ViTrox : Corporate Governance 2023

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	0097
COMPANY NAME	:	ViTrox Corporation Berhad
FINANCIAL YEAR	:	December 31, 2023

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.

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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	: The Board is collectively responsible to the Company's stakeholders for
application of the	the direction and oversight of the Company to ensure its long-term
practice	success. In discharging its fiduciary duties and leadership function, the
	Board is delegating specific powers of the Board to relevant committees
	within the Board ("Board Committees"), the Group CEO and the senior
	management of the Company.
	The Board has direct access to senior management and has unrestricted
	and immediate access to pertinent information regarding the
	organisation's operations and affairs, in the discharge of their
	governance responsibilities. The Board will consider inviting the senior
	management to attend meetings for reporting on major issues relating
	to their respective responsibility.
	All approvals are supported by the authority limits, which clearly sets
	out relevant matters reserved for the Board's approval, as well as those
	which the Board may delegate to the Board Committees, the Group CEO
	and the senior management. The Board Committees are entrusted with
	specific responsibilities to oversee the Group's affairs, with authority to
	act on behalf of the Board in accordance with their respective Terms of
	Reference ("ToR"). The written ToR for the respective Audit,
	Nominating, Remuneration Committees are available on the Company's
	website,https://www.vitrox.com/company/term-reference.php.
	Promote good corporate governance culture and support long-term
	value creation
	The Board, together with the management, is committed to promoting
	good corporate governance culture within the organisation which
	reinforces ethical, prudent and professional behaviour. The Group's
	refined core values, 'I.A.C.T.G.' (The Power of 5), represents the
	fundamental principles of ViTrox's shared values that guide the
	employees to think, talk and do the right things every day in the pursuit
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of both individual and company greatness. 'I.A.C.T.G.' is the acronym for 'Integrity', 'Accountability', 'Courage', 'Trust & Respect', and 'Gratitude & Care'. The Company's Codes of Ethics for Directors continue to govern the standards of ethics and good conduct expected of Directors. The Code of Ethics for Directors includes principles relating to sincerity, integrity, responsibilities and corporate social responsibility together with the details of 'I.A.C.T.G.' are available at the Company's website.

The Board is aware of the importance of sustainability in long run and will be mindful of the requirement when setting and making any plan for conducting its operation. The Board strongly believes that a sustainable environment which continuously promoting healthy habitat for the Group to compete and also would nourish the resources therein growing from time to time. As such, the Board promotes good corporate governance in the application of sustainability practices throughout ViTrox Group, the benefits of which are believed to translate into better corporate performance e.g. the extract of the Lean Problem Solving ("LPS") report and Kaizen project on sustainability activities, demonstrating ViTrox Group's commitment to the global environmental, social, governance and sustainability agenda, are detailed in the Sustainability Report 2023. As a measure to govern the conduct of its employees, the Company has in place its Whistleblower Policy and Procedures ("WPP") and Employees Handbook. ViTrox has also adopted the Anti-Bribery and Corruption Policy ("ABC Policy") to set out the Group's zero tolerance approach against all forms of bribery and corruption and the Group takes a strong stance again such acts. Please see detailed explanation to Practice 3.1 & 3.2 of the CG Report.

As for succession planning, the ESOS (will expire on 1 March 2024) and Share Grant Scheme ("SGS") Committees are tasked to oversee the administration and to ensure proper implementation of the ESOS and SGS in accordance with the respective by-laws of the ESOS and SGS, to motivate, retain and reward Eligible Person(s) who, upon exercising their options, would be given the opportunity to participate in the equity of the Company and thereby relate their contribution directly to the performance of the ViTrox Group.

Setting Strategy, Engagement with Board Committees, Senior Management & Group CEO and monitoring of performance

The Board plays an active role in the development of the Company's strategy. It has in place a strategy planning process, whereby the management presents to the Board its recommended strategy annually, together with its proposed business plans for the ensuing year at a dedicated session, for the Board's review and approval. At this session, the Board deliberates both the management's and its own perspectives, and challenges the management's views and assumptions, to ensure the best outcome. In conjunction with this, the Board also reviews and approves, amongst others:-

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• Key Performance Indicators ("KPIs") under the yearly Corporate Hoshin Plan, ensuring that the targets correspond to the Company's strategy and business plan, reflect competitive industry trends and internal capabilities as well as provide sufficient stretch for the management;
• key strategic initiatives and significant operational issues.

