Hello Chaitra,
thanks for providing the example. In order to get this working, let us implement the missing parts...
First, the GUI component that contains the vertical list, should have key event handler to react on a KeyUp and a KeyDown event. For that purpose, add two slot methods (OnKeyUp, OnKeyDown) and two KeyPressHandler (KeyHandlerUp, KeyHandlerDown).

Configure the KeyHandllerUp in order to react on the 'Up' key and connect it with the slot method OnKeyUp:

Implement the code to select the previous list item when the 'Up' key is pressed:

Configure the KeyHandllerDown in order to react on the 'Down' key and connect it with the slot method OnKeyDown:

Implement the code to select the next list item when the 'Down' key is pressed:

Now you can test the component within the Prototyper (just press 'F5') and you can navigate by 'Up' and 'Down' key inputs within your list (increase the NoOfItems to a higher number e.g. 50). Does this work?
Now you can implement a similar navigation within your main component in order to react on the keys 'Left' and 'Right'. Unfortunately I do not understand how you want to show or create the GUI components within your main screen - but the principles of navigation are the same. Please make sure that your key handler does not consume all key events (by setting the Filter to AnyKey).
Once you have shown the GUI component which contains the vertical list (your Item2), make sure that it is within the focus path:

Does it work?
By the way, you have implemented the menu buttons in a way that you control their selection state by accessing the member 'Line' from outside:

This is not very flexible and maintainable - maybe it would be better to implement them as a toggle button and use the property 'Active'.
Best regards,
Manfred