Tropicana Corporation Berhad Annual Report 2017

SEC 1 • SEC 2 • SEC 3 • SEC 4 > SEC 5 < SEC 6 GOVERNANCE 62 63 TROPICANA CORPORATION BERHAD / Annual Report 2017 TROPICANA CORPORATION BERHAD / Annual Report 2017 BOARD OF DIRECTORS Board Size and Composition Throughout the FY2017, the Board composition complies with paragraph 15.02 of the MMLR of Bursa Securities whereby at least 2 directors or one-third of the Board, whichever is the higher, must be made up of Independent Directors. The Board, as at the date of this Statement, consists of nine (9) members made up of one (1) Non- Independent Non-Executive Director, five (5) Independent Non-Executive Directors and three (3) Executive Directors. The Board comprises members from diverse backgrounds ranging from property development, investments, finance, corporate finance, audit, legal, business and general management, technology consulting and public administration, all of which provide the Group with a diversity of views and a wealth of expertise, experiences and networks to draw upon. The profiles of the Directors are set out in pages 40 to 44 of this annual report. Board Balance and Independence Not only is the Chairman an Independent Non-Executive Director, the majority of the Board is also made up of Independent Non-Executive Directors. The presence of a sizeable number of experienced Independent Non-Executive Directors ensures proper check and balance in the Board, and provides unbiased and independent views, advice and judgement, besides playing key supporting roles. There is a clear division of responsibilities at the head of the Company. The Independent Non-Executive Chairman represents the Board to the shareholders and is responsible for the effective running of the Board. The Group Chief Executive Officer, assisted by the Deputy Group Chief Executive Officer and the Executive Directors are fully responsible for the effective running of the Group’s operations and the implementation of the Board’s policies and decisions. The clear distinction of responsibilities between the Chairman and the Group Chief Executive Officer ensures a balance of power and authority, such that no individual or small group of individuals can dominate the Board’s decision making. It is mandatory for all members of the Board to declare any of their interests in the transactions undertaken by the Group. In such instances, the interested Director(s) shall abstain from deliberation and the decision-making process. Board Duties and Responsibilities The Board assumes the following principal responsibilities in discharging its fiduciary duties and leadership functions:- • reviews and adopts the strategic plan for the Group; • oversees the conduct of the Group’s business to determine whether the business is being properly managed; • identifies principal risks and ensures the implementation of appropriate systems to manage these risks; • establishes a succession plan for the Company; • oversees the development and implementation of an investor relations programme or shareholder communications policy for the Company; • reviews the adequacy and the integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines; • ensures that the Company’s financial statements are true and fair and conform with the laws; and • ensures that the Company adheres to high standards of ethics and corporate behaviour. The Board is also mindful of the importance of building a sustainable business and therefore, takes into consideration its environmental, social and governance impact when developing the corporate strategy of the Group. The Company’s activities in corporate social responsibilities for the year under review are disclosed in pages 53 to 57 of this annual report. Roles and responsibilities of the Chairman The Chairman carries out a leadership role in the conduct of the Board and in his relations with shareholders and other stakeholders. The primary responsibilities of the Chairman are, amongst others, as follows:- • to lead the Board and to ensure the effectiveness of all aspects of the Board’s role; • to ensure the efficient organisation and conduct of the Board’s functions and meetings; • to facilitate the effective contribution of all Directors at Board meetings; • to promote constructive and respectful relations among Directors, and between the Board and management; and • to ensure effective communication with shareholders and relevant stakeholders. Board’s delegation to the management, Board’s reserved matters and Board’s oversight of the management The Board delegates the day-to-day management of the Company’s business to the management under the stewardship of Dato’ Dickson Tan Yong Loong as the Deputy Group Chief Executive Officer, who is assisted by Mr. Dion Tan Yong Chien, the Group Managing Director, and Mr. Dillon Tan Yong Chin, the Executive Director of the Company, upon the retirement of the former Group Chief Executive Officer on 30 November 2017. The Company holds management meetings fortnightly or whenever the needs arise to discuss and review the Group’s businesses and concerns, and to make the appropriate day-to-day business and management decisions. To ensure that the direction and control of the Group is firmly in its hands, and having an oversight of the management, the matters reserved for the Board’s decisions are as follows:- • to approve corporate plans and strategic issues of the Company; • to approve annual budgets of the Company; • to approve material acquisitions and disposals of undertakings and assets as well as major investments of the Group; • to approve new ventures of the Group; • to approve changes to the control structure of the Company including key policies, capital expenditure, authority