A quarterly review of the 2023 Corporate Hoshin Plan was conducted by the Board, at which the targets set by the Board were compared against the actual performance year-to-date. The Board also discussed strategy implementation processes and requirements together with key transformational initiatives undertaken in the current quarter of the year to achieve the targets set out in the 2023 Corporate Hoshin Plan. In this exercise, the Board took cognisance of internal and external factors which had supported various achievements as well as challenges facing by the management. The Board actively engaged with the management in monitoring the progress of initiatives identified in the 2023 Corporate Hoshin Plan and, where required, in identifying alternative measures to be taken to ensure the successful realisation of the strategies.

The Group CEO is responsible for the day-to-day management of the business and operations of the Group in respect of both its regulatory and commercial functions. He is supported by the management committees. The management's performance, under the leadership of the Group CEO, is assessed by the Board through a status report which is tabled to the Board and which includes a comprehensive summary of the Group's operating drivers and its financial performance during each reporting period.

During the financial year ended 2023 ("FYE 2023"), the Board Committees comprise 9 Committees i.e. Audit Committee ("AC"), Nominating Committee ("NC"), Remuneration Committee ("RC"), ESOS Committee, Risk Management Committee ("RMC"), Executive Committee ("EC"), Anti-Bribery Compliance Committee, Environmental, Social and Governance Steering Committee ("ESC") and SGS Committee.

1. To enhance the effectiveness of risk management and internal control systems, the Board has established an internal audit function with the assistance of an external professional firm. The RMC will review with the AC, and recommend to the Board the type and level of business risks of ViTrox Group and the appropriate framework and policies for managing such risks. The RMC assists the Board to fulfil its responsibilities with regard to risk governance and risk management in order to manage the overall risk exposure of the Group. Through the RMC, the Board oversees the risk management framework of the Group in the following manner:-

• RMC presents for AC's review and the Board's approval the annual Corporate Risk Profile which specifies the key enterprise risks in light of the strategic objectives of the Group;

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1. • RMC then monitors the key risks in the business in order to stay relevant on governance practices relating to the risk, and also oversees the compliance with regulatory and statutory requirements;
   • RMC, through AC, advises the Board on areas of high risk and the adequacy of compliance and control procedures throughout the organisation.
   • The Statement on Risk Management and Internal Control set out on pages 79 to 83 of the Annual Report 2023 provides an overview of the state of risk management and internal controls within the Group.
2. The internal auditors are to provide additional independent review on the state of risk management and internal control of the Group and has an independent reporting channel to AC. The AC reviews, deliberates and decides on the next course of action and evaluates the effectiveness and efficiency of the risk management and internal control systems in the organisation, to ensure, as far as possible, the protection of its assets and its shareholders' investment. The summary of work performed by the AC is disclosed in the Audit Committee Report of the Annual Report 2023.
   A whistleblower may make a complaint to the Chairman of the AC of any detrimental action committed by any person against the whistleblower or any person related to or associated with the whistleblower. Any report can be submitted confidentially via email to [e-mail].
   The Group is committed to conduct its business ethically by having procedures for the prevention, deterrence and detection of fraud, bribery and all other corrupt business practices as set out in its ABC Policy. The Group is legally obliged to have a zero-tolerance policy and will comply with the Malaysian Anti-Corruption Commission Act 2009 and the new provision of Malaysian Anti-Corruption Commission Act 2018 ("MACC ACT") and any of its amendments from time to time. The details of this policy is available at ViTrox's website.
3. To ensure there is an effective Board and right leadership in meeting the objectives and goals of the Company, the NC is tasked, amongst others, assess the effectiveness of the Board as a whole and the contribution of each Director, review the size, composition and the required mix of skills of the Board; and recommend the re- election of retiring Directors to the Board.
   A set of quantitative and qualitative performance criteria has been established to evaluate the performance of each member of the Board, each Board Committee and reviewing the performance of the Board as a whole. The Board's effectiveness is assessed in the areas of composition, administration, accountability and responsibility, conduct and the performance of the Chairman and

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Group CEO. The criteria for assessment of each Director or Committee member shall include attendance record, intensity of participation at meetings, quality of interventions, special contributions to demonstrate a high level of professionalism and integrity in the decision-making process.

The Directors' Fit and Proper Policy serves as a guide to the NC and Board in their review and assessment of candidates to be appointed to the Board and directors seeking re-election. The details of this policy is available at ViTrox's website.

On 22 February 2024, an assessment of the effectiveness of the Board, respective Board Committee and Independence ("the Assessment") were carried out in respect of the FYE 2023. Appraisal form which comprising quantitative and qualitative performance criteria to evaluate the performance of each member of the Board as well as each Board Committee, were being circulated at the Meeting for assessment. The NC reviewed the required mix of skills, experience and other qualities of the Board and Board Committee and agreed that it has the necessary mix of skill, experience and other necessary qualities to serve effectively.

