Tropicana Corporation Berhad Annual Report 2020

ECONOMIC SUSTAINABILITY This year, our business and general livelihood were challenged by the outbreak of the COVID-19 pandemic. Various measures and management approach were adopted to ensure that we remain agile in navigating the turbulent economic conditions. Without compromising our high standards of product quality and delivery, we showcased our resilience through minimal project delays and focused on protecting the health and safety of our stakeholders. On the need to futureproof our operations, the Group endeavors to develop, execute and monitor sustainable practices that aims to adapt to climate, market and consumer uncertainties in the years to come. Concerted efforts were made to create lasting values through our investments and assets as we manage the various capital inputs as depicted in our Economic Performance section as below. This includes commitment to high corporate governance standards and expanding opportunities to the local job market and suppliers. For further details on our financial highlights, please refer to the following pages: Management Discussion and Analysis: Pages 40 to 67 Performance at a Glance: Pages 68 to 69 Financial Highlights and Insights: Pages 70 to 71 Value Added Statement: Page 72 Audited Financial Statements: Pages 151 to 292 Stepping into the new decade, we reflect on our presence in the real estate industry for over 40 years with pride and gratitude. Through the years, we consistently demonstrated resiliency, adaptability and quality in our products and services, as well as uphold our responsibilities towards society and the environment. Year on year, we strive to remain committed to elevating the Tropicana brand name and reputation, underpinned by strong corporate governance. Our growth is attributed to the unwavering support from our stakeholders and having the confidence in our ability to deliver high quality products and infrastructure solutions that bridges communities together. In FY2020, the Group registered a revenue of RM1.06 billion and achieved profit attributable to owners of the parent amounting to RM91.3 million. The Movement Control Order (“MCO”) enforced on 18 March 2020 triggered a cascade of repercussions to a majority of supply chains in the real estate development industry. Our core business is to construct buildings – an activity that requires high volumes of raw materials, building resources, property fixtures and more. Our team in the Group Procurement and Tropicana Building Materials departments were quick to respond to the lockdown, successfully navigating disruptions to supply chain activities without causing major delays to our on-going project developments. We remain vigilant to the changes in the current market conditions as a result of the pandemic and continue to work closely with our suppliers to avoid any delays in product deliveries. In FY2020, Tropicana spent upwards of RM300,000 on supplies geared towards combating the spread of COVID-19. The safety of our staff and group of stakeholders remain a top priority to Tropicana as we strive towards creating a safer environment for everyone involved in our business activities. Materiality Matter Importance to Tropicana Management Approach UNSDGs Economic Performance To achieve long-term business growth that benefits current and future stakeholders. Developments and investments that ensures sustainable returns for stakeholders and enhance the value of Tropicana’s business portfolio. Procurement Practices To ensure transparency, fairness, accountability and integrity throughout the entire procurement process. Provide job opportunities to uplift the nation’s local economy and improve local employment availability. Management Approach throughout the COVID-19 Pandemic Group Procurement Direct & Indirect Impact • Products and delivery require longer lead time due to : • Lockdown that affect deliveries to requestors (Limitation of transport and freight services). • Supplier do not have MITI approval permit to operate and/or perform deliveries Measures to Avoid Supply Chain Disruption • No major disruptions were encountered by Group Procurement as all major services have been awarded prior to COVID-19. • Should there be any impact on products availability, the Group will opt for compatible/alternative products. Guidelines to Ensure COVID-19 Safety • Suppliers are required to adhere to standard guidelines set-forth by MOH as well as Tropicana’s requirements during delivery. Spending on Matters Related to COVID-19 Management Disinfectant Services - RM83,631.07 Hand Sanitizer (Bottle Type) - RM17,724.00 Auto Stand Mobile Sanitizer - RM40,377.50 Misting Equipment & Chemical - RM13,585.00 Face Mask - RM18,535.00 Medical Suit - RM760.00 Medical Equipment - RM115,300.00 Thermal Screening - RM15,400.00 Total Spent on COVID-19 Management Supplies = RM305,312.57 Building Materials Direct & Indirect Impact • Products and delivery required longer lead time due to : • Lockdown that affect materials supply chain, production hours, transport and freight availabilities. • Manufacturers trimmed production line. • Manufacturers reduced range of products. Measures to Avoid Supply Chain Disruption • No major disruption were encountered as all our on-going projects are at the advance stage of development and bulk orders have since been fulfilled. Economic Performance Financial Performance (RM’ mil) Total Value Added 611.1 Net Operating Income 606.2 Share of Profits of an Associate and Joint-Ventures 4.9 Reinvestment and Growth (Depreciations and amortisation, retained income) 72.4 Government (Corporate taxation) 91.8 Employees (Salaries and other staff costs) 173.5 Providers of Capital (Dividend, finance costs, holders of perpetual bond and non-controlling interests) 273.4 Supply Chain Management In line with our commitment to develop products of the highest quality, it is essential for us to procure our resources and building materials from suppliers who are equally as committed to the quality and regulatory standards we uphold ourselves to. Through stringent selection and evaluation methods, we award contracts to our suppliers based on merit – taking into consideration their job history, cost of service and ability to meet deadlines. Procurement Practices Fair Supplier Selection and Evaluation To remain fair and competitive, we employ a supplier selection flow which takes into account an Approved Suppliers List (“ASL”) and survey methods to hire new suppliers in the event that a product is not available or a less costly alternative is available. Our hired suppliers are also subjected to continuous assessment of their performance that enables delivery of value added, high quality services at market price. Note: The Management Approach presented above only reflects the initiatives carried out at our HQ. TROPICANA CORPORATION BERHAD ANNUAL REPORT 2020 SUSTAINABILITY AT TROPICANA 088 089