levels, treasury policies and risk management policies; • to approve material borrowings of the Company; and • to review of the financial statements of the Company and the Group on a consolidated basis. The strategic business plan for the Group is presented to the Board for approval on an annual basis and the milestones achieved and progress of the strategic plan and financial targets are reported to the Board on a quarterly basis. The Board has set up an Investment Committee to make sure the management reports to the Board on any material acquisitions or disposals of undertakings and assets as well as major investments of the Group including any new ventures of the Group, to allow the Board for more detailed review of such proposals. To strengthen the Board’s oversight of the management (in addition to the above), the Board has the following agendas at its quarterly meeting:- • the review of the operations of the Group by the Group Managing Director of the Company for the Central Region (non-Board member of Tropicana), and the Group Managing Director for the Northern and Southern Regions (non-Board member of Tropicana); • the reporting of the marketing and sales status of the Group by the Senior Executive Director of Marketing & Sales (non-Board member); and • to review the development of material litigation and/or any new material litigation of the Group. Board’s delegation to Board Committees During the FY2017, the Board has delegated specific responsibilities to several Board Committees, namely the Audit Committee, Nomination Committee, Remuneration Committee, Risk Management Committee, Investment Committee and Pricing Committee to oversee, manage and review specific aspects of the Company’s business operations and corporate matters. The Board Committees operate within their respective approved defined terms of reference and specific authority delegated by the Board. All the Board Committees make recommendation to the Board for approval in respect of the matters under their purview, save for the Pricing Committee, which has been empowered by the Board to make decision within its terms of reference. The Chairman of the respective Board Committees will report to the Board the proceedings of each Board Committee meeting and the reporting of the proceedings will be minuted accordingly. The Board retains full responsibility for the final decision on all matters. (i) Audit Committee As at the date of this Statement, the Audit Committee consists of three (3) Independent Non-Executive Directors, of whom the Chairman is a qualified Accountants. The members of the Audit Committee are as follows:- • Mohd Najib Bin Abdul Aziz (Chairman) • Datuk Michael Tang Vee Mun • Dato’ Gan Nyap Liou @ Gan Nyap Liow (Resigned on 9 April 2018) • Datuk Lim Thean Shiang (Appointed on 9 April 2018) The Audit Committee assists and supports the Board in fulfilling its fiduciary responsibilities in terms of the Group’s financial reporting practices, accounting policies, internal controls, business ethics policies and in assessing the suitability and independence of the Group’s external and internal auditors. None of the Audit members were former key audit partners within the cooling- period of two (2) years. During the FY2017, the external auditors confirmed to the Audit Committee members their independence throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants. There is also a policy within the external auditor firm to rotate the partner-in-charge after five (5) years of audit engagement with the Company. The Audit Committee met five (5) times during the FY2017. The activities of the Audit Committee for the FY2017 are reported in the Audit Committee Report as set out in page 75 of this annual report. (ii) Nomination Committee The Nomination Committee, as at the date of this Statement, comprises the following three (3) members, all being Independent Non-Executive Directors:- • Datuk Lim Thean Shiang (Chairman) (Appointed on 9 April 2018) • Dato’ Gan Nyap Liou @ Gan Nyap Liow (Resigned on 9 April 2018) • Datuk Michael Tang Vee Mun • Mohd Najib Bin Abdul Aziz (Appointed on 21 August 2017) • Tan Sri Rastam Bin Mohd Isa (Retired on 30 May 2017) SEC 1 • SEC 2 • SEC 3 • SEC 4 > SEC 5 < SEC 6 GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT The Board of Directors of Tropicana Corporation Berhad (“Tropicana” or “Company”) is committed to maintain high standards of corporate governance to protect and enhance the shareholders’ value as well as the continued growth and success of the Company and its subsidiaries (“Group”). The Board supports the principles and recommendations of the new Malaysian Code on Corporate Governance issued by the Securities Commission Malaysia which has come into force on 26 April 2017 (“MCCG”) and replaced the Malaysian Code on Corporate Governance 2012. The Board will continue to review the existing corporate governance practices throughout the Group and to undertake appropriate actions in embedding the principles and recommendations of the MCCG. This Statement, which is made pursuant to paragraph 15.25(1) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), sets out the extent to which the Group has applied the principles and the recommendations of the MCCG throughout the financial year ended 31 December 2017 (“FY2017”). Details of the application of each practices of the MCCG during the FY2017 are set out in the Corporate Governance Report which is available at the Company’s website at www.tropicanacorp.com.my . CORPORATE GOVERNANCE OVERVIEW STATEMENT TROPICANA CORPORATION BERHAD Annual Report 2017 ABOUT TROPICANA STRATEGIC PERFORMANCE LEADERSHIP SUSTAINABILITY GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION