Intraco : Corporate Governance Report - For The Year Ended 31 December 2023

INTRACO LIMITED | ANNUAL REPORT 2023

CORPORATE GOVERNANCE REPORT

CORPORATE STRUCTURE

SHAREHOLDERS

BOARD OF

DIRECTORS

MANAGEMENT

REMUNERATION

COMMITTEE

NOMINATING COMMITTEE

AUDIT

COMMITTEE

INTERNAL AUDITOR

EXTERNAL AUDITOR

GROUP RISK COMMITTEE

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INTRODUCTION

Intraco Limited (the "Company" and together with its subsidiaries, the "Group") is committed to ensuring and maintaining a high standard of corporate governance. It understands that it not only has to be legally compliant and socially responsible but also to deliver performance and manage shareholders' and other stakeholder's expectations.

The focus has been on continuing to engage and provide oversight of Management's actions and strategic directions with the Board of Directors of the Company (the "Board"). Such Board oversights of the Company are facilitated through regular Board Committees' meetings and guiding Management in improving internal processes, instilling business values and beliefs with the support of the Board and respective Board Committees. The Board is committed to adopting the best practices in ensuring the spirit of Corporate Governance while carrying out its duties and responsibilities under the framework and rules of Board's operating processes, policies and guidelines.

In keeping with its commitment to a high standard of corporate governance, the Board and Management endeavour to align the Company's governance framework with the principles and provisions of the Code of Corporate Governance 2018 (the "Code").

This report describes the corporate governance framework and practices of the Company with specific reference to each principle as set out in the Code. For the financial year ended 31 December 2023 ("FY2023"), the Board is pleased to report that the Company has complied in all material aspects with the Code. Where there are deviations from any of the guidelines of the Code, explanations as to how the Company's practices were consistent with the intent of the Principle in question are provided in this report. The Company reviews its practices on ongoing basis, as and when required.

BOARD MATTERS

THE BOARD'S CONDUCT OF AFFAIRS

PRINCIPLE 1:The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

Provision 1.1 - Role of the Board

The Board assumes responsibility for stewardship of the Group and is primarily responsible for the protection and enhancement of long-term value and returns for the shareholders. It has oversight responsibility over the management of the business and affairs of the Group. The Board also sets the tone for the Group where ethics and values are concerned.

Apart from its statutory responsibilities, the Board also:

1. provides entrepreneurial leadership and guidance on the overall strategic direction, oversees the proper conduct of the business, performance and affairs of the Group and ensures that the necessary financial, human and operational resources are in place for the Group to meet its objectives;
2. sets objective performance criteria to evaluate the Board, individual Directors and Board Committees' performance and succession planning process;
3. reviews the adequacy and effectiveness of the Group's risk management and internal controls framework including financial, operational, compliance and information technology controls and establishing risk appetite and parameters to safeguard shareholders' interests and the Group's assets;

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CORPORATE GOVERNANCE REPORT

1. reviews and approves key operational and business initiatives, major funding proposals and other corporate actions, significant investment and divestment proposals, including determining the Group's operating and financial performance, the Group's annual budgets and capital expenditure, release of the Group's half-year and full-year financial results and other strategic initiatives proposed by Management;
2. conducts strategic reviews of the Company and annual plans with Management for execution to fulfil key management performance and Company's strategic goals;
3. approves all Board appointments/re-appointments and appointment of Chief Executive Officer ("CEO") and other persons having authority and responsibility for planning, directing and controlling the activities of the Company ("Key Management Personnel" or "KMP"), evaluates their performance and approves their remuneration packages;
4. establishes broad goals and priority for Management and reviews Management's performance by monitoring the achievement of these goals;
5. approves the nominations for the Board and Board Committees by the Nominating Committee;
6. reviews recommendations made by the Audit Committee on the appointment, re-appointment or removal of external auditors;
7. reviews recommendations made by the Remuneration Committee and approves the remuneration packages for the Board and KMP;
8. ensures effective communication with, and transparency and accountability to key stakeholder groups;
9. sets the Company's values and standards (including ethical standards), and ensures that obligations to shareholders and other stakeholders are understood and met;
10. considers sustainability matters, e.g. environmental, health and safety and social factors, as part of its strategic formulation;
11. sets out policy and framework for promoting diversity on the Board;
12. succession planning for the Board and KMP; and
13. reviews recommendations by the AC for any whistle-blowing investigations on practices and infractions of company policies, processes and procedures, staffing and personnel matters, and commercial and legal compliance matters.

In discharging the Directors' fiduciary duties, all Directors are expected to exercise due diligence and independent judgement and make decisions objectively in the best interest of the Company. A Director who is interested in a transaction or proposed transaction is required to declare if he/she has a conflict or potential conflict of interest and recuse himself/herself from deliberation and decisions involving the areas of potential conflict.

