Tropicana Corporation Berhad Annual Report 2017

SEC 1 • SEC 2 • SEC 3 • SEC 4 > SEC 5 < SEC 6 GOVERNANCE 74 75 TROPICANA CORPORATION BERHAD / Annual Report 2017 TROPICANA CORPORATION BERHAD / Annual Report 2017 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL • The Group has an organisational structure that is aligned with its business and operational requirements, with clearly defined lines of responsibility and authority levels. • Internal control activities have been established in all business segments within the Group with clearly defined lines of responsibilities, authority limits for procurement and capital expenditure, awarding of contracts, approving operating expenditures and other significant transactions, segregation of duties, performance monitoring and safeguarding of assets. • Documented policies, procedures and standard operating procedures are in place to guide employees in their day-to-day work. These policies and procedures are reviewed and revised regularly to meet changing business and operational needs and regulatory requirements. • Regular management and operational meetings are conducted by senior management which comprises the Group Chief Executive Officer, Deputy Group Chief Executive Officer, Managing Directors, Executive Directors and divisional heads. • Board meetings are held quarterly with a formal agenda on matters for discussion. The Board monitors the Group’s performance by reviewing the quarterly results and examines the announcement to be made to Bursa Malaysia Securities Berhad. • An Integrated Management System consisting of ISO 9001:2008 has been established and implemented to continuously provide high quality products. • Established guidelines for recruitment, human resource development and performance appraisal to enhance employees competency levels have been disseminated to all employees. A performance management system is in place to monitor, appraise and reward employees’. • Established training and development programmes are identified and scheduled for employees to acquire the necessary knowledge and competency to meet their performance and job expectations as well as to inculcate the Group’s culture of continuous learning. • The Audit Committee is tasked with the duty of reviewing and monitoring the effectiveness of the Group’s internal control systems. In carrying out this responsibility, the Audit Committee relies on the support of Group Internal Audit Department (“GIAD”) which carries out internal audits on various operating units within the Group based on a risk-based audit plan approved annually by the Audit Committee. Based on these audits, GIAD provides the Audit Committee with periodic reports highlighting observations, recommendations and management action plans to improve the internal control systems. In addition, the Audit Committee reviews and deliberates on any matters relating to internal controls highlighted by the External Auditors in the course of their statutory audit of the financial statements of the Group. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The External Auditors have performed limited assurance procedures on this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysia Institute of Accountants (“MIA”) for inclusion in the Annual Report of the Group for the year ended 31 st December 2017, and reported to the Board that nothing has come to their attention that causes them to believe the statement intended to be included in the Annual Report is not prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Guidelines, nor is the Statement factually inaccurate. AAPG 3 does not require the External Auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Directors and management thereon. The report from the External Auditors was made solely for, and directed solely to the Board of Directors in connection with their compliance with the listing requirements of Bursa Securities and for no other purposes or parties. The External Auditors do not assume responsibility to any person other than the board of directors in respect of any aspect of this report. CONCLUSION In line with the Guidelines, the Deputy Group Chief Executive Officer and Chief Financial Officer have provided assurance to the Board that the Group’s risk management and internal control systems have operated adequately and effectively, in all material aspects to meet the Group’s objectives during the financial year under review. There were no material control failures or adverse compliance events that have directly resulted in any material loss to the Group. This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board of Directors dated 9 April 2018. AUDIT COMMITTEE REPORT The Board of Directors of Tropicana Corporation Berhad (“Tropicana” or “Company”) presents the Audit Committee Report of Tropicana for the financial year ended 31 December 2017 (“FY2017”) as follows:- A. COMPOSITION OF THE AUDIT COMMITTEE The Audit Committee comprised the following Directors during the FY2017:- Attendance Mohd Najib Bin Abdul Aziz (Chairman/ Independent Non-Executive Director) 5/5 Dato’ Gan Nyap Liou @ Gan Nyap Liow (Member/ Senior Independent Non-Executive Director) (Resigned on 9 April 2018) 3/5 Datuk Lim Thean Shiang (Member/ Independent Non-Executive Director) (Appointed on 9 April 2018) 0/0 Datuk Tang Vee Mun (Member/ Independent Non-Executive Director) 5/5 Throughout the financial year under review, the Audit Committee of the Board was made up of no fewer than three (3) members, who were all Independent Non-Executive Directors, including the Audit Committee Chairman. Both Mr Mohd Najib Bin Abdul Aziz and Dato’ Gan Nyap Liou @ Gan Nyap Liow are members of the Malaysian Institute of Accountants (“MIA”). Mr Mohd Najib Bin Abdul Aziz is also a member of the Institute of Chartered Accountants in Australia (ICAA). All members of the Audit Committee are financially literate. The composition of the Audit Committee meets the provisions of paragraphs 15.09 and 15.10 of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). B. MEETINGS OF THE AUDIT COMMITTEE The audit committee held five (5) meetings during the FY2017. The attendance record is as indicated in the table under item A above, next to the respective names of the Audit Committee members. The Executive Directors of the Board, which included the Group Chief Executive Officer, and Senior Management attended the Audit Committee meetings held in FY2017 upon invitation by the Chairman of the Audit Committee. The Group’s Head of Internal Audit attended all the Audit Committee meetings. The external auditors’ attended two (2) of the Audit Committee meetings held on 22 February 2017 and 22 November 2017 during the financial year under review. During the FY2017, the Board is satisfied that the Audit Committee and its Members have been able to discharge its functions, duties and responsibilities in accordance with the terms of reference of the Audit Committee. The Audit Committee has direct access to the external auditors and internal auditors, or vice versa. C. TERM OF REFERENCE The Committee has discharged its functions and carried out its duties as set out in the Term of Reference (“TOR”). The TOR of the Audit Committee is available for reference on the Company’s website at http://www.tropicanacorp.com.my/investor-relations/corporate-governance/board-charter TROPICANA CORPORATION BERHAD Annual Report 2017 ABOUT TROPICANA STRATEGIC PERFORMANCE LEADERSHIP SUSTAINABILITY GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION