Kumpulan Perangsang Selangor : Corporate Governance Report 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.

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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.

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• To raise the bar in the Company's CG standards, the
  Board incessantly reviews, benchmarks, and enhances KPS Berhad's governance structures and processes based on global best practices and guidelines. At the same time, ensuring continued support for effective and ethical leadership and that business sustainability is applied in the best interests of KPS Berhad.
  Throughout the FY2022, several new and enhancement of CG Initiatives were implemented, inter alia, the establishment of Directors' Fit & Proper Policy ("DFP Policy") and Code of Business Conduct & Ethics Policy ("COBE") and the revision of various policies/documents such as Board Diversity Policy,
  Directors' Remuneration Policy, Directors' Conflict of
  Interest Policy, Dividend Policy, Enterprise Risk Management Policy, Personal Data Protection Policy, Compliance Policy, Anti-Bribery and Corruption Policy, Talent Management and Succession Planning Policy, Performance Management Framework Policy, Head of Subsidiary Appointment Policy and Entertainment & Gift Policy.
• The above initiatives ensured that the Company complies with the latest regulatory requirements and adopts best CG practices per the Bursa Securities MMLR, MCCG issued by the SC, other relevant rules and regulations, and the Company's business direction. The Board and Management will continue evaluating the CG practices within the Group in response to evolving best practices and changing requirements.
• The Board established the KPS Berhad-GF in 2017 and remains relevant to the existing business model and strategy of KPS Berhad as an investment holding company ("IHC"), having diverse businesses in multiple geographies. It facilitates the Board in ensuring orderly and effective discharge of the Board's responsibilities at IC with regards to key areas of strategy, policy, governance, and efficient execution of value creation plans ("VCPs").

2. Review, challenge and decide on Management's proposal and monitor its implementation by Management, supervise and assess Management performance in managing the Company's business

• The Board guides Management on short and long-term goals, defining the overall strategic direction of the business, providing advice, and devising corporate strategic initiatives developed by Management, strategies on management and business development issues, and monitoring Management performance in

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implementing them.

• The Board deliberates, challenges Management's assumptions and decides on the Company's annual strategic initiatives and the business plan proposed by Management, including the annual capital and revenue budget for the ensuing year as well as the Corporate Key Initiatives ("CKIs") and Key Performance Indicators ("KPIs") for the Company and Managing Director/Group Chief Executive Officer ("MD/GCEO").
  This will ensure that the CKIs/KPIs correspond with the
  Company's annual strategic and business plan and that the best decisions are reached after considering all relevant aspects.
• The Board oversight the conduct of the Company's business while the MD/GCEO, supported by Management team, is responsible for managing the strategic and operational agenda of the Group and implementing the Group's strategies and policies as agreed by the Board. The performance of Management is measured through the Company's and Group's quarterly financial reports as well as half-yearly and full year performance review of the MD/GCEO. Continuously, the Board is kept informed at the quarterly Board meetings on the progress and challenges of the Company's strategic initiatives, key operational issues and the Group's performance based on the approved CKIs/KPIs.
• A separate offsite informal session between the Board, Senior Management ("SM") and Heads of Subsidiaries
  ("HOSs"), known as the Board Retreat Session ("BRS"), is scheduled at least twice a year or as and when the need arises. The BRS is a platform for the Board and Management/HOSs to deliberate, exchange views/opinions and brainstorm in formulating strategic initiative plans, charting the direction of the Group, and including the reporting of its progress. During the FY2022, only one (1) BRS which was held from 10 to 11 December 2022.

3. Ensuring Strategic Initiatives Plan Supports Long Term Value Creation and Includes Strategies on Economic, Environmental, Social & Governance Considerations Underpinning Sustainability

• The Board exercises oversight of policy and strategy to strengthen sustainability at the Group level and across all subsidiaries. Oversight is central to gaining the trust and confidence of the shareholders and stakeholders. To this effect, the Board had since 28 November 2018 established the Sustainability
  Policy ("SP") and subsequently revised it on

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26 August 2021. The revised SP guides the Group's commitment to conducting its business responsibly by integrating Economic, Environmental, Social and Governance ("EESG") considerations in driving sustainable development efforts within the Group.

• Guided by the SP, the Group shall take considerable steps to:
• • Ensure that its activities create long term value for all stakeholders via sustainable development practices; and
  • Execute the Group's strategy in a manner that addresses EESG risks and opportunities in achieving its business aspirations and operational excellence.
• The SP has since been adopted by all KPS Berhad's subsidiaries, namely Century Bond Bhd ("CBB"), CPI (Penang) Sdn Bhd ("CPI"), Toyoplas Manufacturing (Malaysia) Sdn Bhd ("TMM"), Kaiserkorp Corporation Sdn Bhd ("Kaiserkorp"), Aqua-Flo Sdn Bhd ("AFSB"), Smartpipe Technology Sdn Bhd ("SPT") and KPS- HCM Sdn Bhd ("KPS-HCM").
• With respect to the sustainability governance structure, the Board is supported by the Sustainability
  Board Committee ("SBC") which comprises selected
  Board members; the SBC oversees the sustainability implementation plans and make recommendations to the Board on such matters, where necessary. The SBC meets at least twice a year.
• In determining EESG KPIs and initiatives, the
  Corporate Sustainability Champion ("CSC")
  Committee, which comprises of cross-functional and cross-divisional Heads of Departments ("HODs"), identifies and assesses significant EESG risks and opportunities pertaining to the Group's business operations. The CSC also meets at least twice a year, helping the Group to ensure that sustainable development practices are carried out throughout the Group.
• The SBC is also assisted by the Sustainability Unit under the Investor Relations, Sustainability and
  Communications Department ("IRSC"), which is collectively responsible for coordinating and carrying out sustainability initiatives and programmes throughout the Group. Reporting to the SBC on a periodic basis, not only does IRSC recommend
  appropriate EESG-related initiatives for implementation to the SBC, but it also ensures that the initiatives yield significant impact to the targeted

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