitted as the qualified suppliers. A qualified supplier list for the principal raw materials is maintained by the purchase and procurement department and all principal raw materials must be purchased from the qualified suppliers. The Group closely monitors the performance of the suppliers and quotations from different suppliers that are generally obtained prior to certain procurement to ensure the competitiveness of their pricing. Suppliers failing to keep up with the requirements on product and service quality or contribute to material product defects at any stage of production may be removed from the qualified supplier list. 1.2 Product Responsibility With the knowledge that reliable delivery of quality products to the customers is critical to the Group’s success, the Group has implemented quality control procedures throughout the production process. For instance, the Group only sources raw materials from suppliers on the approved suppliers list and evaluate the suppliers from time to time and performs tests on samples collected from potential suppliers before engage them as approved suppliers. The Group ensures none of its products would harm the safety and health of the customers. Over the years, the Group had received a number of awards and certifications in recognition of the business development and quality standards including GB/T19001-2016/ISO 9001: 2015, GB/T24001-2016/ISO 14001: 2015, IATF 16949:2016, Oeko-Tex® Standard 100 Product Class I & II, ISO 13485: 2016 and BRC Global Standard for Packing Materials Issue 6: August 2019. As the Group is to supply to textile industry, the Oeko-Tex® Standard 100 is widely used in this industry as a uniform global standard of testing and certification. The Oeko-Tex® Standard 100 tests harmful substances at all stages of production, including raw materials, semi-finished products and finished products. Only manufacturers who comply with strict testing and inspection procedures and provide verifiable quality assurance are allowed to place the Oeko-Tex label on their products. The Group’s management team members have equipped themselves with risk management knowledge by having attended risk management training, including understanding of ISO 9001 quality management system. For any complaints from customers in relation to product quality, the quality control team will analyse the details of the complaints and the respective products and determine the reasons of and take safeguard measures to prevent it from happening in the future. The quality control team will identify reasons of defective products such as defective raw materials, improper or errors in manufacturing process or improper loading/unloading during Sustainability Report (cont’d)
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