Tropicana Corporation Berhad Annual Report 2020

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL INCORPORATING RISK MANAGEMENT WITH MACRO-ECONOMIC OUTLOOK Since its discovery in late 2019, COVID-19 has spread on a global scale and effectively declared as a pandemic by the World Health Organization (WHO). The repercussions of the pandemic have caused many disruptions to the property development industry which continue to affect the current status of the property market. Throughout FY2020, the Group has identified three (3) key risk areas as potential impacts that would affect our business operations: Key Risk Mitigations Regulatory Compliance Risk • Follow up closely with respective authorities to ensure continuous compliance to regulatory requirements Operations Risk • Prioritize and plan work orders by level of importance • Maintain close monitoring of construction progress • Consider and propose alternative building materials to minimize supply chain disruption • Enhance focus on building sanitization measures • Mandate compulsory use of personal protective equipment (PPE) for all personnel at the project site • Adopt stringent quality standards as outlined in MS ISO9001 throughout the development of Tropicana’s projects Market risk • Conduct market surveys and feasibility studies prior to commencement of project development • Formulate a comprehensive Group marketing campaign • Create promotions that target specific consumer market during the CMCO and MCO period INTEGRATING RISK MANAGEMENT WITH SUSTAINABILITY Year on year, the Group endeavors to continuously improve its business operations through sound risk management practices to ensure long term sustainability. Our Risk Management Department progressively works to align our sustainability reporting process presented within this Annual Report with our risk management framework to ensure that a balance is achieved between the focus on generating business gains while remaining socially responsible to the environment and the society in which we operate. INTERNAL CONTROLS Key elements of the Group’s internal control environment are as follows: Delegated Responsibilities through Organization Structure The Group has an organization structure that clearly defines the reporting lines, roles and responsibilities, accountability and authority from Board and Management to operational levels. Various Board, Management and operational committees are in place to facilitate the decision making process. These committee have been given specific authority and responsibilities, which are stipulated in their respective terms of reference. The structure, terms of reference of these committees are periodically reviewed to ensure that they remain effective and aligned to the Group’s needs. • The following are the Board and Management Committees which have been established to assist the Board in discharging its duties: v Audit Committee v Risk Management Committee v Nomination Committee v Remuneration Committee v Pricing Committee v Investment Committee • 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. • Regular management and operation 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. Operational Policies, Procedures and Authorities • 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. • The Group has clear limits of authority which defines the approving limits that have been assigned and delegated to each approving authority within the Group. The limits of authority will continue to be reviewed periodically and updated in line with changes in the organization. • 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. Human Resource Management • 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 programme’s 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. Integrity Management • An Anti-Bribery and Corruption policy and procedures has been duly approved by the Board on 22 May 2020 and adopted accross the Group. The adopted policies and procedures are in line with the Malaysian Anti-Corruption Act 2009. This policy is available for reference on the Company’s website at www.tropicanacorp.com.my/corporate-governance • A Whistleblowing Policy has been establised to provide clarity of oversight of the whisthleblowing process, protection and confidentiality to whistleblowers. The policy sets out a protocol for employees and stakeholders to raise genuine possibilities of improprieties, malpractices and misconduct within the Group for remedial action. This policy is available for reference on the Company’s website at www.tropicanacorp.com.my/corporate-governance Quality Management System • An Integrated Management System consisting of ISO 9001:2015 has been established and implemented to continuously provide high quality products. Internal Audit • The Group has an in-house internal audit team, that has been tasked to provide independent, reasonable and objective assurance, as well as internal consulting services to improve the overall efficiency of operations. The internal audit team assists the Group to achieve its objectives by bringing a systematic and disciplined approach in evaluating the effectiveness of the risk management, control and governance process. The audit practices are guide by Professional Internal Auditing Standards as prescribed by the Institute of Internal Auditors’ International Professional Practices Framework (“ IPPF ”). 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 2020, 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. 142 143 ANNUAL REPORT 2020 TROPICANA CORPORATION BERHAD GOVERNANCE