Throughout the financial year, any significant risks highlighted by respective Head of Departments within the organisation are monitored and analysed by the Risk Management Department and reported to the RMC for their deliberation and management decision. The Board endorses a clear and defined risk organisation structure that outlines key responsibilities held by respective groups as defined below: Roles and Responsibilities Board of Directors • Oversees the implementation of the Risk Management Framework • Endorses and provides final approval to all risk management strategies and planning Risk Management Committee (“RMC”) • Receives quarterly updates of the Group’s risk management progress • Advises on risk management measures to be initiated by the Risk Management Department and applied by the Business/Operations Head Risk Management Department • Review adequacy and effectiveness of risk management process and system; • Review and present to the RMC, the broad terms risk guidelines and risk appetite of the Group on a quarterly basis; • Review identified key risks of the Group’s operations; • Guide Business/Operations Head in identifying, evaluating and managing key risks; and • Report to the RMC on material and pervasive findings which exceeded the risk appetite. Head of Department • Implements the risk management processes approved by the Board • Submits quarterly updates via the risk register to the Risk Management Department to be presented to the RMC for review and evaluation • Identifies potential and actual risks associated to their respective process; highlights the risk in the risk register and make appropriate recommendations and controls to mitigate the risk. INCORPORATING RISK MANAGEMENT WITH MACRO-ECONOMIC OUTLOOK Since its discovery in late 2019, COVID-19 has spread on a global scale and was effectively declared a pandemic by the World Health Organisation (“WHO”) in March 2020. The repercussions of the pandemic continue to impact the overall outlook of the property market in Malaysia. This includes disruptions to the Group’s financial performance, property sales, delayed project deliverables, resource shortages and more. Throughout FY2021, the Group identified three (3) key risk areas that may potentially impact overall business operations: Key Risk Mitigations Regulatory Compliance Risk • Follow up closely with respective authorities to ensure continuous compliance to regulatory requirements. Liquidity Risk • Annual budgeting process participated by all heads of department resulting in more accurate of projection of funding needs of the Group. • Review of cash flow forecast is carried out on weekly basis and monitor 12months rolling cash flow on monthly basis. • To diversify funding source/lender. • Review existing projects’ cash flow requirement. Challenging sales caused by Covid-19 pandemic • To rebalance product mix to include more products targeted at owners’ occupiers, more affordable landed residential which have more steady demand from local population. • Continuous commitment to integrating technology into our business and utilising digital tools to mitigate the business disruption and allow the continuity of business operation. • Roll out online sales tools to facilitate sales staff and agents continue selling online. • Intensify digital marketing efforts - videos, ads, engagement contest, online campaigns with partners. • Arrange SPA signing via courier of documentation & video conferencing with lawyers. • While market sentiment is still affected by the lingering effects of COVID-19 and the tight lending (end financing) environment, roll out sales campaign that offers buyers attractive sales packages, financing schemes and various incentives to overcome their hurdles in owning a home. • This includes easy entry options such as facilitating loan approvals under Maybank Islamic HouzKEY financing programme. This scheme will help the buyers in overcoming their limitations by getting the much needed boost in securing their ideal home. INTEGRATING RISK MANAGEMENT WITH SUSTAINABILITY Throughout the financial year, the Risk Management Department works progressively to align sustainability reporting and initiatives with the Group’s overall business operations. The Board and members of Management acknowledges the importance of sustainable practices to ensure long term value creation for the organisation. The Group, with approval from the Board, continues to report material sustainability matters in line with regulatory requirements as disclosed in the Sustainability Statement found on pages 50 to 53. INTERNAL CONTROLS Key elements of the Group’s internal control environment are as follows: Delegated Responsibilities through Organisation Structure The Group has an organisation 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, Group Managing Director, Group Executive Directors, 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 a clear limit 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 organisation. • 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 employee’s 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. & INTERNAL CONTROL STATEMENT ON RISK MANAGEMENT Annual Report 2021 TROPICANA CORPORATION BERHAD GOVERNANCE 190 191
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