Dutch Lady Milk Industries : Corporate Governance Report 2022

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	3026
COMPANY NAME	: DUTCH LADY MILK INDUSTRIES BERHAD
FINANCIAL YEAR	:	December 31, 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.

Application	:	Applied
Explanation on	:	The Board plays an active role in the development of the Company's
application of the		strategy. At each Board meeting, the Managing Director reports to the
practice		Board on various management issues such as the Company's business
		performance, marketing strategies, commercial performance, risk
		management, sustainability initiatives and other matters of strategic
		importance and the Board reviews and deliberates on these matters.
		The Audit & Risk Committee and the Board also receives a
		comprehensive summary of the Company's financial performance from
		the Finance Director for each quarterly reporting period. In November
		2022, the Board together with Management deliberated on the
		financial budget for the financial year ending 31 December 2023 and
		the same was approved for implementation.
Explanation for	:
departure

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

Measure:

Timeframe:

2

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 Chairperson ensures that the Company is guided by good corporate
application of the		governance practices. She facilitates robust dialogue during Board
practice		meetings and draws out diverse perspective from the Board members.
		She always encourages input and Board members are comfortable to
		challenge recommendations brought forth by Management. The
		Chairperson ensures that there is a good balance between the time
		allocated to governance matters and discussions on business
		performance and strategies during Board meetings. She also ensures
		that meetings focus on key issues and are not side tracked by
		unnecessary topics.
		In FY2022, to further enhance discussions between the Board members,
		the Chairperson has routinely held meetings with the Non-Executive
		Directors without the presence of Management, as well as meetings
		with the Directors who do not represent the major shareholder, Royal
		FrieslandCampina N.V. (RFC). This allows for a frank exchange of views
		amongst the non-executive directors where all non-executive directors
		can share their views on the issues discussed at the Board meetings and
		align on guidance that they wish to share with Management.
Explanation for	:
departure

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

Measure:

Timeframe:

3

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 1.3

The positions of Chairman and CEO are held by different individuals.

Application	:	Applied
Explanation on	:	The roles of the Chairperson and the Managing Director are separate
application of the		and there is a clear division of responsibilities between them. The
practice		Managing Director is an appointee of the major shareholder and heads
		the Management Team. She is primarily responsible for the day-to-day
		management of the business and operations of the Company. The
		Chairperson is an independent director who has never assumed an
		executive position in the Company.
Explanation for	:
departure

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

Measure:

Timeframe:

4

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 1.4

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	:	Applied
Explanation on	:	The Chairperson is not a member of any of the Board committees and
application of the		does not attend or otherwise participate in any of the committee
practice		meetings.
Explanation for	:
departure

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

Measure:

Timeframe:

5