1. RC is responsible for recommending to the Board on the remuneration framework and the remuneration package of Executive Directors ("ED") to ensure that rewards commensurate with their contributions to the Group's growth and profitability in order to align the interest of the Directors with those of the shareholders. The RC also ensures the level of remuneration for Non-Executive Directors and EDs are linked to their level of responsibilities undertaken and contributions to the effective functioning of the Board.
2. Sustainability is fundamental to ViTrox's operation. The Group's refined core values, 'I.A.C.T.G.' (The Power of 5) are the first and essential steps toward our Environmental, Social and Governance ("ESG") practice to a sustainable future. The ESC, teamed with senior management to set the Group's future ESG strategies and roadmap, and formulate concrete action plans in promoting ESG practices and culture within ViTrox and our supply chain. The details of the ESG initiatives are available at ViTrox's website.

Communication with Stakeholders

The Board is mindful on the importance of maintaining a proper corporate disclosure procedure with the aim to provide shareholders and investors with comprehensive, accurate and quality information on a timely basis. Personnel and working team for preparing the disclosure will conduct due diligence and proper verification and coordinate the efficient disclosure of material information to the investing public.

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The Company has in place a document which sets the policies and standard operating procedures for employees to facilitate and ensure compliance by ViTrox Group. It also serves as a guide to enhance awareness among employees of corporate disclosure requirements.

The management reviewed the results of the 2023 employee satisfaction survey to assess the level of employee satisfaction. The survey, conducted by an internal resource, aimed to ensure continuous improvement in the operating environment by maintaining areas of strength and improving areas of opportunity for its internal stakeholders. Post employee satisfaction survey, intervention initiatives were taken to address those areas below benchmark norms.

As part of the implementation of investor relation programme, the Group CEO is tasked to handle investor relation related matter in the Group. Besides, shareholders or investors may convey any concerns/grievances to the Independent Directors of the Company accordingly. During the financial year, the Company communicated material news on the Company to its shareholders vide release of public announcement. ViTrox's social media such as Facebook and Instagram also serves a communication platform of its stakeholders with Corporate development, functions, products information, etc. Concern regarding the Group may be conveyed by shareholders or investors to any of the Independent Directors at the following address and such concerns will be reviewed and addressed by the Board accordingly:- Dato' Seri Dr. Kiew Kwong Sen

Email: [e-mail]

Integrity of the financial and non-financial reporting

Reviewing the adequacy and integrity of the Group's internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines with the assistance from the Internal Auditors, External Auditors and Company Secretary.

All employees including Directors are required to sign a Non-Disclosure of Information ("NDI") with Company. Please refer explanation to Practice 3.1 for more details.

Explanation for	:
departure

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure:

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Timeframe:

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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 1.2

A Chairman of the board who is responsible for instilling good corporate governance practices, leadership and effectiveness of the board is appointed.

Application	: Applied
Explanation on	: The Chairman of the Board, Dato' Seri Dr. Kiew Kwong Sen plays a key
application of the	role ensuring the effective functioning of the Board and instilling good
practice	corporate governance practices.
	The Chairman's roles and responsibilities are clearly specified in the
	Board Charter, which is available on ViTrox's website at
	https://www.vitrox.com/company/board-charter.php.
	1.	The Chairman is responsible for the Board's effectiveness and
		conduct. He also promotes an open environment for debate and
		ensures effective contributions from Non-Executive Directors.
	2.	The Chairman with the assistance of the Company Secretary sets
		the board agenda for each meeting based on the dates of
		scheduled Board meetings in the annual meeting calendar, and the
		same is circulated to the Board Members accordingly.
	3.	The Chairman promotes a boardroom environment that allows for
		expression of views in the spirit of 'constructive challenge',
		effective debate and contribution from the Board members to
		facilitate informed decision-making by the Board.
	4.	During deliberations at Board meetings, the Chairman provides his
		objective views and decisions to resolve situations when there are
		differing views between the Board Members and the management.
	5.	The Chairman also exercises control over the quality, quantity and
		timeliness of information flow between the Board and
		management.
	6.	At a general meeting, the Chairman plays a role in fostering
		constructive dialogue between shareholders, Board and
		management.

The Board evaluation on 22 February 2024 in respect of FYE 2023 had affirmed the Chairman's effective leadership in managing boardroom dynamics by providing an open environment that encourages participation and active debate amongst Directors and ensuring that there is continued focus on addressing critical matters and issues.

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Explanation for	:
departure

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure:

Timeframe:

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