2018 UEM Edgenta Annual Report

Whistle blower Policy UEM Edgenta is committed to the highest standards of professionalism, honesty, integrity and ethical behaviour in the conduct of its business and operations. Therefore, the Group has established Whistle Blower Policy which provides all the employees and members of the public a secure mechanism for reporting suspected compliance violations. Anyone who has knowledge or aware of any improper conduct committed or about to be committed within the Group is encouraged to report such matters, in good faith, without fear of reprisal. Authorities’ Raid Procedure The Procedure serves as a guide to response to authorities’ raid, both to ensure that the UEM Edgenta fulfils its legal obligations and at the same time, that the legal rights of the UEM Edgenta are respected. It is also important to minimise the impact of the raid on the day-to-day business and reputation of the UEM Edgenta. Organisational Structure The organisational structure of the Group is clear and detailed, defining the roles, responsibilities and reporting line of the various Committees of the Board; Management of the Corporate Office and subsidiaries; departments and individuals. The Board appoints the Managing Director/Chief Executive Officer of the Group, Chief Operating Officer, Chief Financial Officer, Chief Human Resource Officer, Heads of Companies of the subsidiaries within the Group as well as critical roles positions. The organisational structure is reviewed regularly to assess its effectiveness and to ensure that it is in line with any change in business requirements. Operating Plans and Strategies The Group undertakes a comprehensive annual budgeting and forecasting exercise to ensure that the development of business plan for respective operating divisions are in line with the Group’s 5-year operating plan, short term and long term strategic plans. Each operating division is responsible for carrying out a comprehensive analysis and identify the strategic priorities as part of the formation process of the Group annual operating plan, 5-year operating plan and strategic plan. It also includes the establishment of Key Performance Indicators (“KPI”) which is deliberated and approved by the Board and the Board of UEM Group Berhad on a yearly basis. The approved annual operating plan, 5-year operating plan and strategic plan are then cascaded to the senior management teammembers across the Group’s operating divisions for planning and execution. The Group monitors the business performance of respective operating divisions through its KPI and measures it against the approved annual operating plan, 5-year operating plan and strategic plan on a regular basis in the management reports. The management reports analyse and highlight variances against the plan after taking into consideration the macroeconomic sentiments and associated business risks. Similar reports and results are reviewed by the Board on a quarterly basis. The management is responsible for identifying and executing any mitigation action, where necessary. Employee’s Authority and Responsibility The respective Head of Divisions/Departments defines the authority and responsibility of each employee as specified in the Job Description. The establishment of performance monitoring serves as a tool to monitor performance against the set KPI and targets at various levels, covering key financials, customers, internal business processes and learning and growth indicators. Discretionary Authority Limits Clear delegation of authority is defined in the Discretionary Authority Limits (“DAL”), which sets the limit for strategic, operating and capital decisions and expenditures as well as decision authority for each level of Management within the Group, and also the Board’s authority. The DAL is reviewed from time to time to ensure effectiveness of strategic and operational executions. Procurement As a member of UEM Group Berhad, UEM Edgenta is guided by UEM Group’s Procurement Policy. We have established a Standard Operating Procedure (SOP) aligned to the Group Procurement Policy encompassing three key areas, namely, General Procurement, Project Tender & Outsourcing and Contract Management. The potential risks with regard to these three areas is mitigated through procedural governance and compliance as detailed in the SOP. The SOP is reviewed periodically and updated as and when required to ensure continuous improvement in internal controls and taking into consideration process improvement as well any new changes in the group procurement policy. We have included new additional provisions for Compliance with HSSE Management Requirements in the procurement terms and conditions to enhance safety awareness and accountability amongst our contractors. Insurance on Assets Sufficient insurance coverage and physical safeguards on the Group assets, including its human resources are in place to ensure adequate coverage against any mishap that could result in material loss. Coverage typically includes damage to or theft of assets; liability coverage for the legal responsibility to others for accidents, bodily injury or property damage; and medical coverage for the cost of treating injuries and illness, rehabilitation and death. Insurance coverage is reviewed regularly to ensure sufficient coverage in view of changing business environment or assets. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Management Discussion & Analysis UEM Edgenta Berhad Annual Report 2018 About UEM Edgenta Chairman’s Statement 122