For the purposes of Section 156 of the Companies Act, each Director has given notice to the Company of the entities in which he/she is an officer or member of, and which should be regarded as being interested in any transaction between the Group and such entity. The Directors will periodically update the notice wherever there is any change in his/her directorships.

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The Company has established internal policies and procedures on the types of transactions/activities and financial authorisation limits that require Board approval. These include approval of annual budgets, financial statements, business strategies, and material transactions such as acquisitions, divestments, funding and investment proposals, all commitments to term loans and lines of credit from banks and financial institutions. Below the Board level, there is appropriate delegation of authority and approval sub-limits at management level, to facilitate operational efficiency.

CODE OF BUSINESS CONDUCT AND ETHICS

The Board has put in place a Code of Business Conduct and Ethics to guide the Directors on the areas of ethical risk, and help nurture an environment where integrity and accountability are key.

The Group's Code of Business Conduct and Ethics includes the following key principles:

1. Directors must avoid situations in which their own personal or business interests directly or indirectly conflict, or appear to conflict, with the interests of the Group;
2. Directors must immediately declare conflicts of interest in relation to any matter and recuse themselves from participating in any discussion and/or decision on the matter, and are expected to take necessary mitigating steps (if appropriate) to avoid the conflict;
3. Directors should inform the Secretary in writing as soon as practicable upon any appointments to the board of directors of another public or private company or principal commitments;
4. Directors are to exercise due care and maintain the confidentiality of information entrusted to them by the Company or other parties who have business dealings with the Group;
5. Directors must carry out their responsibilities in compliance with the Company's guidelines and policies, and applicable laws, rules and regulations; and
6. Directors must not trade in the securities of the Company if, at the relevant time, they are in possession of non- public materially price-sensitive or trade-sensitive information.

Provision 1.2 - Disclosure on Directors' discharge of duties and responsibilities

All Directors exercise due diligence and independent judgement in dealing with the business affairs of the Group and are obliged to act in good faith and to take objective decisions in the interest of the Group.

Role of Non-Executive Directors

The Non-Executive Directors exercise objective judgement on the Group's affairs independently from Management. The Non-Executive Directors also contribute to the Board process by (monitoring and) reviewing Management's performance against goals and objectives. Their views and opinions provide alternate perspectives to the Group's business. When challenging Management's proposals or decisions, they bring independent judgement to bear on business activities and transactions involving conflicts of interest and other complexities. The challenge is conducted in a constructive and professional atmosphere to evaluate the business options and other risks associated with it adding fresh dimensions to Management's strategy for the best outcome.

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Meetings without Management

The Non-Executive Directors and/or Independent Directors also meet regularly during scheduled and ad-hoc meetings where required without presence of Management to facilitate more open discussions. In furtherance to such meetings, casual discussions were also carried out as and when the need arises to enable the Non-Executive Directors and/or Independent Directors to discuss underlying issues of the Group. All Non-Executive Directors are resident in Singapore.

Directors to receive appropriate and relevant training

All newly-appointed Directors attend an orientation programme to familiarise themselves with the Group's business, operations and governance practices and they are also given materials containing such information. A formal letter of appointment is also provided to any newly appointed Director, setting out his/her duties and responsibilities.

The Group's policies and procedures are also given to the Directors to enable them to gain a clear understanding on the levels of authority in relation to transactions. In addition, Directors are provided with the contact numbers and email addresses of fellow Directors, key executives, the Company Secretary and Auditors to facilitate efficient and direct access.

The Board is kept up-to-date from time to time on pertinent business developments in the Group's business, including key changes in relevant legislation and regulatory requirements, financial reporting standards, risk management, corporate governance, sustainability issues and industry specific knowledge so as to enable them to properly discharge their responsibilities as Board members or Board committee members. Directors and Management also attend courses to keep abreast of changes in the law and governance matters that may affect the Group.

The Board values ongoing professional development and recognises that it is important that all Directors receive regular training so as to be able to serve effectively on, and contribute to the Board. The Company has a budget for Directors to receive further relevant training of their choice in connection with their duties as Directors.

As part of the Board continuing professional development, the Directors had received more than 24 training hours in aggregate through attending various training seminars, courses, conferences and workshops during the year. The Company maintains a register of training to keep track of the training and development hours spent by Directors. The Company is a corporate member of the Singapore Institute of Directors ("SID").

During the year, the Directors attended professional development programmes organised by SID in collaboration with ACRA and SGX as follows:

• 2023 Kevin Mitnick Security Awareness Training (Initial Security Awareness Training)
• Cyber Risk and Resilience in the Digital Age - SID
• SID Directors conference 2023

In addition, all the Board members have completed the mandated sustainability training courses as required by the enhanced sustainability reporting rules in FY2022.

Further , articles, press releases, reports issued by SGX and ACRA which are relevant to the Group's business and compliance obligation are circulated to the Board. The external auditors, BDO LLP, routinely update the AC on new and revised financial reporting standards applicable to the Company.

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Provision 1.3 - Board Approval

The Company has established internal policies and procedures on the types of transactions/activities and financial authorisation limits that require Board approval. These include approval of annual budgets, financial statements, business strategies, and material transactions, such as acquisitions, divestments, funding and investment proposals, all commitments to term loans and lines of credit from banks and financial institutions. Below the Board level, there is appropriate delegation of authority and approval sub-limits at management level, to facilitate operational efficiency.

Provision 1.4 - Delegation of Authority by the Board to Board Committees

To assist in the execution of its responsibilities, the Board had established three (3) Board Committees, namely the Audit Committee ("AC"), Nominating Committee ("NC"), and Remuneration Committee ("RC"), and delegated specific areas of responsibilities to these Board Committees. Each of these Board Committees functions within clearly written terms of reference ("TOR"), which have been approved by the Board.

The composition of the three (3) Board Committees is as follows:

Directors	AC	NC	RC
Mr Mak Lye Mun (Chairman)	-	-	-
Dr Tan Boon Wan	Chairman	Member	Chairman
Dr Steve Lai Mun Fook	Member	Chairman	-
Ms Ong Beng Hong	-	Member	Member
Mr Charlie Ng How Kiat	Member	-	Member

The Board Committees have the authority to deliberate any issue that arises in their specific areas of responsibilities within their respective TOR and report to the Board with their decisions and/or recommendations. The ultimate responsibility and authority for the decisions and actions on all matters rest with the Board.

Besides the Board Committees, there are separate sub-committees at Management level to assist the AC and the Board. The below sub-committees were established and each sub-committee is guided by their respective TOR.

Group Management Committee ("GMC")

The GMC comprising senior management of the Group's business units is headed by Mr Mak, the Executive Chairman and Director. The GMC reports directly to the Board.

Under the GMC's TOR, the GMC is to provide oversight over the business activities of the Group through:

• Developing and implementing business strategies, financial and operational plans, forecasts and budgets, policies and procedures;
• Driving and monitoring the businesses, operating and financial performance;
• Risks management and internal controls; and
• Prioritizing and allocating resources.

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Group Risk Committee ("GRC")

The GRC comprises mainly senior management of the Group's Business Units, reports directly to the AC.

The GRC focuses on identifying, monitoring, tracking and providing guidance on material risks of the Group. This allows for a more structured approach in the Group's Enterprise Wide Risk Management where the GRC will act as a dedicated committee to have visibility across the entire Group's material risk activities.

Under the GRC's TOR, the GRC is to provide oversight under delegated authority of the AC the expected material risks of the Group through:

• Driving and setting of the Group's risk policy direction and framework via the Group's Material Risk Policy ("MRP")
• Identifying and prioritising measurable key material risk metrics to be periodically monitored and reviewed.
• Approving (subject to approval of respective entity's Board) Material Limits and delegated authority to business units and/or employees of the Group.
• Ordering of investigation or unscheduled audit review on serious lapses and breaches and appointment of ad-hoc disciplinary committee and decide on its recommendation.

Provision 1.5, 1.6 & 1.7 - Board Processes

The Board and Board Committees meet regularly and whenever necessary to discharge their duties. When required, the Board also sets aside time at the scheduled meetings to meet without the presence of Management. The annual schedules of Board and Board Committee meeting dates are scheduled in advance each year in consultation with the Directors to assist them in planning their attendance.

Ad-hoc meetings are convened when required to address any significant issues that may arise in-between scheduled meetings. Where physical meetings are not possible, timely communication is achieved through electronic means and circulation of written resolutions for approval. The Company's Constitution ("Constitution") provides that the Directors may conduct meetings by means of telephone or video conference or other methods of simultaneous communication.

All draft agendas for meetings are prepared by the Company Secretary and reviewed by the Chairman of the Board or the Chairman of the respective Board Committees. Papers and/or other information are forwarded to the Directors at least a week in advance of each meeting, enabling sufficient time for their review and consideration. Members of Management are also invited to attend the meetings to present information and/or render clarification when required.

The Board's responsiveness has allowed Management to manage business and corporate matters effectively. Individual Directors make themselves available and accessible to Management for discussion and consultation outside the formal Board and Board Committees' meetings.

Senior executives also make presentations on performance of the Group's various businesses and business strategies at these meetings. These allow the Board to have a good understanding of the Group's operations and actively engage in robust discussions with the Group's senior executives.

Directors may request for further explanation, briefings or discussions on any aspect of the Group's operations or business from Management. As and when required, Board members meet to exchange views outside the formal environment of Board meetings.

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A record of the Directors' attendance at the Board and Board committee meetings as well as general meetings for FY2023 is set out below:

							Extraordinary
							General
	Board	AC		NC	RC	AGM	Meeting
No. of Meetings held during 2023	5	4		1	1	1	2
Name of Directors			No. of Meetings attended in FY2023
Mr Mak Lye Mun	5	4 *		1*	1*	1	2
Dr Tan Boon Wan	5	4		1	1	1	2
Dr Steve Lai Mun Fook	5	4		1	1*	1	1
Ms Ong Beng Hong	5	4*		1	1	1	2
Mr Charlie Ng How Kiat	5	4		1*	1	1	2

*as invitee

The COO and the Group Financial Controller of the Company attended all AC and Board meetings held during the year.

Other senior management were also invited to the AC and/or Board meetings when needed.

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BUSINESS PROCESSES UNDERTAKEN BY THE BOARD

Board and Management Operating System - 2023 Business Process & Operating Mechanisms aligned

1st Quarter 2023

2nd Quarter 2023

3rd Quarter 2023

4th Quarter 2023

Board Meeting 1

Review of FY2022 Results

Evaluation of Board/Board

Committees/Individual/

Executive Director Performance

Review of remuneration packages for Directors and key management personnel

Annual General meeting	Board Meeting 3	Board Meeting 4
Board Meeting 2	Half-Year Results	Review of 3Q2023 Performance
Review of 1Q2023 financial	Announcement,	Performance & Gap
performance of the Group	Operations Report
		Review of FY2024 Budget
		Setting of Corporate Targets
		and initiatives

Board and Management Operating System - 2024 Business Process & Operating Mechanisms aligned

1st Quarter 2024

2nd Quarter 2024

3rd Quarter 2024

4th Quarter 2024

Board Meeting 1

Review of FY2023 Results

Evaluation of Board/Board

Committees/Individual/

Executive Director Performance

Review of remuneration packages for Directors and key management personnel

Annual General meeting	Board Meeting 3
Board Meeting 2	Half-Year Results
Review of 1QFY2024 financial	Announcement,
performance of the Group	Operations Report

Board Meeting 4

Review of 3Q2024 Performance

Performance & Gap

Review of FY2025 Budget

Setting of Corporate Targets and initiatives

The above sets out the typical Board processes during the preceding and current calendar year.

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During the full year meeting, the Board will review the Group's full year performance and matters to be included in the Company's Corporate Governance Report. The adequacy and effectiveness of internal controls of the Group will be ascertained simultaneously when reviewing risks under "Risk Management and Internal Controls" under the corporate governance report below.

The KMP succession planning will be reviewed by the NC where priorities and gaps concerning management leadership within the Group will be discussed.

Apart from the review of the Group's half year and full year results announcement, the AC and Board also monitor the Group's performance for the second and third quarter among other matters. It is also an opportune time to review the progress made by the Group in comparison with its budget decided at the beginning of the year and elaborate the plans and strategies for the future. Heads of business units will be invited to participate in the session. The Board with Management will discuss the mitigation or action plans to achieve the agreed targets.

In the fourth quarter of the year, another performance gap review will be carried out where the Board and Management will fine tune the Group's strategy. The budgets and operating plans for the next fiscal year are also tabled and reviewed at the Board meeting.

Access to Information

To assist the Board in fulfilling its responsibilities, Management provides the Board with reports containing complete, adequate and timely information prior to Board meetings. The Board has unrestricted access to Management and also receives quarterly reports on the financial performance of the Group, strategy implementation updates, key operational matters and updates on potential investment opportunities.

Board and Board Committees papers are disseminated electronically.

Information provided includes background or explanatory materials related to matters to be reviewed and matters under review by the Board, copies of disclosure documents, budgets, forecasts and internal financial statements. Any material variance between the projections and actual results in respect of budgets, is also disclosed and explained.

The Board is also regularly provided with information and updates on the Company's policies and procedures relating to issues pertaining to governance, disclosure of interests in securities and restrictions on disclosure of price sensitive information, changes in reporting standards and issues which have a direct impact on financial statements so as to enable them to properly discharge their duties and responsibilities as Board members or Board committee members. Where necessary, critical information is highlighted promptly.

Minutes of all Board Committee meetings are circulated to the Board so that Directors are aware of and kept updated as to the proceedings and matters discussed during such meetings. This will also enable the Directors to weigh in on any key points under consideration.

Where appropriate, Directors may also be invited to attend the Board Committee meetings to deliberate the matter collectively.

Access to Management and Company Secretary

The Board has separate and independent access to Management, the Company Secretary, as well as to the internal and external auditors. The Company Secretary attends all Board and Board Committees meetings and is responsible for ensuring that Board procedures are observed and that applicable rules and regulations are complied with. The Company Secretary also provides periodic updates to the Board on relevant regulatory changes affecting the Company.

The appointment and removal of the Company Secretary is a matter for the Board as a whole.

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